• Sun. Sep 24th, 2023

Who Stands to Gain From Jeremy Hunt’s New Budget?

ByRuweyda Ahmed

Apr 4, 2023

Jeremy Hunt has released a new budget with a focus on getting the ‘economically inactive’ back to work to help the country’s economy. One of the outcomes of his budget that has made headlines is the scrapping of the £1m cap for tax-free pension savings. Labour’s shadow Chancellor Rachel Reeves criticised the budget, saying it was ‘the wrong priority, at the wrong time’. 

Hunt claimed the UK economy would avoid a recession and inflation is set to at least halve by the end of the year. But he blames a shortage of workers holding back economic growth as he wants more people over-50, people with disabilities and parents of young children to get back to work. Hunt has now offered eligible working parents with children as young as nine months in England 30 hours of free childcare – but this won’t be introduced fully until September 2025 when it is possible that the Conservatives will no longer be in government. 

The flaming criticisms of this budget are that it’s ‘a budget for the rich’ as it allows people who are already well off to save more for their pension. Hunt has also increased the annual tax-free allowance on pensions from £40,000 to £60,000. His budget increases income tax for the average Briton while abolishing a hefty tax for the rich. Hunt says the burden of high tax is because of the pandemic and subsidising energy costs, despite there being no continuation of the energy discount for all households. And it raises the question of who the burden should fall on in a domestic economic recession. 

With the papers focusing on the abolition of tax on pensions, the budget’s lack of a response to students and young people in employment has been ignored. The chancellor’s budget was arguably a missed opportunity, campaigners have said, to support the public sector and students. The NUS’s Vice President for Higher Education, Chloe Field criticised Hunt for ‘ignoring the suffering of students and the choice to do nothing’. The Russell Group’s Students Union published a survey which found one in four students regularly go without food and 54% of students have reported their academic performance has been affected by the cost-of-living crisis. This can have a large implication on university not being a viable option for the socio-economically disadvantaged in the foreseeable future.

Tom Allingham, head of communications at Save the Student, pointed out that Maintenance Loans have not gone up in line with inflation meaning students are £1500 worse off. The budget was the best opportunity to outline targeted support for students and young people in employment. Young people are now sharing their reluctance to go to university with high prices and no employment guarantee. Hunt has overlooked the role young people can play in stimulating economic growth and what he can do to directly help the job market. 

To further emphasise how students have been forgotten in the budget, Hunt’s free £4 billion childcare package doesn’t help student nurses because they don’t get paid enough to be eligible when working mandatory placements. Isabelle Roters, a second-year nursing student at Salford University and mother of three, told Open Democracy that she was on the verge of quitting her degree due to the financial strain of losing her childcare support. The implication of Hunt ignoring students’ will burden parents whose degrees require them to carry out unpaid placements. 

Strikes all over the UK have also been ignored by the Chancellor. 400,000 workers have strikes because of pay disputes, everyone has felt the drawbacks of this, but Hunt has failed to help the public sector. Many teachers are feeling pressure with Hunt wanting people to work for longer, as many can’t see themselves retiring until 69. 

Social Sciences Lecturer at Bournemouth University Patrick Neving told The Guardian that the budget was ‘the usual attempt to give crumbs to the majority to appease them…and further private sector support’. This is a direct contrast to Hunt’s announcing the sale of Silicon Valley Bank to HSBC as a response to the US financial crash and support for the tech sector. This arguably shows that support is there but only for certain sectors that are deemed important to the Chancellor. And sadly, students and the public sector are left behind.  

Jeremy Hunt, W Midlands, 2 July 2010” by Department for Digital, Culture, Media and Sport is licensed under CC BY-NC-ND 2.0.