THE TRADE union leaders are divided over the Tory Budget.
‘Today’s Budget u-turn on spending is long overdue’ says the TUC, forging a partnership with the Tories.
‘The priority now must be to repair the damage of ten years of Tory devastation.
‘Helping working families and rebuilding public services must come first. And we need to see concrete action on the challenges of the future.
‘This means banning zero hours contracts, sorting social care, ending the UK’s dire regional inequalities, setting out a credible plan to achieve net zero, and getting an EU trade deal that supports jobs and workers across the UK,’ THE TUC added.
The headline spending figures made necessary by the devastation of the past decade, the new plans amount to a significant change of course.
- Infrastructure spending will be boosted to 3% of GDP from 2% of GDP, as in the Conservative manifesto pledge.
- Overall current spending will be boosted by around £35bn a year (over 1.5% of GDP), somewhat larger than the manifesto pledge of £3bn.
The backdrop: a weak economy.
As well as needing to help held-back communities and the immediate requirements of coronavirus, the spending has been made necessary by the cyclical slowdown in the economy.
Growth over the past two years (1.3% in 2018, 1.4% in 2019) has been the lowest since the global financial crisis ended in 2010, and half of the pre-crisis average of 2.8%.
If the government hadn’t supported the economy, the feeble growth in 2019 would have been even worse. Business investment spending has completely dried in 2019 and 2020.
Looking into future years the OBR has predicted growth averaging only 1.4%, with government playing a very big role in each year.
The government has announced plans to increase public investment spending to around 3% of GDP, up from the 2% level where it has been held since austerity policies began.
‘This shift brings spending to levels last seen in the 1970s. Broadly this means infrastructure spending will now be at around the OECD average (which is constructed on a different basis), meeting a longstanding TUC call.
‘But while they have met this benchmark, the world has moved on. We now need a further boost of at least 1% of GDP a year for the coming three years, specifically to meet the climate crisis.
‘The announced increases suggest strong growth over the next three years, at a pace last seen around 15 years ago (e.g. growth over 2019-2021 will be nearly 6% a year, pretty much the same as over 2005-2007).
‘A good way to understand spending is to look at departmental spending per head in real terms. The latest version shows spending just below the position in 2009-10 – a far cry from the decimation that had been planned by George Osborne.
‘Of course, at least as important as headline figures is how the money is spent. Arguably, the real test going forward will be whether the government prioritises rebuilding public services and helping those who lost out most under austerity in its spending plans.
‘This u-turn has been necessitated by failure not success. Austerity is ending not because it did its job, but because it didn’t work.
For a decade, austerity policies have devastated public services, workers’ pay and conditions, and crushed economic growth. In the meantime, the underlying threat from private debt and financial speculation has been intensified not resolved.
‘These conditions are common across the whole world and amount to a system that is dangerously precarious – with many fearing recession long before coronavirus hit. Once more central banks have acted decisively, with the Bank of England this morning announcing a 0.5% rate cut down to 0.25% and further subsidies to banks.’
The TUC statement continued: ‘The government has – rightly – ditched its obsession with closing the deficit by cutting spending, and recognised that they need to invest to support the economy. This should be the final putting to bed of the myth that the government budget is like a household budget.’
The political choices to come
‘Announcing the numbers is just the start of the process. Now we need to see whether the government will use these resources to get long overdue help to working families and public services,’ the TUC emphasised.
TUC General Secretary Frances O’Grady said: ‘Helping working families and rebuilding public services must come first. And we need to see concrete action on the challenges of the future.
‘This means banning zero hours contracts, sorting social care, ending the UK’s dire regional inequalities, setting out a credible plan to achieve net zero, and getting an EU trade deal that supports jobs and workers across the UK.’
- The GMB union, said there is ‘nowhere near enough’ in today’s budget to combat Covid-19.
Tim Roache, GMB General Secretary, said: ‘There’s nowhere near enough in the the budget to help working people who have to self-isolate – the government can dress it up however they want.
‘Statutory sick pay is £18 per day, no one can live on that, and that’s what the government seem to expect the 20% of the population who may have to self-isolate to do. If it’s possible, let’s see ministers do it.
‘Coronavirus has highlighted the abysmal state of sick pay in this country. This Budget was an opportunity for the government to right a wrong, but typically they’ve completely ignored it.’
Rehana Azam, GMB National Secretary, said: ‘The Chancellor today claimed our public services are prepared for coronavirus which will be surprising news to many of our members working in those services.
‘After a decade of Tory cuts our public services are underfunded, understaffed and badly stretched before we consider the huge demands to come.
‘When he became Prime Minister Boris Johnson claimed on the steps of Downing Street that he would “fix the crisis in social care once and with a clear plan”. Yet, his own Chancellor barely even mentioned social care in his Budget.
