Solid Foundations

4th March 2021

Partners in crime – Boris Johnson and Rishi Sunak after yesterday’s budget speech

The Budget delivered by Chancellor Rishi Sunak yesterday was never going to fundamentally change the UK economy in such a way that it would ‘level up’ in favour of working people.  As expected, Sunak has merely applied a sticking plaster over a gaping wound, by favouring short term measures to alleviate some of the worst excesses of the pandemic, over long term structural change.  

Some of these measures, the extension of the furlough scheme, additional help for the self-employed, extending the £20 per week Universal Credit top up, will be welcomed by those struggling to make ends meet, who live in fear from one government announcement to the next that the safety net may be withdrawn.

Sunak was keen to portray these measures as an indication of government magnanimity, that in the face of the uncontrollable force of the pandemic the government has taken steps to protect those most at risk and most vulnerable.  Sunak was keen to make it sound as if the government cares.  The increase in Corporation Tax, from 19% to 25% in two years time even gave Sunak cover to suggest that the burden would be shared and even the biggest corporations would be made to pay their share.

This political conjuring is only to be expected from the Tories.  Big corporations in Britian have been getting away with some of the lowest levels of corporation tax in Europe for years, abjectly failing to pay their share while the NHS and local authority run services have had to struggle under the burden of austerity, to pay off the bankers gambling debts from the 2008 crash.

It is easy to see the pandemic as an uncontrollable force.  The fact of it happening may not have been immediately predictable but the response to it has been very much in the hands of governments around the world.  Britain still leads the European league table for death rates, at over 120,000, a national scandal barely acknowledged by the right wing press and BBC. 

The hardest lockdowns have produced the most effective results, in China, Vietnam and New Zealand, where it has been recognised that public health cannot simply be sacrificed on the altar of private profit.  Ironically, having put public health first, these are the places where economic recovery is returning most strongly.  Conversely the United States, Britain and Brazil not only see escalating deaths but flagging economic recovery.

Sunak may be able to bathe in the congratulations of the Tory backbenches for a while.  He may even win the praise of a few hard pressed families desperate to hang on to what little they have in the short term.    The City of London and corporations may whinge a bit about corporation tax but they know they can both afford and absorb a modest increase.  There is no wealth tax or windfall tax on companies which have profited from the pandemic.  There is no indication that the billionaires who have increased their wealth by over £25bn during the pandemic are going to feel any pain.

Frontline staff in the NHS, social care and local government did not warrant a mention in the budget.  Yet this is where the real work of recovery is happening.  The vaccination programme being driven, not by entitled members of the House of Lords, but frontline staff and volunteers working to help out in their local communities.

Even Labour leader, Kier Starmer, not famed for his radicalism, accused Sunak of “papering over the cracks rather than rebuilding the foundation” going on to call for a budget “to fix our economy, to reward our key workers, to protect the NHS and to build a more secure and prosperous economy for the future.”

That would certainly be a start.  Those who have lost their livelihoods as businesses fold, find themselves in increasing debt as bills come in, or have lost their jobs as unemployment escalates, may increasingly find that they need even more.  Rebuilding the foundation is all very well but if the foundations are built upon capitalist economics they will be poorly embedded and prone to crumble in the next economic storm.

Solid foundations will need to be built from socialist bricks. That will not only require radical new architects with a vision for the future but a whole new firm of builders.

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