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Budget 2018 – Missed Opportunities

by timpickstone on 31 October, 2018

Much of the media attention on this week’s budget from the Chancellor was on some of the tax cuts that have been made (or brought forwards one year). These mean that those people who pay income tax will be slightly better off from next April.

Whilst this is welcome, the Chancellor failed to grasp some of the real problems that face public services up and down the country:

  • There was nothing to help the Police, who are struggling to provide enough police to provide adequate community policing or investigate crimes.
  • Local Councils will still have to make £1.3 billion worth of cuts to services as no extra money was found for long term funding.
  • There was a tiny bit of extra funding for schools, but when many schools are having to lose staff at a time of rising costs this works out at less than the cost of a single teacher.
  • Taking action on tacking plastic waste was dodged by failing to provide a tax on single use items like takeaway plastic cups.

On social care funding, the Chancellor announced £650 million of extra money for local councils to help with the enormous costs of social care. While £650 million for social care sounds a lot, this includes £240 million already announced for reducing winter pressures. Adult and Children’s social care faces a funding gap of £2.6 billion in the next financial year, so the £410 million extra isn’t enough to fill this. For example, the increases in the Budget for the National Living Wage for care staff, while very much deserved, need to be paid for.

What would we have done differently?
A Liberal Democrat budget would:

  • Secure the future of our NHS, focusing on social care and mental health with an extra £6bn per year, funded through a penny in the pound on income tax.
  • Improve living standards for 9.6m parents and children, by reversing George Osborne’s cuts to the “work allowance” under Universal Credit, costing £3bn.
  • Invest an extra £2.8bn in to the schools budget, by reversing the Government’s proposed cuts to school funding.
  • Scrap business rates – replacing them with a tax on land values known as the Commercial Landowner Levy.  The reformed system would increase incentives to invest in new equipment and renovations, and cut taxes for businesses in nine out of ten English local authorities.
  • Reverse Conservative cuts to Corporations Tax – still leaving the UK with the lowest rate of corporation tax in the G7.
  • Work with the EU to crack down on tax avoidance by the tech titans, and working to secure agreement on taxing multi-nationals’ profits.
  • Reform wealth taxation – bringing capital gains and dividend taxes into line with income taxes, removing the most generous pension tax reliefs from the highest earners, and replacing the inheritance tax system with a fairer lifetime transfer tax.

 

 

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