Osborne’s promises woefully short of minimum to live
TORY Budget triumphalism was cut short yesterday as George Osborne’s living wage promise was exposed as a cruel “con trick.”
Blue backbenchers celebrated wildly in the Commons as the Chancellor claimed he was creating a compulsory “national living wage.”
In the final announcement of his one-hour six-minute speech, Mr Osborne said all workers over 25 would be paid at least £7.20 from next April. He said it proved the Tories were “the party of the working people of Britain.” But his claims unravelled within an hour when the Living Wage Foundation stated his announcement was “not a living wage.”
The rate is significantly less than the £7.85-an hour national living wage set by the foundation, which calculates the “minimum acceptable standard of living.”
And even the £9 an hour promised by Mr Osborne by 2020 is less than the current London living wage of £9.15. Responding to the Budget, Living Wage director Rhys Moore queried: “Is this really a living wage?”
“This is effectively a higher national minimum wage and not a living wage.”
On London, he said: “These changes will not help the 586,000 people for whom even the 2020 rate announced today would not be enough to live on now.”
And he suggested that a real living wage would now need to be raised further because of cuts to child and working tax credit announced by Mr Osborne yesterday. The income threshold in tax credits was slashed from £6,420 to £3,850, while families will no longer receive support for any more than two children.
A two-tier benefits cap was also introduced, with families in London limited to £23,000 and those outside just £20,000 — down from £26,000. The public-sector pay squeeze was also extended for a further four years.
Labour said the Chancellor had tried to “pull the wool over people’s eyes” by rebranding the national minimum wage a living wage.
And the party calculated that almost half the income gained by the poorest workers from the new national minimum wage would be taken away due to benefit cuts. Acting leader Harriet Harman accused Mr Osborne of “playing politics” in her response to the Budget. “Normally it’s government that governs while the opposition plays politics, but this government is playing politics with this Budget,” she told the Commons. “This Budget is less about economic strategy, more about political tactics designed by the Chancellor to help him move next door.”
The Chancellor had used the TUC’s campaign slogan in his speech, saying: “Britain deserves a pay rise and Britain is getting a pay rise.”
TUC general secretary Frances O’Grady welcomed the fact that he had “finally woken up to the fact that Britain needs a pay rise.”
But she added: “The Chancellor is giving with one hand and taking away with the other. Massive cuts in support for working people will hit families with children hardest.”
Unions were also quick to brand the Budget a “beautifully crafted con trick.”
As Mr Osborne slashed benefits, he compensated big business with another corporation tax cut. Despite Britain already having the lowest rate of corporation tax in the G20 group of economically advanced nations, the Tories will cut it to 18 per cent by 2020.