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

Elliot Chappell
© HM Treasury/CC BY-NC-ND 2.0

Rishi Sunak delivered the Budget and spending review this afternoon, saying there would be a real-terms funding rise for all government departments with a £150bn increase, which the Chancellor described as the “largest increase this century”.

He confirmed the planned rise in fuel duty would be scrapped, announced £1.7bn in ‘levelling up’ funding and made a £21bn spending commitment on roads and £46bn for railways, alongside changes to Universal Credit and business rates.

The Chancellor told MPs today that the Universal Credit taper rate, the rate at which the entitlement is withdrawn as a person earns more, will be cut from 63% to 55% in the next few weeks. He said the measure will cost around £2bn.

He announced that there will be a revaluation of business rates every three years, saying Labour’s plan to abolish business rates and replace them with a different system, announced at the party’s conference, would cost the country £25bn.

Sunak outlined plans to halve business rates for companies in the retail, hospitality and leisure sectors with the relief to be offered to businesses such as pubs, music venues, cinemas, restaurants and hotels in a tax cut worth £1.78bn.

Other significant announcements in the Budget this afternoon included an overhaul of alcohol duties and a reduction of taxes on draught beer and ciders, a cut to air passenger duty on domestic flights and a new tax on ultra long-haul flights.

The Chancellor described the Budget as one that “builds a stronger economy for the British people”. Rachel Reeves, standing in for Keir Starmer, declared that “bankers sipping champagne on short-haul flights will be cheering”.

Here is what the rest of the labour movement had to say…

Trade unions

“The Chancellor has gone from pay freeze to pay squeeze,” Frances O’Grady said. The TUC general secretary highlighted that Sunak admitted that there will be no pay growth this year, saying that he has “no plan to get real wages rising for everyone after an 11-year pay squeeze”.

On the cut to the Universal Credit taper, she said: “Workers on universal credit should always have been able to keep more of their wages. This change does not make up for the £1,000 per year cut to universal credit, and does not help those on universal credit who cannot work.”

Unite’s Sharon Graham branded the Budget “unacceptable”. The general secretary said it “makes it clear that the government wants workers to pay for the pandemic”, adding that “their incomes are under attack from tax rises and inflation while the super-rich will continue to prosper”.

She condemned the Chancellor for failing to invest in growth and jobs, highlighting that the government delayed its own targets for research and development investment and described talk of ‘world-class’ public services as “laughable”.

“This was a Budget of smoke and mirrors and in time will be seen to be one of insignificant promises that will never be kept. New economy? More like same old same old,” Graham said.

“Public sector workers won’t be raising many glasses to the chancellor. With no certainty pay will rise above inflation, services will go on shedding experienced staff,” UNISON general secretary Christina McAnea commented this afternoon.

She said the £4.8bn grant funding announced for local government would not make up for the cuts inflicted on councils over the past ten years and condemned silence in the Budget on social care, adding: “Quality care won’t exist while the government continues to treat the sector as a bargain-basement service.”

GMB general secretary Gary Smith criticised Sunak for re-stating previous spending commitments in his statement and argued that the Budget was “big on headline-capturing announcements but scant on detail”. He called for a guaranteed pay rise for public sector workers and said the minimum wage increase is not enough.

“If the government really wants to end the scourge of low pay and insecure work we need substantial wage increases across key areas of the economy, public services, social care, supply chain sectors and the so-called gig economy, and massive industrial investment to onshore the green jobs of the future,” he said.

Paddy Lillis, Usdaw general secretary, expressed disappointment that the Budget did not take action to avert the “cost of living crisis faced by low-paid workers” or provide help for struggling businesses in the retail sector.

“The temporary relief to business rates announced does not provide the fundamental reform to the system which the sector has been calling out for. The Chancellor has simply kicked the issue into the long grass,” he argued.

TSSA general secretary Manuel Cortes said the statement today was “the wrong Budget for a climate emergency”, saying that it will “do nothing to decarbonise travel” and that Sunak has “got this badly wrong”.

He said: “Domestic air flights cause seven times the carbon impact of rail journeys, and car journeys produce more than four times the greenhouse gas per passenger mile as travelling by rail. Yet, with COP26 just around the corner, the Chancellor opted to use his Budget to subsidise road and air travel rather than incentivising rail travel.”

