George Osborne today presented the first Conservative Budget since 1996, promising to deliver to this generation of voters “economic security for working people”, and “a more productive, balanced economy”.
The Chancellor of the Exchequer set out a plan to reduce the deficit by approximately 1.1 per cent of GDP a year, through billions of pounds in welfare cuts and addressing tax law breaches.
A compulsory National Living Wage will be introduced for workers aged 25 and over, starting in April at £7.20 an hour and aiming to reach £9 an hour by 2020.
A University of York economist was involved in an influential report for the think-tank Resolution Foundation, which called for a reform of the minimum wage.
Karen Mumford, of York’s Department of Economics, was a member of a panel of academics and policy experts that produced ‘More Than A Minimum: The review of the minimum wage’. The report, mentioned by the Chancellor in his Budget speech today, was chaired by Sir George Bain, founding chair of the Low Pay Commission.
The Budget also declares the party’s intention of clamping down on tax evasion, avoidance and tax planning. This comes shortly after revelations that Osborne’s family business avoided paying £6 million in taxes through a property deal with a developer in the British Virgin Islands, a tax haven.
More significant for students, the government plans on replacing maintenance grants with loans, from the 2016-17 academic year. The maintenance loan itself will increase to £8,200 a year for students at universities outside London.
Although students would leave university with a larger debt, student loans will only be paid back once earnings exceed £21,000 a year, and would leave many students with more financial support whilst at university. Recent reports suggest that many students turn to gambling, borrowing money or work in the sex industry as current maintenance loans may not cover living costs.
The Budget does not mention, however, what percentage of the graduate’s income is to go towards repaying the loan, the interest rate of repayment or whether all loans will continue to be written off after 30 years.
The government also intends to remove the cap on student numbers to encourage higher student participation at university.