There are some – maybe in a rush of spending review-day excitement – out there saying that we’ve just seen a Labour budget. That after over a decade of cuts we’re back to pre-austerity Britain. Make no mistake – we are not.
This budget will hit working people hardest. In-work poverty has reached record highs under the Tories, with two million more people from working households now living in poverty, compared to 2010 when the Tories came to power.
Average real wages will still be lower in 2026 than they were in 2008 – if wages had continued to grow at the pace they did under Labour, workers would have been £100 a week better off when the pandemic hit.
Despite this cost-of-living crisis, taxes are higher than at any point in the last 71 years. It’s the highest ever sustained tax burden on working people during peacetime.
Meanwhile, bankers enjoy a £4billion tax cut on their profits and retail giants like Amazon will see a £12billion tax cut.
Never has a Chancellor asked the British people to pay so much for so little.
The worst impacted will be those on Universal Credit who are unable to work due to illness or disability, and unpaid carers. Even before the Universal Credit cut many low-income families were behind on rent, bills, and going into debt. Everyone on Universal Credit just lost £1000 a year from the cut, but anyone in a family where no one can work will be £13 a week worse off – meaning thousands of families face the choice between eating and heating this winter.
The Tories not only have no intention of addressing the cost-of-living crisis, their scandalous 50% tax cut on short-haul flights, delivered just days ahead of the COP26 conference, shows that the Tories have no intention of addressing the climate crisis either.
Boris, we know, is all performance and Wednesday’s budget was illusion. When you look past the rhetoric, the funding outlook for our vital local services is equally grim.
The headline story was a 3% bump for local government. Unpick that and 1.2% is for new social care costs. Unpick it more and the rise is just for a year. Then government funding flatlines, meaning that the cost of local services will quickly outstrip the money we have for them.
We are still nowhere on social care. The government told us back in the summer that they’d put up national insurance – just about the worst way to tax wealth – to fund the NHS and care. That was never going to be enough, but it now turns out that the government is pushing more social care costs onto local government – with changes to means-testing and the cap on care costs. A limit on what people have to pay for their care is good. Making underfunded local councils pay for it is not.
The cap on the Adult Social Care precept (the secondary council tax ringfenced for care) is being lowered from 3% to 1%, making it even harder for councils to find the money for social care. The need for care grows and grows, but this government still crimps our ability to meet the cost, meaning almost-constant council tax rises and never-ending cuts elsewhere. We know it better than just about anywhere in Haringey, where we have some of the greatest need for children’s and adults’ care in London.
A bold government would tackle the social care crisis head-on and come up with a serious long-term plan, but that’s not what we have. We have Boris, who sets budgets by general elections not general wellbeing.
What with 2022 now very likely being an election year, the cap on council tax rises will stay at 2% – a rise that most councils will be forced to make due to a decade of underfunding from the Tories’ austerity programme. The government has of course once again sidestepped the chance to reform council tax, leaving us with a basically unfair tax that has sat on the ‘too difficult’ list for nearly three decades.
A 2% increase isn’t really an increase at all – as the Institute for Fiscal Studies says, it just about lets councils keep pace with inflation. And it boxes councils in, forcing them to either put up an unprogressive tax or make cuts to local services – or both.
The price of goods is going up – breaking through 4% this year – and the cost for us to provide services is going up with it. When we repair homes or community buildings, fix potholes or replace pavements, install streetlights or plant trees, or any of the other essential things we do – the cost of materials and labour is going to be much higher.
In Haringey, we will fight tooth and nail to defend services and protect those in the greatest need. We’ve been able to set a budget with zero cuts this year. In spite of Tory cuts, we will be an ambitious Labour council, setting out to create a fairer and more equal borough. But what we need as much as ever is Labour in government.
The opportunity for a Labour government might come sooner than we expect. The Fixed Term Parliament Act will soon be abolished, meaning Boris Johnson will be able to call a general election whenever he pleases within the five-year parliamentary term. There is a very real chance that, once the boundary changes (which are set to benefit the Tories by up to ten seats) come into effect, Boris Johnson will call an early election to avoid some of the worst impact of this budget before an election. That means there is a very real danger of having the Tories in power until 2028.
If we want to reverse the widening inequality, the dismantling of the NHS, the inaction on the climate crisis, the abandonment of unpaid carers and the sick and disabled, the chronic underinvestment in our schools and young people, and the waste, cronyism and vanity projects that are hallmarks of this Tory government, we need to be ready for a general election. Labour wins by being on the doorstep, being active in our communities, and having policies that truly respond to the needs of the country. We need to be ready to fight the Tories at the next general election.