Budget responses from the labour movement

Mark Serwotka, PCS general secretary:

“The Chancellor billed this budget as one built on fairness, yet continues to hide behind the discredited argument that public sector pay is fuelling inflation as an excuse to drive down the wages of the people who keep this country running. The budget was a missed opportunity by the government to reach out to civil and public servants in recognising that they are the victims of inflation and deserve fair pay. With a quarter of the civil service earning less than £15,500 and thousands just above the minimum wage, the continued policy of capping pay to below inflation will create more resentment and anger as people’s wages are cut in real terms. The government can avoid the growing number of pay disputes across the civil service by recognising the injustice of their policy and by paying civil and public servants a fair wage.”

And from a man who won’t learn:

Tony Woodley, Unite the union joint general secretary, said the chancellor had gone some way to tackling the issues of fuel poverty but he had missed an opportunity to levy a windfall tax on the excess energy company profits.

“Of course we welcome the extra money for winter fuel allowances and the help for those on pre-paid meters but he could have gone further,” said Mr. Woodley. “Those price hikes are going to go through from those private companies alongside their multi-billion profits.”

Mr. Woodley also expressed his disappointment that with the forecasts for economic growth and low inflation there was nothing in the Budget to indicate a relaxation on the artificially low public sector pay limits.

“In the week that our low paid but high skilled defence workers have put in their claim for pay justice, we were listening for some positive news on public sector pay,” he said. “There was none but we’ll press the case for decent pay for public sector workers who contribute so much.”

Paul Kenny, gen sec of the GMB:

“The Chancellor has bowed to pressure from the multi-millionaire elite who run the private equity and financial institutions to enable them to continue to receive income as capital gains. He has missed the moral target of making this buccaneering elite, whose recklessness is a contributory cause of the turbulence in the world’s credit markets and the trouble that it will visit on ordinary citizens, pay the same rate of tax on their income as their cleaners.

His approach to public services pay and to those on incapacity benefit is sharply different. He wants to hold down public sector pay below inflation. This attempt to cut living standards will be met with resistance and will undermine morale.

His requirement that those on incapacity benefit must attend work capability assessments is based on the false notion that the high levels of claimants in some areas is due to the fact that these people to not want work. He fails to see it for the labour market issue that it really is. In areas with high employment rates, like Berkshire, there are low rates of people on incapacity benefits, while in places with low employment rates, in the former industrial areas like South Wales, there are very high rates of people on incapacity benefits.

The Chancellor needs to face up to the fact that in today’s labour market able bodied and fully fit workers get jobs ahead of those who are disabled and those not fully fit. The unpalatable truth is that the problem lies with the lack demand from employers for these workers. Why does the Chancellor think GMB put up such a fight to stop the Government sacking 2,500 disabled Remploy workers as they close 30 factories? Most of these Remploy workers will never work again.”

Unison‘s gen sec Dave Prentis:

“Chancellor Alistair Darling’s debut budget lacked the X factor. There were some flashes of colour in an otherwise dull budget, with a welcome green agenda containing new measures to penalise gas guzzling cars, more energy efficient homes and plans to phase out free supermarket bags.

“However, public service workers such as nurses, teaching assistants, dinner ladies, care workers, cleaners and nursery nurses are bearing the brunt of the squeeze on public services.

“The budget would have been an opportunity to boost morale by getting rid of the artificial pay cap, a move that would have demonstrated real fairness and paid dividends. World-class public services demand well trained, motivated staff, and sticking to a 2% pay limit will lead to a recruitment and retention crisis, as staff see higher pay increases in the private sector.

“Only last week, UNISON lodged its 40,000th equal pay claim, but there is no recognition in the chancellor’s budget that this blight on the public sector must be tackled. The government must ensure that local authorities obey the law and give them the means to deliver fair pay for women workers.

“Tackling child poverty is still an important part of the government’s agenda and the increase in tax credits and child benefit is a welcome plus to parents. Reducing charges for people using pre-payment meters is only a partial solution to fuel poverty. The chancellor should have gone ahead with a windfall tax on the outrageous profits announced by energy companies to help fund the fight against fuel poverty.

“Rising fuel bills are adding to the misery of low-income families and many public-service workers. However, the chancellor is right to recognise the plight of pensioners and raise the much needed winter fuel allowances.”

Mr Prentis welcomed moves to tax non doms. “This is a small step towards creating a fairer tax system which highlights the need for a wider public debate on the whole tax regime. For years the super rich have got away with not paying their fair share.”

The Green Party‘s female Principle Speaker Dr Caroline Lucas MEP:

“This Budget isn’t Green, it’s Brown. After spinning extensively that we were going to see the most environmental budget ever, the government have given us more of the same.

