George Osborne's budget is far from his first as Chancellor, but it is his first as a really Conservative Chancellor, freed from the dead hand/restraining influence of the Liberal Democrats (delete according to political preference).
These are exciting times, politically. There are clear economic, social and geopolitical challenges to face, and Osborne's budget has some big ideas about how to tackle them. Whether they are the right ones, time will tell.
However, the statement is very typical of Osborne and the prevailing Conservative mindset, containing as it does a mixture of pragmatism and ideology. During his five years as Chancellor, Osborne has been willing to trim his sails according to the prevailing wind – unapologetically adjusting his deficit reduction targets, for instance – while being prepared to contemplate a level of austerity which his opponents argued was unnecessarily harsh.
In this budget it is probably fair to say that, as in the past, the decisions driven by pragmatism deserve applause and those driven by ideology, not so much.
What follows is, of course, an entirely personal view.
There'll be a new "living wage" for all workers aged over 25, starting at £7.20 next April and rising to £9 by 2020.
The Chancellor has faced pressure from heavyweight Tories like Boris Johnson to introduce this. But though £7.20 is good – a 50p increase on the current minimum wage – it's still short of the Living Wage Foundation's target of £7.85, and a long way short of the London Living Wage, which is £9.15. Also, the Living Wage is calculated on the basis that someone claims all the benefits they're entitled to. If these go down (see below) the Living Wage goes up.
The deficit will be cut at the same rate as in the last Parliament, putting the country in surplus by 2019-20, a year later than planned.
Osborne's pragmatism again. But make no mistake, a surplus is a good thing: at the moment the country pays around £50 billion to service the national debt. As Jubilee Centre economist Paul Mills says, this has to come down.
The government is to spend two per cent of GDP on defence every year, meeting the Nato target, and spending on defence will rise in real terms every year during this parliament.
Defence is always a controversial issue for Christians, with most mainline denominations functionally pacifist, at least in their public pronouncements. There are certainly questions about the strategic value of particular expensive bits of kit – Trident and those aircraft carriers without any aircraft, for instance – but the first duty of government is the defence of its citizens. Most people will be glad of a real commitment to security in a world more dangerous than it's been for decades. Whether our armed forces will be used wisely is a different question.
A consultation will take place on changing Sunday trading laws.
Announced before the budget. Further liberalisation of Sunday trading is a really bad idea, representing the capitulation of social values under the assault of the profit motive.
The inheritance tax threshold will be increased to £1m from 2017.
It is easy to portray inheritance tax concessions as benefiting the rich and middle classes, which of course they do. However, it is a very odd tax, and of questionable morality in the first place. Money used to buy assets has already been taxed, and it's hard to see why the state should have a claim on assets inherited from previous generations.
There will be no rise in alcohol, tobacco or fuel duties.
Alcohol and tobacco are society's deadliest drugs, in terms of the number of casualties they cause every year. Raising prices reduces consumption and cuts deaths. However, price rises are a blunt instrument: they penalise the poorest who can least afford them. Discuss.
The NHS will receive another £8 billion by 2020.
Good, but it won't be enough. One estimate is that the NHS faces a £30 billion funding gap by 2020, with the remaining £22 billion coming from 'efficiency savings'. Former NHS chief executive Sir David Nicholson told Radio 4's Today programme that this was was not achievable. Again, discuss.
Student maintenance grants will be replaced with loans from 2016-17, to be paid back once people earn more than £21,000 a year. The student maintenance loan will increase to £8,200.
At the moment, grants cost £1.57 billion a year, a figure set to rise to £3 billion as the cap on student numbers is lifted. Osborne sees this as unaffordable. However, increasing student debt – a fundamentally questionable principle – is likely to mean fewer students from disadvantaged backgrounds and a rise in social inequality.
Previously £26,000, the annual household benefit cap will be reduced to £23,000 in London and £20,000 a year outside it.
It is hard to find anyone outside the goverment who believes that this is a good thing. In a Guardian article, Patrick Butler cities numerous sources predicting that it will cast more than 40,000 chidren into poverty, with widespread evictions, debt and hardship. Ironically, evicted families will require temporary council accommodation at a typical cost of £245 a week – more than it would cost to keep them in their homes.
Welfare and pensions will take a huge hit, and anti-poverty campaigners have been quick to say so.
Working-age benefits will be frozen for four years, included the local housing allowance, leaving claimants very vulnerable if rents rise. Tax credits and Universal Credit will be restricted to two children for those born after April 2017, unless subsequent children are the result of multiple births. Tax credits will be withdrawn when earnings reach £3,850, rather than the current £6,420. And 18-21-year-olds will not be entitled to claim housing benefit automatically.
Against this, the threshold at which people start paying tax will rise from £10,600 to £11,000.
Employment and Support Allowance payments for claimants deemed able to work (ie in the ESA 'Work Related Activity Group') will be "aligned" with Jobseeker's Allowance for new claimants. This is really serious, as they will be subject to the draconian sanctions regime which has been so thoroughly discredited. This group of people comprises those who can't work because they have serious illnesses – 60 per cent of them mental illnesses – but might one day be able to do so. The difference in financial terms is £30 a week.
Church Action on Poverty said: "Further cuts to tax credits and other benefits will cause real hardship for thousands of people. These are the very people who have already shouldered the burden of austerity over the last five years, in the form of insecure work, stagnant pay, slashed benefits, and huge rises in the cost of everyday essentials – they can ill afford to see their incomes cut still further."
CARE CEO Nola Leach said that the Chancellor had missed an opportunity to increase the married couples tax allowance, a long-standing concern: ""Expanding the marriage tax allowance from the paltry 10 per cent it currently is to 100 per cent will save one-earner couples nearly £2,000 a year.
"Marriage should not be fiscally less accessible here in the UK in comparison with the rest of the OECD and a One Nation government should not be ignoring one-earner families."
Paul Morrison, Public Policy Adviser at the Methodist Church, sums it up like this: "For low income families who can work full time today's benefit cuts will be partially offset by the increased minimum wage. If you can't work full time – if you have caring responsibilities, or you're ill – you will be a lot worse off. If you have children and are claiming benefits, this budget presents real problems.
"For the average family things might be OK, but for people at the bottom, their only solution will be to find more work. If they are unable to, it will not be pleasant."
There seems no doubt that many poor families will suffer as a result of this budget. Against that, the Chancellor would argue that it is inevitably a blunt instrument and that more good than harm will be done by it in the long term. He was wise enough not to talk about not making an omelette without breaking eggs, having learned from a previous Chancellor who remarked that unemployment was a price worth paying for growth. The Church, however, has a particular care for nameless broken things. It will want to pick up the pieces, but it will want to argue that with more care, they would not be broken in the first place.
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