Trade unions round on the Chancellor’s Autumn Statement

Hunt's budget described as "Austerity 2.0" and criticised for making working people take the 'hit' of economic chaos

18 Nov 2022| News

Trade unions stood united in their condemnation of Thursday’s Autumn Statement, Jeremy Hunt’s first as Chancellor of the Exchequer. In his Autumn Statement he announced, amongst other things:

  • a range of tax threshold freezes, including for income tax and inheritance tax for a further two years, on top of an existing four-year freeze, to April 2028
  • The threshold for the 45p additional rate of tax will be cut from £150,000 to £125,140
  • Windfall taxes will raise £14bn, including a new temporary 45% levy on electricity producers.
  • Existing departmental spending under the 2021 spending round will be kept. Then departmental spending will grow at 1% a year in the three years that follow.
  • The government’s energy price guarantee will be kept for a further 12 months at an average of £3,000 for a typical household, up from £2,500 at present.
  • The “national living wage” will rise by 9.7% next year to £10.42 an hour.

But in the context of economic recession, soaring inflation and stagnating wages, many of the unions were sharply critical of the measures as hitting ordinary working people with stealth taxes and public service freezes, while protecting the profits of big corporations and the wealth of the super rich.

The GMB’s Gary Smith said:

“The Tories have crashed the economy but it’s working people who are paying the bill. The Chancellor has decided to double down on the Conservatives’ recipe for recession, ushering in a new era of austerity in public services.

NHS workers from nurses and porters to paramedics, who put their lives on the line during the pandemic, are being thanked with yet another big real-terms pay cut. Meanwhile he’s ducked the big decisions on defence and hydrogen spending and long-term investment is being slashed – stagnation is here to stay with this Government.

“Even the Minimum Wage is being cut in real terms – it’s clear the Government no longer believes in clapping key workers and prefers to stick two-fingers up instead. This disgraceful Tory Government is out of ideas, out of time, and should be out of office.”

Unite General Secretary Sharon Graham said:

“Our economy is broken. This Autumn Statement is not for working people. The chancellor has taxed income over wealth, backed City bankers instead of nurses and chosen profiteers over public services. He has made political choices based on rules that he himself has the power to change.

As for the Labour Party, they appear to have accepted the economic premise of the black hole rather than challenge it. That is a mistake.

We are stuck in an economic straight-jacket. Our political class repackage the same failed approach crisis after crisis, choosing to put a sticking plaster on a wound that needs surgery. In a country where the wealth of billionaires rockets whilst pay is cut and the gap between the super-rich and the rest grows, we need do more than appease the markets.

Austerity and tax rises for workers will do nothing to create decent jobs or put money in our pockets. As a country, we must now begin a discussion on how to do things differently. We need different rules and to make different choices. We need an economy that works for all.”

PCS General Secretary Mark Serwotka said:

“This statement is a catastrophe for our members. The government is cynically using the soaring inflation and devastating cost of living crisis to punish workers. Be in no doubt, austerity is back.

These cuts aren’t inevitable or a necessity, this rotten government is making a political choice that makes you and your family worse off.

Further cuts will be a disaster for PCS members and the public who rely on the services they deliver. After over a decade of relentless attacks on their living standards, and with a further assault on the horizon, it’s no surprise our members voted so overwhelmingly for strike action.”

Dr Mary Bousted, joint general secretary of the National Education Union, said:

“Today’s budget demonstrates the scale of this government’s failure to grow the economy. It presages a terrible period of austerity where the reduction in household disposable income per person will be the biggest on record, taking incomes down to 2013 levels. Teachers know what this means – more children coming to school hungry, cold and unable to learn. It is they who will pay the price of Liz Truss and Kwasi Kwarteng’s disastrous budget which created a £30 billion fiscal black hole – which will be filled by inflicting misery and want on children, young people and their families.

“The government’s announced increase in school funding is clearly a result of both the relaunch last week of the School Cuts campaign with NAHT, ASCL and Parentkind, and of the ballots for fully-funded inflation-proof pay rises.

“Any additional funding for our schools will meet some of their desperate need. However, the money announced by the Chancellor will not be sufficient to prevent schools from having to make cuts. It will still result in schools having less funding than in 2015. Public services have been cut to the bone. For schools and colleges, there are no more efficiency savings to make. We will study closely today’s commitment on education funding and revise the School Cuts site accordingly, so that parents can judge for themselves. But there is no doubt that challenges will remain. Despite some progress this increase is still below inflation forecast by the OBR.

“Schools are more than buildings and materials. Teachers and support staff are also homeowners, renters, consumers and parents. The impact of rising costs will be felt by all, and it is simply not sustainable for them to continue with real-terms pay cuts. Teacher pay had already fallen by 20% in real terms between 2010 and 2021, even before the Government’s attempt to impose another huge real-terms pay cut against inflation in 2022. Support staff pay has fallen by 27% over the same period. The latest teacher pay deal offered by Government is well below inflation. The much-vaunted increases to teacher starting pay are also well below inflation.”

TUC General Secretary Frances O’Grady said:

“The Conservatives crashed the economy – now they are making working people take the hit. This is a recession made in 10 Downing Street, which will put jobs at risk and hit workers’ wages. We are all paying the price for the last decade of Tory governments, which decimated growth and living standards. Today’s statement shows it will be two decades until real wages recover.

Millions of key workers across the public sector – who got us through the pandemic – face years of pay misery as departmental budgets are brutally squeezed. The chancellor talked about everyone making sacrifices, but the super-rich have once again been let off the hook – token tweaks to tax will do little to dent their bank balances.

This is a government more interested in rewarding wealth than work. This is a government choosing to hold down the wages of nurses and teachers while it allows bankers unlimited bonuses.

This winter, workers will be taking action to defend their jobs and pay. They need a government that is on their side – not one determined to hold down their pay at any cost.”