Britain’s first ever female chancellor’s budget is the talk of the moment. Here I will analyse a social take on it giving all a working-class perspective. The budget offers some relief through the National Insurance Contributions (NICs) U-turn and cost-of-living payments. These measures are indeed a lifeline for many households struggling to make ends meet in the current economic climate. However, there is a palpable sense of unease among analysts and those affected that these provisions may only scratch the surface, failing to tackle the deeper, systemic issues that continue to plague the working class.

A Dual-Edged Sword for Working Families

The budget’s commitment to providing immediate financial relief is a commendable step towards alleviating the hardships faced by working-class families. The reversal of the NICs increase saves workers a 1.25% rise in tax, essentially meaning they get to keep more of their hard-earned money. This decision is particularly beneficial for lower-income earners, who often rely on every pound to meet their daily needs.

In addition to this, the announcement of a one-time cost-of-living payment of £900 for low-income households is a strategic move to provide direct assistance to those most impacted by rising prices. With inflation still outpacing wage growth, this financial aid could prevent countless families from slipping into poverty or facing significant financial distress.

Nevertheless, these measures are temporary solutions to what many believe are long-term, deeply rooted problems. The working class has been advocating for permanent changes that address the growing wealth gap and a cost-of-living crisis that shows no signs of abating.

Income Tax and Wage Conundrum

A notable concern among the working class is the government’s decision to maintain the status quo on income tax. Freezing the income tax threshold for a further two years means that while workers will not be taxed more, they will not be paying less either—despite the ever-increasing cost of living. This decision stands in stark contrast to the clamour for a more progressive tax system that eases the burden on the working class.

Coupled with this is the budget’s silence on significant wage increases, particularly concerning the minimum wage. The Living Wage Foundation has advocated for a £11.05 minimum wage rate, exceeding the announced £10.90 National Living Wage. This minor increase may not substantially improve the lives of low-wage earners, making it challenging for them to afford essentials like food, housing, and utilities.

Second-Hand Economy: A Panacea or Placebo?

Chancellor Reeves’s surprising U-turn on taxing profits from selling second-hand items online has sparked both enthusiasm and scepticism. This move aims to boost the circular economy, and it encourages individuals to make extra income from items they no longer need. From an environmental perspective, this decision is a step towards sustainability, minimising waste and promoting the reuse of resources.

However, the question remains whether this initiative will offer substantial benefits to the working class. Critics argue that such measures, while laudable, may not fundamentally change the financial trajectory for those facing unemployment, underemployment, or rising living costs. For this sector of society, the focus needs to be on more immediate and impactful interventions.

The Role of Small Businesses and Housing Support

Budget 2024 heralds a significant push to bolster small businesses, with the government vowing to make the UK the “best place to start and grow a business.” While this could indeed stimulate the economy and potentially create more jobs, the working class might remain sceptical until they see tangible benefits. Ensuring that these jobs are well-paid and secure is pivotal to earning their trust.

Another bright spot in the budget is the £490 million boost for building new council housing. This investment could lead to increased housing affordability, a critical issue affecting the working class. Providing more social housing can help low-income families find stable accommodation, which in turn can free up resources for other essential expenses.

A Work in Progress

In summary, Budget 2024 delivers a mix of short-term relief and long-term question marks. While measures like the NICs reversal and cost-of-living payments offer immediate help, they are temporary and do not address the systemic flaws that perpetuate economic disparities.

The omission of impactful changes to income tax and minimum wage, as well as a clear, comprehensive strategy to tackle the escalating cost of living, may leave the working class feeling overlooked and underserved.

As politicians and analysts continue to dissect the budget’s implications, the working class persists in their struggle, hopeful for a future where budgets truly reflect and address their pressing needs. The government should continue engaging with these issues to ensure that future budgets deliver more than just temporary relief for the hardworking citizens of the United Kingdom.