Written by Luna Webster
It felt pretty ironic writing “4 the youthz” as the title of this piece because actually those three words represent the public’s general perception of what The Budget isn’t.
I wrote about the final coalition budget back in March. When Mr Osbourne made his speech then there was a fair amount of controversy. But the outrage surrounding the first fully Conservative budget since 1996 makes last time’s seem like a whisper in the wind.
The main reason people have been so very reactionary is because this year’s Budget seems to hit young and vulnerable people the hardest, which was not what Osbourne and Cameron have been implying recently on social media and in the news. They’ve been very insistent on being seen as a party for everybody, a party that will “support the vulnerable“. However the economic policies they are introducing are likely to do the opposite.
One policy that has been seen as fairly progressive is Osbourne’s introduction of the “living wage”, which replaces the national minimum wage. As of April 2016 anybody aged over 25 will earn a minimum of £7.20, which will be increased to £9 by 2020. There has been criticism surrounding this though, as it turns out once the cuts to tax credits have been made and take into consideration inflation, families on this wage will actually be worse off than they are now.
The threshold for inheritance tax will rise to £1 million as of 2017 which means that the wealthiest families with the most expensive properties don’t have to pay as much tax anymore.
As of 2017 you will only be able to claim Universal Credit and tax credits for two children. Critics have hit back at this policy suggesting they have essentially created a two child rule for the poorest families.
The amount of benefits you can claim in one household per year has been lowered to £23,000 in London and £20,000 across the rest of the UK.
18-21 year olds will no longer be able to claim housing benefit by default. There may be exceptions under a new “earn to learn” obligation.
Corporation tax will be cut to 19% in 2017, then lowered further to 18% in 2018. This means big businesses will not be required to pay as much tax anymore.
Student maintenance allowance is to be replaced by loans as of 2016 – these will be paid back once the person is earning more than £21,000 a year. The major concern surrounding this policy is that poorer young people will be put off from attending university as they will finish their degree in far more debt than richer ones. This could prevent children from poorer families ever being able to move up the scale in terms of social mobility and turn universities into exclusive clubs for the youth of wealthy families.
Defence spending is to increase by 2% per year, while public sector spending is to grow by only 1%.
What many people have taken from The Budget is that very little is being done to close the quickly growing gap between the richest and the poorest in the UK. Others however see it as an important step towards clearing the defecit and improving the economy. You can make your own mind up by watching The Budget being presented by George Osbourne in full here.