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#Budget2021 – Labour Needs to Demand Radical Action to Save Lives, Jobs and Livelihoods

“The coronavirus pandemic has already impacted millions more, over a longer period, than it should, due to the government’s refusal to offer sufficient financial support to isolate, including leaving an inadequate statutory sick pay rate in place which means many have continued to put themselves at risk.”

By the Labour Assembly Against Austerity Team

Rishi Sunak delivers the Budget this week with the UK on the edge of a huge debt and jobs crisis. Labour’s Keir Starmer has called the moment a fork in the road, but his recent speech was light on the radical policy demands Labour needs to be advocating at this time of crisis.

The backdrop is unemployment has been rising through the period of the pandemic, as businesses struggle to survive financially and other employers seek to cut employment costs. This increase in unemployment has been held in check by the furlough scheme deployed during the pandemic, but millions are now reliant on it, with their futures uncertain as the government considers how to roll it back as it seeks to reopen business.

Unemployment has increased from around 4% to 5% over the pandemic, with 1.75million people now seeking work, but the numbers on furlough are as high as 4.7million, with that number increasing 700,000 in the past month. That scheme comes to an end on 31 April, with the majority of those from small businesses.

The impact of that is that the majority of those who have lost income in the pandemic have been those who can least afford – those on lowest incomes have been more likely to lose income in the past year.

Millions will be desperate for the Chancellor to extend furlough and guarantee increased financial support whilst coronavirus restrictions prevent returns to work. The coronavirus pandemic has already impacted millions more, over a longer period, than it should, due to the governments refusal to offer sufficient financial support to isolate, including leaving an inadequate statutory sick pay rate in place which means many have continued to put themselves at risk.

Keir Starmer will give Labour’s response to the Chancellor on Wednesday, with the Shadow Chancellor Anneliese Dodds overseeing the economic response, and whilst the Labour leadership ties itself in knots over how it may respond to tax changes, the Left and trade unions have set out a series of economic demands he must consider.

On 14th January, Labour Assembly Against Austerity published it’s Workers Can’t Wait petition, with a clear series of economic demands for the Budget.

Those demands included a number that would boost incomes, from fixing furlough to ensure full payment of wages and increasing pay both at the minimum wage to a living wage rate, and increasing public sector pay after a decade of restraint cutting real value. The petition also demands the Chancellor fix Statutory Sick Pay and drop plans to cut back the Universal Credit uplift and ensure a Minimum Income Guarantee.

From the labour movement, a pre-Budget submission by the TUC reflects many of those demands in the Labour Assembly petition, from extending the furlough scheme to the end of 2021, preventing any furlough falling below the minimum wage rate, and both fixing Statutory Sick Pay and ensuring permanent retention of the pandemic increase to Universal Credit. The TUC also calls for public sector pay to be increased in opposition to an announced freeze.

Trade unions are demanding a public sector pay increase after a decade of restrictions. Unite, the GMB and Unison have all called for a ‘substantial’ pay rise of at least 10% for council and school workers in a submission to the national joint council.

In the NHS, seeking recognition for health workers sacrifice over the past year, on top of recent pay restraint, Unite is demanding a 15% pay increase, and the Royal College of Nursing is demanding a 12.5% pay increase, from the NHS Pay Review Body.

On the Labour left, John McDonnell, former Shadow Chancellor to Jeremy Corbyn, has been leading calls to deliver a debt jubilee, for low-income individuals who have had no alternative to building up personal debt over the pandemic. Some estimates suggest six million have fallen behind on household bills, while 1.2 million are in severe problem debt. McDonnell has advocated funding the cost of wiping such debt through a windfall tax on the profits of those companies that have most benefited during the pandemic. The former Labour leader candidate, Rebecca Long Bailey, has also advocated a debt jubilee, including at Arise’s major Fighting Back at 2021 event.

There is also growing demand for renewed green investment as the governments faltering ambition is exposed ahead of the COP26 in November. The green homes grant scheme is likely to have issued support to less than 50,000 of its 600,000 households target to made more energy efficient.

Labour for a Green New Deal have urged Labour to recommit to its Warm Homes For All policy set out in the 2019 manifesto, which would reduce energy bills for low income households whilst reducing carbon emissions through greater energy efficiency.

As Keir Starmer has recently said, this week’s Budget is a fork in the road, but it is only through commitment to concrete, radical policies defending jobs and incomes that Labour can pressure the government and set out a positive alternative to appeal to voters.

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