The pitiful submission by the Tories of a 1% increase for all NHS staff to the Pay Review Board is a huge kick in the teeth to all those frontline workers. The government’s hypocritical excuse for the award is that they cannot afford it. This jaw dropping assertion has left even media commentators agog at the Tories’ complete underestimation of the mood in the workplace and the wider public. As soon as the information was made public on March 6th, nurses’ social media posts began to hum with fury and rage, as well as understandable despair. Sunak had just delivered a budget which had committed to spend another £65bn in the next 4 months and then claimed there was no money left!
NHS staff are rightly pointing to the wasted £22bn doled out to the government’s private sector mates who have completely failed to provide the promised ‘world class track, test and trace service’. Likewise the ‘lost’ £12bn which was allocated to other private sector companies to provide PPE. And what about the pay increases MP’s have had over the last 10 years? Their pay has gone up from £66,396 to a whopping £81,932 whilst nurses’ pay has dropped by an average of 7.4%. A recent survey of NHS staff found that 97% did not trust the Tories with the NHS.
Quite right too! Hidden in the small print of the budget is a real terms cut to NHS funding over the next year. Jonathan Ashworth, Labour’s Shadow Health Secretary, claims the NHS is set to lose £30.1bn from frontline NHS services. The Institute of Fiscal Studies has identified a cut of £16bn from public services over the next year in the budget small print. Whatever the true figure, NHS staff cannot afford what in reality will be a pay cut, amounting to an average increase of £3.60 per week for a nurse! As one nurse commented on social media, that will cover around one third of the 5% council tax increase about to drop through our letter boxes.
Union leaders have queued up to condemn the proposal from Unison to the Royal College of Nursing (RCN) and British Medical Association (BMA). Starmer has called for an improved pay award for NHS staff. He must back up these platitudes with full support for industrial action. Public opinion will come behind the clamour for the Tories to change their mind. The NHS, and its staff, are wholly responsible for ensuring the vaccine is being successfully delivered. Workers have worked tirelessly, and often in their own time because they understand the importance of mass vaccination, to ensure that so far over 20 million have been injected. This huge sacrifice has to be properly rewarded, not with applause, but with better pay and working conditions.
In reality, the 1% figure came from the government’s submission to the so-called ‘independent’ Pay Review Body (PRB) which has been considering NHS pay for the last 6 months. It was due to report on its findings in February, but that was then put back to May. Any pay awards are actually due in April so further delay has been built into the system. All NHS staff are acutely aware of how pay has fallen behind over the last 10 years of austerity. In reality, it has fallen in real and relative terms since 2010, which is why unions have mostly fallen in behind the demand for a 15% pay increase. A huge campaign around the 15 Now demand has sprung up on social media with the ‘Nurses United’ and the ‘NHS Workers Say NO!’ Facebook pages attracting over 100,000 followers. They have been flooding into the unions to demand action around pay and were instrumental in developing the demand for 15%.
The current situation is not unlike the mood of education staff in January when they forced the governments’ and the unions’ hands by refusing to return to unsafe schools. It is now imperative that preparation for action gets underway now. Unions had been waiting for the outcome of the PRB in May but enough is enough! The Tories have played their hand and their intent is very clear. Rank and file NHS staff need immediate fighting leadership.
The RCN has warned that thousands are contemplating leaving the NHS. Frontline staff report very high levels of exhaustion and despair, some even suffering from PTSD. It is critical that the mood of anger is channelled into an immediate and effective campaign for the full 15%, backed up with industrial action. This must include the immediate declaration of a dispute with the Tories and coordinated industrial action ballots. Campaign groups like Keep our NHS Public and Health Campaigns Together must come alongside staff and unions to build up public support. Jonnson has performed over 20 u-turns when confronted by mass anger, and they can be forced back again. A pay victory for NHS staff can galvanise the much needed fightback for better pay and conditions for workers everywhere. We cannot allow the Tories to heap the cost of this pandemic onto our backs, and especially not frontline NHS staff who have literally given their lives during this crisis.
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Today’s budget announcement has provoked more political and media discussion, debate and controversy than most in recent memory.
