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In the Labour List Article entitled, “How the labour movement reacted to Rishi Sunak’s 2021 Budget,” Elliot Chappell documents the critical response from the left and representatives of the left behind he notes after “Rishi Sunak delivered the long-awaited 2021 Budget this afternoon. He announced the extension of the £20-per-week Universal Credit uplift via a one-off payment and confirmed that the furlough scheme and support for the self-employed will continue until the end of September. The Chancellor told parliament that the government’s restart programme’ would help get over one million people into work with the incentive for hiring apprentices doubling to £3,000 and £126m to help people offer trainee shifts to apprentices. He revealed that corporation tax, paid on company profits, will increase to 25% from April 2023. He added that smaller businesses will be protected, as firms with profits of less than £50,000 will pay the current 19% rate.”
Chappell reported that “Sunak confirmed that business rates relief and the reduced VAT rate for leisure and hospitality businesses would continue and announced a £300m culture recovery fund, £300m for sports clubs and £19m to support victims of domestic abuse. The Chancellor said the basic allowance will continue to go up to £12,570 as planned but will then remain at that level until 2026, and that the higher rate threshold will also go up to £50,270 but then it will be frozen for the same period. He described the Budget as one that will ‘unite and level up” the country, but Keir Starmer declared that he “barely mentioned inequality let alone tried to address it’. Here’s what the rest of the labour movement had to say…”
Chappell first looked at the “Trade unions” where he noted that “The Chancellor was ‘strangely silent on public services’, UNISON general secretary Christina McAnea said, commenting that workers will be concerned by what the Chancellor did not announce today. ‘Economic recovery and rescuing beleaguered public services should go hand in hand,’ she said after the Budget statement this afternoon. ‘Both are essential in the kind of society in which we all want to live’. TUC general secretary Frances O’Grady warned that the Chancellor is ‘gambling with the recovery when he should have acted to create jobs’ and argued that the extension to the furlough scheme to September ‘ends too soon’. ‘After a year of key workers going above and beyond, it’s an insult that he announced no new support for our hard-pressed NHS or public services and no guarantee of a decent pay rise for all our public sector key workers,’ she added.”
Chappell reports that “GMB acting general secretary Warren Kenny told the Chancellor that ‘warm words don’t pay the bills’, criticising the absence of support for public service workers and a commitment to take action on the low level of statutory sick pay. ‘The Chancellor has presided over a wasted opportunity in his Budget, again ignoring the plight of the travel sector and others who have been so badly hit in the pandemic,’ TSSA general secretary Manual Cortes said today. ‘Where were the rewards for our key workers who have done so much for our country throughout the pandemic?’ he asked. He said Sunak offered nothing on sick pay, the minimum wage, climate change or workers ‘after a decade of Tory cuts’.”
Chappell heard that. “Extending furlough by six months, short-term business rates reductions and one-off grants do not allow retailers the opportunity to plan their recovery out of the pandemic and secure jobs,’ Usdaw’s Paddy Lillis declared. The general secretary added: ‘Huge issues like expensive rents and rates, along with unfair taxation continue not to be addressed by the government. Today’s Budget is yet another missed opportunity. Royal College of Nursing national officer Hannah Reed described a ‘failure to listen’ from Sunak in his refusal to give nurses a pay rise and warned that it ‘leaves even more contemplating their futures and only adds to the nurse staffing crisis’. ‘We hope the silence from the Chancellor on NHS pay in today’s Budget is not a sign of government inaction on a fair rise for all NHS workers,” Royal College of Midwives executive director of external relations Jon Skewes said’.”
Turning to members of the Labour Party Chappell reported the following unflattering comments. “This budget won’t rebuild Britain,’ newly elected leader of the Scottish Labour Party Anas Sarwar told his followers on social media shortly after the Budget statement was delivered to the UK parliament today. ‘The UK is in the worst economic crisis of any major economy and the Scottish people need a plan for jobs, inequality, social care and more. The priority of the UK, and Scottish, [governments] must be Covid recovery and uniting our country’. ‘Have I missed the bit where the Chancellor announced a pay rise for health and social care workers?’ Deputy Labour leader Angela Rayner tweeted. ‘I suppose last year’s clapping will have to pay this year’s bills’.Shadow Chancellor Anneliese Dodds highlighted that Sunak failed to mention key workers, social care, high streets, sick pay or inequality and said, Tory mismanagement of the crisis meant the economy has been ‘hit harder’.”