“It tells you all you need to know about the government’s attitude to the environment that Darling chose the section on climate change to reaffirm his commitment to expanding both Heathrow and Stansted airports. He claims he wants tougher carbon reduction targets, but if air travel expands in the way he wants, the only way to meet the cuts we need would be to sacrifice every other part of our economy.

“Under pressure from roads lobbyists, he has backed down on the already timid 2p rise in fuel duty, putting it back until autumn apparently due to high oil prices. If he really thinks oil will be cheap by October, his basic understanding of economics must surely be in doubt. Fossil fuel costs will remain high as long as demand remains high, and cowardly decisions like this will only make the problem worse, not better.

“The £20 increase in child benefit is of course welcome, but it falls well short of what is required to meet the government’s laudable targets for cutting child poverty. The £3.4bn that it would take to halve child poverty by 2010 is instead being spent on occupying Iraq and Afghanistan in 2008 alone. We need a real commitment to spending on the things that matter, we need to insist that employers pay a real living wage, and we need to end the assault course of benefit traps and welfare blackmail that the government has set up on the border between benefits and work.”

The Communist Party issued this press release:


‘Chancellor Darling is like the boy standing on the burning deck, told to stay there looking heroic by his callous father’, Communist Party industrial organiser Kevin Halpin declared in response to today’s budget.

‘The budget was an exercise in deception using self-defined rules, elastic budgets, permanently revised forecasts and hidden financial liabilities’, he accused, ‘and it refuses to recognise the slide towards recession’.

‘Instead, Britain is to remain a haven for tax-dodging millionaires and multinational corporations, while public sector workers and benefit claimants are to be squeezed until the pips squeak’, Mr Halpin said.

‘The Chancellor will be raiding the £38 billion National Insurance Fund surplus to hand out more money to the banks and private contractors, while taxes on business profits are slashed and an extra

£2 billion is poured into the military supression of Iraq and Afghanistan’, he pointed out.

Pouring scorn on the Chancellor’s ‘puny’ measures to help low-income families and pensioners, he called for price controls and a windfall tax on energy and banking corporations.

‘Monopoly-dominated markets and the City of London will never solve huge problems of carbon emissions and road congestion’, Mr Halpin insisted, ‘what Britain needs are bold measures such as compulsory solar panelling of new buildings and a massive shift of freight from road onto a publicly owned railway system’.

And the Morning Star editorial:

Two views of reality
(Wednesday 12 March 2008)
MOST people know what words such as fairness mean and they are pleased when they hear that the government will tackle climate change and help hard-working families.

Their difficulty comes when they listen to the mood music and then compare it with the reality of economic policy.

Gordon Brown’s latest budget, delivered in the Commons by Alistair Darling, was a classic of its kind, promising one thing and then announcing policies that point in a different direction.

Business Secretary John Hutton had already given us a clear indication of how the government views fairness, pleading for the rich to be allowed to become even richer without risking punitive taxation.

He certainly had no problem convincing the Brown-Darling coalition, who plumped for the normal approach of subservience to big business and contempt for working people.

There was no word of a windfall tax on the utilities companies that have increased charges to consumers far above the rate of inflation even after seeing their profits zoom into the stratosphere.

The Chancellor had nothing to say about the failings of privatisation, as in the rail industry, where cowboy privateers continue to live off the fat of the land while service standards plummet.

Nor did he appear to have noticed the case made by rail union RMT to close the loophole whereby deferred tax of about £750 million over a five-year period, which had been marked for investment, was translated into shareholder dividends by train operators and rolling-stock companies.

But he had no difficulty in identifying the need for “discipline” over pay in the public sector as a means of guaranteeing “low and stable inflation.”

Mr Darling must know that penalising low-paid public-service workers by staggering below-inflation pay rises has little or no effect on the rate of inflation.

And he must also know that there is no point in playing to the gallery by announcing a showroom tax on 4×4 Chelsea tractors or proposing a flight tax rather than air passenger duty if these fly in the face of other government policies.

Caving in to the airline and construction lobbies by agreeing to concrete over much of southern England to increase Heathrow and Stansted airports exposes these proposals as ineffective fig leaves.

There is no logic in the Chancellor’s attempt to attribute inflation around the 2 per cent mark, despite the trebling of energy prices since 2002, to the “success of the monetary policy committee and resilience of the UK economy.”

If manufacturing was still a substantial part of Britain’s economy, higher fuel prices would have a substantial impact, but it is not, because new Labour has turned its back on manufacturing, accepting the EU commission’s designation of this country’s main areas of economic activity as pharmaceuticals and overseas services.

The main reason for low inflation in Britain has been low global food prices and the huge influx of cheap manufactured products from China and other Asian markets.

And, far from this being the basis for stability in Britain, it is storing up problems for an economy that has grown on the basis of consumption funded by house-price inflation and, in the long run, unsustainable personal debt.

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