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Nov
2017
Wednesday 22nd
posted by Morning Star in Features

BEN CHACKO and ROB WELLS explore the lows and lows of Hammond's 2017 Budget


LAST week shadow chancellor John McDonnell demanded an “emergency Budget” to respond to the crisis facing our public services.

The NHS reports record staffing shortages while waiting times climb. Public servants have seen their pay packets shrink for seven years running.

Eighty-eight per cent of schools are seeing budget cuts which average £52,546 a year for primary schools and a staggering £178,321 a year for secondary schools, according to research by the School Cuts website.

The social care sector is starving, as are increasing numbers of children (with this government now set to plunge a million more children into poverty by the time it’s done, as Jeremy Corbyn noted in Parliament today).

All this after seven years of austerity which have not reduced Britain’s debts (they have doubled since the Tories took power) and which might be costing ordinary people the Earth but have singularly failed to dent the still swelling fortunes of the richest (the Sunday Times rich list reported a record number of billionaires for 2017, while the scandals of the Panama and Paradise Papers show how far the wealthy go to avoid making even modest contributions to the national purse).

McDonnell proposed practical solutions: £17 billion extra invested in public services, with a focus on the NHS and social care, a large housebuilding programme and significant investment in infrastructure.

Moderate tax rises on the richest and a reversal of corporation tax cuts would pay for the whole programme and put a halt to Britain’s spiral of economic decline.

What a contrast there is between that bold vision and the wash-out delivered by Philip Hammond in today’s Budget: tax cuts by stealth, cash for property developers and another year of downward pressure on pay for millions of workers.

The Chancellor did his best to pretend that the economy is getting healthier, but few were convinced.

Shadow education secretary Angela Rayner noted that there was laughter in the chamber at the “completely delusional” claim that Britain’s underlying debt has peaked (a claim he also made last year).

This fiction is achieved by a typical Tory accounting trick, counting the promised one-off proceeds of RBS shares the government is selling at a loss and reclassifying housing association debts as private-sector (the Office for Budget Responsibility (OBR) saw through this immediately).

With no action on the social care crisis and no pay rise for public-sector workers (a hint of jam tomorrow for NHS staff is contingent on increased “productivity” from nurses literally on the breadline and struggling to compensate for the yawning hole left by tens of thousands of vacant posts), Hammond clearly wants us to think that he has, at least, stepped into the breach on housing.

But abolishing stamp duty on properties under £300,000 for first-time buyers will do nothing but inflate the housing bubble — with the OBR estimating that prices will rise by twice the amount of the duty, leaving homes even more unaffordable than they are now.

At the same time the tax cut will cost the Treasury more than £500 million over the next two years, money our public services sorely need.

Billions directed at “construction” will be another bonanza for greedy developers: “nearly £50 billion of public money going to fund more of the same,” in the words of housing campaigner Glyn Robbins, who dismisses this Budget as “a groundhog day for failed policies.”

Hammond was less than clear about exactly what his £44bn in “total support for housing” involves, but if it’s simply more cash for the Help to Buy loan scheme it won’t help those most in need.

“Will it address housing need? No,” is Robbins’s simple verdict.

And the Tories are still pushing the right-to-buy madness that helped create the desperate shortage of affordable housing we see now, with £200 million for a regional pilot of Right to Buy for housing associations in the West Midlands.

As for granting councils the power to compulsorily purchase land banked by developers, the policy sounds good — but there is no indication as to when, how or how often these powers will be used, or how well compensated the private owners will be.

Government hostility to public housebuilding would suggest it is unlikely the proceeds will be handed to councils.

As with the £400m to “regenerate” housing estates, one must take Tory headlines with a pinch of salt: most redevelopments to date have involved turfing out the existing residents of an estate so private developers can grab the land and build luxury flats.

The Budget prompted a succession of increasingly furious tweets from Green MP Caroline Lucas, which is hardly surprising given its complete irresponsibility over environmental degradation and climate change.

Fuel duty has been frozen again (as every year since 2010), a policy which disproportionately benefits richer families as car use declines with decreasing wealth.

Air passenger duty is again frozen for short-haul flights and will also be for long-haul flights from next year, when a tax that rises with the number of flights taken is needed to target frequent flying by the richest.

There is no new support for renewable energy until 2025 — supposedly to keep bills down, when nationalising the industry would be a far safer bet if that’s the goal and investment in renewables would make them cheaper faster.

Continued tax write-offs for oil and gas-drilling firms is yet another handout to private profiteers and no substitute for the industry-wide plan with sustainable jobs at its heart that trade unions have repeatedly demanded.

Changes to the personal tax allowance do nothing for the lowest earners; ratcheting up the threshold for higher rate income tax gifts £1,350 each to the top 10 per cent of Britons.

The con-trick “national living wage” will be about a pound an hour lower than the actual living wage outside London even after Hammond’s 33p increase, and falls well short of the £10 an hour pledged by Labour.

Like most Budgets, this was peppered with promises that ring hollow. Extra cash for the NHS is far short of what’s needed: a sticking plaster on a gaping wound.

Gimmicky handouts to schools dependent on how many kids take maths at A-level do even less to address budget cuts that head teachers across the country are saying will mean redundancies and bigger class sizes.

As for the tax-dodgers, they’re sitting pretty: nothing in this Budget suggests a clampdown is on its way.

This was the programme of a government with no mandate and no answers, intoning the same old pieties in the face of an existential crisis.

The sooner we sweep it away, the sooner Labour can implement the emergency Budget Britain needs to pull itself back from the brink.

Ben Chacko is editor and Rob Wells an assistant editor at the Morning Star.




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