The Weekly paper of the New Communist Party of Britain
Week commencing 2nd August 2024
The Weekly paper of the New Communist Party of Britain
Week commencing 2nd August 2024
The Weekly paper of the New Communist Party of Britain
…while giving little with the other. Monday started off well with the announcement that the Government and the British Medical Association had agreed on a 22.3 per cent pay rise for junior doctors over two years in England. It was not to last, however, and not just because the award, while still substantial, was below the 35 per cent to restore the value of pre 2008 salaries.
In the afternoon the new Chancellor, Rachel Reeves, made a statement in the Commons on the “Public Spending Inheritance” that will set the tone of the new Labour Government. Instead of pulling a rabbit out of a hat to impress the audience she effectively said we will not be getting much more than a few rabbit droppings.
The former Chancellor angrily denied any deception about the state of Britain’s public finances and cited the Institute for Fiscal Studies in support of his claim that she ought to have known the true figures. And he has a point.
It is, indeed, clear that things are worse than the Tories let on. But it is also clear that claims of a massive unexpected “black hole” to the extent of £21.9 billion are exaggerated and deployed to justify the sort of cuts Labour used to oppose in opposition.
Rachel Reeves claimed that the former Tory Government planned to spend £35 billion more than announced, of which £13 billion was for emergencies and “slippages”. This gave her an excuse to “reduce that pressure on the public finances by £5.5 billion this year and over £8 billion next year”.
In particular she complained about the costs of the now shelved Rwanda deportation scheme and the Tory policy of simply handing out more cash to the railways to compensate for post-COVID declines in passenger numbers. Needless to say, she regards Tory military expenditure, particularly in Ukraine, as sacrosanct.
She boasts that she will be accepting the much-delayed recommendations of the supposedly independent Public Pay Review bodies. While it is technically correct to say that the 5.5 per cent offered to NHS workers and teachers is an above inflation rise, that figure does not nearly compensate for the 14 years of Tory austerity and the recent high inflation.
One of her anti-Tory soundbites, “they spent like there was no tomorrow because they knew someone else would pick up the bill”, sounds as though the ghost of Margaret Thatcher’s speech writer is being kept busy.
In a classic case of robbing Peter to pay Paul, she said that the £9 billion extra on public sector pay will mean cuts of £3 billion to departmental budgets.
The Measures
Another thing getting the chop is the new educational qualification – the advanced British Standard. Meanwhile drastic cuts are planned in the use of hotel accommodation for migrants. What is going to happen to them is unsaid, but more rapid deportation seems to be the unspoken solution.
£1 billion worth of unfunded transport projects for both road and rail will be cancelled. “If we cannot afford it, we cannot do it” is the Government’s mantra. It is a good thing that the road under Stonehenge has been dumped but she seems to have entirely forgotten that taxes can be raised on those who can afford it.
While she denounced the previous Government for its empty promise of 40 new hospitals her only response is to “conduct a complete review of the new hospital programme, with a thorough, realistic and costed timetable for delivery”. This can be read as saying the whole thing will be abandoned without a formal declaration.
Likewise, Tory adult social care reforms to cap the lifetime costs borne by recipients were never implemented have now been scrapped on cost grounds. Also, the winter fuel payments worth £200 will now be restricted to those receiving pension credit or £300 to households in receipt of pension credit with someone over the age of 80. This will adversely affect about 10 million pensioners.
This measure enabled former Tory pensions minister Baroness Ros Altmann to get on her high horse and claim she was “shocked that the Chancellor has chosen to take money away from some of the poorest people in this country”. After all that is a traditional Tory task. Reeves claims that 850,000 eligible households do not claim and merging pension credit with housing benefit will enhance uptake among those entitled to it.
The forthcoming Budget, we are warned, “will involve taking difficult decisions to meet our fiscal rules across spending, welfare and tax”. That does not sound like good news for the working class.
It is traditional for Tories to condemn the unemployed as work-shy layabouts happy to live off benefits. Reeves takes a similar view, albeit with more polite language than Norman Tebbit’s infamous “On yer bike”. It is difficult to see what other interpretations can be put on her remarks that “because if someone can work, they should work. That is a principle of this Government, yet under the previous Government, welfare spending ballooned, while inactivity has risen sharply in recent years”.
While saying that “we will ensure that the welfare system is focused on supporting people into employment” sounds good in theory, experience suggests that it will be a case of driving sick people off benefits and into poorly paid jobs. It was telling that she speaks of plans to “assess the unacceptable levels of fraud and error in our welfare system and take forward action to bring that down” while failing to mention a clampdown on the much greater losses caused by skilful tax evasion.
She confirmed that the Office for Budget Responsibility will be given an effective “fiscal responsibility” veto – which is a polite term for not annoying bankers.
Public sector reform is promised that looks forward to grasping the “opportunities of artificial intelligence to improve our public services”. It might be unduly pessimistic, but it sounds like a recipe for job cuts. No mention was made about reversing penny pinching out-sourcing in the public sector that would be an effective means of saving public money.
Ironically, on the same day as Reeves’s speech, security guards employed by G4S at DWP offices started a week-long strike in protest at being paid only the minimum wage and even forced to undergo training courses in their own time unpaid.
GMB National Officer, Eamon O’Hearn, said that the latter point “constitutes a breach of National Minimum Wage laws and the Modern Slavery Act. G4S gets millions in taxpayer cash to run the job centre security contract for DWP”. He added that: “Instead of forking out for expensive agency staff and lining director and shareholder pockets, that money should be used to make sure these workers can live.” No chance of that unless Starmer and Reeves are forced to change course.
The Reaction
The response from unions to Reeves’s speech was mixed.
Unite general secretary Sharon Graham said: “We are the sixth richest economy in the world, where the 50 richest families are worth £500 billion. It is clear irrespective of ‘black holes’ that we need to consider a wealth tax.
“Workers and communities cannot wait for growth, nor can they be told to pay for another crisis not of their making. People are struggling. Living standards have fallen, inequality has increased and our public services are on life support.”
More specifically, the union said of the NHS 5.5 per cent pay offer: “The government has rightly recognised this with restorative pay rises for junior doctors. It’s imperative to ensure that we are not dividing NHS workers and creating even greater differentials between different groups.” But “health workers being offered less than half of what junior doctors have been offered is not good enough. It will certainly not deal with the recruitment crisis in the NHS.
“The PRB [Pay Review Body] process has today been proven to be broken beyond repair. We cannot have a situation where restorative pay awards are offered to some and not to all.” That, however, is exactly what we have.
Unison, the largest union for NHS staff, sounded more grateful, saying “this is a government thankfully prepared to act quite differently from its predecessors”, but added that: “This year’s wage increase is already more than a quarter of a year late. NHS staff will be pleased ministers haven’t made them wait any longer” and “this year’s pay rise cannot be a one-off. It’ll take much more than this boost to get the NHS into a better place.”
Daniel Kebede, General Secretary of the National Education Union, the largest teachers’ union, doffed his cap and welcomed the 5.5 pay award but described the “so-called independent pay review body as a failed process that has resulted in pay cuts over the last 14 years”. He correctly noted that only industrial action had changed the pay review body’s thinking on teacher pay.
It is likely the doctors will accept the offer, but what the teachers and other NHS workers will say is more uncertain…