I recall that, once upon a time, the Budget was something that happened in the spring and a battered red box was involved. Now we have budgets almost monthly for varying reasons – yet another Chancellor, another emergency, a budget to fix the last one etc. I’m writing this several days after the most recent iteration but there could be another soon if the banks continue to topple.
Interest rates, inflation, commodity prices, wage rates and fuel costs are part of our everyday conversation now in a way they haven’t been since the 1970s. We even all became experts on bond yields for a week last autumn, and tracking the exchange rate against the dollar was briefly a national pastime.
But I’m afraid that this elevated interest in the economy means that people are worried. They are worried about paying the bills, about the cost and availability of food in the shops, and about the value of their income against the rising cost of living.
And how could they not be worried? In the last 12 months, inflation has reached levels not seen for decades, interest rates have gone up to 4%, having been below 1% for nearly 15 years, and, even with the Energy Price Guarantee, energy bills have doubled. Wages have been stagnant for many, year after year after year, and are likely to remain so. Living standards are squeezed.
The Office for Budget Responsibility – the government’s independent economic forecaster – says real household disposable income per person will fall more between last year and next year than at any time since records began in 1956. And while the Chancellor didn’t announce any headline changes to income tax rates, for millions of people income tax will go up because the thresholds at which people start paying tax, or start paying higher rates, have been frozen.
For most Dorset residents, the Budget hasn’t delivered anything unless you are so well off you can pile extra funds into your pension fund and bypass inheritance tax. Some consultant doctors may be persuaded not to retire early but it does nothing to address the haemorrhage of junior doctors from the NHS. No extra money for social care, nothing to address the drag on the economy that is workforce and skill shortages, nothing for bus services. And Dorset was bypassed in allocating the Levelling Up Partnerships while Devon was given two!
We need to address inequality in health and wealth, invest in jobs and provide properly paid apprenticeships. The private sector stands ready with the capital, skills and innovative capacity to decarbonise transport, energy and industry, but is lacking leadership and strategy from the government.
We urgently need a bold plan for green investment in new technologies, like tidal power, hydrogen and battery technology, and in green skills for the future.
The Conservatives have become a high tax party, because they’ve become a party of low growth.
In Dorset, there’s so much potential and yet the Government and Dorset Council are not seizing it.
NICK IRELAND
On behalf of South Dorset Lib Dems