Chancellor Rishi Sunak’s Summer Statement on Wednesday was a mix of ineffectual half-measures and attacks on the working class.
Sunak said he was presenting “a plan for jobs” and that government interventions have already “significantly protected peoples’ incomes”.
“Although hardship lies ahead, no-one will be left behind,” he said.
It’s nonsense. One of the biggest attacks is what Sunak called Kickstart—the creation of a pool of “free labour” for companies. The government will pay the minimum wage to up to 300,000 people aged 16-24 for six months from August.
This is in a long line of cheap labour scams such as the Youth Opportunities Programme that began in 1978, the Youth Training Scheme unveiled in 1983 and the New Deal programme that began in 1997.
They force young people to work for very low wages as an alternative to life on miserable benefits. And they drag down wages more generally by filling jobs that might otherwise have been on a higher rate.
Companies will frequently take advantage of the state subsidy for six months then dump the young person once they actually have to be paid by the boss.
Previous versions of such schemes were opposed by the unions. Not this time.
Dave Prentis, general secretary of the Unison union, said “there’s much for young people” in the package.
TUC general secretary Frances O’Grady said, “Kickstart is a good first step”.
And looking at the package as a whole John Phillips, GMB union acting general secretary, said, “We will subject the Chancellor's policies to close scrutiny—but what has been outlined today seems to be a good start.”
Such statements betray the paucity of a political approach that says the only way for workers to secure good jobs and pay is for their bosses to prosper. But the whole system pushes bosses to hold down pay and slash jobs when it’s necessary to compete effectively.
Kickstart is the first phase of a “start kicking” attack on workers.
A real recovery plan would require direct public control of large parts of the economy to break from the logic of capital and impose the dictates of human need
Companies that have survived on state handouts for the last few months may now go under as the support is withdrawn. Many will impose pay cuts and mass redundancies, or shut.
The billions talked about by Sunak sound a lot. But compare the total of up to £30 billion he claims to be available from the Summer Statement with the £55.2 billion the government borrowed in May alone. It’s a drop in the ocean.
The furlough scheme which presently pays 80 percent of the wages of around nine million workers will be cut back in August and abolished in October. Nobody can be sure how many of those workers will then be unemployed.
Sunak promised a £1,000 bonus for employers that bring back a worker from furlough. But as Rustom Tata of the City law firm DMH Stallard said, “this might seem largely inconsequential for most employers considering whether or not to go ahead with substantial redundancies”.
Other measures just look pathetically meagre. Half-price meals, up to a maximum of £10 per head, will be offered to people eating out every Monday, Tuesday and Wednesday during August. But the “Eat Out to Help Out” scheme won’t stop employers cutting swathes of jobs.
VAT will be cut from 20 percent to 5 percent on goods and services supplied by the tourism and hospitality sector for six months. This does not apply to alcoholic drinks.
People who can afford expensive meals will gain most.
And as well as what he did, there's what Sunak left out. There was no increase in the minimum wage, no long-term action to stop evictions or cap rents, no improvement in Universal Credit or statutory sick pay or child benefit.
Even worse may be ahead if coronavirus worsens—which is highly likely under the Tories’ reckless policies.
The main hospital serving Boris Johnson’s west London constituency has closed to emergency admissions because of a coronavirus outbreak, with 70 staff members isolating.
A real recovery plan would require direct public control of large parts of the economy to break from the logic of capital and impose the dictates of human need. That was spoken about in the early days of the pandemic. It must now be fought for.
And that means a fighting approach, not surrender to the bosses from the union leaders.