Wednesday’s much trailed budget will offer little of substance for working people argues Terina Hine
Gone are the days of Budget purdah, in its place we have a deluge of press briefings, designed to hide the figures behind the spin. So far there have been 16 Treasury press releases and two leaks providing plenty of material for nonsense news on levelling up and socialist Sunak.
The government has provided little or no detail behind its document drops - there are no time periods for spending nor information as to how the success of increased funding is to be measured, and there’s scant information as to where any money might come from. There is no reference to what has already been spent, or promised in previous pay rounds - even the head of the Institute for Fiscal Studies (IFS) is unable to work out how much is extra capital and how much re-announced.
MPs from all parties have attacked the government for showing contempt to Parliament by briefing the budget ahead of time, enabling ministers, and in turn the media, to focus entirely on the briefings with minimal scrutiny and no numbers to back anything up. The Speaker of the House, Lindsay Hoyle, was so angry he suggested the Chancellor should resign.
So far Sunak’s team have announced extra money for infrastructure, for the NHS, for those red wall turned blue seats. They’ve announced £5.9bn “investment to tackle NHS waiting lists”, £2.6bn for schools to help children with special educational needs, £3bn for skills and just under £7bn for transport.
And having found a magic money tree the Treasury’s latest announcements include the end to the public sector pay freeze and a rise in the national minimum wage - set to go up by an inflation busting 6.6% from £8.91 to £9.50 per hour in April for the over 23s.
Well let’s not get carried away by the hype - none of this is enough to deal with the damage of a decade of austerity and cuts. 6.6% may sound a lot in isolation but when inflation is expected to be 5% it is not quite so eye catching. In fact the Resolution Foundation has said the pay rise is lower than many in recent years despite the headline figure.
The Treasury says this rise in the national living wage will boost pay by £1,000 per year for a full-time worker. However, according to the IFS few low paid workers are likely to be that lucky. Cuts to Universal Credit, the hike in National Insurance contributions and scary inflation figures will all take their toll.
A senior researcher at the IFS said “while this boosts earnings for full-time minimum wage workers by over £1,000 per year, those on universal credit will see their disposable income go up by just £250 because their taxes rise and benefit receipt falls as their earnings increase”.
However welcome this minimum wage rise is, and it is welcome, it will not prevent millions from suffering real hardship. The increase isn’t implemented until April - five months from now - during which time many households will be plunged into poverty as heating, fuel and food bills escalate and the cuts to Universal Credit bite. With 5 million people on Universal Credit and two million on the minimum wage - and they do not necessarily overlap - this wage rise will barely be a sticking plaster on the poverty levels in the UK
As for the lifting of the public sector pay freeze it is far from a pay rise.
Across the public sector there has been a decade or more of lost wages - the average teacher is paid 9% less today than in 2010 - it would take a very generous Chancellor indeed to remedy that. And where is the money to come from? If, as suspected, from existing budgets or ‘efficiency savings’ aka staff cuts, it really will be the case of the Treasury giving with one hand while taking away with the other.
So let us be clear, whatever happens in the Budget the messaging from the government is pure spin: the Chancellor claims to be the side of working people, the government to be levelling up the country, but the reality, as experienced by millions of workers this winter, will tell a very different story.
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