'Tinkering around the edges'

Unite has slammed chancellor Rishi Sunak’s Spring Statement today (March 23), which the union has said does not go anywhere near far enough to tackle an unprecedented cost of living crisis.

Expected to do much more to support those hardest hit by the cost of living squeeze, such as uprating benefits in line with inflation, Sunak instead only announced an increase of £500m to the Household Support Fund. This fund is distributed through local authorities and critics have said will be difficult to access for the many millions of families who are struggling the most.

On energy bills, Sunak only announced a cut to zero from 5 per cent on VAT for households installing solar panels, heat pumps and insulation, which Martin Lewis, author of the popular money-saving blog Money Saving Expert, slated as “limited and won’t impact the majority of households who will see a likely £1,300 average increase in year-on-year bills by October”.

Sunak also announced that fuel duty will be cut by 5p a litre from this evening for a full 12 months. This will be only the second time fuel duty has been cut in the last 20 years.

While many motorists may have welcomed the move, critics have highlighted that 40 per cent of the poorest households do not own a car, and the cut will disproportionately benefit the wealthiest fifth of households, who tend to have bigger cars and drive longer distances, and spend five times more on fuel than the poorest fifth of households.

The chancellor went on to announce a string of future tax cuts, as well as a rise in the National Insurance (NI) threshold of £3,000 to £12,750 from July. This means that workers will only begin to pay National Insurance contributions on income earned over £12,750. The tax cut is estimated to be worth an average of £300 a year per worker.

The rise in the NI threshold was also widely criticised as disproportionately benefiting top- and middle-income earners, with think tank Resolution Foundation CEO Torsten Bell highlighting that only £1 out of every £3 will benefit the bottom half of earners.

Sunak said that while the planned 1.25 per cent increase increase National Insurance contributions will go ahead, he also promised a 1 per cent income tax cut by 2024 – the same year the next general election is expected to take place.

The Resolution Foundation’s Torsten Bell also criticised the income tax cut, noting that it was “totally bonkers to be raising National Insurance (on earners) while cutting Income Tax (includes those with other income sources)”.

The inadequacy of the measures announced in the Spring Statement was thrown into sharp relief on the same day new inflation figures were published.

Data from the Office for National Statistics (ONS) has shown the CPI measure of inflation, which excludes housing costs, skyrocketed in February to 6.2 per cent, up from 5.5 per cent in January. A more accurate measure of inflation which includes housing costs, RPI, has soared to 8.2 per cent.

The surge in inflation represents the steepest cost of living increase in over three decades, and as the war in Ukraine rages on, inflation is only expected to further soar in the coming months.

Unite member and Bristol bus driver Stephen Lloyd, who lives with his wife, a mental health nurse, and their four children, said the cost of living crisis has hit his family hard.

He told UNITElive, “We’re struggling as it is. We’ve never faced anything like this situation before – it really worries me. The levels of poverty we’re seeing everywhere are absolutely terrifying. The government should be ashamed. They hide behind their wealth and in their offices – while leaving us to face the impact of their decisions, out in the cold.” 

Commenting after the Spring Statement, Unite general secretary Sharon Graham lambasted the government’s failure to take on highly profitable companies that have reaped billions in profits over the course of the pandemic while the rest of the country suffered.

“With inflation at its highest for 30 years, Rishi Sunak’s Spring Statement just tinkers around the edges of this shocking cost-of-living crisis,” she said. “Workers will still be facing sleepless nights worrying about how to make ends meet, overwhelmed by rocketing prices.

“His Spring Statement does nothing to tackle the corporate elite, the billionaires who stash their loot but sack UK workers by Zoom,” Graham added. “Once again, ordinary working people bear the broadest burden while the super-rich get off scot-free.”

Announcing a key new Unite initiative, Graham said, “That is why I’m calling on the government to join Unite in our new workers’ commission on profiteering because it’s not just the big six energy firms who have made money from this crisis.

“What about those providers who made bundles charging exorbitant prices to our NHS during the pandemic? What about Amazon and the money it made from lockdown. What about DP World, who made over $1 billion dollars in profit and then sacked 800 P&O workers on the spot?

“Our commission will bring together experts and workers to uncover exactly where the money has gone, who has profited while others have suffered and who should really be paying the price for this pandemic,” she went on to say.

“One thing is clear, working people are paying for bad decisions made by powerful people. Unions must now step up to the plate and take over the reins. The rebirth of the trade union movement must now begin.”  

By Hajera Blagg