The chancellor needs to appeal to the silent majority. He needs to reduce the cost of living, fix Universal Credit, strengthen families, up-skill the non-graduate workforce and keep promises on immigration, says Alex Fiuza.
Philip Hammond finds his career on the line as he unveils his Autumn Budget today. Another fiasco like the attempt to raise National Insurance taxes on the self-employed this Spring would make it almost certain he will go. To avoid this, he should make this Budget a good one – a Budget which solves real problems for real people, and a Budget that speaks to the silent majority whose interests are too often lost behind the racket of loud activist groups. What ought to be included in such a Budget?
Obviously, there should be moves to reduce the burden of the housing crisis, to the immense benefit of young people and renters. Hammond could do this without spending a penny, by rationalising the planning system. The application process should be streamlined and deadlines for acting upon permissions given teeth. Height restrictions should be loosened. The Green Belt should be greened – environmentally and socially low-value land opened to construction and replaced in the Green Belt by more valuable land.
As well as the cost of housing, Hammond should look at bringing down the cost of energy. VAT could be removed from this – saving the average household £64 per year – albeit only after Brexit. Alternatively, the Professor Helm report which the Government commissioned showed around 20% of bills – over £150 per household – is made up of assorted ‘green taxes’ and levies. Helm concludes these are higher than they need to be – they could be brought down.
Next, Hammond can straightforwardly fix Universal Credit, using the lessons of the pilot schemes. The absurd helpline charge has been removed, but this must be complimented by a reduction of the 6 weeks wait time to under a month, and more transparent sanctions system. Given one of the purposes of Universal Credit is to incentivise work, a taper rate – the pennies in benefit lost for each pound earned from work – of 63p is too high. This should be brought down to 60p, with a stepped plan to bring it to 50p.
Another key area for popular and necessary reform is family policy. The tax system currently privileges two-earner households, and the benefits system currently and perversely incentivises family breakdown. Family breakdown, let us not forget, even controlling for demographic factors makes children far more likely to have mental health issues, commit crimes, be drug addicted, and unemployed.
Moreover, it’s been shown that having a partner makes men, especially non-graduate men, more likely to have jobs. Meanwhile the Department of education found in a massive 2014 survey that around 33% of mothers of young children would spend all their time looking after their children if they could afford it, and 57% would work fewer hours to make more time for their kids if they could.
The interests of children, non-graduate men and the majority of women in this sphere are rarely heard because the political class is dominated by stable, wealthy, career-focussed, two-earner, graduate households to whom it is all rather far away. Now is as good a time as ever to correct this – but how to go about doing so?
Start with an upgraded Marriage Allowance, which makes a partner’s Personal Allowance fully transferrable, including unused tax allowances, perhaps expanded to long-term cohabiters with children under 18, would both empower women who want to spend more time with their children and remove the tax system’s pressure against single-earner households. A commitment should be made to ensure the benefits system doesn’t make someone worse off if they are in or get into a permanent, cohabiting relationship. The £7billion free childcare programme, the benefits of which are shown by the IFS to be at best dubious. should be converted into a generalised childcare allowance. This would benefit every household with very young children.
As families are strengthened, Hammond should also look to the interests of non-graduates. Not only do they form the majority of the nation, but the Sutton Trust has shown that many degrees from non-Russell Group Universities now give a lesser lifetime bonus than apprenticeships. Pushing more people into University has passed the point of diminishing returns. Government successes in apprenticeships should be built on – perhaps offering living grants to apprentices – and far more emphasis should be put on further and technical education. This would produce far more people with the specific skills our economy needs, particularly benefitting groups current policies have left behind.
Finally, the Budget should include policies to help fulfil a promise the Conservatives have made three times – a serious reduction of net immigration, to under 100,000. There is a phenomenal 77% behind this cause, and consistent failure to achieve it has shredded Conservative credibility, especially with the lower middle class and working voters they must win over to win the next election.
A good start which falls within the Chancellor’s purview would involve simply doing what David Cameron planned for after his vaunted renegotiation – restricting migrant access to benefits until they have lived here for 4 years. This should also encompass social housing, meaning both more social housing for needy Brits, and less of the resentment that arises from immigrants gazumping poor locals in the social housing queue.
Popular policies to reduce the cost of living, fix Universal Credit, strengthen families, upskill the non-graduate workforce and keep promises on immigration. Hammond has this chance to act in the interests of the silent majority and enact such policies. Will he?