‘It beggars belief that ministers think they can meet the challenge of an epidemic like coronavirus which older people and those with health conditions are most vulnerable to – without fully funding social care in this country. The Tories either don’t know what to do with social care or they don’t care – either way this is scandalous neglect.’
- The RMT accuses the Chancellor of fuelling the climate change crisis as he pumps billions into roads which could have been used for public transport.
RMT General Secretary Mick Cash said: ‘In the first Budget of the new decade we needed a clear commitment to the greatest investment in public transport ever, instead we get this Tory government celebrating over the largest investment in roads ever.
‘We’re facing a transport crisis and a climate crisis and after over 25 years of failed privatisation and a decade of Tory austerity our rail and bus network is a mess but yet again this government continues its obsession with the private road user.’
- Commenting on the Chancellor’s Budget speech, Dr Mary Bousted, Joint General Secretary of the National Education Union, said: ‘While the government obviously needs to address the short term challenge of the coronavirus crisis, it must begin to plan for the long term as well. This Budget does not support a long term plan for the millions of young people being educated within a chronically underfunded system.
‘The government knows that lack of funding is putting schools and colleges under great pressure. Class sizes are rising, subjects are being dropped, SEND support is disappearing and inadequate pay is making the staffing crisis worse. All of this is happening just to balance the books.
‘School buildings are badly deteriorating after a decade with almost no money spent on their fabric. 3,731 schools need immediate repair and a further 9,872 school need work within two years at the latest. Spending on school buildings has fallen dramatically since 2010 – it is now 42% lower than under the last government. We greatly regret the government’s neglect.
‘The £7.1 billion already promised for schools over the next 3 years should have been increased. It is welcome but it falls well short of the £12.6 billion needed to replace the cuts since 2015, let alone provide a world-class education for every child.
‘83% of schools will be worse off this April in real terms than in 2015. Maintained nurseries continue to survive hand to mouth, with many under threat of closure, and 16-19 education continues to suffer as well.
‘The additional capital funding for FE colleges is welcome but, with almost 4,000 schools in need of immediate repair, we greatly regret the government’s neglect of schools capital funding.
‘Missing from the Chancellor’s “plan for prosperity” is any recognition that 4.1 million children in our country are currently trapped in poverty.
‘With the Institute for Fiscal Studies predicting that a further 1.1 million children will be living in poverty by 2022 it is extremely disappointing that there has been no indication today of a government strategy to end child poverty.
‘The government has recognised the need for short term action to support workers and businesses during the coronavirus crisis. If the Chancellor is to achieve his ambition for a high skilled workforce he must also recognise the need for long term investment in the education system and commit to addressing the underfunding that our education system has faced for far too long.’
- Reacting to the budget, PCS general secretary Mark Serwotka said: ‘This budget is a slap in the face to our members who are delivering Brexit, working in Jobcentres, helping to secure our borders and those collecting tax.
‘Rishi Sunak insists that the public finances are strong and that human capital is important for the economy. Yet he will not give the government’s own staff a pay and pensions increase.
‘Promises of investment in public services do not make up for a decade of austerity which has created misery and hardship for the low paid and vulnerable.
‘Despite the Chancellor’s ludicrous claims to the contrary, the Conservative Party remains the party of big business.’
- Royal College of Nursing has responded to the Budget statement. Dame Donna Kinnair, Chief Executive and General Secretary of the Royal College of Nursing said: ‘The Chancellor is right to give frontline health and care services whatever they need to fight Covid-19.
‘It is crucial that both current staff, and any retired nurses or students brought in to support them, are properly resourced. They also need to be sure they can raise the alarm at any point if they have any concerns.
‘The Chancellor also reiterated the government’s commitment to increase nurse numbers in the NHS in England by 50,000. What we need now are detailed plans for how the new nurses will be educated or recruited, and how nurses leaving the NHS will be persuaded to stay.
‘This needs to be part of a comprehensive pay strategy for England. Pay is an important tool for recruiting and retaining staff – across the UK, we are calling for a meaningful pay rise in 2021/22 for all staff providing publicly-funded health and care services.’
The Royal College of Midwives (RCM) has responded to the financial arrangements for student midwives in today’s budget.
Commenting, Jon Skewes, RCMs Executive Director for External Relations said: ‘While we welcome the commitment in today’s Budget of additional non-repayable maintenance grants for new and existing midwifery students, there is the larger issue of fees that needs to be addressed urgently.
‘Many women come into midwifery as a second career with existing caring responsibilities so the additional promise from the government of a further £3,000 grant for those students with childcare responsibilities is really good news for our student midwives.
‘Given the current shortage of midwives in England this is a positive first step towards making a career in midwifery more attractive and attainable for many.’