John Milne

This Budget has around 100 separate measures, but most would never have featured in the previous Chancellor’s Budgets—not because of any particular policy difference, but because they are just too small. It is less “Steady as she goes”, and more “Let this grind to a complete halt.” As far as taxation goes, by far the biggest impact comes from a policy that was not even mentioned: the continued freeze on personal tax thresholds. This year alone, it means another half a million people will start paying tax for the first time, and a further half a million will be pushed into a higher tax bracket—all a function of that handy Chancellor’s trick: fiscal drag. Understandably, the Conservatives give the Government an easy ride on this, as it was their idea in the first place. When it comes to welfare, the critical Milburn and Timms reviews have both been conveniently kicked to the other side of the Budget, but the issues that we face are not what people think they are. It has been said so many times that everyone assumes it must be true that millions of people are getting personal independence payment or universal credit health awards for mild anxiety. The appeal of this story is that it makes people think that we can slash social support for vulnerable people and feel morally good about it. Unfortunately, it is just not true. In reality, absolutely no one gets PIP for mild or severe anxiety, or for any form of mental health condition. That is because PIP is not awarded according to condition. Rather, applicants are assessed according to their daily abilities or lack of them—whether they can wash themselves, cook for themselves or manage short distances walking. There is not even a category for mild anxiety. I find it incredible that politicians, including Members who are the welfare spokespeople for their parties, can continue to ask for something that they must know by now is not possible. What chance have we got of making smart reforms to the economy if politicians cannot even get the basic facts straight? While we continue to wait for all the missing parts of the Budget over the coming weeks and months, I urge caution. Welfare cuts are just a right-wing version of the magic money tree. As a proportion of GDP, today’s spend on non-pension welfare is roughly the same as it was in the mid-80s, when a certain Margaret Thatcher was Prime Minister. At that time, the Defence budget was twice what it is today, so clearly the current level of welfare spend is perfectly compatible with meeting our defence targets, and welfare is not the reason why our defence budget is in such trouble. The peace dividend did not go to UC and PIP; it went to the NHS and pensions. Above all, this is a challenge caused by a general decline in the economy, not welfare. Yes, it is always important to control welfare spend, and I support that, but slashing welfare on the basis of an arbitrary financial target invented simply to raise enough to pay for some dramatic manifesto pledge is not a credible path to anything. What we have is a Budget that does not seek to do anything very much about anything; the real battles have yet to come.