The budget that was announced as a “new age of optimism” on 27 October saw the Tory government steal the clothes of the Labour Party by partially increasing public spending. The Office for Budget Responsibility said the economy is rebounding and expected to grow 6.5% in 2021. Taxes are lifted to the highest level since the early 1950s, and the budget deficit may halve in 2021-22.i
By Peter Windeler – ISL/Britain
In March, Rishi Sunak, Chancellor, announced an increase in corporation tax from 19 per cent to 25 per cent plus freezing of allowances and thresholds in the personal tax system.
The chancellors budget pumped £150bn into the economy in the run-up to the next election. He pretends cuts are being reversed to public services with a mixture of tax increases and funding from revenue due to increased growth rate forecasts.
It was also announced that millions of public sector workers are to see their wages rise next year as the pay freeze is being lifted.
So everything is rosy in the UK?
As inflation picks up and the tax rises take effect, workers will have to pay £3,000 in extra tax per family, and by the mid-2020s, the average paid worker will be £13,000 worse off than if their wages grew at the pre-2008 financial crisis rates.
The wage freeze may be lifted but between 2010 and 2021 pay freezes have been imposed for five years on all public sector workers and for many of those workers for eight years.
There was nothing in the budget for local authorities. Austerity never went away, some councils will be hit with the most significant single cut they had since 2010.
Since the days of Thatcher in the 1970s and 1980s, the working class has been under the cosh. At the same time, capitalism has thrived. Private schools and private health have flourished, while council housing has been destroyed and the health service dismembered. No wonder the UK has the second-largest number of beneficiaries of off-shore tax havens of any country, just below Russia and ahead of Argentina.
If you look more closely at the budget figures, you see that inflation could be 5% by next year. Banks have started putting up mortgage rates to protect their profits from inflation, meaning that mortgage payments will likely be 13% higher by 2023. Although the government says it will be spending £150bn over the next three years on the welfare state, this will only take spending to the levels of 2008, just before the financial crash.
In September, National Insurance rates were increased (a tax) by 10%. At the same time, unemployment is forecast to rise to 5¼ per cent this winter.
Gas, as in Europe as a whole, has increased in price dramatically (4 times higher within four months), and just with the inability to produce PPE and all the equipment necessary to safeguard the population against Covid, the storage of gas was a crisis waiting to happen as the government sold off gas storage facilities.
Destroying the health of a nation
This is a government that boasts it is or wants to be a world leader in the economy, and yet it was paralysed in facing the problems of Covid due to the cuts in public health and Johnson’s policies of using private business rather than public health services. He had to use advice from time to time because the Covid death rate became the highest in Europe.
But the NHS remains starved of medical staff, and those who work for the NHS had a 3% pay increase imposed on them by the government, which means a pay cut because of inflation. And that is better than others! Teachers in England have a pay freeze, and teachers in Wales got a 1.75% pay increase
Because of the lack of staff, beds and wards, there are around 5.3 million people waiting for treatment, the most since records began, and the number could be seven million by the end of the year.
NHS staff suffer mental health challenges and burnout at previously unheard-of levels: a survey in April found a 300% increase in the highest levels of stress, anxiety and depression. Staff who were female, on the frontline, young or managers were especially likely to report “severe psychiatric symptoms” (three-quarters of NHS employees, and 90% of nurses, are women); healthcare workers from minority ethnic backgrounds were 50% more likely to be suffering from post-traumatic stress disorder. A House of Commons report found workforce pressures had increased exponentially, with huge amounts of additional, unpaid work being undertaken.
Tory Brexit has not solved any of the NHS problems because the plan was not to solve these problems for the benefit of NHS workers and patients but to use these problems to accelerate the use of private business to run NHS services using the NHS logo.
Johnson promised to allocate an extra £5.4 billion for the NHS over the next six months, Prime Minister Boris Johnson boasted, “We will continue to make sure our NHS has what it needs to bust the COVID backlogs and help the health service build back better from the worst pandemic in a century.”
The NHS Confederation and the NHS Providers say that at least an extra £10 billion in 2022/23 is needed to cover ongoing COVID-19 costs and recover care backlogs.
But services are reduced in England alone; total bed capacity was slashed from 160,254 in 2009 to 118,000 in 2020, according to NHS England figures. Brexit will not reverse that as trade deals look for private multinationals to enter the UK public sector.
Large-scale privatisations mean that any money spent on reducing the backlog or on the NHS will go directly to line the pockets of the private hospitals and health company owners, many of whom are in the Tory Party or closely connected to it, just as happened with Covid health services.
It must be remembered that all the gains of the health service, unemployment benefits and post-war nationalisations were the result of a mass movement of workers starting in 1942 that forced the 1945 Labour government to enact social reforms to protect workers. The workers that fought the war were not prepared to return to the conditions of the 1930s with the dole and poor housing. They wanted to avoid the fate of those that had fought in the First World war who returned to the pre-war conditions.
It is against this backdrop that we have to view the budget and Brexit deregulation and privatisation processes. The Tories are on a roll or were until a Tory MP had to resign over procuring government Covid health contacts for a company he was a consultant for.
The working class has suffered massive attacks since the financial crisis in 2008. To cast our minds back, the Labour government of Blair and Brown bailed out the banks after the capitalist system imploded only for the Tories to make the working class pay for this by enacting swingeing welfare cuts.
Even the Labour leader Kier Starmer is often a big supporter with his pledges of support to them in the House of Commons.
It must be remembered that the winning of the last election was the result of the Tories using the understandable indignation of sections of the working class to the years of austerity and wishing to break free of the EU who they saw as a source of many of their ills. The break of workers who voted Brexit and Tory in the last election from this party is growing. And as they fight = they are unlikely to return to Labour.