Tag Archives: budget 2021

What we should have been saying in our response to the budget

On Thursday I received an email from Dan Schmeising giving me a link to an “exclusive budget briefing” setting out our reaction to Wednesday’s budget.

The budget briefing states:

  • Provide at least the full recommended £15 billion to fund the catch-up needed in Education over three years.
  • “Double the Warm Home Discount on energy bills and extend it to everyone on Pension Credit and Universal Credit”.
    Why haven’t we included extending it to the legacy benefits? The Warm Home Discount is currently a £140 refund on a person’s energy bills if they receive particular benefits.
  • Implement (it is implied) our 10-year plan to insulate homes.
  • “Invest £150 billion into a Green Recovery Plan to promote active and zero-emission travel, protect our countryside and clean up our air. This will be paid for by taxing the wealthy and frequent fliers – not the less well-off”.
    We don’t say we want to do this over three years and if we want to split the money evenly into £50 billion a year or invest £30 billion in the first year, £50 billion in the second and £70 billion in the third. We don’t say how much the extra taxes will raise.
  • Restore spending 0.7% of our Gross National Income on Overseas Development Aid.

The budget briefing includes, “The Local Government Authority projects councils will be facing an £8 billion black hole in their budgets by 2024. The Tory Government has responded with… £4.8 billion.”

This £4.8 billion is £1.6 billion a year. But we don’t say we would provide the £8 billion and we should.

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Budget 2021: Wales levelled down says Dodds

The Welsh Liberal Democrats have accused the Conservative government of levelling down Wales in Wednesday’s budget, stating that measures announced by the Government do not even come close to replacing lost EU funding.

Welsh Liberal Democrat Leader, Jane Dodds MS, stated:

We are now seriously beginning to feel the consequences of this Conservative Government’s obsessive Brexit ideology and the harm it is inflicting on the Welsh economy. In addition to acute labour shortages, supply shortages and price increases we now have significant evidence provided to us by the OBR showing the damage Brexit is doing to our economy. This can no longer be passed off as project fear, but rather project reality.

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Lib Dem MPs react to the Budget

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Budget 2021: Young people’s mental health missed

The Chancellor has given his Autumn Statement setting out the Conservative government’s spending priorities for the next year. Mental health care services, however, have been short changed and neglected once again.

The Government’s own budget research states that “Mental health and wellbeing have suffered during lockdowns, and anxiety and depression levels are now consistently higher than pre-pandemic averages”. Despite this, the Chancellor made no reference to mental health support in his speech and no new money for mental health services, let alone extra money to tackle the mental health crisis facing children and young people.

Hundreds of thousands of young people today are struggling with their mental health and far too often they cannot access support when they need it. Latest data from the NHS suggests that one in six young people now has a probable mental health disorder, up from one in nine in 2017. In a survey for YoungMinds in 2019, three-quarters of young people said they could not find support when they first needed it.

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Budget 2021: Davey says bankers get twice the catch-up for children

Following today’s budget, Ed Davey has slammed the Chancellor for giving twice as much away in tax cuts to bankers as extra catch-up funding to help children make up for lost learning during the pandemic.

Analysis by the Liberal Democrats shows that reducing the banking surcharge will cost the Treasury over £3.8 billion over the next four years. This compares to just £1.8 billion of additional catch-up funding in today’s Budget. That is the equivalent of £1 of extra catch up funding per child every school day, compared to a £6 a day tax cut for each banker.

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An Alternative Budget – a budget for the poorest in society

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Rishi Sunak will be presenting his autumn budget on 27th October. Currently inflation is rising with wages increasing up to 7% in some sectors, quantitative easing is due to end at the end of the year. Rishi Sunak has stated he wants to reduce the deficit.

The economic outlook is not clear, but I think Rishi Sunak should assume that the increase in inflation will only be short-term and the government and the Bank of England will not need to take any action to reduce inflation. The ending of the Covid support schemes will reduce government spending by £100 billion. While household savings have increased, I don’t believe all of these savings will be spent into the economy next year, or will be large enough to make up for the £100 billion being removed from the economy.

Therefore I believe that the Chancellor should not remove all of the £100 billion from the economy but should commit to continue to spend up to £40 billion of it. I suggest he should make the following changes above the normal upgrades and what has already been announced.

Benefits are due to increase in line with the inflation rate of September which was 3.1%. The triple lock on pensions has been suspended for next year, so instead of pensions increasing by 8% (the expected increase in earnings) they will be increased by 3.1%. As the party now supports a UBI we should be moving towards the idea that a couple receives twice the amount as a single person. Therefore I would make an exception for the couple’s Guaranteed Pension and instead of increasing it by 3.1%, increase it by 8% to £291.92 a week. This would move it from being 1.53 times the single rate to 1.6.

Party policy to scrap the ‘bedroom tax’ and the benefit cap should be implemented.

If the Local Housing Allowance rate was restored to the 50th percentile more than 32,000 households would be lifted out of relative poverty including more than 35,000 children (based on Crisis 2019 figures). Therefore the Local Housing Allowance should be increased to the 40th percentile from April 2022 and the 50th from April 2023.

These four measures should remove many pensioners from poverty.

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Tory Budget Targets Lowest Earners for Greatest Pain

On first sight there seems little in Rishi Sunak’s budget to scare the horses. With tax threshold increases delayed and Covid support continuing for the time being, Sunak has avoided an immediate hit to families’ wallets.

Look below the surface though and what becomes apparent is that those on the lowest incomes will suffer the most once the measures outlined in the budget kick in.

The most glaring example of this is the cruel decision to reduce universal credit at the end of September by £20 per week, just at the time when unemployment is expected to rise. This will hurt the poorest families the hardest and shows the lack of compassion and empathy that is at the heart of Tory thinking.

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Call for an email campaign to influence the March budget

Last year I emailed Rishi Sunak suggesting some policies for his summer economic statement, which incorporated some improvement to working-age benefit including making permanent the £1000 Universal Credit increase and some economic actions. I think these were far too radical for the Conservatives, so this year I am calling on him to:

  • Extend the £1000 temporary increase in Universal Credit to April 2022 and consider making it permanent;
  • Increase the Benefit Cap by £1000 plus £1105 to cover some of the increase in LHA rates brought in last year (based on the difference between the non-London average for Category D rates) and the inflation uplifts for the last year (1.7%) and this year (0.5%) so the unemployed can benefit from these recent changes. When rounded to the nearest pound the new couple rates would be increased to £22,557 for outside London and £25,623 for London.
  • Make it illegal for anyone to be evicted if they pay the LHA rate they receive and consider what actions can be taken to reduce rent levels and increase LHA gradually back to the 50th percentile.

I think we should email Conservative MPs asking them to write to Rishi Sunak asking him to do these things.

If you agree with me you might wish send an email to your Conservative MP similar to the one below.

I wrote:

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