Sunak’s Spending Review Talks Big But Acts Small
Today's spending review was an opportunity for the government to help millions driven into insecurity by the pandemic. Instead, Rishi Sunak took money out of workers' pockets – and the economy will pay the price.
Rishi Sunak is a fortunate man. Late-stage capitalism has been very kind to him, bestowing upon him wealth and security beyond the wildest dreams of ordinary folk.
Millions of men and women in our country are very far from being so fortunate. They live on wages that don’t last the month, working in jobs that they never know will exist one day to the next.
Chronic insecurity was a disease consuming this country before the Covid crisis – the virus simply super-charged these inequalities, and the fear is that it has far from finished wreaking havoc on our communities.
Now, more than ever, we look to the might of the state to get us through these dark times to better days.
So today’s comprehensive spending review was Mr Sunak’s chance to show that he got this, and that he would use the power and responsibility of his office to do something about it. He didn’t.
The need to stabilise low incomes and to create jobs is urgent and evident. But for all his talk of the economic emergency engulfing the nation, Sunak’s financial package for the coming year lacked the ambition and the appetite to address this rolling crisis on the scale required. Setting out more chairs in the job centre will not help avert mass unemployment.
Perhaps then, this spending review has revealed the Chancellor as the financial hawk he is in reality, a reality which was suppressed back in March when the country was forced into an economic coma in order to battle a deadly virus. He is now acting according to his right-wing ideological instincts but with the PR flair to make doing little go a long way.
My union, Unite, had urged him not to play up to type, pleading with him for an economic shot in the arm to be delivered by this spending review.
We called for a strategy that would deliver a post-Covid, manufacturing-led programme with investment, employment and training to the fore to create secure, decent jobs. But instead, government policy seems to be to hold out for the vaccine to recover the economy, doing as little as possible in the meantime for the lowest incomes and most insecure.
And while his national infrastructure bank in the North, a policy borrowed from John McDonnell, and the £4 billion ‘levelling up’ fund are welcome moves, once again this government resists acting on the scale of our competitor economies. France and Germany recently announced tens of billions in green investment spending.
Today’s announcement allows local MPs and communities to bid for funds (taken from the raid on the foreign aid budget) for their areas to build things. Sunak singled out bridges as an example, and we know his boss likes bridge-building, but what we needed to see was the bridge from now to the emerging economy. We needed to point the direction to the new while defending and supporting the jobs in the industries devastated by the pandemic, including civil aviation, aerospace, automotive and hospitality. For these industries, emergency support was absent.
Where were the announcements on electric vehicle battery production and green, clean energy underpinned by high-quality training, including a large-scale apprenticeship programme, to upskill and help people back into work? Why not look to the £3 billion sitting idle in the apprenticeship levy pot and put that to better use to create the jobs our young people need? What about a plan we can all get behind of restoring our shattered economy and kick-starting demand in our struggling sectors by delivering the genuine green industrial revolution our communities, industries and planet are crying out for?
A programme that centred on a much-trailed slap in the face for the millions of low-income public sector workers, still reeling from a decade of wage austerity, is the wrong programme for our people.
By freezing public sector pay for all but NHS staff, itself a masterclass in divide and rule tactics, Rishi Sunak has delivered a bodyblow to workers he has singled out to bear the brunt of the pay freeze. By seeking to justify this so-called ‘pause’ in pay rises – a real-terms pay cut – on the equally divisive basis of a disparity in public and private sector wage increases, he ignores the fact that freezing public sector pay simply suppresses the spending power of all workers, right across the economy.
Public sector workers, in the main low-waged and women, don’t keep their cash in the Cayman Islands away from the taxman’s grasp. They spend it in our shops, helping our struggling high streets, buying products produced, supplied and served in the private sector. A £250 sop to two million of the lowest paid public sector workers is simply an insult, which does nothing to restore the pay lost in real terms from a decade of austerity. It will be the corner shops, the hairdressers, the bars and restaurants that will feel this hit in their tills.
Then there was the failure to address the UK’s poverty-inducing sick pay, the meanest in Europe and not even available to all workers. It is not right for government to simply await for the wonder of science and mass vaccination to deliver, to open up the economy, while working people are living in chronic fear.
The other day, I heard a man from my hometown of Liverpool confess to the BBC that he is not participating in the city’s mass testing programme. He’s not doing so because he is terrified that he’ll be told to isolate, which he cannot afford to do. As one of the millions of so-called self-employed in this country he does not qualify for statutory sick pay, and despite having friends die of the disease, he will not use the NHS app, for the same reason. A ping from the app would instantly plunge him into poverty.
Eight months into this terrible disease and the government still refuses to do the one thing everyone agrees make it easier for workers to stay safe – give them income security.
Next time Matt Hancock chooses to lecture terrified workers living pennies away from being unable to put food on the table about staying home when unwell, he might want to remind himself of it is his government’s refusal to raise sick pay to a living level that enforces this situation.
The Chancellor was silent, too, on the £20 uplift to Universal Credit – a £1,000 lifeline to six million needy people, many in work and many who’ve lost their jobs because of the health and economic crisis. Make it permanent, Chancellor, or make a total mockery of your claim that this government will not blight people’s lives. Listen to the IMF and World Bank who say to governments around the world that this is not the time to launch an assault on the incomes of the poorest; to do so is to imperil recovery.
Tellingly, the Chancellor thinks government spending is secondary to the “courage, wisdom, kindness and creativity it unleashes.” Day in, day out, my union deals with workers who are summoning every ounce of their courage and creativity to fight for their jobs, to keep their families’ heads above water. They’re doing their bit to keep our industries in with a shout of coming out of this in any sort of shape. The least they expect is that the government uses its immense power to do the same.
Rishi Sunak likes to present himself as modern, a trendy guy in number 11, but the cautious measures he set out today are depressingly old hat. Talking big but acting small wears thin with a nation exhausted by this pandemic and terrified about what’s around the corner.
The deepest recession we’ve ever seen, a pandemic of jobs and incomes insecurity and scarring mass unemployment in a time like never before requires action like never before. Sadly for the people of this country, we’re still waiting.