What does the budget really mean for you?

by Anna Birley from UNISON’s policy unit

While goings on in Westminster can feel a long way from normal day-to-day life, the decisions made at the budget by the chancellor have a huge impact on everybody’s work, household finances and the public services we all rely on.

This week’s budget was no different, so let’s break down what the budget means for you and the services you rely on, along with some helpful myth-busting on the way.

What’s happening with my taxes?

The biggest headline, which was trailed days before the formal announcement, was the 2p cut in National Insurance. At first glance, this seems positive – after all, National Insurance is a tax specifically on working people.

However, in practice, this small cut hides a much more troubling picture. At a cost of £10bn, this is a very expensive way to put money back into the pockets of higher income workers.

While the government suggests that it will be worth £450 for the average worker, what this actually means is just £34 back each year for low-income workers, compared to £424 a year for the richest households.

This means almost half of the £10bn spent will end up in the pockets of the richest 20% of households and only 3% will benefit the poorest 20%.

On top of this, other, stealth taxes – measures that were not mentioned in the chancellor’s budget speech but will have a huge impact on household budgets – are more than cancelling out the National Insurance cut.

The personal allowance threshold has been frozen, which means more and more low earners are being pulled into paying taxes, and which is increasing the level of tax that everyone pays, especially lower earners.

The big picture is that taxes haven’t been higher since the Second World War – so the National Insurance announcement is little more than a gimmick. More pain for working people, while the Conservatives play games to try and reverse their electoral misfortunes. On top of that, they cut capital gains taxes, which will benefit landlords and second-home owners, not workers.

Will the budget help grow the economy?

The chancellor claims that tax cuts are the route to growing the economy. But every time he tries this same trick, the economy continues to stagnate. He’s cut National Insurance once already, just a few months ago, in the autumn statement. The result? The UK entered into recession.

At UNISON, we know that tax cuts are not the route to economic growth. Instead, investment in public services is critical to a healthy economy.

People cannot return to work if they are too sick – and they won’t get better if the social care system is in tatters and NHS waiting lists remain so long. Good quality local services, from schools to councils, are the foundation blocks of economic growth.

What about public services?

Instead of investing in essential public services, the chancellor announced further cuts. Instead of investing in police staff to ensure the streets are safe, he announced drones. Instead of funding more nurses, he announced an IT system upgrade.

Public services are on their knees – as are the workers delivering them. Public service workers need a pay rise, not a chancellor telling them to work harder for less.

Is there anything to be positive about?

It’s not all bad news. The Conservatives, clearly out of ideas, stole a couple of good policies from Labour.

They finally decided to abolish the non-dom tax system which allowed people to keep their money overseas without paying taxes, and they extended the windfall tax on the big oil and gas companies that are continuing to profit from high energy bills while polluting the planet.

They also bowed to pressure to extend the Household Support Fund and raise the child benefit taper.

But there’s more to do – these stolen policies are a start, but there is a long way to go to creating a fairer economy.

The chancellor claimed that his party was the only party with a plan for the economy – but when the plan destroys services, keeps wages down and bills high, and pushes the economy into recession, while cutting taxes for the country’s higher earners, then it’s clear the plan isn’t working.

With the right people in power, making the right choices, it is possible to have a thriving economy, driven by a healthy, happy, safe and productive workforce.

The article What does the budget really mean for you? first appeared on the UNISON National site.

What does the budget really mean for you?

by Anna Birley from UNISON’s policy unit

While goings on in Westminster can feel a long way from normal day-to-day life, the decisions made at the budget by the chancellor have a huge impact on everybody’s work, household finances and the public services we all rely on.

This week’s budget was no different, so let’s break down what the budget means for you and the services you rely on, along with some helpful myth-busting on the way.

What’s happening with my taxes?

The biggest headline, which was trailed days before the formal announcement, was the 2p cut in National Insurance. At first glance, this seems positive – after all, National Insurance is a tax specifically on working people.

However, in practice, this small cut hides a much more troubling picture. At a cost of £10bn, this is a very expensive way to put money back into the pockets of higher income workers.