The main reasons for this are two-fold. On the one hand, because of the still devastating situation in which most working people still find themselves. In the midst of a third lockdown, with rising unemployment, millions are relying on furlough, Universal Credit and other schemes to make ends meet. For these millions, the run up to Sunak’s budget brought constant reminders of the potential cliff-edge facing them and their families.
On the other hand, this was a budget which finally began to raise the question which will dominate budgets and to a great extent, British politics in general, over the coming period: who will pay the bill for Covid-19?
In both these respects, the budget fundamentally resolved nothing. Regarding furlough and universal credit, the can has been kicked a little further down the road, with the insufficient current packages being extended for 6 months, at which point the cliff edge will again become visible.
Also, for all the Tories’ talk of “levelling with the public” and “honesty” about the British economy’s mounting debt and deficit crises, no real strategy to address these issues was outlined. Among other things, this reflects both the splits which are emerging within the ruling class about how to respond to this question, and the knowledge that after a decade of devastating austerity, the working class and young people in England, Wales, Scotland and Northern Ireland will not simply swallow being made to pay for another, this time even worse, capitalist economic crisis.
Needless to say, the budget contained nothing in the way of pay and conditions for the key workers who have been the backbone of society’s battle with covid over the past year.
Almost as striking as the Tories’ bankruptcy was that of Keir Starmer’s Labour “opposition”, which seemed desperate to use the budget to prove its capitalist credentials to big business, following the counter-revolution which has done away with Corbynism in the leadership of the party.
Never before in history has the crisis-ridden state of the capitalist economy shown so much the need for a socialist transformation, in Britain and internationally. Rather than holding out for crumbs in Tory budgets, the labour movement and Left must prepare for mass struggle and organization to defend the working class.
Justified optimism?
Sunak’s budget was accompanied by a forecast for economic growth by the Office for Budget Responsibility (OBR), predicting 4% growth in 2021 and over 7% in 2022. An improvement on prior predictions, this was hailed as grounds for optimism and evidence of the great British “bounce back” which is pending. But is such a rosy prognosis justified?
Of course, some measure of economic growth is inevitable as the locked down parts of the economy reopen and more money is spent, in the same way as two is always greater than one. But a closer look shows that this is not just an episodic “blip” in a rosy pattern of growth. Damage will be longer term, and the economy has entered a structural downturn that will not just be undone once lockdowns are over.
Even the OBR’s super-optimistic figures predict the economy will still be smaller overall than before the pandemic at the end of 2021. Once the benefit of restrictions being lifted has passed in 2022, they predict that growth will average at 0.4% per quarter, in effect a picture of stagnation. Most tellingly, in 5 years’ time they predict that growth will still be 3% of GDP less than it would have been before the onset of this crisis.
And let’s remember we are talking about the most optimistic predictions made for quite a while. What is the basis for this increased optimism? Important assumptions include that this will really be our last lockdown, and that new variants, or more monumental Tory mismanagement of the pandemic will not come back to rain on the parade.
The bigger picture here is that the British economy is plagued by fundamental problems, which were already pushing in a recessionary direction before the pandemic hit. Essentially, British capitalism faces a long term crisis of productivity and investment, caused by an especially parasitic capitalist elite which, especially since the Thatcher era, has sought to boost its profits by reducing wages and conditions and through financial speculation rather than by investing and producing more.
Moreover, following an era of deindustrialisation, the sectors which British capitalism has overwhelmingly based its economy – services and finance – themselves face especially challenging times, due to the combined impact of lockdown and Brexit.
Nothing in Sunak’s budget, or apparently in the minds of any section of the British ruling elite, resembles a recipe to tackle these deeper problems. There is no reason to expect that Sunak’s announced “super deduction” on taxes for companies which invest, will persuade big business to steer its billions away from bitcoin or other stock market speculation bonanzas – where far quicker and easier bucks can currently be made – any time soon.
Debt – a ticking time bomb?
The government used the budget and surrounding commentary to ring the alarm bells over public debt. This year, an unprecedented 17% of all national state income will be borrowed. Next year, the figure will still be over 10%, which will exceed any other year on record apart from this one or during the World Wars.
