Charities have hit out at George Osborne’s latest Budget, accusing the Chancellor of lavishing money on big business while ignoring poor children, domestic violence victims, and disabled people.
Wednesday’s spending statement saw Mr Osborne unveil further cuts to corporation tax, business rates, and a tax cut for higher earners – but provide little in the way of relief for the most vulnerable.
Though Mr Osborne claimed he had “put the next generation first”, Alison Garnham, chief executive of the Child Poverty Action Group, said children had lost out at the expense of business groups.
“This Budget puts the next generation last and set to be the poorest generation for decades,” she said.
“The Chancellor ignored both the 3.7m children in poverty now and the fact that according to IFS projections we face the biggest increase in child poverty in a generation.
“The Chancellor delivered some big investments for the better off but there was little here for hard-up parents trying to get better off by earning more. Children were prioritised behind business groups who got costly tax cuts.”
National deaf-blind charity Sense said the Budget was a “bleak day for disabled people” and accused the Chancellor or ignoring them, while United Response, which provides disability support services, argued the Budget “does nothing but compound the uncertainty already facing people with disabilities”.
Michelle Mitchell, chief executive of the MS Society, said the confirmation of a further benefit cut to Personal Independence Payment disability benefit would cause sufferers of multiple sclerosis “anxiety and fears”.
The Chancellor’s Budget included a further cut in corporation tax to 17 per cent, an extension of small business tax breaks on business rates, and cuts to capital gains tax.
Mr Osborne also increased the level at which the higher 40p rate of income tax kicked in – effectively a tax cut for the highest 15 per cent of earners – and announced £3.5 billion of further cuts in public spending by 2020.
The Government in the last month enacted cuts to Employment and Support Allowance and tax credits. It is also pushing ahead with cuts to the Personal Independent Payment.
The one area hailed as positive charities was new funding to house rough sleepers. Crisis and the YMCA welcomed this development.
Vivienne Hayes, chef executive of the Women’s Resource Centre, said she was “encouraged” that women charities had received investment from the tampon tax fund, but warned they were still “chronically underfunded” and that women were being impoverished by wider economic policy decisions.
George Osborne 2016 budget at a glance
George Osborne 2016 budget at a glance
1/8 Debt forecasts up, growth forecasts down
The OBR’s new forecasts have downgraded growth in all of the next five years to 2020. The watchdog says the economy will only grow by 2 per cent in 2016, as opposed to the anticipated 2.4 per cent. Borrowing and productivity growth are also down – with forecast borrowing in 2018-198 £16 billion higher
2/8 New tax on sugary drinks
The Chancellor announced a new tax on sugary soft drinks, which is projected to raise £520 million. At least some of the money will be spent on doubling funding for school sport, the Chancellor says. Labour leader Jeremy Corbyn welcomed the levy
3/8 Tax cut for higher earners paying the 40p rate
The Chancellor has raised the threshold for paying the higher rate of income tax to £45,000. The higher rate is paid by roughly the richest 15 per cent, currently people earning over £42,386
4/8 Increase in tax-free income tax threshold
The tax-free allowance increase to £11,500 in April 2017 – up from £10,600 now. The Chancellor previously raised the allowance from £6,475 in coalition with the Liberal Democrats. The Conservative manifesto pledges to put the allowance up to £12,500 by the end of the Parliament
5/8 New devolution for counties and powers for London and Manchester
The West of England, the East of England and Greater Lincolnshire will all get elected mayor-led combined authorities with new powers. The Chancellor says they are backed by £1 billion new funding. Greater Manchester will get new powers of criminal justice while London will keep its business rates – giving whoever is elected Mayor a lot more spending power
6/8 Fuel duty frozen for sixth year running
The Chancellor had planned to end the fuel duty freeze he had put in place for the whole previous parliament. In the event, he has announced a freeze for another year
7/8 All schools to become academies
As reported yesterday the Chancellor unveiled legislation to turn all schools into academies. He said all schools would either be academies or on their way to being academies by 2020, and that funding had been set aside to fund the change
8/8 Lifetime ISA
The Chancellor announced a new savings account to encourage under-40s to save for retirement – for every £4 saved, the Government will top this up by £1 up to the value of £4,000 a year. Tax-free ISAs will also be increased from £15,000 to £20,000
In his statement to Parliament, the Chancellor said: “In this Budget we choose the long term; we choose to put the next generation first. Sound public finances to deliver security, lower taxes on business and enterprise to create jobs. Reform to improve schools, investment to build homes and infrastructure – because we know that’s the only way to deliver real opportunity and social mobility.
“And we know that the best way we can help working people is to help them to save and let them keep more of the money they earn. That is the path we followed over the past five years. And it’s given us one of the strongest economies in the world. And that is the path we will follow in the years ahead.”
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- Budget 2016