Mythbuster: the spending review

UNISON acting head of policy David Arnold casts a debunking eye over the spending review and budget

We heard a lot of big promises from the Chancellor last week, about how the pay freeze is over and how the Tories are now the party for public services. But how do the promises stack up?  Here is a short myth-buster, setting the government’s claims against the reality.

The government claim: the pay freeze is over

Fact. Although the chancellor said that the public sector pay freeze is over, it’s far from clear that he’s given government departments the funding necessary to meet pay claims in 2022. Paul Scully, the business minister, rather let the cat out of the bag in an interview with Sky News shortly after Rishi Sunak’s announcement, when he said that the government could not even guarantee that pay rises in the public sector would be equal to inflation. The Bank of England predicts that inflation will hit 5% in 2022.

Claim: the government is creating a high-wage economy

Fact. The government has increased the national living wage, and pay in some sectors (road haulage) has gone up. However, the big picture and the long-term pay trends for most working people remain dire.

Analysis by the Resolution Foundation think tank shows that real terms pay growth will have been just 2.4% in the 16 years between 2008 and 2024. In the 16 years up to 2008 pay grew by 36%.

Claim: the government is levelling up public services 

Fact. The spending review did deliver increased investment in public services compared with previous years. But this doesn’t come close to making good on the cuts and below-trend investment that our services have encountered during the austerity years since 2010.

These have accumulated over the years and mean that there are still significant capacity issues. The chancellor promised 20,000 new police officers, but neglected to mention the fact that we’ve lost more than 40,000 police staff and officers since 2010. He promised 50,000 new nurses at a time when there are 94,000 vacancies in the NHS and 105,000 in social care.

The Institute for Fiscal Studies has concluded that cuts to council services are still likely without additional funding from central government.

Claim: the government is helping families with the cost of living and simpler and fairer taxes

Fact. The government has cut the £20 per week uplift in universal credit, which hit the incomes of millions of working people. Although the spending review resulted in a partial U-turn, the changes still mean that the poorest fifth of households will be £280 a year worse off.

The freeze on tax thresholds, the recently announced national insurance increases and council tax hike mean that the tax burden is now at its highest sustained level in peacetime. But what makes this especially unfair is that that the tax hike isn’t shared evenly, with the chancellor allowing corporations like Amazon off the hook.

Claim: the government is at the forefront of global efforts to tackle climate change

Fact. The trove of documents released alongside the budget revealed very little to indicate that the government is serious about net zero.  Given the number of global leaders arriving in Glasgow for Cop 26 just a few days after the budget, it smacked of hypocrisy and complacency to announce a cut on taxes for short haul flights and to not rise fuel duty.

Claim: the Conservatives are the party of public services

Fact. Although the budget does not deliver – at least the Tories are forced onto UNISON’s territory.  The campaigns that we continue to run, many focussed on red wall seats, are a major reason for this. We should thank the 20,000 members who took part in our recent campaign action, writing to the chancellor demanding an end to the pay freeze and for sustained investment in public services.

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