Chappell reported that “Jonathan Reynolds thanked people who had campaigned alongside Labour against cutting the increased rate of Universal Credit, and said on social media that it should remain in place ‘until Universal Credit is replaced’.” The switch to a one-off payment was ominous as it signals the Tory determination to return to the pre-Covid level of grotesquely inadequate benefit payments that were the result of George Osborn’s prolonged benefit freeze that have dragged so many into destitution, reliance on food banks and unacceptable child poverty. While the Furlough scheme could potentially be extended if the situation changes there is a sharp cut-off for that vital £20 a week, rendered invisible by no longer being included in regular payments. This decision also slams the lid down on the possibility that those on legacy benefits will be awarded parity. Tories realised what a serious mistake it was to offer the uplift in the first place as it exposed the fact that the benefit’s real spending power had been declining for years.
According to Chappell “John McDonnell argued that Sunak ‘steals my rhetoric’ without the substance, condemning measures including the council tax rise, public sector pay freeze and lack of support for those excluded from the self-employed scheme. Shadow Home Secretary Nick Thomas-Symonds declared that the economic statement ‘fails key workers who’ve done so much throughout the pandemic but are now rewarded with a pay freeze’ and added that this is ‘totally wrong’. Shadow minister Liz Kendall highlighted, as the Labour leader did, that social care was not mentioned by Sunak. ‘Elderly and disabled people need decent social care so they can live with dignity and respect,’ she said. Jess Phillips tweeted that ‘children were decidedly missing” from the Budget. She also said: ‘No social care, no child care, nothing about children. Nothing specifically targeting women’s jobs which have been damned’.”
Chappell reported how “Justin Madders remarked that it seems the controversial Towns’ Fund will be allocated on the same party political basis as before’. The Tories were accused of directing funding towards its target seats in the 2019 general election.” This is highly likely because the Tory Party are not robustly challenged when it comes to this type of corruption or any type of corruption for that matter. When issues like this are exposed, usually in the alternative Media, the BBC and Mainstream Media still give the Tory Party and all Tory Ministers a free ride. They are caught cheating, lying and squandering public funds with impunity and are never held to account: Ministers are never fired or expected to resign because in the Tory Party corruption is backed-in! It goes back to a point well before the totally unfathomable result of the Covert 2019 Rigged Election when nobody challenged the voting anomalies or demanded an Investigation. They got away with industrial-scale fraud and decided it was a valid working model!
Sunak’s offer of funding to increase scrutiny over one area of fraudulent abuse was a pathetic token. Chappell noted that “Rosena Allin-Khan commented that the Chancellor’s £100m taskforce announced to tackle those abusing Covid schemes should; start with the list of donors to his party’, resharing an article on dodgy Tory contracting in the crisis.” The ‘taskforce’ is typical of the Tories ongoing commitment to go after those who have been forced through circumstances to avail themselves of Government help and may have made genuine mistakes. Sure there are some that will have gamed the system, but the amount will just like ‘benefit fraud’ be paltry in comparison to the excessive largesse available to companies who have had massive sums of money inappropriate awarded for shoddy goods and services not provided or the money syphoned out of our economy by the wealthy tax-dodging elite!
Chappell reported that “Backbencher Bell Ribeiro-Addy criticised the Chancellor for not mentioning the NHS in his statement, telling her followers that a ‘government that doesn’t value NHS workers doesn’t value the NHS’. ‘Disappointed this budget does not address reform of social care, a pay rise for our brilliant NHS and care staff, a permanent increase to Universal Credit, investing in education and a plan to eradicate child poverty,’ Diana Johnson tweeted. ‘Is this a joke?’ Rebecca Long-Bailey tweeted this afternoon, slamming the measures on the climate emergency in the Budget and describing the £12bn announced for the new national infrastructure bank as ‘paltry’. Karl Turner criticised Tory mismanagement of Covid: ‘I’m baffled Rishi Sunak boasts that we need to spend £407bn to deal with the pandemic. Most other countries haven’t needed to spend anything like that. Why? Because they dealt with it early’.” The bill in the UK is astronomically high not just because of shambolic Tory policy, but their prioritization of greed!
