The Tories are preparing to plunge many more working class people into poverty and despair. Chancellor Rishi Sunak is under pressure to keep measures that support ordinary people in this week’s budget.
But any extra help will be temporary. What Sunak really wants is “fiscal responsibility”—cuts.
The budget follows a year of misery as joblessness and poverty soared.
Unemployment reached 5.1 percent in the three months to December—the highest figure for five years. In January 2.6 million people were either claiming Jobseeker’s Allowance or Universal Credit (UC) because they were looking for work. The figure last March was 1.4 million.
More than a third of all claims ever made for UC have been made during the pandemic. And things will get worse, with unemployment expected to peak later this year.
But for all the talk of support for workers, many have been abandoned—and are furious.
Nicky had a job offer withdrawn as the virus hit last year. She said she has been “fortunate” to have been working for the past few months, but more uncertainty lies ahead.
“My contract is coming to an end soon,” Nicky told Socialist Worker. “I am already suffering anxiety and insomnia about the worry of finding another job.
“I used what little savings I had to keep afloat when my Jobseeker’s Allowance ran out. I now face having no income again and that is hugely stressful.”
Anna, a self-employed potter, was pushed onto UC after losing work during lockdowns. She’d been left with £8 a month after rent to pay her bills and feed herself and three children.
“The government has failed me massively,” Anna told Socialist Worker. “My business has been almost destroyed and I have had to sell half of my equipment to survive.
“I’m so cross with this government and its ineffectual ministers, whose main agenda appears to be looking after their mates. Things could have been so different.”
Anna said she is “grateful” for being able to claim a grant from her council. “But it does not even begin to cover money lost through being shut down,” she said.
Nicky said it’s harder to find work because so many people are looking for jobs, and wages have dropped too. “The government completely ignored people like me who have fallen through the cracks,” she said.
Stress, depression and anxiety has soared along with unemployment and poverty. “Many people’s mental health has been pushed to the edge,” said Anna. “Some have taken their own lives because they see no other way.”
Nicky said her mental health “is at an all-time low”. “I have got to the point where it all feels too much,” she said. “There are so many of us who were and still will be excluded if the government doesn’t listen.”
Anna and Nicky want Sunak to “do the right thing” and bring in measures to support everyone who has lost out during the pandemic. Disgracefully, the Tories will make many people’s lives even worse.
Sunak plans a new round of austerity once the worst of the virus crisis has passed. It follows rising government borrowing and spending to try and protect the system during the pandemic.
“Sunak will use his budget to signal that the borrowing binge cannot last forever,” reported the Financial Times newspaper last week. And one Tory warned, “There is a bill to be paid for all this spending.”
They say austerity and cuts are needed to “balance the books”. But the last round of austerity didn’t see the government pay off its debts or get the deficit down.
“The government completely ignored people like me who have fallen through the cracks”Nicky
Instead it was an excuse to shift wealth from the poorest to the richest. Working class people paid the price of bailing out banks and businesses.
It’s not true that states can’t borrow to spend, or get into debt.
The government has spent around £280 billion during the pandemic to “support the economy”. This includes the furlough scheme, which pays bosses part of workers’ wages to stave off job losses.
But this isn’t a case of the Tories being nice to workers. Sunak wanted to help bosses by protecting their businesses from collapse.
He may increase the corporation tax on profits in the budget. But this follows years of cuts to the tax. And bosses will still be paying one of the lowest rates in the world.
The government will be looking to line the pockets of the wealthy by cutting where they can. But it may also want to keep new voters on side.
For now, the Tories think that some extra temporary spending is the best way to prop up the system. But ordinary people still face pay freezes, attacks on benefits and cuts to services.
And once the Tories feel the immediate crisis has passed, they will be back on the offensive. “A reckoning lies ahead,” said the Financial Times. Workers have to be prepared to fight.
‘I’ve been suicidal, thinking how am I going to eat?’
For the first time in decades, infant mortality is rising in Britain. For every 1 percent rise in child poverty, there are an extra 5.8 infant deaths per 100,000 live births.