Mick Whelan described the Budget as a “confidence trick”. “It’s not new money – or even a new announcement – it’s just a rehash of money that has already been promised, and already allocated, dressed up to make the Chancellor look good,” the ASLEF general secretary said this afternoon.

He said the cuts to air passenger duty and help for the road haulage industry, just days before the international climate summit COP26 is due to be hosted in the UK, “send out all the wrong signals” and called for a greater commitment to rail.

UCU general secretary Jo Grady highlighted in response to the Budget that pay for further education workers has been cut by 35% in real-terms since 2010 and that 24,000 teaching staff have left the sector over the last decade.

“Rather than waste any more time tinkering around the edges of a broken funding model or dictating to students what constitutes a valuable degree, the government would be much wiser to explore investing in a publicly funded higher education system,” she added.

Labour Party

Labour leader Keir Starmer, who could not respond in-person as he was self-isolating, described the statement from the Chancellor as a “smoke-and-mirrors Budget, which does nothing for working people and nothing about the cost of living crisis” in a short video message released this afternoon.

Nick Thomas-Symonds wrote on social media that the Budget “fails working people”, adding: “With increased inflation, the universal credit cut, and rising energy prices, families are feeling the pinch. The Chancellor could have accepted Labour’s proposal to cut VAT on domestic energy bills for six months but did not.”

Bell Ribeiro-Addy criticised Sunak for announcing a cut to the bank surcharge tax, from 8% to 3%, tweeting: “In the same month that the poorest UK households have seen a £1,040 cut to Universal Credit, they’re giving away billions to banks.”

“Another Budget from the Chancellor which failed on both the cost of living crisis and the climate crisis. No green recovery, no plan to save families £400 on bills, no plan for green steel. Working people will pay the price of Tory climate delay,” Ed Miliband tweeted this afternoon.

John McDonnell described the Budget today as an “almost complete failure to address climate change” and pointed out that the cut to the taper rate “helps only half the people claiming Universal Credit and only takes the level back to what was originally planned when the Tories then increased it”.

“Never in our history have the country been asked to pay so much for so little. When you look at the burden of taxation, which is now the largest since 1945, and where that burden is falling it is still disproportionately falling on workin gpeople and it’s falling on some of the people on lowest incomes,” Wes Streeting said.

Shadow Women and Equalities Secretary and Labour Party Chair Anneliese Dodds highlighted that of the 196 pages in the autumn Budget and spending review, just four were dedicated to equality and that there was no equality impact assessment.

Beth Winter tweeted: “Today’s Budget fills me with pessimism. It does everything to protect the wealthy & bankers. It does nothing to address the cost of living crisis, low pay, welfare cuts, poverty & inequality endemic in society. The absence of measures to tackle the #ClimateCrisis is shameful.”

Charities, think tanks, campaign groups

The Fabian Society research director Luke Raikes said: “The Chancellor’s increases in some areas of spending are welcome but long overdue. These are just sticking plasters on a state that has been left creaking by a decade of cuts.”

Luke Murphy at the Institute for Public Policy Research said Sunak “used the budget to extend the ages of fossil fuels”, criticising the cut to air passenger duty and said he “talked for longer about beer duty, than our duty to future generations”.

Katie Schmuecke, deputy director of policy and partnerships at the Joseph Rowntree Foundation, welcomed the cut to the Universal Credit taper rate and increase in the minimum wage but said “the reality is that millions of people who are unable to work or looking for work will not benefit from these changes”.

“The Chancellor’s decision to ignore them today as the cost of living rises risks deepening poverty among this group, who now have the lowest main rate of out-of-work support in real terms since around 1990,” Schmuecke added.

Local Government Intelligence Unit chief executive Jonathan Carr-West welcomed the local government grant increases of £1.6bn per year for the next three years and a 3% increase in core spending power as a “step in the right direction” but warned that they “do not undo a decade of cuts”.

“Social care costs will continue to rise, especially given the announcement of an increase in the minimum wage. That will eat into most, if not all, of a 3% increase in spending power. And, it’s still far from clear when the benefit of national insurance contribution increases will be felt across social care,” he said.

Anne Taylor, executive director of the Food Foundation, welcomed the commitment by the Chancellor to continue funding the holiday activities and food programme but added: “This alone will not be enough to prevent child food insecurity.”

“There are still far too many children not benefitting from the safety net that these targeted schemes should be providing. Nearly 50% of children experiencing food insecurity in England are still not eligible for free school meals or holiday clubs,” she said.

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