Chappell noted that “On spending announced to support sports clubs, Charlotte Nichols quipped: ‘Unsurprising the Chancellor is spending more money on supporting cricket because this Budget is a masterclass in spin’. The Labour MP for Warrington North added: ‘Statutory sick pay is not nearly enough to live on as is, but a real-terms cut is just unconscionable when it’s in the wider public health interest that everyone can afford to self-isolate!” Undoubted this issue has been deliberately systematically ignored because if the amount was raised now during the Covid crisis the Tories would have a really tough time pruning it back down again after the pandemic was under control. The UK‘s statutory sick pay was woefully inadequate before Covid hit and the crisis with the need for large numbers of people to self isolate just exposed this inadequacy. The Tories do not care that this has accelerated the spread of Covid 19 and put huge numbers of frontline workers at risk; they were considered expendable during the grand cull!
Chappell said “Apsana Begum remarked that ‘austerity 2.0 v likely’ with ‘even larger insecurity on the cards. with the extension of support to September, noting the absence of a social care plan or any commitment to address child poverty.” Chappell then turned to representatives from “Charities, think tanks, campaign groups.” He reported “Fabian Society general secretary Andrew Harrop described the Budget as ‘very bad news for low income families, vital public services and affordable housing and said the cuts to benefits and tax credits ‘robbed low-income families’. ‘Instead of new ideas, they’re stealing ours,’ Momentum co-chairs Andrew Scattergood and Gaya Sriskanthan argued, citing the creation of the national infrastructure investment bank and the increase to corporation tax. They criticised Labour for ‘wobbling’ over corporation tax rises, adding: ‘By allowing themselves to be outflanked on profit taxes, the leadership has ended up gifting the party of cronyism a new source of anti-establishment legitimacy’.”
Chappell noted that the “Institute for Public Policy Research North director Sarah Longlands said there was very little in today’s Budget to help bolster the creaking foundations of the North’s economy such as poor skills, health and child poverty.’ ‘Recovery in the North will take longer,’ she said. ‘What we needed today was long term, comprehensive investment plan for recovery. What we got doesn’t feel like a genuine attempt to ‘level up’ but a short-term package of measures to win votes’.” Chappell reported that the “Joseph Rowntree Foundation director Helen Barnard described as unacceptable the decision to cut the incomes of millions of families by £1040-a-year in six months’ and argued the Budget has created the ‘perfect storm for the end of this year’.”
Chappell noted that “Generation Rent said the Chancellor’s promised 95% mortgages are ‘completely out of touch when 60% of private renters had no savings at the start of the pandemic and another 18% have had to use savings to pay their rent in the past year’. ‘The government tried a mortgage guarantee scheme eight years ago and all it did was push up house prices, while another half a million households have got stuck renting over the same period,’ director Alicia Kennedy said.” This is so typical of the Tory Party who refuse to learn from their mistakes.” Instead of investing in the building of much needed affordable Council Homes, the Tories decide to focus on helping those in the least distress, the wealthier sector of young people can afford to buy property or get into the buy to rent market. There is no debt right-off scheme to bail-out in those in rental arrears due to Covid related redundancy.
Chappell said “The Chancellor’s Budget has fallen short when it comes to what councils up and down the country desperately need to help their communities out of this pandemic,’ Local Government Intelligence Unit chief executive Jonathan Carr-West declared. He described the state of local government finance as unsustainable and added: ‘Unless we are building prosperous, resilient, well-governed places then the Chancellor’s vision of a green, high-tech, high-skills economy will be built on sand.’ Locality chief executive Tony Armstrong welcomed the announcement of the community ownership fund in the Budget, which allows community groups to bid for up to £250,000 to buy or take over local assets at risk of being lost. But he warned that the £150m fund must provide a mix of capital and revenue funding to support assets to be sustainable in the long term and added that it is vital to ensure that communities with fewer resources are not disadvantaged.” I have to say this sounds like another selective Tory only perk!
Josiah Mortimer examines another aspect of Sunak’s Bidget in the Left Foot Forward Article entitled “Budget: Is Rishi Sunak about to launch a wave of legalised tax-dodging?” He says “A new report has poured cold water on the Chancellor’s plans for freeports. They’ll be announced with grandiose rhetoric about forming ‘safe harbours’ for world trade and ‘levelling up’ the UK. But new analysis of the government’s plans for freeports, tax-free zones often based at ports and airports, has debunked Conservative claims about the proposals. A report from the independent UK in a Changing Europe think tank ahead of Wednesday’s Budget finds that freeports, likely to form part of Rishi Sunak’s plans, will at best relocate, rather than create, economic activity and jobs.” He declares that “They are unlikely to lead to the sort of transformation the government hopes for.”
