Spring Statement - a view from the North: Taking the hardest hit and delaying inevitable bad news
The Teesside Lead editor and political journalist Leigh Jones digs into what the Chancellor had to say and what it really means for the northern regions.
It may be the most non-event fiscal event for years. Rachel Reeves’ Spring Statement held few surprises, having been trailed and drip-fed for weeks.
While there were no policy surprises in the statement, the illuminating detail came in how the Government chose to present its decisions.
“[The Government] is making the right choices to bring security to working people and to put more money in their pockets,” it says.
In the order they are listed, Labour say they’re focused on increasing defence spending, reforming welfare, and investing in capital projects.
Given the planned reforms to welfare, described repeatedly as “balancing the books on the backs of disabled people”, it seems quite pointed that the Government chose to highlight the fact its plans bring security only to working people.
For those unable to work, or in need of financial support to make work feasible, the support of the state will no longer be there.
Labour’s own assessment, which should be considered to be on the generous end of negative impacts, suggests 250,000 people could end up in poverty as a result of the proposed cuts. On top of that, 800,000 people will lose money from Personal Independence Payments [PIP] – money that’s supposed to help disabled people into work.
In response to the statement, Save the Children UK said: “If ministers do not take decisive action soon, this will be the first Labour Government ever to preside over a significant rise in child poverty.”
Zoë Billingham, Director of think tank IPPR North highlights the inequality of the proposed cuts. “The North too often takes the hardest hit,” she says. “These are inequalities that have led to poorer health outcomes for people in northern regions.
“It is no accident that the region with the highest percentage of people in need of our social security safety net – whether this is because they are disabled or on low incomes – is the north east of England.”
Middlesbrough & Thornaby East MP, Andy McDonald, made a similar point in the House of Commons in response to the Chancellor’s cuts. “The impact of the cuts to welfare payments will reduce the incomes of some of the poorest constituents in my constituency,” he told her.
The Digital Services Tax – a levy which generates roughly £800m a year for the Treasury – could be axed as the UK attempts to negotiate its way out of tariffs due to be imposed by the US next week. Campaigners say Elon Musk could stand to personally benefit from this exemption.
It highlights the bind Labour find themselves in, and barely nine months into government, polling released this week has indicated people are less likely to believe ongoing financial issues like the cost of living are a result of the previous government.
Henri Murison of the Northern Powerhouse Partnership says increased defence spending “will unlock growth in regions across the North from Barrow to Teesside”. This may be true, although the real meat of the Government’s plans remain to be seen in June’s spending review.
With all signs indicating that summer review will be an exercise in saving money and cutting costs, yesterday’s statement could just be delaying the inevitable bad news to come.
About the author: Leigh Jones is an investigative journalist based in Teesside, he is editor of The Teesside Lead and also reports for the BBC in the Tees Valley. He was previously an investigative reporter at The Yorkshire Post. He has written extensively on Teesworks.
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