Want to understand the Budget? Nadia Whittome breaks it down
The Chancellor's budget offered a chance for 1945-style investment. Instead the public has been shortchanged.
05 Mar 2021
Despite the government’s rhetoric to “Build Back Better” and the headline-grabbing (delayed) rise in corporation tax, this was a budget full of half-measures and gaping holes that will fail to address the multiple crises stacking up in the UK.
Our underfunded and undervalued social care sector, where I used to work, is a prime example. Even before the pandemic, it wasn’t meeting the needs of 1.5 million people. The care workforce, disproportionately made up of migrant women and women of colour, exists on the lowest of pay. In the pandemic, care homes were an afterthought. Many were put at risk through PPE shortages. In order to clear beds in hospitals, patients untested for Covid-19 were discharged into care homes.
The number of unpaid carers, predominantly women again, plugging the gaps has risen from 4.5 million to more than 13 million in the last year alone. With an ageing population, this crisis will only grow, while those working in care are trapped in poverty.
Yet in the entirety of Rishi Sunak’s Budget, “social care” was mentioned only five times – as part of the title “Department of Health and Social Care”. There was not a single penny or policy announced to address this severe situation.
And care wasn’t the only omission. Millions are still excluded from employment support schemes, like the furlough scheme and similar measures for the self-employed. The £20 increase in Universal Credit has only been extended for six months and other benefits remain frozen. Groups already marginalised in the labour market who are facing the largest job losses – such as people of colour and the young – are being plunged into poverty by these decisions.
With Statutory Sick Pay only rising by an insulting 50p to £95.50 a week and the vast majority applying for self-isolation payments being refused, low-paid, precarious workers will continue to have to choose between staying at home and paying their bills.
Meanwhile a £30bn cut to the NHS was quietly sneaked through. And NHS staff are up in arms about a “pitiful” 1% pay rise after promises to have their low wages reviewed.
“In the entirety of Rishi Sunak’s Budget, ‘social care’ was mentioned only five times – as part of the title ‘Department of Health and Social Care’”
The last 10 years of Tory austerity has left our NHS and welfare state in tatters. Our society is more unequal than ever. These factors, coupled with government failures in the last year, paved the way for the worst Covid-19 death toll in Europe and the worst economic recession of any major economy – borne most heavily by the poorest communities. This Budget takes us further in the same direction.
But did it have to be this way? Is the economy just too weak to support massive public spending? History shows us this isn’t the case. The 1945 Labour government built the modern welfare state out of the devastation of the Second World War.
Despite a ruined economy and the exorbitant cost, Nye Bevan never said that this wasn’t the time to create a healthcare system for all, free at the point of use. He overcame political opposition from the Conservatives, the medical establishment and even within his own party to implement a policy that not only changed the lives of that generation, but of every generation since.
This is the scale of ambition we need today as we rebuild from the pandemic. We must tackle gross inequality and invest in public services, with policies that permanently transfer power and wealth away from billionaires and politicians back into our communities.
Like the NHS, we could create a National Care Service, funded by taxation, which provides care free to all who need it and pays care workers properly. We could implement a massive social house building programme and proper regulation of the rental sector. A Green New Deal would bring hundreds of thousands of well-paid jobs to address the climate crisis to every region, city and town in this country. We could make the minimum wage the real Living Wage, give a pay rise to key workers and provide social security payments which don’t force people into poverty.
As for how these policies would be paid for, public spending is always a matter of priorities. This government spent £22bn on a failed, needlessly outsourced, Test and Trace system, including £7,000 a day for consultants. It gave £2bn of public contracts to Tory donors and cronies – £30m alone went to the Health Secretary’s local pub landlord. Over the past decade the Conservatives have slashed taxes on corporations and the rich, while cutting public services the rest of us rely on.
The costs of our recovery should be borne by those most able to pay – particularly super-rich individuals and corporations. We should close tax loopholes, implement a wealth tax, a windfall tax and increase corporation tax. If we taxed capital gains (the profit when you sell an asset that has increased in value) at the same rates as income tax, it would bring in £14bn – enough to double the amount spent on Universal Credit, for example.
We should also stop obsessing about the national debt in the way we would over household finances – it’s just not comparable. Public borrowing to invest in the long-term while interest rates are historically low makes sense.
Our rigged economic system is currently designed to serve a few people at the very top. If our generation is ever to earn decent wages, live in affordable housing, survive the climate crisis, and be looked after in our old age, we cannot just tinker around the edges. We need to take the economy in a new direction. This Budget would have been a good place to start. Instead, we waste another year, as public services collapse, inequality deepens and the climate crisis inches ever closer.
Nadia Whittome is the Labour MP for Nottingham East.