This Budget was billed as the “end of Austerity”. Alas, it was nothing of the sort. It is true that the Chancellor allowed another £15 billion into the economy, with £11 billion increase in spending and £4 billion cut in taxes. But that represents just 1.8% of the £842 billion total government expenditure next year, around the same level as the average growth rate for the country, and a much smaller percentage than the rate of inflation.
For all the talk of “billions” of pounds, the extra money actually represents roughly £250 per year for each person in this country. But of course that £250 will not be distributed evenly. The personal tax allowance has gone up to £12,500 – which is a good thing for lower-paid working people – and the threshold for higher-rate tax has gone up to £50,000. The people who benefit most from both of these tax changes are those who earn over £50,000 per year – not only is their higher-rate tax reduced but they also collect the whole reduction from the rise in the allowance, too. Like Robin Hood in reverse, the Chancellor is rewarding the wealthiest people in our society with the bulk of the £4 billion tax-cuts, while reducing the amount available via Universal Credit for the worst off.
The vast majority of Ipswich residents don’t earn less than £12,000 per year or more than £50,000 per year, and if you are one of that majority you probably won’t notice any significant difference in your taxes from this budget. What you will notice is the effect of all the things that the Chancellor is NOT doing.
An economy like ours, which suffers from low productivity and lack of investment demand, needs a massive increase in government capital expenditure. We need a National Transformation Fund such as the one that Labour proposed last year. We need a Green Investment Bank to provide financial support for renewable electricity generation, for zero emissions vehicles, for home-insulation grants and for energy-saving equipment for small businesses. There was none of that – in fact the green business scheme that did exist was scrapped.
While we are getting new trains, we are not getting all the rail infrastructure investment that would make those new trains run faster, or more reliably, or at all.
There was no additional funding to provide the North Ipswich Bypass or to improve the junctions on the A14 which is vital for the economy of Ipswich and Felixstowe and the whole UK.
And while Suffolk was lucky enough to have won first prize in the Local Full Fibre Networks Challenge Fund contest – £5.9m, or about £9 per person – that will only provide full fibre connections to key public buildings and comes nowhere near creating an ultra-fast coverage for all of us, which is what we need if we are going to compete.
Because Amazon and other online shopping giants continue to get away with paying virtually no tax, shops on our “Golden Mile” continue to close.
Because council funding has been cut and cut again, there is no extra investment in local highways – instead of rebuilding inadequate roads, we get a pothole grant to fill in the gaps temporarily.
There is nothing to help Suffolk New College widen their range of technical courses or increase the levels of staff in order to give more young people a marketable skill.
And while Ipswich Borough Council will continue to build as many council houses as it can, there will be no national fund to build the houses so desperately needed for our current and future young families.
The Chancellor has done nothing to end the scourge of late payment, which so often brings otherwise perfectly sound businesses to, or over, the brink of bankruptcy. And there are fewer and fewer police to protect local businesses from criminal damage or theft.
Ipswich stands on the brink of a renaissance. We are poised to embrace the IT and creative future that has helped transform towns like Reading. But that renaissance is at risk while capital investment in Britain continues to fall. And our future is at risk while young people are put off from accessing the education and training they need by the fear of swingeing debt from tuition fees.
I believe in Ipswich, I believe we will thrive in the end, but we would thrive a whole lot sooner if we had a government that believed in our country enough to invest in it.