I’ve called on the government to publicly reject proposals for tax increases and funding cuts that were outlined in a Treasury document drawn up for Chancellor Rishi Sunak.
The leaked Treasury report suggests that Sunak may wish to increase income tax by 1%, end the pensions triple lock, and freeze public sector pay for two years following the coronavirus crisis. It states that the proposed “policy package” aims to “enhance credibility and boost investor confidence” in the UK economy.
These economic measures would mark a continuation, and intensification, of the austerity that subsequent governments have implemented since 2010.
In May of last year, the United Nations’ rapporteur on extreme poverty, Professor Philip Alston, said that the government’s “ideological” cuts to public services since 2010 had led to “tragic consequences”.
He reported that “UK standards of well-being have descended precipitately in a remarkably short period of time, as a result of deliberate policy choices made when many other options were available”.
Although the United Kingdom is the world’s fifth largest economy, one fifth of its population – 14 million people – live in poverty, and 1.5 million of them experienced destitution in 2017.
Earlier this year, a review by public health expert Sir Michael Marmot concluded that austerity had led to life expectancy in the UK stalling for the first time in 100 years.
In the wake of the 2008 financial crisis, many economic experts opposed austerity and leading economists have now warned Sunak against implementing the Treasury’s latest proposals.
Christopher Pissarides, winner of the 2010 Nobel Prize in economics, has reacted to the leaked report by stating that Conservative governments’ funding cuts “slowed the recovery” and were “a mistake that should not be repeated”. He has now advised the government to “continue to support business, stimulate growth and support workers” both during and after the coronavirus pandemic.
Ten years of cuts to public services have had a severe human cost. Pay has stagnated, standards of living have reduced, and food banks are booming.
At the same time, we’ve seen negligible economic growth and government debt has increased year on year.
The coronavirus crisis has revealed just how much we all rely on public services and low-paid key workers. It’s also brought into stark relief the inequalities in our society and the consequences of cuts to our NHS and care systems.
After the pandemic is over, the government should take action to reduce those inequalities and ensure that public services have the funding they need to support our communities. We cannot go back to business as usual.
The Chancellor and the Prime Minister must make it clear that they will not implement these leaked proposals.