While the government suggests that it will be worth £450 for the average worker, what this actually means is just £34 back each year for low-income workers, compared to £424 a year for the richest households.

This means almost half of the £10bn spent will end up in the pockets of the richest 20% of households and only 3% will benefit the poorest 20%.

On top of this, other, stealth taxes – measures that were not mentioned in the chancellor’s budget speech but will have a huge impact on household budgets – are more than cancelling out the National Insurance cut.

The personal allowance threshold has been frozen, which means more and more low earners are being pulled into paying taxes, and which is increasing the level of tax that everyone pays, especially lower earners.

The big picture is that taxes haven’t been higher since the Second World War – so the National Insurance announcement is little more than a gimmick. More pain for working people, while the Conservatives play games to try and reverse their electoral misfortunes. On top of that, they cut capital gains taxes, which will benefit landlords and second-home owners, not workers.

Will the budget help grow the economy?

The chancellor claims that tax cuts are the route to growing the economy. But every time he tries this same trick, the economy continues to stagnate. He’s cut National Insurance once already, just a few months ago, in the autumn statement. The result? The UK entered into recession.

At UNISON, we know that tax cuts are not the route to economic growth. Instead, investment in public services is critical to a healthy economy.

People cannot return to work if they are too sick – and they won’t get better if the social care system is in tatters and NHS waiting lists remain so long. Good quality local services, from schools to councils, are the foundation blocks of economic growth.

What about public services?

Instead of investing in essential public services, the chancellor announced further cuts. Instead of investing in police staff to ensure the streets are safe, he announced drones. Instead of funding more nurses, he announced an IT system upgrade.

Public services are on their knees – as are the workers delivering them. Public service workers need a pay rise, not a chancellor telling them to work harder for less.

Is there anything to be positive about?

It’s not all bad news. The Conservatives, clearly out of ideas, stole a couple of good policies from Labour.

They finally decided to abolish the non-dom tax system which allowed people to keep their money overseas without paying taxes, and they extended the windfall tax on the big oil and gas companies that are continuing to profit from high energy bills while polluting the planet.

They also bowed to pressure to extend the Household Support Fund and raise the child benefit taper.

But there’s more to do – these stolen policies are a start, but there is a long way to go to creating a fairer economy.

The chancellor claimed that his party was the only party with a plan for the economy – but when the plan destroys services, keeps wages down and bills high, and pushes the economy into recession, while cutting taxes for the country’s higher earners, then it’s clear the plan isn’t working.

With the right people in power, making the right choices, it is possible to have a thriving economy, driven by a healthy, happy, safe and productive workforce.

The article What does the budget really mean for you? first appeared on the UNISON National site.

Chancellor is living in a fantasy world

Commenting on the spring budget today (Wednesday), UNISON general secretary Christina McAnea said: 

“This is the stuff of fantasy. The public won’t be fooled. Taxes overall remain at a record high and the promised growth is nowhere to be seen, despite what the chancellor would have everyone believe. 

“There’s no budget giveaway for the lowest paid. They’ll be substantially worse off. And persistently punching public services in the face helps no one.

“Families might be struggling, but people would rather have functioning local services than a few possible extra pounds in their pockets. 

“Public services are the fabric keeping communities together. No one wants to go weeks to see a GP, spend hours waiting in over-crowded A&E departments or languish on growing NHS waiting lists. 

“People want care packages when they need support, school buildings that won’t fall apart and for the police to keep them safe. That’s no longer possible under the Conservatives.

“Public services can barely cope as it is. Proper investment is what’s needed, not another dose of callous austerity or telling nurses, teaching assistants and care staff to work harder. 

“Never mind going back to square one, the chancellor’s determined to take the country back to the days of Charles Dickens.

“But let’s face it, this government ran out of ideas long ago. Ministers have misread the public mood and will pay for it at the ballot box.

“Rishi Sunak and his failing ministers are living on borrowed time. This lot should finally put the country first and call an election.”

Notes to editors:
– UNISON is the UK’s largest union with more than 1.3 million members providing public services in education, local government, the NHS, police service and energy. They are employed in the public, voluntary and private sectors.

