How the labour movement reacted to Rishi Sunak’s 2021 Budget

Elliot Chappell
© UK Parliament/Jessica Taylor

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.

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…

Trade unions

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.

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”.

“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.

Labour Party

“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”.

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”.

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.”

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.

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.

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 pandemic. Most other countries haven’t needed to spend anything like that. Why? Because they dealt with it early.”

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!”

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.

Charities, think tanks, campaign groups

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.”

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.”

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”.

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.

“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.

Everything Labour.
Every weekday morning.

By clicking ‘subscribe’ you confirm you have read and agree to our privacy policy

More from LabourList