So while the chancellor stated the Budget was “asking more of those people and businesses who can afford to contribute and protecting those who cannot”, in practice it delivered the reverse. The measures announced have asked ordinary households to contribute more in the form of tax rises and spending cuts, while not asking the pandemic’s biggest winners for an extra penny. And crucially, they have failed to adequately protect the most economically vulnerable.
Nowhere is this doublespeak more clear than in the Budget’s housing announcements. Throughout the pandemic, private renters have been among the groups most exposed to financial hardship. While homeowners and landlords have been offered mortgage holidays to assist with cash-flow issues, tenants have received precious little support – despite being far more likely to face financial difficulties. One in three private renters has lost income because of the pandemic, and 840,000 renters are now estimated to be behind on their rent payments. Without financial support, many face the impossible prospect of paying accrued arrears on top of what are already some of the highest rents in Europe.
One week before the Budget, a coalition of trade unions, tenant unions and housing organisations wrote to the government asking for financial support to help clear rent debt and protect tenants from eviction. “Without swift action, many renters will be unable to protect themselves and their families from coronavirus, homelessness and the misery of severe and perpetual indebtedness,” they wrote.
In the Budget the chancellor ignored this plea, and instead extended the stamp duty holiday and introduced a new ‘mortgage guarantee scheme’ to subsidise mortgages on home purchases valued up to £600,000. Despite government claims that the measures are intended to help “‘generation rent’ to become ‘generation buy’”, even the government’s own independent forecaster predicts that the main effect will be to push up house prices further – a scenario that will benefit existing owners and kick the ladder further out of reach for everyone else.
It’s not unusual for British chancellors to intentionally drive house prices upwards while paying lip service to tackling housing affordability. But to do so during a pandemic and an acute housing affordability crisis reveals the government’s true priorities .
Overall the Budget seems designed to fuel a two-tier recovery, where the winners from the pandemic prosper at the expense of everyone else. Ultimately, the effect is to shift the cost of the pandemic onto those who can afford it least. Often this is the young, women and ethnic minorities.
“The COVID-19 pandemic has exposed and exacerbated inequalities within our economy and society. Women, particularly the poorest women, Black and minority ethnic women, disabled women, lone parents and young women have been badly hit,” Dr Mary-Ann Stephenson, director of the Women’s Budget Group, explained.
“This Budget was a missed opportunity to address these inequalities.”
This post was originally published on Radio Free.