And around a third of the rises in infant mortality between 2014 and 2017 “can be attributed to rising child poverty”.
That’s the message from a new report from a cross-party group of MPs into the impact of the Tory Welfare Reform and Work Act 2016.
Ten years of austerity created “rampant levels of poverty particularly affecting children and disabled people” even before the pandemic.
Benefit claimants have lost “self-esteem and confidence” with some feeling “worthless”.
And Britain “is one of a few advanced economies where life expectancy has flatlined since 2018, with poor areas seeing a decline”.
Aurora, a widowed parent of two children, told the report how cuts have affected her. “We can no longer afford the essentials to ensure even a basic standard of living,” she said.
“After rent and deductions are paid there is nothing left. I do not feel supported and I feel ignored.”
Universal Credit claimants described a “hostile, dysfunctional, uncaring system”. One claimant said his partner was “in and out of hospital with his depression, self-harming and that”.
He said, “It was just horrible. He was like, we’ve got no money, what’s the point, I can’t go out, can’t see people, can’t even eat properly.”
Another claimant said, “I’ve been suicidal, that’s how bad it’s been. Just desperately thinking, ‘How am I going to eat?’”
Work not a route out of poverty
Spending on social security for working age people will have fallen by a massive £34 billion since 2010 by next year, according to the Resolution Foundation.
The Tories hail their system for “encouraging” people to work. Yet the MPs’ report explained how the system puts barriers in the way of work.
Cuts to disability benefits harm claimants’ health, and many said this delayed their return to work. The “poor quality” support for disabled people is “largely ineffective” in helping them find work.
Neither is work a “route out of poverty”. Some six in ten people in poverty now live in a working household. Child poverty has risen since 2010 due to “reductions in state support”.
The report heard that child poverty would continue to rise “without a supporting welfare structure”.
A “levelling off of life expectancy, no improvement at all in mental health and a rise in child poverty” have accompanied large rises in employment.
And “most jobs accessed by people who may alternatively be unemployed are short term and badly paid”.
“The bottom of the labour market is helping to keep people out of unemployment, but not out of poverty,” said one submission to the report. “A minority of people find accessing benefits so difficult that they turn to family and friends for support.
“But as family members are likely to be poorly-off themselves, the poor are sustaining the desperate.”
Can’t live on Universal Credit
The number of families with children claiming Universal Credit (UC) has shot up by 51 percent since the start of the pandemic.
Over 620,000 families with children have started claiming the benefit since the pandemic began, according to the Save the Children charity. Some 1.8 million families with children rely on UC.
In a report last week the charity said many “will be forced to rely on foodbanks or run up debts” if the £20 weekly uplift to UC is cut.
And Becca Lyon from the charity said a six-month extension “just won’t cut it” because soon “hundreds of thousands of people will lose their jobs”.
Two thirds of the families now receiving UC are single parent families, and around 90 percent of single parents are women.
Single parent Rebecca said UC “just isn’t enough to live off”. And if the £20 uplift goes, she would have to rely on food parcels.
“I’m already panicking about buying food,” she said. “We’re scraping around, and if anything we need more money. If they took away the £20 I wouldn’t be able to buy enough food.”
Single parent Aneita said the £20 “means we can have two or three decent healthy meals a day and not just one because we have to make the food stretch”.
“It gives you a little bit of leeway,” she said. “A little bit of dignity.”
There’s no crisis for the rich
London now has the highest concentration of “dollar millionaires” in the world. Nearly 875,000 people in London have assets worth over £720,000, according to property consultants’ Knight Frank’s annual study of the wealth of the rich.
Meanwhile, over a quarter of people living in London are officially in poverty.
The Knight Frank report showed that the rich have got richer during the pandemic. More than 6,000 people became ultra-high net worth individuals, who have assets over £21.3 million, last year.
A 1 percent tax for five years on anyone with more than £500,000 in assets could raise £260 billion—enough to fund the NHS for a year.