PRESS RELEASE Wednesday 8th March 2017 

Philip Hammond’s Tory Budget today brings no joy for working class families and austerity continues, says Sheffield Trade Union Council.

Benefit cuts from April

He could have reversed George Osborne’s planned cuts to welfare benefits for the poorest families due in April – but he hasn’t. Child Benefit will be restricted to two children for all new claimants, and young people (18-21 year olds) will no longer be entitled to housing benefit, putting 9000 young people at risk of homelessness. Many thousands more families will find themselves on Tory “universal credit” which will reduce the total benefit payable. All non-pensioner benefits will be frozen i.e. not uprated by inflation which will mean a cut in real terms. The dreaded Bedroom Tax remains in place as do draconian sanctions for benefit claimants who miss an interview or fail to record their attempts to find work. Ken Loach’s compelling film “I Daniel Blake” tells the awful truth of the mean, uncaring state the Tories have created – and it’s getting worse. Food Banks are one of the few “growth areas.”

Health Services in crisis

Much has been made of Philip Hammond’s pledge to find £2B for social care services. It’s over 3 years and it is not yet clear whether this is really new central Government funding or an extra burden pushed onto cash-strapped local councils. Whichever way, it’s not enough. Our social care services are a national scandal, enforcedly privatised by the Government, doling out huge profits from the public purse to irresponsible private companies who recruit poorly qualified staff on minimum rates of pay. Stories abound of elderly people suffering unacceptable standards of care as under-trained and exploited workers dash from one appointment to another. Travelling time for staff is still often unpaid. This sector has suffered £5B austerity cuts so it needs more than £2B to put this right – and it should be brought back into public ownership and control where it belongs.

But what about cash for our NHS? 250,000 people marched through London on Saturday in protest at the Tories’ irresponsible stewardship of our National Health Service. £22B of “efficiency savings” – austerity cuts by any other name – are taking their toll. Chronic staff shortages plague the NHS as essential health staff walk away from a profession that has cut or frozen their pay every year since 2010 and devastated their pensions. The Tories’ mad obsession with privatising this essential service has made the situation even worse – fragmenting service provision, leaking much needed public funds to private profit and threatening the survival of a free public health service. A massive rationalisation is underway as A&E services are centralised, local hospitals closed and specialist services concentrated in fewer and fewer hospitals requiring many patients to travel huge distances to access the services they need. The answer from Philip Hammond today? Silence.

Education for the privileged

Philip Hammond found £300M for a further wave of “free schools” now apparently the vehicle for academic selection to satisfy Theresa May’s obsession with bringing back grammar schools. This is yet another unwinding of the once universally-acclaimed principle of free, state comprehensive education. Already far too many of our local schools have been taken out of Local Education Authority control via the academy route – privatisation by any other name. Academies are vastly more expensive on the public purse because of the huge incentives to the private providers to run them. Cuts to education budgets amount to 12% since 2010 so classroom sizes are bulging and the fabric of school buildings is crumbling but this Government wants to plough yet more money into out-of-control “free schools”. To add insult to injury, state schools pay full business rates unlike academies and free schools which get relief because of their “charitable status”.

Local Council spending cuts continue unabated

No other area of public spending has been hit as hard by austerity spending cuts as our Local Councils. Many Labour-controlled authorities have seen their funding cut by over 50% since 2010 (whilst certain favoured Tory Councils have seen no cuts or even increases in funding!). Silence from Philip Hammond on this one but he continues with George Osborne’s programmes of further cuts until central government grant is abolished altogether in 2020. Councils will then have to rely on business rates which is fine if you are a rich Tory council in Southern England with a vibrant local economy – but disaster in huge areas of de-industrialised Northern England and Wales. Libraries, arts and culture, parks, street cleaning, road repairs, environmental health, child support services, housing, and all the other essential service our local communities need are dying on their feet.

National Insurance rise for self-employed

The scandal of de-unionised, exploited Britain has begun to unnerve even the Tories. Stories abound of exploitative zero-hours contracts, bogus self-employment, desperately low wages, sharp practices and bullying, from Sports Direct to Deliveroo, from UBER to ASOS. A small rise in National Insurance for self-employed people of course puts the burden on those who are exploited rather than the real culprits – the employers who get off scot free. Where is the incentive to employers to stop their exploitative practices? They will still require their workers to adopt bogus self-employment tax statues, from which the employers will continue to be the major beneficiary.

Is the economy really so healthy as claimed?

The Chancellor announced an increase in the growth forecast this year to 2% and healthier tax returns to reduce the deficit faster than expected. Unemployment has fallen to 4.8% apparently. But the gap between rich and poor is rising inexorably, and UK living standards for working class families are still on the downward turn. Profits are up but consumer spending is fuelled by record levels of debt rather than real earnings growth. Companies are holding back on investment plans because of uncertainty about the Government’s plans for BREXIT. A big hit on inflation is just around the corner due to the fall in the pound as increased imports feed through into shop prices.  There are few significant public sector investment plans under this Government to boost the economy so the future looks bleak for jobs and wages.

A missed opportunity

Whilst the European Union examines new ways to make big employers pay their corporation tax, this Government is doing nothing to combat corporate tax evasion. Even on conservative estimates, the Exchequer is failing to recover over £30B in taxes evaded, avoided or simply uncollected by an under-resourced UK Treasury. Richard Murphy, tax expert researcher for PCS trade union, estimates the true figure at over £100B per year. Instead what is Philip Hammond’s solution? Reduce corporation tax to just 17%! That’s a lower rate than ordinary hardworking citizens’ PAYE on their weekly earnings.  This is a Government of millionaires, for millionaires who want low taxes on their massive wealth and are prepared to squeeze public finances to pay for it!

So what could we do instead?

The UK is creaking under the strain of austerity and declining living standards for the many. Worse still, infrastructure spending on our transport, housing, green energy and digital economy is lamentable. With interests rates so low, many serious economists would recommend a boost to Government borrowing (not the Tories’ obsession with reducing it to zero) to invest in important capital projects that would give us real sustainable growth. We should embark on a massive council house building scheme as the obvious solution to a housing crisis that is pricing a roof over our heads out of the reach of millions of ordinary people. This would be a massive boost to the economy, putting construction workers back to work, stimulating business from building materials to domestic furnishings and dramatically reduce the Housing Benefit bill which has been grossly inflated by the rise in private sector rents. Now is also the opportunity to invest in the new green economy and achieve sustainable growth whilst greening our planet. Investment in public transport, green energy and building insulation for homes and offices will provide good jobs and stimulate healthy tax returns to the Exchequer at the same time. Europe is preparing now for the new digital revolution. Britain needs investment urgently in this area too if we are not to be left behind.

Of course none of this can be expected from an ideologically-driven Tory Government that believes in an ever smaller state and minimum public spending. That is why we need a proper Labour Government under Jeremy Corbyn with a vision for a better, fairer Britain.