The “Emergency” Budget


I can rarely remember a Budget over which there has already been so much speculation, concern and fear. And the announcements we will hear on Wednesday are not even the annual budget the Chancellor is required to present every March. This is ‘an emergency summer budget’ – made necessary because the Tories pledged to make £12 billion in welfare savings before the Election, without any idea of how they could do so.

Over the past few weeks I have been contacted by scores of local people who are worried about where the axe will fall. Will it be further changes to the support given to disabled people? Or will we see housing benefit cut for young people who are out of work? It now seems certain that George Osborne will use his new Budget to undercut the tax credits that so many families rely on to get by.

The last Labour Government introduced tax credits, which are given to those on low incomes and parents who work a certain number of hours per week. The aim was to help tackle poverty and stop welfare dependency by removing disincentives for work – because instead of seeing support withdrawn as soon as you get a job, tax credits ensure that those with families and on low incomes keep some benefits when in employment. These tax credits have contributed to one of the biggest improvements in child poverty seen in the 20th Century. Between 1998 and 2012 the number of children in poverty fell from 35 to 19%. But this progress is fragile. Since David Cameron became Prime Minister 500,000 more children are living in absolute poverty and we know more and more families are struggling to make ends meet.

Now, charities such as Barnados, the Institute for Fiscal Studies and even some Conservative commentators are warning that if tax credits are cut without immediate action to tackle low pay and increase employment, even more children will be pushed below the poverty line. These are not just statistics – they are real children and they are the children of our friends, relatives and neighbours. In the Northfield area, there are over 17,000 children living in families who supported by tax credits – and there is real fear about what these cuts will mean for them.

Of course, high spending on social security is often a sign that something is wrong – that unemployment is too high, or low pay too widespread. Our area has the worst record on the living wage in the country – and it is that which forces far too many people to rely on benefits to get by. That is part of the reason that the Government’s social security spending is £25 billion higher than the Chancellor expected. But you cannot solve those kind of problems simply by cutting benefits. It will just be completely reprehensible and wholly unfair if the Chancellor dishes out tax breaks to the wealthiest, while taking away money from the lowest paid families and children, on Wednesday.

We need action to get people into good, well paid jobs and affordable homes if we are ever to really cut social security spending. What we don’t need are short-sighted measures that will cut back the opportunities and life chances of our children. The Chancellor claims this Budget will be for ‘Working People.’ Does a policy which will undermine work as route out of poverty really meet that test? I don’t think so.

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Richard Burden

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I was Labour Member of Parliament for Birmingham Northfield between 1992 and 2019 and a former Shadow Transport Minister. I now chair Healthwatch in Birmingham and Solihull, and the West Midlands Board of Remembering Srebrenica. I also work as a public affairs consultant. I am an effective community advocate and stakeholder alliance builder with a passion for human rights. I am a trustee of the Balfour Project charity and of Citizens Advice Birmingham, and a former Chair of Medical Aid for Palestinians.

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