Thursday, 9 July 2015

The Tory Moratorium.

I was very interested to see the shift leftwards in the first Conservative (8.7.15) budget  in 20 years. It seems that The Conservatives, mindful they have the tiniest of majorities + perhaps the Greek referendum result, have capitulated to the tremendous pressures from people everywhere to adopt a more centre ground approach. Pressures like an unprecedented estimated quarter million people protesting in London this June. Pressures like University Professors writing on their blogs in strong protest about Tory policy since 2010. And pressures like large sections of the populace + press furious about policies that have only been working for the very rich.

This budget is actually a small victory for political activists and democracy, if people hadn't taken the time and trouble to campaign and protest - work that carries no monetary reward but  done simply because they care - The Conservatives could have done anything they pleased and we certainly need to continue to monitor their moves.

New Tory policy like rent controls on social housing, fixing the labour price, abolition of non-dom status are all Labour policies they have borrowed. I'm not saying the budget is brilliant, hard working people will lose tax credits and child tax credits,  and  when you take into account inflation + the tax credits cuts - the new Tory living wage  won't compensate for these losses. The real living wage as campaigned for is more than this Conservative living wage, but it's still a step in the right direction.

So George Osborne is softening the blow of his welfare cuts with a living wage - ok - but as argued before, if he increases the supply of housing to meet demand, rents and purchase prices will dramatically lower. Following this economic reasoning, a weeks rent ideally will lower from £120 to £60 - this being in real terms the same rent deal previous generations enjoyed - think how much further the £9 an hour living wage would stretch then. Tax Credits might not be needed at all in this configuration. With housing supply matching demand, citizens would have much increased disposable income which can be spent in the economy, increasing aggregate demand and therefore productivity and in turn Gross Domestic Product.

I think the Chancellor may now be thinking that a largely unregulated free market - won't magically set up an economic miracle for all. There is still much work to do, young people need more support, not more cuts as has been done in this budget. Also, the Tories are trying to strip unions of much power, creating an unhealthy, destructive weighting in the relationship between workers and employers. There is still a painful housing crisis, we need to relentlessly keep up the campaign for housing supply to match demand, the Chancellor himself knows the benefits of doing this. Other problems persist like the benefit cap, an arbitrary figure which has little care if it provides for basic necessities. We need to unceasingly continue to make the case for any government in power to be fair to all groups. This step toward the centre ground will help the Conservatives make the country a success and stay in power - they should be encouraged to continue towards a more moderate, less extreme road.

James Bickle.