According to Mortimer “The Chancellor has long been wedded to the idea of freeports. When he was still a backbench MP, Rishi Sunak wrote a report for the Centre For Policy Studies extolling their virtues, with ideological zeal. He claimed they would ‘unleash the potential in our proud historic ports, boosting and regenerating communities across the UK’. The government’s consultation on the plans last year claimed they would ‘create national hubs for global trade and investment across the UK’, ‘promote regeneration and job creation,’ and ‘create hotbeds for innovation’. But there’s scant evidence to back up the tax-handouts, according to academics. The Government wants to launch up to 10 freeports across the UK, with one in each of the four nations. Freeport sites could be located inland as well as by ports, increasing the range of options for sites and potentially allowing existing manufacturing plants to be designated.”
Mortimer notes that “A new report, Freeports, finds that evidence about freeports create additional jobs is unclear, and at best mixed. It notes that there is a ‘public cost’ of maintaining freeports, which is exacerbated by the necessity of providing financial incentives for businesses to relocate to them. And the groups that will benefit from freeports are businesses that relocate there and high net-worth individuals. Freeports, a type of ‘Special Enterprise Zone, have been used by countries such as the United Arab Emirates to create areas with 0% corporation tax, no VAT, income tax, indeed no tax at all. Such a radical scheme in the UK would simply see a rush of UK companies moving from tax-paying areas to tax-free ones.”
Mortimer says “There are also fears over money laundering and international tax evasion: ‘Goods can enter a freeport, stay there indefinitely and trade an unlimited number of times without ever having been taxed…The Financial Action Task Force report[s] that this lack of scrutiny can ‘facilitate’ trade-based money laundering, through ‘relaxed oversight, lack of transparency, trade data and systems integration.’ The Geneva Freeport, for example, has reportedly been used to store stolen archaeological artefacts and artworks. The report notes one study by academics Larkin and Wilcox, concluded that ‘up to 41% of the 58,000 jobs created in the enterprise zones of the 1980s were relocated from elsewhere in the UK’ (and even the ‘new’ jobs might have been created elsewhere if enterprise zones had not existed)’. While they could help if focused on ailing sectors or move jobs from high-employment areas to low-employment ones, they are unlikely to offer real benefits.”
Mortimer warns that “Instead, they look a lot like a giveaway to multinational firms who will go from paying tariffs to avoiding them legally.” This would make sense of Sunak’s early warning of a Corporation tax hike scheduled for two years hence. I do not know the particular advantages offered to companies operating within the Freeports, but I question whether the sizable rate increase in 2023 is a logical wait for the economy to recover enough for big companies to get back on track financially or if it is just a two year window for them to up sticks and relocate to a Freeport to dodge the tax burden? Mortimer says “The report notes the UK had freeports until 2012 when the relevant legislation lapsed, amid suggestions that freeports were of limited use, made no difference to Government revenue or customs reliefs, and that they introduced unnecessary complexities regarding customs.” It is therefore untrue for the Brexiteer Tories to tout this as a new benefit of our freedom from the regulatory constraints of the EU.
Mortimer concludes by revealing that “Commenting on the findings, Professor Catherine Barnard, deputy director of UK in a Changing Europe and one of the authors of the report, said: ‘If the Government thinks freeports are a magic bullet that will create hundreds of thousands of new jobs, bring billions of additional pounds to the Exchequer and radically transform an area it is mistaken. ‘That is not to say they should not be created but the thought they’re going to transform the wealth and prosperity of this country is simply untrue. It will help the regions that get a freeport, but possibly to the detriment of those that don’t’.” Undoubtedly the locations will be carefully considered to advance Tory Party influence in deprived areas where workers well accustomed to serious exploitation will be grateful to accept low pay and the barest means of survival in a continuing age of austerity. This Budget will monetize misery for the masses to further enrich the elite hiding their wealth in Freeports; we must Get The Tories Out ASAP! DO NOT MOVE ON!