You wouldn’t have known it from Theresa May’s laughs and Chancellor Philip Hammond’s boasts, but the Budget this week failed to address the key issues and underlining problems facing the British economy.
This Tory complacency in terms of economic policies and planning, alongside their ideological commitment to austerity makes a toxic mix that will damage the living standards of the majority of British people. The reality of Tory Britain today is that we have a low productivity, low wage economy and even the jobs that are being created are insecure and often poorly paid. 900,000 workers are now on zero hours contracts, 55 percent of whom are women.
Real hourly wages are 10% lower than before the financial crash meaning Britain is the only major developed country in which economic growth has returned yet workers are worse off.
Millions are struggling to pay their rent or mortgage; with private renters on average pay nearly half their income in rent. 86% of tax and benefit savings to the Treasury have come from women and they have also landed most heavily on disabled people and the poor. In this context, millions of people needed a budget this week that would prioritise protecting the living standards of the majority, yet we saw just what this Government’s priorities actually are.
In terms of tax, on the one hand, Hammond and May used their first budget to take an extra £2 billion in tax on those self-employed who are on low and middle incomes. On the other hand, he was still boasting about the £70 billion worth of bumper tax giveaways at the top announced by George Osborne.
Then there are the public services we all rely on. Hammond and May, like Thatcher before them, clearly feel there is no such thing as society, as tax breaks for the few go alongside public service cuts for the many.
So whilst last week the Institute for Government said there were “clear warning signs” of the damaging impact of the Government’s cuts on schools, prisons, health and social care,” the Government did remarkably little in terms of spending on our vital public services.
The NHS is perhaps the clearest example of this. There was again no extra funding for the NHS in the budget.
Indeed, whilst the Tories promised to protect NHS funding in their last manifesto, the reality is that we are witnessing the largest financial squeeze in the NHS’s history, meaning that by 2018 NHS spending per head will be falling.
The government is driving through £22 billion in cuts by 2020 meaning that we should expect further winter crises in the NHS in the years ahead.
And the big long-term issues in terms of the chronic under-investment in Britain’s economy – which is a key underlying reason for all the problems listed above – and the Governments approach to Brexit, there was barely anything.
As Frances O’Grady, general secretary of the TUC, put it “today the Chancellor missed the opportunity to get Britain match-fit for Brexit by investing in jobs and infrastructure. “
In contrast to this, with Jeremy Corbyn as Labour leader and John McDonnell as Shadow Chancellor Labour has articulated a real and coherent economic framework based on investment, representing a credible alternative to austerity. And they are announcing policies that will be popular on the doorstep.
Jeremy Corbyn used his response to the budget to explain how Labour will bring in a £10 per hour real living wage meaning a pay rise for six million people, end the public sector bay cap benefitting five million people, cap energy prices, and bring the railways back into public ownership to keep the cost of living down.
This is all underpinned by both a commitment to opposing the Tories’ “hard Brexit” plan that will jeopardise jobs and growth and a commitment to a massive boost in investment in skills and infrastructure to give the economy the shot in the arm it needs.
The the challenge for us all now is to unite behind this programme and help popularise it, whilst also continuing to expose – and build resistance to – the cuts at both a local and national level through both community campaigns and initiatives such as last week’s NHS demonstration and the People’s Assembly Against Austerity movement.
As John McDonnell put it this week, “A Labour government led by Jeremy Corbyn, which will herald in the greatest transformation our country has seen since the 1945 Labour government, the Tories know this and it fear it deeply.”
The stakes couldn’t be higher – let’s make it happen.
- Matt Willgress is the national organiser of the Labour Assembly Against Austerity. On March 14 at 7pm at the Boothroyd Room at Portcullis House, they will host an event on Labour’s Alternative to the Tory Austerity Budget with John McDonnell MP, Diane Abbott MP, Richard Burgon MP and many others. You can register in advance at https://bit.ly/mcdonnellonthebudget