Emergency Budget draws mixed reaction from Christians

George Osborne’s emergency Budget has been met by a lukewarm response from some Christians who fear its impact will be felt the most by those who can least afford it.

The Chancellor unveiled the toughest Budget in nearly 30 years today, outlining tax hikes and painful cuts to public spending.

VAT is set to rise to 20% from on January 4, 2011, while personal income tax allowance will be increased by £1,000 in April to £7,475, a move the Chancellor believes will take more than 800,000 people out of tax altogether.

Tax credits will be cut for households on a combined income of more than £40,000 and child benefits will be frozen for the next three years.

A new maximum limit of £400 a week in housing benefits will be set on properties with more than three bedrooms, while housing benefits for the unemployed will from April 2013 be cut by 10% for claimants who have spent 12 months on Jobseekers Allowance.

Paul Morrison, a member of the Methodist Church’s Joint Public Issues Team, said the taxation burden should have been put on the people who could afford it, rather than those who could least afford it.

“Sadly VAT hits the bottom 10 per cent of society twice as hard as it hits the top 10 per cent of society, so those people will be hurt and the Church is entirely against the poorest being targeted in that kind of way,” he said.

Mr Morrison said it was too early to tell what impact the spending cuts would have, although it was likely that poorer people on housing benefits would find it harder to pay their rent and be left in “an awful position” if house prices go up or they become unemployed.

He went on to raise concern over the Government’s plans to conduct medical checks on all people currently claiming disability living allowances.

“We have no problem if people who are claiming it don’t deserve it, but we do have a huge problem if the people doing the medical checks are under huge pressure to reduce the numbers on disability living allowance,” he said.

“We want to make sure that these medical checks are done fairly because, certainly, the ones who shouldn’t be paying for the nation’s financial crisis are the disabled. That would be appalling.”

He continued: “The Church has a concern for the poor and a concern for the vulnerable. Governments should change the balance of taxation and spending but they should also protect the poor and protect the vulnerable and we are very concerned that this Budget has not done that.”

Frank Kantor, the United Reformed Church’s Secretary for Church and Society, said he was disappointed that the Government had not sought an alternative to raising funds through an increase in VAT.

The URC is among the Churches and organisations that have been campaigning in recent months for the Government to raise new funds by implementing a financial transaction tax.

He said: “Such a tax could raise billions more in a way that would not impact on the poor or the average person on the street. Even a financial transaction tax of just 0.05% could raise a significant amount of money for the deficit or international development, climate change and poverty, both domestic and international. Instead, the VAT rise is going to have an impact on those who are least able to afford it.”

He said the URC was “very disappointed” that the Chancellor had opted for a “piddly” bank levy of just £2 billion instead of £20 billion, calling it a “missed opportunity”.

Mr Kantor added that there had been a “degree of fairness” in the taxes and cuts, particularly the changes to income tax, but added that cuts to welfare and pensions would be “particularly severe” and “impact negatively on the poor”.

“The poorest members of society will be hit by the cuts,” he maintained.

Chris Sheldon, Deputy Chief Executive of Kingdom Bank, welcomed the Government’s efforts to reduce the nation’s massive deficit.

“I am pleased to see that the government is taking the issue of balancing the country’s income and expenditure so seriously,” he said.

“It is a strong biblical principle that we should not spend more than we can afford and that applies to the country in the same way that applies to individuals.

“It will be a disappointment to all of us that VAT is to rise and that applies to Churches as well as individuals, however the raising of the personal allowance will help to some extent.

"We must all recognise the very poor state of the country’s finances and realise that we cannot go on enjoying the benefits without paying for them.”