Not only does this build up the budget deficit, but also places longer term burdens on the public finances, some of which are also subject to volatility, such as interest rates which have remained at an historically low level for some years now. Sunak explained in pre budget interviews the dramatic impact which a 1% increase in interest rates would have on the UK budget deficit, costing an extra £25 billion per year.
While worldwide, central banks show no signs of raising interest rates in the short term, the fear of inflation (which is now becoming the subject of more discussion among economists as hyper-inflation is crippling the Lebanese economy) means such a prospect can come back onto the agenda.
And it’s not just public debt that the British economy has to worry about. Already before the pandemic, a mountain of household and corporate debt was stalking the country. And the pandemic has turbo-charged the problem. Households who have taken advantage of “mortgage holidays” have seen their debts pile up, and over 700,000 more Universal Credit recipients are unable to cover rent payments . The pandemic has also given birth to a new generation of “zombie businesses” kept alive only by state-backed Covid loans (which Sunak has clarified must indeed be paid back).
This all points to the prospect of a new financial crisis, which would hit both the public and private sectors hard, already in a very weakened state. Indebtedness is a major potential spanner in the works of Sunak’s hopes for a consumer-driven, “growth led” recovery.
Tax rises – making the rich pay?
The budget saw future rises announced in corporation tax, and the freezing of personal tax allowances.
Framed in the media as an attempt to make the wealthier pay for the crisis, the corporation tax rise to 25% in 2023 will still leave the rate 10% below it’s UK historical average and as the lowest rate of any G7 country, as Sunak was keen to point out.
This didn’t prevent it being controversial, both among Tory libertarians and Keir “now is not the time” Starmer. Indeed, a hot-under-the-collar Tory MP told the Guardian “It’s close to Jeremy Corbyn territory”, referring to Corbyn’s promise to raise the rate to 26% over the course of a government term, dubbed loony left madness by the political establishment. Johnson’s government’s embrace of such a policy is, of course, a sign of changed times, in particular of the undermining of the unquestioned neoliberal dogma which dominated both Tory and Blairite thinking and policy making for decades.
However, in reality Sunak’s new policy does not even scratch the surface of what a real programme to make big business pay would look like. He also steered clear of moves towards a “windfall tax” (a special tax on those who made big profits during the pandemic) which even right-wing capitalist economists had been urging.
Furlough and Universal Credit cliff edge
Almost a year after its inception, there are still 2-3 million jobs which exist only due to the furlough scheme, according to most estimates. Sunak extended the scheme until September, to begin winding down in July. But for these millions of workers, who face being thrown back to the mercy of a shrinking labour market, the fear of unemployment in the autumn remains.
In the context of uncertainty, and lasting damage to several key sectors (such as hospitality, tourism and aviation) which employ millions, a “big bang” withdrawal of furlough risks a big bang of mass unemployment. It has already been demonstrated that job losses in this crisis have disproportionately affected young and BAME people, accelerating the growth of inequality in British society.
The situation is similar for those claiming Universal Credit, with the terrifying prospect of the withdrawal of the £20-per-week “uplift” only delayed until September. Already a key issue in public discussion and debate so far this year, this issue can be a major battleground in the coming months, which the labour movement needs to forcefully take up. The fact that right wing Tory MPs like David Davis who cheerleaded the grotesque benefit cuts following 2010 have come out in favour of a permanent “uplift” shows the strength of working class public opinion on this issue. Gone are the days when the Tories could lean on their toxic “benefit scroungers” narrative to make attacks on the most vulnerable and needy.
Labour’s loyal (to the system) opposition
It was in this context that the Labour Party spent the most part of the last week criticising the Tories – from the right. From opposing increases in corporation tax, to refusing to commit to an indefinite Universal Credit increase, Starmers’ leadership seemed to be in overdrive, desperate to prove itself to the system as a safe pair of hands.
This follows perfectly the logic of Starmers’ loyal “constructive” opposition so far, as he aims to court a phantom right-ward moving electorate: refusing to back teachers’ unions fighting for a safe reopening, denouncing BLM protestors, and opting for nauseating flag-flying “patriotism” over real proposals for fundamental change.
When Starmer won the Labour leadership, Socialist Alternative warned that the counter revolution he wished to carry out would, if successful, make the Labour party unfit for purpose as a vehicle for working class resistance in the 2020s. The unfortunate confirmation of this perspective could not have been clearer than during Budget week. We need a new mass Left party for the struggles to come.
