It was heralded as a back to work budget. But back to work ‘incentives’ that reward the wealthy and penalise the poor simply reinforce the underlying problems of the labour market and further entrench the imbalance of wealth and power in this country.
We’re told that our economic woes have been created by the double whammy of the Covid pandemic and the war in Ukraine. Yes, they’ve contributed to the turmoil in the economy but the roots of our acute economic problems can be traced back further.
Between the banking crash of 2008 and the arrival of the pandemic, the wealth of the richest 1,000 people in our country increased by £538 billion and stock exchange value increased by £2 trillion.
Over the same period, wages fell by £433 billion – a direct and huge transfer of income and wealth from working people to the richest in our society. Meanwhile, millions fell into poverty and our public services were cut to the bone.
That’s why my criteria for a back to work budget was simple: will it make work pay, tackle insecure work and give unions the powers they need to properly defend workers?
Unfortunately, this Budget did nothing of the sort. Instead, this was a budget for well-off older professionals and big corporations. There will be tax cuts for the richest 1% in our country and bungs to some of the biggest companies – a business as usual Budget.
The Tories have scrapped the pension lifetime allowance, which limited the maximum amount of pension savings an individual could build up over their career without having to pay additional tax to just over £1 million. This measure is estimated to cost the Treasury £800 million every single year into the future. However, it will only benefit the already very well-off.
That’s on top of the tax breaks of £700 million for North Sea Oil exploration, in a country that has some of the lowest oil tax rates in the world. The increase in corporation tax will be a drop in the ocean for the likes of BP and Shell, who together made £33 billion profits last year, while household energy bills are set to rise by 40 per cent.
A three-month extension of the energy price guarantee of £2,500 will not stop millions more people being plunged into fuel poverty because it’s pegged at a level that is already unaffordable for many.
At a time when so many people in our country are struggling with the cost of living, the government could’ve chosen to ease the tax burden for low and medium earners or to provide additional support to the poorest in society. Instead, they’ve chosen to make those with the broadest shoulders even richer.
There was nothing for our NHS other than the aforementioned pension tax changes aimed at retaining senior consultants. But senior doctors retiring early because of their pension arrangements is far from the only challenge facing our health service. What about the lack of beds? What about the lack of equipment? What about the nurses, junior doctors, paramedics, porters and all the rest who urgently need a decent pay rise?
Even the phased expansion of free childcare for working parents of one-and two-year-olds to 30 hours is unlikely to help early years providers serving poor communities, such as Little Gruffalos in my Hemsworth constituency, which is facing closure. When your entire intake is fully-funded, meaning there are no parents paying fees to cross-subsidise the steeply-rising outgoings, additional free hours for families only compounds the challenges.
As one single mum working in the NHS who has two school age children told me: “this budget did nothing for me or my children.”
Over a decade of Tory underfunding of the early years sector is not reversed by an increased £204 million, which is just a tenth of the £2 billion shortfall estimated by the Department for Education in 2021.
How can it be that whilst corporate profits are booming, the OBR is still forecasting that 2022 and 2023 will see the biggest ever fall in living standards in our country’s history? It is astounding just how bad Tory rule has been for working people.
The truth is that the wealth of the country as a whole iscontinually increasing as we produce more goods and services. But this new wealth is all going into the pockets of the richest people.
It is clear to me that our priority must be to shift the balance of wealth and power in this country in favour of working people. To do that we must fix our broken labour market and create a fair tax system starting with a Wealth Tax.
But this Budget means that instead we will get more of the same. Once again, the Tories have demonstrated they lead a government of the rich, by the rich and for the rich.