Media contacts:
Liz Chinchen M: 07778 158175 E: press@unison.co.uk
Anthony Barnes M: 07834 864794 E: a.barnes@unison.co.uk

The article Chancellor is living in a fantasy world first appeared on the UNISON National site.

Chancellor is living in a fantasy world

Commenting on the spring budget today (Wednesday), UNISON general secretary Christina McAnea said: 

“This is the stuff of fantasy. The public won’t be fooled. Taxes overall remain at a record high and the promised growth is nowhere to be seen, despite what the chancellor would have everyone believe. 

“There’s no budget giveaway for the lowest paid. They’ll be substantially worse off. And persistently punching public services in the face helps no one.

“Families might be struggling, but people would rather have functioning local services than a few possible extra pounds in their pockets. 

“Public services are the fabric keeping communities together. No one wants to go weeks to see a GP, spend hours waiting in over-crowded A&E departments or languish on growing NHS waiting lists. 

“People want care packages when they need support, school buildings that won’t fall apart and for the police to keep them safe. That’s no longer possible under the Conservatives.

“Public services can barely cope as it is. Proper investment is what’s needed, not another dose of callous austerity or telling nurses, teaching assistants and care staff to work harder. 

“Never mind going back to square one, the chancellor’s determined to take the country back to the days of Charles Dickens.

“But let’s face it, this government ran out of ideas long ago. Ministers have misread the public mood and will pay for it at the ballot box.

“Rishi Sunak and his failing ministers are living on borrowed time. This lot should finally put the country first and call an election.”

Notes to editors:
– UNISON is the UK’s largest union with more than 1.3 million members providing public services in education, local government, the NHS, police service and energy. They are employed in the public, voluntary and private sectors.

Media contacts:
Liz Chinchen M: 07778 158175 E: press@unison.co.uk
Anthony Barnes M: 07834 864794 E: a.barnes@unison.co.uk

The article Chancellor is living in a fantasy world first appeared on the UNISON National site.

UNISON opinion: The budget will deliver more cuts and more pain

By UNISON general secretary Christina McAnea

Working people are bearing a triple burden. The cost of living crisis is still here, taxes are weighing heavy on workers, and in return, we’re getting broken public services that can’t guarantee support for everyone.

It’s even more galling for public service workers – they spend their working lives propping up essential services, only to be undermined at every turn by the Westminster government.

Underfunding services and undervaluing the workforce sabotages every effort made in hospitals, councils, schools, care homes and in the community.

The prime minister and the chancellor keep telling the public to stick with the plan, but the plan failed a long time ago.

Tomorrow’s Budget is an opportunity to help the economy grow, invest in public services, tackle low pay and ensure the country is not only prepared for the challenges ahead, but building a better future for everyone.

It will likely fail on all counts, with the Conservatives hoping to take off the edge with a sweetener gimmick. But gimmicks and slogans don’t put food on the table.

Rishi’s recession threatens to trap even more people into poverty, and the Treasury seems poised to further trash our public services with more cuts to spending. They’ll try and justify it with a small cut to income tax or national insurance.

Given the choice, the public would rather miss out on this ploy if it means properly investing in our struggling NHS, broken social care and childcare systems, saving councils from bankruptcy and boosting the economy.

UNISON agrees that taxes on working people are too high and it’s wrong that wealth isn’t taxed to the same level as earned income, but a 1p or 2p cut to National Insurance will benefit the richest households 12 times more than the poorest.

UNISON believes in an economy that has fairness at its heart. That means cancelling the personal allowance freeze so the lowest earners aren’t pulled into paying taxes they can’t afford. It means increasing taxes on unearned wealth so landlords are no longer paying less in taxes than their tenants. And it means fixing the tax loopholes that allow non-doms to get away with not paying their fair share, and gives the green light to oil and gas companies pocketing mega profits while polluting the planet.

Above all, fairness is about equal access to great quality public services. Right now, they’re on their knees – as are the workers delivering them.

After fourteen years of economic mismanagement, I know what to expect from tomorrow’s budget. More pain for working people, more money in the pockets of the wealthiest, more cuts to public services.

