Cash for infrastructure, but cuts looming?

The UK government just announced a sizeable investment in national infrastructure, including housing, transport and energy. As well as extra money for the NHS.

While we welcome these announcements, the government needs a plan to pay for it. And we heard disappointingly little about plans for social care or social security. Investment in infrastructure alone won’t improve people’s living standards.

This means these areas could be at risk of even deeper and more dangerous cuts. Already, proposed cuts to disability social security are expected to push over 250,000 more people (including 50,000 children) into poverty.

We cannot allow the most marginalised and vulnerable people in society, who’ve already borne the brunt of over a decade of austerity, to be further squeezed and forced to sacrifice.

We need to make it clear that such cuts are unacceptable— and easily avoidable. The government can afford to fund the public services we all rely on properly, without raising taxes on ordinary people, or borrowing more, if it just ends its massive giveaways to corporations and super-rich individuals, and taxes extreme wealth more.

Fresh austerity?

Yesterday, Rachel Reeves– the Chancellor of the Exchequer— laid out the Government’s new Comprehensive Spending Review (CSR). This review sets all departments’ budgets day to day spending plans for the next three years, and capital spending plans for the next four years.

Whilst Reeves announced infrastructure investment, increases in the defence budget, and NHS spending, she was conspicuously silent about other essential departments, or unveiled real-terms cuts to their budgets.

Even if overall government spending has increased, these departmental cuts will feel like a fresh round of austerity. This will mean further misery for millions already squeezed between stagnant wages, and unaffordable living costs.

The government went big on infrastructure investment, banking on this to deliver economic growth, and talking up their credentials as responsible financial managers keeping the books balanced in tough times.

The truth is: cuts to areas like social care and social security are political choices and would be totally reckless, causing serious harm to those of us dependent on these vital services. We also know that times aren’t tough for everyone— globally, billionaires saw their wealth grow by $2 trillion last year.

At the same time, a new report from the National Audit Office (NAO) has made it abundantly clear that the government is failing to adequately pursue super rich tax cheats. If it did, it could raise the revenue needed to avoid damaging cuts to social security and social care — find out more in our video explainer here.

Taxing wealth is a political choice

Whether it’s closing loopholes, pursuing tax cheats, instating wealth taxes (or ideally all three), there is money to pay social care, social security and all our public services. It boils down to political priorities. The choice is simple, either we can have world-class public services that look after people or billionaires and the super-rich can keep adding zeros to their bank balances.

It should be a no-brainer. In fact, the vast majority of millionaires in the UK actually agree that they should be paying more taxes.

A poll from our friends at Patriotic Millionaires UK showed that 85% of those with more than £10 million would support a 2% wealth tax on wealth over this amount — meaning those who’d have to pay, are happy to.

And despite what we’ve heard over and over again in scaremongering news articles, there is no evidence that tax reforms alone scare the wealthy away.

The so-called “millionaire exodus”, which was explicitly cited by the government as a reason for softening tax reforms, was debunked this week by Tax Justice Network research, showing just 0.3% of UK millionaires migrated last year.

The government is running out of excuses, out of support and out of opportunities to set the country on a path to a more just, equitable and prosperous future.

But many MPs are unhappy about the government’s approach, and worried about their popularity with their constituents. That means we have an opportunity to apply pressure and win real change.

The government only have to look at the results of the local election to see that people are desperate for change.

So, instead of tinkering around the edges, and protecting the pockets of the obscenely wealthy, the government needs to get serious about wholesale rewiring of the economy to make it work for everyone, and revitalise the country.