Jeff Salway: Budget deluded, dangerous and beyond the pale

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When the dust settled on Wednesday’s Budget I was left with two overriding emotions. Anger over the government’s continuing attack on the sick, the disabled and the vulnerable. And frustration, because more shiny new savings initiatives couldn’t hide the failure to do anything that addresses the UK’s long-term savings crisis.

I’ve covered every Budget, pre-Budget speech and Autumn Statement since 2003, yet for all the bluster of the Brown years and the drama of the post-crisis speeches, Osborne’s was the most deluded, dangerous, foolhardy, misguided and wrongheaded yet.

Osborne lives in a world in which a loss of £3,500 a year is neither here nor there. That’s the amount that some 370,000 people will lose out on as a result of changes to personal independence payments (Pip). The changes will mean people who use aids such as specialist toilet seats or grab rails will lose some or all of their entitlement to Pip. Hundreds of thousands of people who need those aids to cook, get dressed or go to the toilet won’t be able to afford them.

Claimants who are disqualified under the new points system will also lose other welfare support to which they are currently entitled.

Osborne certainly wouldn’t notice the loss of £29.05 a week. That’s the amount being cut next April from the support paid to new claimants of employment and support allowance (ESA) who are in the work-related activity group. That was announced in last summer’s Budget and voted through in early March. The result will be hundreds of thousands of people driven into poverty purely because they are too ill or disabled to work.

The cuts to disability support were the biggest single “saving” in the Budget, yet Osborne didn’t think to mention them in his speech. Perhaps even he realised the measures are beyond the pale. Which is why he was more comfortable outlining that even though growth forecasts are down, debt is up, productivity is still flatlining and he continues to miss most of his targets, he can still find new tax breaks for those more fortunate.

Even the savings handouts have flaws, however. While the lifetime Isa may encourage those already saving to set more aside for retirement, the opposite could also be true. That’s because it threatens to undermine automatic enrolment, which so far has been hugely successful in getting young workers into pension schemes.

They’ll now get the option of the new lifetime Isa, which doesn’t benefit from employer contributions but which they could – and probably will – use towards a home deposit. That, in turn, will drive house prices up even further, the last thing first-time buyers need.

The lifetime Isa also targets those who already have the means and inclination to save. It does nothing to tackle the many barriers to saving, such as low incomes, low financial literacy and high debts. That’s why Osborne’s decision to scrap the Money Advice Service, while a popular one in many quarters, is particularly shortsighted.

In trust, all of it was astonishingly shortsighted from a Chancellor who, by relying again on short-term fixes and gimmicks at the expense of the next generation, did the opposite of what he claimed to do.