Anneliese Dodds with
Anneliese Dodds with 'Austerity has failed: only Labour will rebuild Britain' sign
Anneliese Dodds, Tuesday 30 October 2018

This week we had the announcement of the annual budget, setting out the government’s tax and spending plans. In the limited space available to me here, I’ll try and provide a snapshot of how the budget might affect us here in Oxford.

First, there is the elephant in the room- Brexit. Usually, the budget would set the scene for spending for the next year. The Chancellor initially acknowledged that his plans might have to change in the event of a ‘no deal’ Brexit. However, he was slapped down very quickly by the Prime Minister who insisted that no change would be needed. I have consistently been calling on government to rule out a ‘no deal’, cliff-edge Brexit, but senior Ministers including the Brexit Secretary have talked up its prospects. In those circumstances, government could be forced to expend significant resources on, for example, underwriting the costs of stockpiling medicines and other supplies- including for Oxford businesses. It is irresponsible to suggest that a ‘no deal’ would not require these kinds of additional resources.

Secondly, we did not see in this budget the ‘end to austerity’ that had been promised. There will be some additional NHS funding- which we can only welcome here in Oxford given current cost pressures. But it is less than expert organisations like the Kings Fund have called for. Worryingly, there will be no change in funding either for regular policing, nor for schools’ running costs. Indeed, the Chancellor appears to have enraged many local teachers when he said that the small amount of additional capital spending provided for schools in the budget will help them fund the ‘little extras’. Many schools in the city have been asking parents for help to pay for the basics of education through a direct debit contribution. We don’t just need ‘little extras’ for Oxford’s schools, but adequate core funding.

The budget proposes an increase in funding for Universal Credit, going into the ‘work allowance’ element- but this only amounts to half of what was taken out in 2015. That is simply not enough for those low-paid people struggling to live in our city with its exceptionally high housing costs.

While it was positive to see continued support from the Chancellor for the Oxford-Cambridge arc, it was disappointing that this was not tied to the need for more affordable housing. In addition, we did not see any indication of a rethink on the previous decision not to electrify the Oxford-Cambridge rail link; nor was there a commitment to fund the Cowley Branch line.

Perhaps most importantly in the long run, where the Chancellor is spending more, this is based on the temporary space created by government receiving more in tax receipts than expected, and spending less than forecast. There is no guarantee that this will persist- quite the opposite. The Chancellor could, instead, have taken the responsible decision to reverse income tax cuts for the very best-off people, and cuts in corporation tax for profitable businesses.  Now that would be a balanced, long-term budget- rather than this panicked, short-term response.

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