'The elephant in the room is the lack of funding for pay rises to recruit/retain public sector workers.'
As the soaring cost-of-living continues to sting ordinary families and hundreds of thousands of public sector workers are on picket lines across in the country in one of the biggest days of strike action in decades, Jeremy Hunt delivered his highly awaited Spring Budget.
Amid empty supermarket shelves and huge healthcare waiting lists after 13 years of Tory rule, the Labour leader Keir Starmer described it as a Budget ‘for managed decline,’ leaving Britain as the ‘sick man of Europe.’
We take a look at how the Spring Budget fails to deliver for working people.
No plan to get wages rising
As the strike action of ‘Walkout Wednesday’ continued, the Budget failed to announce measures to pay public sector workers what they deserve and get wages rising. Commenting on the Budget, Paul Nowak, general secretary of the TUC, said:
“There is no plan to get wages rising across the country. Real wages will not return to 2008 levels until 2026. And the elephant in the room is the lack of funding for pay rises to recruit/retain public sector workers.”
Energy Price Guarantee
Hunt confirmed that he is delaying an increase to the Energy Price Guarantee for the next three months. The average household bills will stay at around £2,500, rather than increasing to £3,000, as had been planned. However, the energy rebate is set to end this month for most households. The ending of £400 discount on energy bills that was spread across the winter, will come as a major blow to households for whom it has been a lifeline.
Warm This Winter, a coalition of 50 leading UK charities that demand immediate government action to lower energy bills, said: “He [Hunt] forgot to mention that houses will actually be paying £67 more per month on energy bills because the Energy Bills Support Scheme is ending.”
On the £67 a month rise on energy bills from April, Adam Scorer, chief executive of National Energy Action said: “There will be 7.5 million UK households in fuel poverty – up from 6.7 million. The cost of a warm and safe home is still out of reach for millions.”
Adult social care nowhere in sight
Childcare might have been high on the agenda, but adult social care was nowhere in sight. Prior to the Budget, the Care and Support Alliance (CSA) implored Hunt to act on adult social care. The organisation called for the three changes: “a richly deserved pay rise for all care workers”, which it said would benefit the sector during the recruitment crisis; “a doubling of funding” for “short breaks for carers” to aid burnout and exhaustion among the overburdened workforce; and an increase of the lower and upper capital limits in the care means test.
Pension overhaul will benefit high earners
Hunt announced he is going to increase the annual pensions tax free allowance from £40,000 to £60,000, after it has been frozen for years. The tax-free limit for pension savings during a lifetime will also be abolished in April. This means wealthy savers will be able to put more money into pension pots. Those who are already drawing a pension but want to save more will be able to put in £10,000 a year, up from £4,000.
As Starmer said in his response to the Budget, “pensions will benefit those with the broadest shoulders.”
Hunt ‘finds £6bn to cut fuel duties’ amid widespread strike action over pay
The Chancellor announced changes to fuel duty, extending the 5p fuel duty cut for another 12 months. It is estimated the move will save the average driver £100 per year. While the saving will be welcomed by car users, concerns around spending around £6bn to cut fuel duties, while failing to provide real-terms pay increases for the public sector, have been raised. Paul Johnson, director of the Institute of Fiscal Studies (IFS), said: “Recall that the government has spent months saying it can’t find any money to prevent nurses and teachers getting very big pay cuts. He just found £6 billion to cut fuel duties. That’s a choice.”
£4bn childcare expansion does not go far enough
As expected, the Chancellor announced a £4bn expansion of free childcare. Working parents with three and four-year-olds are eligible for 30 hours of free childcare per week. This will be extended to cover younger children in England, when both parents are working. The same funding will be given to authorities in Northern Ireland, Wales and Scotland.
Though many say this does not go far enough given how high UK childcare costs are. The childcare sector also faces soaring energy costs and a recruitment crisis that has forced many nurseries to shut in recent years. Neil Leitch of the Early Years Alliance, a group that represents childcare providers, says the new money offered by the government is “unlikely to match what’s needed to put providers on a steady footing.”
Universal Credit claimants still £140 short of the money needed for basic living essentials
From April, benefits are increasing by 10.1 percent, as promised in the Autumn Statement. However, campaigners have repeatedly warned that this is ‘too little, too late’ to help families on low incomes. The Trussell Trust and Joseph Rowntree Foundation (JRF) have warned that Universal Credit claimants will be £140 short of the income they need to afford basic living essentials each month. The charities have called on the Treasury to implement an ‘essentials guarantee’ to ensure people can afford basic living costs, something which the government has failed to proceed with.
Gabrielle Pickard-Whitehead is a contributing editor to Left Foot Forward
Image credit: YouTube screengrab