Much of today’s Budget detail is unsurprising, especially given how much information had been leaked to a sympathetic press and media since the weekend. As we stated last week in our response to the Department of Finance’s one-year draft Budget, the case for a furlough extension was overwhelming and it is welcome that this has happened.  Our comments within that response re: how a headline figure of a replacement ratio of 80% has to be seen in the context of a low pay economy; how the social security system needs to be changed to make it both progressive in its payments and properly staffed to deal with demand and how UK employers’ National Insurance Contributions need to be raised to the level of their European counterparts are also applicable to today’s announcements.

In relation to much of the rest of the UK Budget, we note the forecast £410 million increase to the Block grant and await fuller detail of other Barnett consequentials for our devolved administration. Certain truths, however, beyond these figures need to be restated. The first is that we must resist the economic illiteracy of treating decisions around national and international finance as comparable to dealing with a household budget. This is a deliberate attempt to use descriptions of “historic” debt levels to supress our rightful demands, outwith the pandemic emergency spend, for appropriate investment to build the decent society that we deserve. Resistance to this “there’s no money” narrative will be essential if we are to ensure that the “new normal” is not simply a socially  distanced version of the last decade’s reactionary normal - of real terms pay cuts, staffing shortage, profit seeking from negligence, zero hours contracts, foodbanks and the continual undermining of appropriate social security. For example, while today signalled a forecast Corporation tax rate of 25% by 2023, the Chancellor subverts this headlined “tax rise” with a different corporate opt out of a “small profits rate” and also boasts only 10% of companies will pay the full/highest rate in three years’ time. We should bear in mind, therefore, that amidst the false debate of “where is the money?” the Chancellor denies the Exchequer a 1% rise now on the UKs current Corporation Tax rate of 19% (the 4th lowest among 37 OECD countries) that would generate £3bn. Meanwhile our members who pay Protecting Public Services … Supporting Public Servants (tax) as they earn including regressive VAT rates have no such opt outs. With even the new head of the CBI in Britain talking recently of the post-Covid re-build needing to look more like 1945 than 2008, it is clear that today’s Budget is far from that.

A key fact that the pandemic has shown us is that only the state has the economic power and leverage to intervene and invest in the public services/infrastructure that could provide the spine of a decent society. What must not be lost either after today or in the context of the Assembly’s Budget is the scale of the real terms funding withdrawal that austerity has inflicted on us. For example, before the pandemic emergency, according to the Department of Finance’s own figures “the Executive’s Budget for everyday spending for 2019/20 was £530 million less than pre-austerity level of 2010/11” and the much hyped “New Decade, New Approach” financial package only constituted £152m per year over 5 years, one third of what the pre-Covid health service needed to meet “inescapable pressures” (including the pay award).  As we have previously stated the real long term challenge remains how we truly build a civilised society. The starting point for this is to invest in the pay, terms and conditions of our public servants and the vital services they provide. NIPSA and the wider trade union movement will continue to argue that “thinking big” cannot begin with a health crisis and end with an austerity re-set. Any “new normal” needs real economic change.

Alison Millar
General Secretary