Rishi Sunak’s recent budget statement included the following claims: “Employment is up. Investment is growing. Public services are improving. The public finances are stabilising. Wages are rising.” It was a very positive stance from the Chancellor to what many have argued is a “spend, spend, spend now” budget. But is Rishi really spending that much and will it help the poor?
The past 18 months have been unlike any before as COVID-19 and the lockdowns, vaccinations and other restrictions associated with it have hammered the economy.
While many people still have employment, countless others have either lost their jobs or are now on reformed contracts, with some working more hours on less pay than before. Others have been put on zero hours contracts as businesses large and small struggle to stay afloat.
At the same time as adapting to the restrictions and alterations brought on by COVID, the public has had to cope with rises in the cost of fuel, energy, groceries and household goods – as well as taxes that have gone up more quickly than wages, some of which have been frozen. So what were the key points of this year’s budget?
- The national living wage will increase from £8.91 to £9.50, an increase of 6.6%
- National insurance contributions will increase by 1.25% percentage points, from 12% to 13.25%
- The CPI (Customer Price Index) is expected to inflate to 4%, meaning the cost of goods and energy will go up
- The Universal Credit Taper Rate will be cut from 63p to 55p
- £2bn of new funding will be found to help schools and colleges
- Government spending on skills and training will rise by £3.8bn
- Internal domestic flights will have air passenger duty cut
But what does the public think? Rising East reporter Malachi Gowie took to the streets of Beckton and East Ham to test opinion, especially about tax rises; the cost of living; the new alcohol duty; and the government’s solutions to climate change.
Bakery assistant and full time student Mortada said, “My salary has risen so it’s great for me”, while Ragan, who works as a front office duty manager at a Marriott hotel, was not pleased with the rise in inflation. “I’m going to be paying more tax and earning less money,” he said, “so by the time I pay my rent and bills I will be left with a lot less”.
The decision to increase duty on alcohol based on its strength brought mixed reactions. Chef and student Joesph was dismayed: “I think it’s a poor decision, they’re going to miss out on a lot of customers. Me myself I drink spirits so this will affect me quite negatively”. Fellow student Oforma worried that the move would “… encourage more alcoholism. Increasing alcohol is a good idea but people will always find a way to buy it”.
The government’s approach to environmental issues faired more positively. Most of those we spoke to approved of the expansion of the Ultra Low Emission Zone (ULEZ) and of extending the hours of the congestion charge. Most felt that both moves would help reduce pollution and encourage more exercise. Primary school teacher Robert put it this way: “The ULEZ is good, promoting cleaner air in certain areas”. But London City Airport security officer Amina voiced concerns about the cost: “They’re doing what they can. They are changing cars due to pollution, which is bad on us as we need to find the money or pay the tax”.
Although there are various minimum wage rises for those aged 22 upwards, there is still a substantial difference between the cost of living and the average wage. Monthly if not weekly we hear reports of price hikes in everything from gas to crisps. With winter and then Christmas approaching, people will need more fuel and more food, which may prove increasingly difficult to budget for. During the past two years we have seen an abundance of new food banks and shelters opening up to extend their arms towards those in need.
Government plans to reduce the Universal Credit Taper Rate by 8% – allowing recipients to keep more of their payment – is I believe a small but positive move which will help families in need – especially those entitled to school meals during term and holiday times.
As a part time courier and also a central London resident, the extended ULEZ zone and additional congestion charge hours have affected me both financially and in terms of mobility. But I understand why the government has taken these measures and I have noticed a reduction of traffic, fumes and noise pollution in my area – especially as I live on a ‘School Street’.
A stronger economy for the British people? The budget looks like an attempt to rebuild and improve things post-COVID. But I worry that rather than helping those that need it quickly, the best this budget can do is stabilise the economy and re-empower business, in the hope that taxes can be reduced later on.
But in the meantime, I can only see the gaps within society getting wider.
To hear some of the opinions of the people we spoke to. click on the link below:
Rishi Sunak picture: Creative Commons Licence
