A Pessimist's Guide to George Osborne's 'Emergency Budget'

It's just 112 days since the last budget but George Osborne decided to have another one yesterday. I guess he loves doling out punishment. The phrase "Emergency Budget" is apt to describe the impact cuts that will have a devastating impact on the disabled, the unemployed and the working poor. Osborne said this budget puts "economic security" first, secured by pushing some more people onto the breadline. Welfare payments are being cut by £12 billion over three years, grants for the poorest students are getting swapped into loans that have to be paid back, and housing benefits are dismantled as rents rise.

Here's how it went down…

Yesterday's budget includes plans to scrap housing benefit for under 21s. There was no mention of how to fund badly needed house building. Joined up thinking: there's no point having housing benefit if there are no houses to live in anyway.

Buy-to-let landlords will get hit with a crack down on mortgage tax relief, but they'll probably raise your rent to make up for this. The idea is to "level the playing field for homebuyers and investors".

Osborne boasted of Britain's 3 percent GDP growth, but there was no mention of how reliant that recovery is on the housing bubble. Meanwhile, the right-to-buy extension for housing associations was included in a budget that will inflate housing costs even more for those renting from private landlords. Social housing tenants get a 1 percent rent cut every year, which is better than nothing – but as Osborne himself mentioned in his speech, those in council homes currently pay a fifth more in rent than they did in 2010.

Osborne introduced a "living wage" plan of £7.20 an hour to come in next April. It's not actually a living wage, of course – it's less than what the Living Wage Foundation calculates you actually need to live on, which is £7.85 per hour.

It will only apply to those aged 25 and over – I guess the idea is that for the first few years of your working life, poverty wages are character building and make you more aspirational.

Anyway why work at that age when you can be a student and invest in your future? With that in mind Osborne raised the maintenance loan to from £8,000, up from £5,500 outside London, which is great for easy cash and you can think about the whole "repaying my mounting student debt" thing later.

Osborne called the university system a "jewel in the crown" of the British economy.

He then took away grants to the poorest students, arguing that it was a "basic unfairness" to ask "taxpayers to fund the grants of people who are likely to earn a lot more than them".

The same argument applied to health would say it is unfair for people with cancer to have their treatment paid for by healthier citizens. Quite right too, imho.

If you're the kind of person to pretend to live in Bermuda for tax purposes, start panicking. Osborne's hoping to boost government coffers by £5 billion a year by hammering tax dodging by corporations and rich people. But Osborne struck a cautious note when it came to non-doms, saying "many make a considerable contribution to our public life". I guess funding the Conservative Party – as many of these people do – counts as "public life". Celebrity tax avoiders, meanwhile, are going to be named and shamed, so we can all look forward to some awkward moments on TV panel shows.

Meanwhile the NHS has done alright on the spending front, with the Tories fulfilling manifesto pledge to increase health spending by £8 billion.

However, this is somewhat undermined by the huge numbers of furious doctors, nurses and health staff who are going to be hugely pissed off with the Chancellor's pledge to keep public sector pay frozen at 1 percent rise per year, while demanding £22 billion of cuts.

So 22 billion — 8 billion = £14 billion cuts, which is not really the same as increasing spending.

Labour have a delicate task when it comes to opposing Tory spending plans. In a clever outmanoeuvring of the opposition, Osborne has brought in a "fiscal charter" that commits Britain to keep debt falling. This is total bollocks, economically speaking, but Labour is now split. Blairites like Liz Kendall and Chuka Umunna argue Labour should back the plan to get Britain in the black, so that they won't face any jibes about "same old Labour, wasting everyone's money". Meanwhile Jeremy Corbyn and his left-wing chums want to Britain to take advantage of low borrowing rates to invest in public services and quash austerity.

Backing up Corbyn and Co in saying Osborn is a dolt are 77 of the world's leading economists. Famous economic philosopher Thomas Piketty and his colleagues at places like Oxford, Cambridge and LSE say running the largest surplus in at least 40 years will mean: "Households, consumers and businesses may have to borrow more overall, and the risk of a personal debt crisis to rival 2008 could be very real indeed". For Osborne, the deficit is an article of faith. His genius has been to make public debt something to fear, while private debt, such as the mortgage lending that caused the financial crisis – which is actually much more scary – becomes a normal thing.

"We should always fix the roof while the sun is shining" – the Cameron cliché was again rattled out by the chancellor yesterday. But really, the roof was leaking because of the financial crisis in the banks, not because of government overspend. Today it is tax credit recipients, disabled people who have lost the Independent Living Fund, and the under 25s that are paying the price.

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