This new profound crisis underlines the need for the movement to go further in our programme. In a situation where the Tories have been forced to mobilise the “fiscal firepower” of the state to such a degree, de facto enacting parts of Labour’s 2017 and 2019 programmes, it is not enough to merely demand they go a little bit further, or raise corporation tax a little bit higher. Our movement needs a socialist programme, to make the rich pay, and to transform the economy along socialist lines.
Battle of the 2020s: who will pay the bill?
This budget brings the total cost of pandemic relief packages so far to over £400 billion. As Sunak himself, and the hoards of right wing commentators are beginning to remind us all ad nauseum, this is a bill that will need paying for. A bitter battle over who pays, and how, will be the overriding framework of the class struggle over the course of the 2020s.
The working class and young people cannot expect this, or any future Tory budget, to protect our interests going into a decade defined by the deepest economic crisis since the Second World War. While this government will not revert to neoliberal “business as usual” austerity of the Cameron/Osborne brand, this does not represent a change in the colour or class position of the Tory party.
This or that crumb may be thrown our way, out of fear of political oblivion, and in the interests of propping up demand for the profit making machine. But make no mistake, in the long run, the “solution” to the economic quagmire which this government will pursue is one which aims to protect the profits of the billionaires at our expense. The last decade has shown us that there is no economic “national interest” – economic policy will ultimately benefit either the super rich, or the working class majority.
Our interests can only be protected in this period by our own endeavour – through the strengthening and rebuilding of the labour movement, and by organization, mobilisation and struggle bringing together fighting unions, social movements like BLM and the climate strikes, and the struggles of women, LGBTQ+ people and all the oppressed. Our movement needs its own programme, its own way out of this capitalist crisis, which puts the needs of working people first. No back to the Tories’ “normal” of misery and inequality.
From invisible hand of the market to “fiscal firepower” – we need socialism
Our world is immersed in a perfect storm of crises – health, economic, geopolitical, climate… Each and every one of these point to one thing: the notion that the all-powerful “self-regulating market” can meet the needs of people and the planet is in tatters. Staring into our second devastating world recession in 12 years, the policies and ideology of free market capitalism are in disarray.
From a triumphalist faith in the “invisible hand of the market”, governments all over the world are turning to the guiding hand of the state. The whole house of cards that is the capitalist economy is left standing only due to this factor. In 2020 Britain, 57p of every single pound spent was spent by the state.
However, rather than draw the logical conclusion that would benefit humanity – assign the “market” to the dustbin of history and make public ownership and socialist planning the motor of the economy – the bosses’ agenda is merely to use the resources of the state to get the profit machine back up and running, preparing the ground for new and worse crises.
The situation is crying out for socialist policies. A working class government could seize the wealth left idle by speculating billionaires via bold taxation and put it to work in mass green jobs, housing, transport and infrastructure programmes. Instead of wasting money on “incentivizing” private companies to invest (in vain), it could take the banks and major corporations into public ownership and use them to drive a plan for sustainable economic growth, to benefit the majority, and not the profits of the 0.1%.
This is the vision which needs to be put forward by the labour movement and Left in the 2020s. Join Socialist Alternative if you agree.
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As capitalist governments continue to attempt to tackle the Covid-19 pandemic, demand for a vaccine is outstripping the supply.
This isn’t helped by the overstocking of vaccines by advanced capitalist countries. Last week the UK government announced it was purchasing an extra 40 million doses of the Valneva vaccine, bringing the total number of vaccines purchased to well over 400 million, enough to vaccinate everyone in the UK three times.
Meanwhile the African Union has only been able to secure 270 million doses, for the whole of Africa (with a population of 1.3 billion people) – barely enough to vaccinate 10% of the continent’s population. These will only be available from April, five months after the first vaccinations started in the West.
In 2020 the head of the World Health Organisation, Dr Tedros Ghebreyesus, said that, “vaccine nationalism will prolong the pandemic, not shorten it,” and warned of a “protected economic recovery” unless the vaccine is equitably distributed.
