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Budget


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From: Article posted to home page Home, 9 March 2017: Socialist Party news and analysis

Search site for keywords: Budget - Workers - Schools - Pay - NHS - Government - Public services - Tories - Tax - Local government - Cuts

Tory budget - dull but nasty

Roger Bannister, Liverpool Socialist Party

Tory Chancellor of the Exchequer Phillip Hamond's first budget had been predicted by several commentators to be a dull budget. It certainly had few highlights to raise any excitement, and in particular among working class people. What this budget actually represents is the continuing relentless pursuit of austerity measures - the massive financial attack on public services - that are causing misery to millions of working class people.

Jokes?

There is little to laugh about for millions of workers in Britain, but throughout his budget speech, Hammond cracked jokes aimed at the opposition parliamentary benches. However his biggest 'joke' attracted no laughter from Tory MPs, when he declared the Tories to be the party of the NHS! Clearly the quarter of a million people that marched through London four days earlier in defence of the NHS did not find this quip amusing either.

325 million has been put into the NHS budget for the new Sustainability and Transformation Plans, but this money will have no direct impact on patient care. It will go as overheads to the consultancies and managers implementing the STPs, which will result in massive cuts to service delivery.

Crisis in social care

The public outcry about the crisis in social care has forced Hammond into a partial U-turn. Having previously denied the need for any bailout, he has now put an additional 2 billion, over three years, for social care in England. But this amount is just half of the 4 billion already cut from the social care budget, and represents just 33% of what is needed to bring social care provision up to acceptable levels and standards.

Pay restraint

Public sector pay restraint is to be maintained, meaning that the real terms pay of millions of public sector workers, many of whom are low paid, will continue to fall.

Forecasts and targets

Hammond based his budget on an optimistic forecast for economic growth, which he raised from 1.4% to 2%, which is not supported by many economists.

Also, his borrowing predictions of 51.7 billion in 2016-17 and 58.3 billion in 2017/18 acknowledges the previous abandonment by the government of a surplus by the end of the decade.

Contradictory approach to small businesses and self-employed

The Tories traditionally pose as the champions of small businesses and the self-employed. Hammond did nod in the direction of small businesses, many of which are struggling in the current economic climate, by delaying a year in implementing quarterly reporting for businesses below the VAT threshold. Also he capped business rate rises to 50 a month for small businesses losing their rate relief, and pubs with a rateable value below 100,000 will get a 1,000 discount on business rates.

These measures are intended to quell opposition within the Tory back benches, which had been picked up by some right-wing press sources. At the same time Hammond is increasing the National Insurance contributions of self-employed people, which in the current 'gig' economy will impact on the growing numbers of workers forced into artificial forms of self-employment by unscrupulous companies unwilling to shoulder the responsibilities of an employer. This measure is undoubtedly an overturning of the Tory election manifesto pledge not to increase National Insurance.

'Sin' taxes

While duties on alcohol and tobacco products remain unchanged, sugar is clearly the latest 'sin tax', now set at 18p and 24p for the main and higher bands.

No real help for low paid

Low paid workers face a kick in the teeth as the so-called 'National Living Wage' will only rise to 7.50 an hour, far from a genuine living wage, and way off the target of reaching 9 an hour by 2020.

Personal tax allowances for basic rate taxpayers will rise to 11,500, to satisfy original proposals to take the low paid out of the tax system.

Education

This budget effectively sets policy in important areas of education. While few could argue with additional funding for PhD placements, 320 million set aside to fund 110 new free schools, and the extension of free school transport to children at selective schools receiving free school meals, firmly establishes the Tory agenda of turning their back on the majority of schools, most of which are underfunded. They are funding their pet project of independent, increasingly selective schools, a back door route to the reintroduction of grammar schools.

Local government

Chronically underfunded local authorities are to receive no additional funding to keep their day-to-day services running, despite being the hardest hit of all the public services, but are to share 690 million to reduce urban congestion.

Devolution tensions

The Tories' continuing fear of the break up of the UK can be seen in additional funding allocated to Scotland, Wales and Northern Ireland. But it is doubtful that the allocated 670 million will do much to solve the problems of ordinary workers living under these devolved administrations.

Organise and fight

Coming from a right-wing Tory government, there are few surprises in this budget. The cuts in public services will continue, with the NHS tottering on the brink of disaster and local government services reduced to bare minimum levels, and below that in many areas.

Last Saturday's NHS demonstration shows that there is a mood to fight back amongst working class people. The Socialist Party argues and campaigns for further broad action, backed by the public sector unions, with industrial action where necessary, to defend public services and public sector jobs. The trade unions should also be pushed from below into action to break the pay freeze, and to abolish low pay.






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