Budget Response: The most vulnerable are being left out in the cold

Back in March, at the very outset of the crisis, the chancellor Rishi Sunak said that: “Now more than at any time in our history, we will be judged by our capacity for compassion.” That was true then and it is true now. Yet the mini-budget announced yesterday regrettably showed that the government has failed that test. At a time when millions of people across the country are facing the threat of poverty and unemployment, this plan fell far short.

There were some important and welcome measures, in particular, the £1,000 incentive to persuade employers to keep on furloughed staff. But the decision to reduce stamp duty for landlords and second homeowners, for instance, the wrong priority at a time when so many are struggling to get by.

The total projected cost of cutting stamp duty is £3.8 billion. That is money that could have been spent on helping the hundreds of thousands of families being pushed into poverty by this crisis. This measure will disproportionately benefit the wealthiest, while poorer households that rent have been left out in the cold.

While a landlord buying an additional home costing £500,000 or more will now pay £15,000 less in stamp duty, a family of for relying on universal credit will struggle to get by on little more £280 a week. A discounted meal at a restaurant will be little comfort to those struggling to pay their rent each month.

Figures I uncovered yesterday, reported in the Mirror, show the number of families struggling to pay bills has more than doubled since the coronavirus outbreak, rising to almost one in nine. The Government needs to step up and provide extra support to these hard-pressed families, including by scrapping the heartless two-child cap on benefits which is projected to push one million children even deeper into poverty by 2023-24.

I’m also urging the government to reconsider its appalling decision to resume evictions from 24 August. If ministers are serious about the levelling up agenda, they need to act now to ensure vulnerable households across the country are protected.

Coronavirus has exposed deep inequality and unfairness in our society. We must now ensure that the country moves forward and that we don’t go back to how things were.

That means supporting millions of people who are in desperate need of help: renters, families, the self-employed, young people, and more. As a catch-all solution, we should look to introduce a Universal Basic Income to ensure no-one is left behind.

We must seize the moment to build a fairer, greener, more compassionate country, where everyone has the security to live life as they choose. If you agree with my vision for our party and country, please back my campaign to become the next leader of the Liberal Democrats, and remember that nominations close at 5pm today.

* Layla Moran is the Liberal Democrat MP for Oxford West and Abingdon

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This entry was posted in Op-eds.


  • David Evershed 9th Jul '20 - 1:06pm

    On the other hand the Treasury report just publish shows that during the Coronavirus crisis the net income of the lowest decile of households went up by around 3% whilst the net income of the highest decile of households went down by 14%.

    However, average net household income is down 8%.

    See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/898420/Impact_of_COVID-19_on_working_household_incomes.pdf

  • Lorenzo Cherin 9th Jul '20 - 1:14pm

    I agree with this from Layla, which reveals as is so, that she is indeed concerned with bread and butter issues, expressed in the interview in the New European.

    Much of what Sunak does and says is very good compared with others in the government as well as previous chancellors. He is way to the left of them. He is though, someone who is a slow burn rather than a quick firebrand! We need to up the emphasis and the heat!

    Compared to , say the DWP, the Chancellors department is an oasis.

    My advice to Layla, and colleagues, press the case against the benefit sanctions, and evictions as you are, never stop until these do!

    And my advice really strongly to members, listen to Layla as she talks sense!

  • Layla, thank you! At last, a top voice proclaiming “We must now ensure that the country moves forward and that we don’t go back to how things were.

    That means supporting millions of people who are in desperate need of help: renters, families, the self-employed, young people, and more. As a catch-all solution, we should look to introduce a Universal Basic Income to ensure no-one is left behind.

    We must seize the moment to build a fairer, greener, more compassionate country, where everyone has the security to live life as they choose.”

    It is indeed a moment for seizing; and for shaping things into UBI. I have been afraid that our very Chancellor of the Exchequer might be showing an interest of a UBI kind, and it would be a tragic waste if the Johnson Government should ever get any credit for a UBI, after the dismal decade of conservative “Austerity”, now truculently accepted as (to be charitable) misconceived, by much of the guilty Party. Lib Dems must look again, and soon, at the arguments for UBI, and cease their endless havering about whether we can afford it. The question is the opposite: can we afford to let slip the opportunity Covid offers?

  • Katharine Pindar 10th Jul '20 - 8:01pm

    On the other hand, David Evershed, the Treasury supporting a higher proportion of the income of the poorest households than it has the income of the richest households is surely only to be expected. If you have very little to start with you can’t afford a cut, you have to have more to survive on, as the Chancellor seemed to recognise by adding nearly £20 to the weekly payment for Universal Credit. If you are richer you should be able to absorb a cut. To lose 5% of £100 is a disaster if that is all you have, but to lose 5% of £1000 should merely be an inconvenience.

    All the welfare benefits need increasing, and our acting leader Ed Davey asked the Chancellor for considerable increases back in March, to give a single person £150 per week when not in work, or £250 for a couple. It is increased benefits which are the first requirement to lift people out of poverty, which is the state of 14 million people in our rich country, including 4.6 million children. This is what our party needs to campaign for first of all.

  • Peter Martin 11th Jul '20 - 6:59am

    “The Government needs to step up and provide extra support ….”

    This doesn’t sound like the ‘fiscally responsible’ ‘put a penny on income tax’ Lib Dems who made the point that theirs was the only ‘fully costed’ manifesto in 2019. Everyone else was supposedly relying on the “magic money tree”!

    Then it was just a few tens of billions of new money to finance the NHS and other essential services. Which would have been relatively benign, but still considered unacceptable by neoliberals. Now it’s hundreds of billions and no-one is batting an eyelid! However, the situation is much more dangerous than it was, not just because of the much larger amounts involved, but because the economy has taken a supply side hit too.

  • Matt McLaren 11th Jul '20 - 5:16pm

    Welcoming the £1,000 bonus to keep on furloughed staff, really?!

    Firstly, this policy doesn’t distinguish between those employers who were going to bring back staff anyway and those that were considering laying off staff. The result is potentially billions of taxpayers’ money going to employers and jobs that were never at risk.

    Secondly, for those employers considering laying off staff (such as those in sectors which still have a very long time to wait before economic activity comes close to returning to normal) £1,000 is not nearly enough to persuade them to keep on staff whose wages and other employment costs they will have to pay despite a drastically reduced (or even on some cases, non-existent) revenue stream.

    In short, the £1,000 bonus for employers is appallingly inefficient, eye-wateringly expensive and will be completely ineffective at it’s purported aim (i.e. to significantly limit redundancies). The Labour front bench are absolutely right to direct their criticism of the Government’s plans on this feature for these reasons, and I am incredibly disappointed to see a candidate for Leader of the Liberal Democrats either ignoring or being ignorant of these problems in welcoming it!

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