With the right people in power, making the right choices, it is possible to have a thriving economy, driven by a healthy, happy, safe and productive workforce. But all this depends on having a government that will deliver decent public services that can support everyone.

The article UNISON opinion: The budget will deliver more cuts and more pain first appeared on the UNISON National site.

UNISON opinion: The budget will deliver more cuts and more pain

By UNISON general secretary Christina McAnea

Working people are bearing a triple burden. The cost of living crisis is still here, taxes are weighing heavy on workers, and in return, we’re getting broken public services that can’t guarantee support for everyone.

It’s even more galling for public service workers – they spend their working lives propping up essential services, only to be undermined at every turn by the Westminster government.

Underfunding services and undervaluing the workforce sabotages every effort made in hospitals, councils, schools, care homes and in the community.

The prime minister and the chancellor keep telling the public to stick with the plan, but the plan failed a long time ago.

Tomorrow’s Budget is an opportunity to help the economy grow, invest in public services, tackle low pay and ensure the country is not only prepared for the challenges ahead, but building a better future for everyone.

It will likely fail on all counts, with the Conservatives hoping to take off the edge with a sweetener gimmick. But gimmicks and slogans don’t put food on the table.

Rishi’s recession threatens to trap even more people into poverty, and the Treasury seems poised to further trash our public services with more cuts to spending. They’ll try and justify it with a small cut to income tax or national insurance.

Given the choice, the public would rather miss out on this ploy if it means properly investing in our struggling NHS, broken social care and childcare systems, saving councils from bankruptcy and boosting the economy.

UNISON agrees that taxes on working people are too high and it’s wrong that wealth isn’t taxed to the same level as earned income, but a 1p or 2p cut to National Insurance will benefit the richest households 12 times more than the poorest.

UNISON believes in an economy that has fairness at its heart. That means cancelling the personal allowance freeze so the lowest earners aren’t pulled into paying taxes they can’t afford. It means increasing taxes on unearned wealth so landlords are no longer paying less in taxes than their tenants. And it means fixing the tax loopholes that allow non-doms to get away with not paying their fair share, and gives the green light to oil and gas companies pocketing mega profits while polluting the planet.

Above all, fairness is about equal access to great quality public services. Right now, they’re on their knees – as are the workers delivering them.

After fourteen years of economic mismanagement, I know what to expect from tomorrow’s budget. More pain for working people, more money in the pockets of the wealthiest, more cuts to public services.

With the right people in power, making the right choices, it is possible to have a thriving economy, driven by a healthy, happy, safe and productive workforce. But all this depends on having a government that will deliver decent public services that can support everyone.

The article UNISON opinion: The budget will deliver more cuts and more pain first appeared on the UNISON National site.

Blog: Money for everything, everywhere, just not your pay rise

Today’s budget was supposedly a ‘back-to-work’ budget, with policies trailed over the past few days promising to help parents, disabled people, and the over-50s return to the workplace.

In reality, though, this budget was back-to-normal for the Conservative Party – big tax cuts for some of the highest earners, and billions of taxpayer money spent subsidising big businesses.

Over thirteen years of Tory austerity, chancellor after chancellor has claimed that there is no money for public services and that the country cannot afford to pay key workers more.

However, somehow, today’s budget found the cash to offer tax cuts to big businesses and the highest earners.

Today’s budget was also as much about what the chancellor didn’t say as what he did.

Childcare

The UK has the most expensive childcare in the OECD, and it is testament to the campaigning of UNISON and others that the chancellor used his budget to announce an additional £4bn investment.

However, what he didn’t mention is that many nurseries already struggle to provide the free hours that parents are entitled to, and many communities suffer massive shortages of provision.

Crucially, childcare doesn’t deliver itself – staff need better pay not lower staff-to-child ratios, but the chancellor said nothing about pay. Cutting staff reduces quality, not cost, and will only accelerate the recruitment and retention crisis in the sector.

Tax loopholes for big business

The chancellor announced a new scheme called “full capital expensing” that allows companies to deduct expenditure on things like IT equipment from their taxable profits.

This loophole is the equivalent of a corporation tax cut worth an average of £9 billion a year. It means that, as well as having one of the lowest corporation tax rates in the world, only 10% of businesses will actually end up paying the full rate.

