Osborne’s axe will hit the young hardest
PUBLISHED: 11:17 24 June 2010 | UPDATED: 18:04 25 August 2010
YOUNG people have a bleak future ahead of them after the budget cuts according to a youth worker in one of the poorest areas of the country.
YOUNG people have a "bleak future" ahead of them after the budget cuts according to a youth worker in one of the poorest areas of the country.
Labour politicians claim that unemployment will rocket after the raft of measures announced in George Osborne's emergency budget on Tuesday which included raising VAT to 20 per cent.
The hike is estimated to raise £13 billion a year, while freezing child benefit and putting caps on housing benefit are estimated to save £1.8 billion, raising fears that the cuts will hit people on lower incomes the hardest.
Project Manager at the Youth Awareness Programme on the Tavy Bridge estate in Thamesmead, Roy Gisby, said the worst is still to come.
Thamesmead, which was built in 1968, now has one of the highest concentrations of NEETS in the country - an acronym for young people not in employment, education or training.
Mr Gisby, a grandfather, said: "The budget is just the start of something bigger. Where is the council going to make cuts?
"The Positive Activities Scheme for Young People was scrapped last week. The Children's Fund has gone this week. These are things that weren't mentioned in the budget.
"Young people are very angry about the banking crisis. It is going to be a very bleak time for young people. People don't realise how severe the cuts that are coming will be. It will affect everyone."
The father-of-six said he fears the drop-in centre where he works will be axed in the current climate of cuts.
He added: "Our project could be going. We don't know what is happening with the Youth Justice Board and that is where we get our money from. The government office for London has been scrapped and they were a great supporter of ours."
Eltham Labour MP Clive Efford said the budget will affect low-income families most, especially those living in social housing.
He said: "This is a budget that will increase unemployment and reduce growth putting us in danger of a double dip recession.
"I was shocked by the changes to the people on lower incomes.
"I just don't think the government cares about people and don't care what they suffer. People living in family homes will be told they have to move.
"Under this budget people are going to be made unemployed and due to the benefit changes, they will have to move out of their homes."
Defending the cuts, Mr Osborne said: "We need to restrain public sector pay in these difficult times. And we need to do something about the spiralling costs of public sector pensions. The public sector was insulated from these pressures but now faces a similar trade off."
Emergency budget key points
* Two-year public sector pay freeze on staff earning more than £21,000
* Those earning less than £21,000 get a £250 pay rise for each of the two years
* Operational allowance for troops in Afghanistan doubled to £4,800
* Child benefit freeze for three years
* Caps on housing benefit
* Sure start maternity grant only for first child
* Child element of the child tax credit to increase by £150 above indexation next year
* Corporation tax down from 28% to 24%
* VAT up to 20% on January 4 next year
* Capital gains tax up to 28% for high earners
* Personal income tax allowance to be raised by £1,000
* Higher rate income tax threshold frozen until 2013
* State pensions re-linked with earnings
* State pension will increase every year by highest of either earnings, inflation or 2.5%
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