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No Budget for Workers

Rishi Sunak's Budget has been hailed as groundbreaking, but for workers it meant tax increases not pay rises – and little if anything to tackle the insecurity which the pandemic threatens to make normal.

This Budget did not just declare war on the low-paid. It laid out an ideological vision for the Tories of a society of deregulation and in-work poverty. At a time of national crisis, and widening inequality, it  has failed all of us: workers, communities, and society.

This was billed as a Budget to help workers, a Budget for recovery, a Budget for jobs, and a Budget that would rebuild our country. It was none of those things.

In declaring eight freeports, in delaying the increase in corporation tax, in placing a freeze on income tax thresholds and in giving such a measly increase to those on minimum wage, the government has made clear that deregulation and low pay are key parts of their plan for the UK.

We have seen nothing for the NHS workers, nothing to end the privatisation of the NHS, no investment in social care, no challenge to the gig economy that has created nothing but debt, and no massive stimulus to create green jobs. In reality, it’s a continuation of the austerity years for public sector workers, and for workers in the UK whose wages have stood still since 2008.

After the year our key workers have had, putting themselves at risk every day, and coping with this government’s many failures on PPE and test and trace, they have now been told all they deserve is a real terms pay cut.

For the millions of people already in poverty in the UK, the Budget actually makes things worse. The £20 uplift is extended only temporarily, and is still not extended to those on legacy benefits – leaving many people with disabilities out. The failure to fund local government leading to a rise in council tax. These will hit the poorest and most vulnerable in society hard.

At the same time as Sunak hits families with a £2 billion council tax hike, he has a nice tax giveaway to those with second homes – yet more redistribution of wealth from the poorest to the richest.

Sunak made very clear that the government would be freezing personal tax thresholds, and once raised next year, that they would not rise again until 2026 – and then shamelessly called it progressive. This is a lie. It is a regressive tax which will potentially leave people on low incomes hundreds of pounds worse off by 2026. The freeze of the income tax threshold, your personal allowance, is a war on the low paid.

As well as being economically illiterate, it is just immoral to reduce the income of workers in the middle of a pandemic. Sunak said this was a budget for jobs, yet where was the focus on green jobs, and support for our industries and sectors? Where was the massive stimulus package we desperately need? Absent.

With the lines blurred between insecure and secure employment, employers using ‘fire and rehire’ to drive down pay and terms and conditions, the number of people on zero hours contracts reaching one million, and unemployment at two million already—with some forecasts saying that could rise as high as four million—their announcements didn’t even amount to the aforementioned sticking plaster.

The job retention scheme extension and the doubling of apprenticeship money to £3,000 to give to firms who take on apprentices is no substitute for a job strategy that invests in our sectors. January saw 4.7 million people on furlough through the job retention scheme – and the extension of this, as well as casting doubt on their roadmap plans, still means millions of workers surviving on 80 percent of their in wages.

For those with a low income, this has driven them into poverty and left them reliant on foodbanks. Bills and rent have not been reduced by 20 percent.

The 5 percent mortgage offer does nothing for those paying 40 percent of their income on rent, the over half a million people in rent arrears as a result of the pandemic, or the three million self-employed that have gone without any support from this government for a year, many now having lost jobs as a result.

We needed a Budget that invested in people – yet what we got was eight new freeports and not a penny for our key workers. Sunak described freeports as an unprecedented economic boost across the UK – but despite reducing tariffs on goods across the UK, these freeports will just help the rich get richer and help bosses escape our already weak labour laws.

Sunak’s Budget also omitted any support for the education sector, which will be vital for rebuilding and reskilling our country. There was no mention of the desperate need for investment in social care, support for childcare, or measures to counteract unemployment levels among young people.

Despite UK billionaires adding £33 billion to their wealth in 2020, there was no attempt at a windfall tax on profits. Disgracefully this wasn’t even a demand made by the Labour front bench.

When it comes to the much discussed corporation tax rise—a tax on profits—the Tories gleefully took the opportunity Labour provided to push the rise back to 2023, despite UK corporation tax rates being the lowest in G7.

Today was a chance for Labour to say that wealth and profit must not just pay for the crisis but be used to create a fairer society. We needed a front bench to demand investment in public services and a wealth tax, and to step up and demand that workers will not pay for this crisis.

They failed. The reality is a lawyer faced off against an economist, and neither spoke for those who have fought to keep our nations going through Covid – the workers. As Bobby Kennedy once said, ‘GDP measures everything except that which is worthwhile.’ Sunak and Starmer made the case for that today.

David Cameron referred to this as a Wartime Budget. The Budget in 1946 laid out a vision for a social state, an NHS, and third-tier education for workers’ children. Nothing like that appeared today.

It now falls to the trade union movement to give confidence to workers to take up the fight. The Labour front bench is not the solution. This will not be an easy task – workers are faced with increasing uncertainty over employment, with rising levels of financial insecurity topping off the emotional stress that this health crisis has already created. They must be given the support needed to fight to defend their pay and conditions, and to demand a better future.

It will be the trade unions that defeat fire and rehire, that protect jobs, that get a 15 percent pay rise for the NHS, that get a minimum wage that reaches £15 an hour. It will be the trade unions to speak up for a wealth tax, to see rights extended to the gig economy, and to speak up for saving the planet, by creating green jobs that build clean engines for cars and planes, manufacture windfarms, and see the investment needed for hydrogen to be the new clean energy.

It falls to the trade unions to give hope to the next generation that a better society is possible.