This means ordinary taxpayers are giving big businesses a £9bn tax subsidy.

Another big tax loophole was left wide open too: the government’s failed windfall tax on oil and gas companies was untouched in today’s budget.

Since the windfall tax was announced, big oil and gas companies like Shell and Exxon have made record profits and paid out billions to their shareholders and executives – while despite the energy cap staying in place another three months, bills are more than double what they were last year.

It doesn’t have to be this way – windfall taxes in other countries have been far more effective, raising billions for the public purse and lowering bills. The chancellor missed an opportunity today to do the same.

Tax relief for the better off

One of the most expensive items in today’s budget was the big tax cuts for high earners who have accumulated significant pensions savings.

For those lucky enough to have over £1.07million in their pension pots, the chancellor abolished the lifetime pensions allowance. This policy only helps around 8,000 of the wealthiest pensions but works out as a £1.1bn a year tax giveaway by 2027.

Another group paying less tax will be some of the UK’s highest earners. As well as increasing the tax allowances for the wealthiest pensioners, the chancellor abolished the lifetime pensions allowance altogether for those lucky enough to have over £1.07 million in their pension pots – helping only 8,000 of the wealthiest pensioners – a huge public subsidy for those on bigger salaries.

Tax rises for everyone else

Meanwhile, the chancellor neglected to mention the taxes that ordinary households will be paying. A huge tax rise is coming next month, thanks to the freezing of tax thresholds in April.

Economists call this ‘fiscal drag’ – but in plain English all this means is basic rate taxpayers will be paying £500 more and those on the higher rate will pay £1000 more.

Over 3 million low paid workers will be dragged into the tax system at the bottom end, while another 2.5 million will be hit with the 40p and 45p top rates.

What is clear is that the cost of living crisis hasn’t gone away. The money for pay rises and public services exists – but it’s concentrated at the top while ordinary households continue to struggle with the rising costs of living.

The article Blog: Money for everything, everywhere, just not your pay rise first appeared on the UNISON National site.

Growth won’t happen without strong public services

Commenting on the budget delivered by Jeremy Hunt today (Wednesday), UNISON general secretary Christina McAnea said:

“There are more holes in this budget than on most public highways.

“It’s funny how the chancellor can lay his hands on billions when he wants. Ministers have sounded like a broken record, insisting the country can’t afford to pay key workers more.

“Yet, in a flourish, there’s cash for another fuel duty freeze, tax cuts for those who need them least, and no action to curb the mega-profits of the oil and gas giants. But not a dickie bird on public sector pay.

“It’s meant to be a budget for growth, but allowing public services to wither away and failing to invest in the workers tirelessly delivering them will come back to haunt the government. Economies can’t thrive with weak public services.

“The government’s childcare pledges are a helpful start but no panacea. Many nurseries struggle to offer enough free hours as it is, and can’t recruit the workers to deliver extra.

“Altering the ratios so fewer minimum wage childcare staff end up looking after ever more youngsters is not the answer. Valuing the workforce with proper rates of pay to match their skills should be the order of the day.”

Notes to editors:
– UNISON is the UK’s largest union and the largest union in the NHS and in the ambulance sector. It has more than 1.3 million members providing public services – in education, local government, the NHS, police service and energy. They are employed in the public, voluntary and private sectors.

Media contacts:
Liz Chinchen M: 07778 158175 E: press@unison.co.uk
Anthony Barnes M: 07834 864794 E: a.barnes@unison.co.uk

The article Growth won’t happen without strong public services first appeared on the UNISON National site.

Blog: Which version of the UK will Jeremy Hunt choose to back?

Last week, the news showed two versions of the UK. In one, school buildings are crumbling and ambulances have to queue outside overstretched A&E departments. Public service workers who we clapped through the pandemic are relying on food banks, and credit cards to afford their energy bills and childcare costs. Workers across the country are making the difficult choice to take industrial action for a decent wage.

In the other UK, though, profits are booming. The oil and gas giants made record returns, while our energy bills hit record highs. And as public service workers are told to accept pay restraint, Shell’s outgoing CEO was given a 53% pay rise and a payout in the millions. Bankers bonuses have doubled since the 2008 crash.

