Budget 2012: The missed opportunities
Now the dust has (almost) settled from the Budget, it’s worth thinking about the missed opportunities. What didn’t we see last week that would have been welcome?
Here are three big things this budget didn’t do:
1. Funding of social care
It would cost the Government £1.3bn to implement the recommendations of the Dilnot review, which isn’t cheap. But the dangers of waiting any longer before organising the funding of social care are huge. It’s not a party-political issue, and the Government will have to do something – before it’s too late.
2. Comprehensive housing tax reform
The raise in Stamp Duty is probably good for generating cash, but it makes much more sense to start with reforming council tax. It’s hugely regressive, hasn’t been rebanded since 1991, and is a much more pressing priority for reform. Even then, if you’re going to change Stamp Duty, better to change its structure from a ‘slab’ (paid on the whole value of a property, above a threshold) to a ‘slice’ (marginal rates) and make sure it’s uprated regularly – not just increase levels on some specific categories.
3. Undo the uprating of benefits by CPI rather than RPI
This is a big cash-saver for the Treasury – a whacking £11bn by 2015. The effect on incomes across that period is huge, though – effectively a massive cut to benefits. Changing the uprating mechanism is a sleight of hand that hits incomes. If only this Budget had undone that damage.
Now, it’s easy to suggest those when money is no object. No-one’s under any illusion totting up a fiscally neutral budget is hugely difficult – and one of the under-reported things about this Budget was its extension of hugely gloomy fiscal prospects, well into the next Parliament. But looking back at the different wish-lists and submissions of different organisations, it’s also hard to avoid the sinking feeling that this Budget was notable for what it didn’t do, as much as what it did.
Julia Unwin is Chief Executive of Joseph Rowntree Foundation and the Joseph Rowntree Housing Trust
This post originally appeared on the JRF blog on 26th March 2012
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