There were few elements to be welcomed in today’s Autumn Statement, which aimed to prioritise stability, growth and public services – yet it failed to address serious structural issues with our economy. The measures announced today will do nothing to tackle high and entrenched levels of inequality – which is critical for a stable economy that works for everyone.
Instead, Chancellor Jeremy Hunt leaves us with chronically underfunded public services, an economy in recession and living standards set to crumble to historically low levels for all but the richest few.
Whilst measures such as the first increase in the benefits cap since 2016, the increase of the National Living Wage, better targeted support on energy costs for the poorest and the increase to pensions and working age benefits will provide some relief for many of us, the Chancellor has done the bare minimum to avoid complete destitution for households.
Despite uprating benefits by 10% in April 2023, they will still be at their lowest level since 1990 (Resolution Foundation, 2022); and workers face real terms pay cuts as they deal with constant increases in the cost of food, fuel and housing. None of these announcements will help people now, when so many are facing a crisis. The profits-price spiral, that we see in rocketing CEO pay levels and sky-high shareholder pay-outs from energy producers (Guardian 2022), demonstrates that there is no need for suffering – the UK is the sixth largest economy in the world and austerity is a political choice.
Real terms cuts in public spending will see a further squeeze on public sector pay, at a time when our NHS and education systems are already at breaking point. Nurses’ real pay is still down by over £4000 since 2010 (TUC, 2022), per pupil funding remains below 2010 levels and £3.3bn for the NHS over two years is less than half of that called for in 2023/24 by the NHS’s Chief Financial Officer (Guardian, 2022).
Although there have been small increases in taxes on wealth and profits, these do not go nearly far enough, and we see tax increases by stealth for the rest of us. Windfall taxes, although welcome in the current context, are a short-term measure – and huge tax breaks and loopholes remain. The Chancellor had the opportunity to invest in green energy infrastructure and create well paid jobs in these industries to raise dire living standards and take steps to address the climate crisis.
On a local level, councils cannot plug huge funding gaps through council tax increases alone, and this regressive tax is long overdue for reform. By voluntarily adopting the Socio-Economic Duty, councils will be able to target support where it is most needed, whilst ensuring that those with the ability to pay more do so. There is still scope to tackle the cost of inequality crisis locally.
To tackle a forecast rise in unemployment of 500,000 (Office of Budget Responsibility), Jeremy Hunt plans to force 600,000 Universal Credit claimants into work, with no mention of support for affordable childcare. This is a key structural issue that could support parents and carers who want to seek more work yet are stopped by the high cost of childcare – something that primarily impacts on women and contributes to the gender pay gap.
Jo Wittams, co-Executive Director of The Equality Trust said “This Autumn Statement will widen structural inequalities of wealth, income and power – with ordinary people continuing to bear the brunt of the cost of inequality emergency.
If this government really wants to prioritise stability, growth and public services it needs to reduce high and entrenched levels of inequality by commencing the socio-economic duty, further regulation of excessive CEO pay, increasing public spending in real terms, tax wealth in line with incomes and invest in long term structural changes to the UK’s economy – including in renewable energies and affordable childcare.”
1 – The Socio-economic Duty is Section 1 of the Equality Act 2010, which would require public bodies to pay due regard to reducing the equalities of outcome that result from socio-economic disadvantage.
2 – The Equality Trust is the national registered charity that works to improve the quality of life in the UK by dismantling structural inequalities of income, wealth and power. For further comments or to arrange an interview, contact Jo Wittams on jo.wittams@equalitytrust.org.uk.