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Executive Leader Cllr Brenda Warrington

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Councillor Brenda Warrington, Executive Leader of Tameside Council

The Wrong Budget at the Wrong Time

Friday, 05 March 2021

All eyes this week were on the House of Commons as the Chancellor of the Exchequer, Rishi Sunak, announced the latest national Budget. While Budget day is always a major event, this one was even more significant as it would give us the first indication asto whether the government was sincere in its commitment to build back better and fairer after coronavirus.
 

The announcement comes at a time when the economic impact of this once in a generation pandemic is beginning to be felt. The forecasts show that the UK economy will not return to its pre-coronavirus levels until 2022 at least. While annual growth is expected to rebound by 4% this year and 7.3% in 2022, this means that the economy will still be 3% smaller in 2026 than was predicted before coronavirus. More disturbing of all is the spectre of a new wave of unemployment. It’s estimated that 700,000 people in Britain have lost their jobs since the pandemic began, and the rate of unemployment is expected to increase to as high as 6.5% next year.

It is in this context that I believe that the Chancellor’s decision to cut Universal Credit by £20 a week in September is a grave error. As unemployment rises and the furlough scheme comes to an end, it is estimated that this change could plunge over half a million people, including 200,000 children, into poverty. Many of these are likely to be people who have worked most of their lives, and are now rewarded by the government pulling away the safety net at a time when it is needed most. The fact that the Chancellor has correctly elected to gradually phase out other elements of coronavirus support, including the furlough scheme, business funding and VAT reduction, makes this brutal and unnecessary cut all the more glaring.

The Leader of the Opposition also accurately pointed out that the Budget speech, which lasted over an hour, did not mention the funding of social care once. That phrase might sound like a cliché, but the consequences are real. Up and down the country, councils are starting to run out of money to meet their legal obligations for providing social care and other services. Since the beginning of the coronavirus pandemic Croydon Council has declared bankruptcy, and four more were forced to borrow money to fund day-to-day spending. The government has not come close to repairing the damage inflicted by a decade of ideological austerity, and I regret to say that this Budget continues to do nothing to protect our local services, our NHS, or our elderly and vulnerable.

 

Worse still are the political games that the Budget appears to be playing with the little funding that they have offered. Back in the Spending Review at the end of the last year, the government announced a £1 billion Towns Fund and Levelling Up fund. We now know that out of the 45 towns selected to receive this money, 40 of them are in constituencies represented by Conservatives MPs. This includes the Chancellor’s own constituency in Richmond, which is already one of the richest in the North of England, as well as towns in the constituencies of four other government ministers, the Communities Secretary Robert Jenrick (Newark), the Welsh Secretary Simon Hart (Carmarthen West and South Pembrokeshire), the Scottish Secretary Alister Jack (Dumfries and Galloway) and Northern Ireland Secretary Brandon Lewis (Great Yarmouth). The National Audit Office has also found that almost £10.5 billion in contracts have been awarded by the government without a competitive tender process, leaving the British taxpayer vulnerable to cronyism, conflicts of interest and, although I hope this isn’t the case, outright corruption.

Put all this together and it’s clear thar this Budget is far from the radical and decisive action we need to emerge from the coronavirus pandemic. Instead it reinforces the fact that lavish money is available for those who know the right people in the government, while everybody else has to make do with crumbs. This is not the way that a first-world country should be run. We can, and we must, demand better.

 

Posted by: Executive Leader


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