Underwhelming and uninspiring
The Chancellor of the Exchequer will be thoroughly disappointed that headlines in the days following the political theatre of last week's budget were dominated by 'Granny tax' rather than the major cuts in Corporation tax and the lifting of the untaxed personal allowance for the lowest paid workers. As Kevin Maguire put it, that's what you get for leaking so much ahead of budget day that Osborne's speech was more like a review of the papers.
Without any evidence for so-doing, I awaited the budget with some hope and even optimism that the Chancellor would take this opportunity to put some energy behind the Coalition Government's attempts to 'rebalance' the economy in the north east - to help give the private sector a much needed boost, especially in key potential growth sectors and to introduce measures that would encourage and enable employers to develop and offer new jobs, especially for those hardest hit by the ongoing economic downturn. I should have known better.
While the Corporation tax cut will mean more on the bottom line of businesses, it is unlikely that this alone will lead to any increase in private sector investment or stimulate employment growth. The increase in personal allowances is welcome; bringing marginal benefit to thousands of workers in the north east. However, as a gesture it is undermined by the reduction in the 50p rate of taxation which will see the wealthiest receive a phenomenally larger tax rebate while those in the 40 per cent tax bracket have actually seen their personal allowance decrease, the 'squeezed middle' will continue to feel the pinch.
Extending the pay freeze to significant numbers of public sector workers was probably the most negative inclusion in the budget (Granny tax aside). This will directly affect thousands of workers in the north east, who are already relatively low paid, with the net consequence being millions of pounds of spending power taken out of the regional economy, directly harming retail, hospitality and tourism, all sectors of importance in the north east, all currently suffering much more than the government (or the OBR) had predicted.
It is unlikely that this squeeze on public sector workers will end there given the predictions of ongoing austerity beyond 2015 and a loaded remark in the Chancellor's speech to further changes in employment law.
Perhaps what was not in the budget is most disappointing. There was a total lack of any kind of incentive to support the development of key sectors in the regional economy. Offshore wind manufacturing could offer thousands of jobs, the region has the location, skills and expertise to capitalise, but suffers from more attractive offers in neighbouring areas. A public sector pay freeze does not make it easier for the private sector to recruit new workers, a growing economy does, but there was nothing in the budget that showed a vision for growth.
Yet another missed opportunity for this government to back the north east.
Kevin Rowan
Regional Secretary
Northern TUC
Stay Updated
Want to hear about our latest news and blogs?
Sign up now to get it straight to your inbox