As richer countries stockpile the vaccine, vulnerable people and healthcare workers in the neocolonial world will be left unvaccinated; continuing the pandemic, causing further unnecessary death and suffering, and creating a petri dish for further variants – potentially vaccine resistant – to develop.
But these tensions exist within the West too. The recent diplomatic conflict between the EU and the UK surrounding the AstraZeneca vaccine shows this. AstraZeneca suggested it would not be able to deliver tens of millions of promised vaccines to the EU due to ‘manufacturing problems’.
The EU introduced export controls on doses produced in the EU preventing distribution to non-member states. They also threatened to trigger Article 16 – which would override the Northern Ireland protocol agreed in the Brexit trade deal just five weeks previous – to prevent doses from travelling into the UK via Northern Ireland (effectively meaning introducing a border between the north and the south of Ireland).
This was widely condemned and the EU was forced into a humiliating climbdown, but this use of the article has now set a precedent and inflamed the situation in Ireland. The DUP and other unionist organisations have used this, alongside the violence in the port of Larne, to press for abolishing the Northern Ireland protocol, which introduced an administrative border between Britain and Northern Ireland. Boris Johnson has indicated the UK’s willingness to invoke Article 16 in response to this.
This article was initially created as an emergency procedure to prevent serious economic consequences of Brexit, but it is now being used as a way for both the UK and EU to throw out the deal whenever it becomes convenient. The Northern Ireland protocol already represents a temperamental compromise, and this use of Article 16 has highlighted the inability of the capitalist class to contain sectarianism and national divisions.
Capitalism is fundamentally incapable of resolving national oppression and its consequences. This is likely to be the beginning of further tensions between the EU and UK, not just regarding Northern Ireland, but the Brexit deal as a whole.
The development of a Covid-19 vaccine in record time has given just a glimpse of what human beings are capable of when given sufficient resources and decent funding. The only reason the necessary research has been able to take place is due to unprecedented levels of public financing to all major companies. But whilst private companies weren’t prepared to put their own money into this research, they will be reaping the rewards.
The Financial Times estimates that Pfizer is expecting $15 billion in revenue in 2021 thanks to it’s Covid-19 vaccine. AstraZeneca has pledged not to profit from its vaccine, but only “during the pandemic,” and it is plotting in private to declare the pandemic over as soon as possible. Documents between AstraZeneca and Fiocruz, a Brazilian manufacturer, declares the pandemic period to end on 1 July 2021, after which it will be free to up its prices and begin to profit from this crisis.
A number of poorer countries are proposing to the World Trade Organisation that it waives patent rights for Covid-19 vaccines to enable affordable production and universal access to the vaccine. This is being strongly lobbied against by pharmaceutical companies – supported by the UK, US and EU.
This has echoes of how the HIV/AIDS pandemic was dealt with. Once lifesaving drugs were discovered, pharmaceutical companies – in an attempt to maximise their profits – continued to try to sell these at high prices to poorer countries hit hard by the pandemic. They were supported in doing this by advanced capitalist countries, and were only forced into ending this practice through mass action during the anti-globalisation protests in the late 1990s.
The development of the vaccines has highlighted the problems inherent in a capitalist system, driven solely by the profit motive. A total of 236 vaccines are in various stages of production, nearly all identical to others being produced. Both Moderna and Pfizer spent time, money and resources creating nearly identical vaccines using this new mRNA method. The shareholders of both companies want their payouts, so it makes sense for them both to compete to develop these vaccines to make as much money as quickly as possible. But does it make sense to humanity to duplicate these processes?
Capitalism, with its short-term focus on profits, has no real plan for dealing with this crisis, and is completely incapable of taking the planned international action needed to end this pandemic.
A socialist society, with a real plan for solving the Covid crisis, would bring these big pharmaceutical companies into democratic public ownership, and share their technology and patents to allow sufficient doses to be produced. It would solve the problems of production by retooling factories to mass produce doses, and would distribute them by bringing under democratic control the massive supply chains of companies like Amazon, and use them for public good, not Jeff Bezos’ profit.
It would ensure that these doses were allocated internationally so that the world’s most vulnerable could be protected.
A socialist transformation of society is the only way for humanity to ensure internationally that public health is put before private wealth.
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