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Philip Hammond’s budget ends austerity for wealthier Conservative voters

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philip hammond budget analysis
Philip Hammond set out his budget for the coming year
on Monday

Getty

  • UK Chancellor Philip Hammond has set out his budget for
    the year ahead.
  • Hammond declared that “austerity is coming to an
    end.”
  • However, analysis of the measures contained in the
    budget suggests the new spending is targeted squarely at
    wealthier voters.
  • There are big tax cuts for Conservative-leaning voters
    while most areas of public spending remain unchanged.

 

LONDON — There was widespread scepticism when Theresa May
declared in her Conservative party conference speech earlier this
month that austerity would come to an end.

After eight years of a Conservative-led government which has made
reducing public spending its central mission, few believed that
there would be any significant shift towards a loosening of the
public purse.

Philip Hammond’s
budget speech on Monday
suggests that cynicism wasn’t fully
justified.

As the official spending watchdog, the Office for Budget
Responsibility, confirmed yesterday, this government plans the
biggest budgetary loosening in over a decade.

However, those hoping that this loosening of spending rules would
benefit those most in need of it are set to be disappointed.

Hammond splashes out on wealthier Conservative voters

As this chart from the Resolution Foundation
thinktank illustrates, the beneficiaries of Hammond’s spending
boost are overwhelmingly those least in need of help from the
government.


resolution foundationResolution Foundation

According to the Resolution Foundation’s analysis: “The richest
tenth of households are set to gain 14 times as much in cash
terms next year from the income tax and benefits giveaways in the
Budget as the poorest tenth of households (£410 vs £30).”

Austerity is coming to an end. It’s just that it’s coming to an
end primarily for richer, Conservative-leaning voters.

Expect an early election


theresa may philip hammond
Theresa May and Philip Hammond
Getty

The failure of this group of voters — predominantly made up of
doctors, lawyers and other professionals — to vote Conservative
at the last election was one of the main reasons why May lost her
majority in parliament.

Hammond’s decision to hand a big tax giveaway to this group a
year earlier than originally planned has led some to speculate
that an early election could be on the cards next year. The
other big measure in the budget, to give a big cash boost to the
NHS, also appears targeted at this same group of voters.

While richer voters may not notice the effect of austerity on a
daily basis in the same way that poorer voters do, one of the
main areas where it does touch their lives is the NHS, which has
become incredibly strained under the current government.

Another area is the state of British schools, many of which now
routinely send out begging letters to parents in order to

pay for basic teaching materials such as books and
stationery.

Hammond’s announcement of an extra £400 million for what he
described as “little extras” in schools barely touches the sides
of this problem but it at least shows the government is now aware
of the electoral danger it faces.

However, once you go beyond these areas of public spending, the
claim that “austerity is coming to an end” looks rather hollow.

Indeed, as the Resolution Foundation also points out, once you
strip out spending on health, spending in other departments is
set to remain flat or even decline in real terms.


resolution foundation 2Resolution foundation

After 10 years in which departmental budgets have been cut by
around 20%, the announcements set out on Monday will, therefore,
do little to end austerity for the vast majority of public
services.

For most voters and in most areas of public life, austerity has
not come to an end and is unlikely to for the foreseeable future.

However, politics is often as much about tone and presentation as
it is about objective reality, and the government will hope that
the wealthier voters who turned away from the Conservatives at
the last election will pocket their tax giveaway, read the
announcements about giveaways for hospitals, schools and
potholes, and feel comfortable about voting Conservative again.

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