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Siobhain responds to the Spring Budget

Home / News & Views / Siobhain's views / Siobhain responds to the Spring Budget

14 March 2017

Budget 2017 Last week’s budget represented another kick against my constituents who are ‘just about managing’.

My constituents have had their living standards squeezed for about a decade now – and the Chancellor is offering them nothing in return.

Indeed, this is set to be the worst decade for pay growth in two centuries of earnings data, as we face a ‘third parliament of austerity’, according to the Institute for Fiscal Studies.

Calculations by the JRF have shown that by 2020, ordinary working families will be significantly worse off.

For instance, a couple with two children, working full time on the so-called ‘National Living Wage’, will lose around £1051 – while a single parent with two children working full time on the statutory minimum wage will be almost £3,400 worse off. Meanwhile, the continuing freeze on working-age benefits has made the lives of those already struggling even harder.

But it is the reform on National Insurance Contributions, paid on annual income over £8,060 that I want to focus on. This tax will increase to 11% by 2019 – and will hit the 2.5 million people who are self-employed, most of whom are earning very modest wages.

Not only did the Conservative Party promise ‘no increases in National Insurance Contributions’ in their 2015 manifesto.

There are also many vulnerable groups that will be hit by this change.

For instance, Gingerbread, the single parents family charity, has shown that almost a fifth of single parents were in self-employment – with half of these earning below the statutory minimum wage or earning low pay. So these NIC hikes will burden this already hammered group.

So millions of self-employed workers could pay an average of £240 per year – at the same time as big businesses are seeing a cut in corporation tax.

It is also my concern that self-employed workers in the emerging ‘gig’ economy will be hardest hit. I was shocked to read of the policy at Parcelforce charging couriers up to £250 per day if they are off sick and are unable to find a replacement.

Workers at Parcelforce, Deliveroo and DPD are notoriously undervalued and underpaid – and government policy will now kick them even harder.

On social care, the government’s headline figure of £2bn in extra funding might seem impressive – but it’s too little too late. The money will be spread over just three years, being phased out again in 2020.

Meanwhile, further cuts to local government budgets will further squeeze the provision of adult social care in our communities.

It is also dispiriting to see hand-picked free schools getting £1bn in extra funding – while the rest of our schools will get just a quarter of that, £260m between them, over the same period.

Once again, the government fails to invest in the real vehicles of social mobility in this country – comprehensive state schools.

And despite these dispiriting choices, and various promises from the government about the importance of fiscal responsibility, government borrowing is set to rise from £51.7bn this year to £58bn next year.

I wonder who exactly is benefiting from this borrowing?

Wages are stagnating around us – but this government is so divorced from reality that it cannot see this. Indeed, the JRF has also demonstrated that the cost of living will be about 10% higher by 2020.

Around 19 million people are currently struggling to maintain a decent standard of living in our country – and I deal with hundreds of those most vulnerable constituents each week.

I wonder what it will take for the government to take seriously the mess it has got those ‘Just About Managing’ in?