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Budget 2012: Better or worse for Black Britain?

WITH A Voice online poll suggesting that 82 percent of black people believe that the coalition government’s Spring budget will leave black communities worse off, Zita Holbourne, co chair of pressure group Black Activists Rising Against Cuts (BARAC), tells us five things we should be concerned about.

"HAVING LOOKED at what the budget means for black workers, communities and families we need to be as much aware of the things the budget is silent on as what it says. Many of the cuts announced in the last budget have yet to fully hit black families. The coalition programme of cuts to jobs and services, attacks on pensions and frozen public sector pay is already impacting us but there’s further detrimental disproportionate impact to come.

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INCOME TAX

Black families should not be fooled by the announcements that the personal tax allowance will be raised by just over £1000 from next year because at the same time from April 2012 Working Tax Credits will be cut for many.

Of the 2 million people on low to middle incomes, which includes the majority of black families, all will be impacted. Individual losses could run into several thousand pounds with a disproportionate impact on households with children.

It is estimated that the average family will be around £550 worse off per year but when you take into account the fact that black families are concentrated in the lowest income brackets due to the discrimination they face in the labour market with a high proportion working in the public sector this figure is likely to be considerably higher for the average black household and those with children will be hardest hit. The amount that will be gained through the personal tax allowance being raised next year will be far lower than the amount lost and any bridge in the gap won’t be felt this year.

There will be a requirement for many to increase the number of hours they work in order to be eligible which at a time of economic downturn will be impossible for most black workers to negotiate an increase in hours. In any case there are a higher proportion of black workers in part time work again because of the discrimination in the labour market forcing black workers to take on part time and temporary work. The cut to the top rate of tax to 45p will do nothing to help the vast majority of black people in the UK as we are hugely under represented at that higher rate and do nothing to reduce the burden on us.

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CHILD BENEFIT

Four million children are living in child poverty in the UK. Poverty rates for black ethnic groups are between 35 to 70 percent compared to 10 percent for white children. At least two fifths of black and minority ethnic families live in poverty – twice the rate for white families. The government now plans to cut child benefit for households earning over £60,000 per year and reduce it for those earning £50,000. For a family where one parent earns over £60,000 with four children they will receive no child benefit at all and lose £3146 per annum, yet still be faced with rising childcare costs, no Education Maintenance Allowance (EMA) and in the case of older children tripled tuition fees for university of £9000 per annum from September 2012. The change will be detrimental to single parent households in particular. The changes could see more families sinking below the poverty line but there was nothing in the budget to address child poverty.

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REGIONAL OR LOCAL PUBLIC SECTOR PAY

The announcement that the government will now look at introducing regional or local public sector pay to match rates of pay in the private sector will not only impact negatively and disproportionately on black public sector workers but will harm economic recovery.

The public sector is the largest employment sector of black and minority ethnic workers (BME). BME workers are already facing job cuts, frozen pay, having to pay more into their pensions amongst other attacks on public sector workers and as they are concentrated in the lowest grades on the lowest pay rates because of discrimination in appraisal, promotion, progression and recruitment are already struggling to make ends meet and keep their heads above water. Whilst there is no real detail yet of what is planned in terms of regional / local pay, we do know black workers have gravitated towards the public sector because discrimination in the private sector often means they can’t even get a foot in the door. Lowering wages will drive black workers into more dire poverty and further hurt economic recovery.

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IMPACT ON THE YOUNG

The budget has offered no positive developments or changes for young people. There are over 1 million and rising young people unemployed but the situation for young black people is that one in two 16 to 24 year olds are unemployed. Further education is not an option for many young black people because the attacks on their families mean they have no spare money to put towards funding their children’s educations. The budget offers no solution to youth unemployment and access to education and the disproportionate unemployment rates for young black people.

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PENSIONERS

The government is raising the state pension age to 67 in 2026, with some other reforms coming in as soon as April. For example, in April public sector workers will have to pay more into their pensions each month. This means a huge reduction in wages – over £100 per month for many whilst receiving less when they do retire after being forced to work for more years. By 2015 my pay as a public sector worker will be worth 13% less, I will have to pay £147.50 more per month towards my pension. I will lose £24038 of my pension through the change from RPI to CPI rating and a further £41845 from my pension, working to over 65.

Research about life expectancy and poverty has shown for those at the bottom of the economic ladder compared to the top of it die 17 years earlier and are more likely to end up with disabilities. This means that black workers who are being driven into deeper poverty every day under the coalition are likely to die before they even get to see their pension and for those who survive retire with a very low quality of life and into even more poverty.

The new flat rate pension will penalise those pensioners who have worked hard all their lives with those pensioners with an income of between £10000 and £24000 having to pay an extra £3billion in tax. Many black pensioners in the UK will have worked hard all their working lives and paid in so that they could build up more for when they retire only to be penalised by this. Estimates are that people retiring next year could be £279 worse of per year and more than 4.4 million existing pensioners will be affected by a freeze on the personal allowance in 2013, losing £84 per year.

To conclude, this is a budget by the rich for the rich and disgraceful.

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Zita Holbourne, co chair of pressure group Black Activists Rising Against Cuts (BARAC)

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