“Those who believed the Tory spin that austerity is over & a new “levelling up” agenda will be different from the Osborne years are going to be in for a series of nasty surprises.”Claudia Webbe MP
A report last week from the Institute for Fiscal Studies (IFS) warning that our public services face cuts of up to £17 billion more did not receive the media attention it deserved, writes Claudia Webbe MP.
A recent Institute for Fiscal Studies (IFS) report argues that from April 2022 the Tory government will spend up to £17 billion less on a range of public services than they were planning to before the Coronavirus pandemic and their ongoing catastrophic handling of it.
Looking at the economic context for Rishi Sunak’s rumoured upcoming spending review in the Autumn, the report highlights how our economy is forecast to be smaller in the years ahead and how the existing Tory spending plans imply cuts to some unprotected government departments including schools and the NHS.
Those who believed the Tory spin that austerity is over and a new “levelling up” agenda will be different from the Osborne years are going to be in for a series of nasty surprises.
The existing Tory plans make absolutely no allowance for additional virus-related spending – instead setting out that this will be cut to zero after the end of the current financial year in March 2022 – and the inevitable cuts to public services will occur at a time of much higher demand because of the ongoing impact of the pandemic and the disastrous way the Tories have handled it.
This is both impracticable and unacceptable.
In reality Sunak was recently warned by the Office for Budget Responsibility (OBR) that the Government need to find an additional £10 billion a year for the next three years to fund the cost of the government’s Covid response, including for ‘vaccination boosters,’ keeping the test-and-trace programme, and responding to the health and social impact of the coronavirus crisis as it continues.
Cuts are the last thing that either our health or our economy need right now. If we are to finally respond to the virus properly and rebuild our economy justly then in fact much more investment is needed.
People rightly believe that the Government must not only maintain higher levels of spending on key public services as the crisis continues, but also going into the future if we are to build a better, fairer society.
The worsening issues of economic and social inequality Britain faces, including through deepening poverty, cannot be addressed in any way if vital budgets – such as those of local government – are slashed even further.
Even before the pandemic, a decade of vicious, ideologically-driven austerity has meant our NHS, local government and other essential public services have been starved of vital resources.
A new wave of austerity will further devastate communities and cause permanent damage to the economy as well as dampening any immediate economic recovery.
Yet we are seeing more and more signs that this is exactly the dangerous direction the Tories are looking to take economic policy, refusing to spend what is needed on our public services and to provide support for those increasingly facing a deepening cost-of-living crisis.
To give just three examples, firstly, we have seen that despite experts warning it will potentially throw millions of people into poverty, the Universal Credit cut of £20 has been confirmed as going ahead in October.
Secondly, last week the Tories refused to carry through earlier suggestions of expanding who was entitled to sick pay, despite the ever growing number of people needing to self-isolate at home. Not only has this expansion – which would have particularly benefitted low paid workers – been rejected, but the Tories have also refused to raise Statutory Sick Pay from its current paltry level.
As TUC General Secretary Frances O’Grady so correctly noted, “This is yet another example of short-sighted penny pinching from the Treasury, which is undermining Britain’s public health effort.”
And thirdly, the recent batch of pay offers to public sector workers have also been far from what was needed or expected. Our key workers who are keeping the country going, keeping us fed, staffing and cleaning our schools and hospitals, and keeping us safe throughout the ongoing pandemic deserve better.
As I have previously argued, a return to ‘business as usual’ when it comes to how our economy is restructured – let alone a further dose of severe austerity – would be deeply damaging for both our economy and society.
The disgusting normalisation of incredibly high levels of poverty and inequality, a homelessness crisis on our streets plus the longest wage squeeze in recorded history prior to the pandemic must not be returned to. Recent IPPR analysis revealed how one in six working households face poverty – with low wages and insecure work, insufficient social security income levels and high living costs such as housing and childcare driving in-work poverty upwards.
Yet, there is plenty of government action that could be taken on all of these questions, including a Wealth Tax that would drive down and eliminate poverty.
It is up to all of the labour movement to keep making clear the arguments why austerity hasn’t worked and why there must be no return to it full stop.
Instead, we need to say there is an alternative and stand for a clear investment, not cuts agenda. This is the only way forward for our economy, society and public services.