Wednesday’s budget is about choices. The chancellor has to choose which of the two versions of the UK is his priority. Will he choose to let oil and gas giants continue to make massive profits at the expense of ordinary households struggling to pay their bills? Will he choose to allow obscene payouts at the top, while telling public service workers to accept yet another pay cut?

Or will he choose to fix the crisis in public services and the crisis that each of us faces as we grapple with the rising cost of living?

When working people get a pay rise, they don’t gamble it in stocks and shares, or buy second homes. Instead, they spend it locally, buying food in local shops, taking their family to the cafe, paying their nursery bills or getting a haircut, thereby helping businesses locally and the economy as a whole.

Giving a pay rise also helps essential public services at a time when they are haemorrhaging staff.

UNISON’s recent NHS staff survey shows that 1 in 9 nurses left active service in 2021-2022 while a quarter of paramedics say they would leave their job as soon as they could find another one. The outlook is bleak unless the chancellor chooses a drastically different direction.

All the reports say that there is some financial wriggle room in this budget. Borrowing was lower than forecast, and the government has an unexpected surplus.

On Wednesday, Jeremy Hunt can afford to invest in working people and public services, and he has the money to be able to keep energy bills down and ensure people can afford the basics. The question is, will he choose to?

We’ll be watching closely, and we’ll be ready to take action if the chancellor fails to fix the crisis in pay packets and public services.

The article Blog: Which version of the UK will Jeremy Hunt choose to back? first appeared on the UNISON National site.

How the budget could fix public services

                                                                    Jeremy Hunt. Image © Richard Townshend

The budget takes place next Wednesday and is the Westminster government’s opportunity to take big decisions that would benefit people’s lives, such as investing in public services, improving wages, making the tax system fairer and tackling out-of-control energy bills.

But new UNISON research shows that an overwhelming 94.5% of public service workers are not optimistic that it will do any of those things.

This is against a backdrop of almost nine in every 10 public service workers (88.1%) finding it harder to pay their household bills than they did six months ago.

This financial strain is forcing them to make some incredibly difficult choices: 86% of those surveyed are cutting costs to make ends meet – of whom more than one in 10 (10.5%) have had to use, or plan to use, a foodbank.

As well as making cuts, one in five has also taken steps to increase their income, of whom two thirds work overtime, over a third are already working two jobs and a further 24.1% plan to find a second job; 6.5% of respondents have even taken on a third job.

The need to find better-paid work is a major factor in the staffing crisis in public services, the survey shows, with a third of those surveyed planning to leave the public sector altogether for a job elsewhere.

UNISON general secretary Christina McAnea commented today: “It’s difficult to see how one of the richest politicians in the UK [the chancellor is worth an estimated £14 million] can deliver the policies that ordinary people who work in and rely on public services need.

“So, here at UNISON we asked the experts – those workers on the frontline in their communities – what policies would improve their lives and boost the economy.”

Abbi, a probation service officer in Llanelli, says that “working full time, two average incomes just doesn’t cover the cost of living anymore.” She would like to see the government put money into tackling poverty, helping with housing costs and bringing down the cost of essentials, like childcare.

Similarly, Kate, a staff nurse in Leicester, would prioritise making sure that working people are able to pay for the essentials.

Three quarters of frontline workers say that an above-inflation pay rise wouldn’t just benefit them, but would boost the whole economy.

Michaela, a teaching assistant in Cornwall, says a pay increase above inflation would mean she and her colleagues could “live without relying on food banks, can be warm in their own homes, not worry about their pay running out in the middle of the month and not having to constantly live hand to mouth. We could live, not just exist.”

Jayne, a legal assistant in Essex, says that an above inflation pay rise would “mean I could eat and put the heating on.”

Jacqueline, a social care support worker in Goole, East Yorkshire, says she would focus on making society fairer, stopping companies from making vast profits when their employees are low paid, and closing tax loopholes so no one avoids paying their due.

Similarly, Derick, a medical librarian working for the NHS in Birmingham, says that if he were chancellor, he would increase the windfall tax on excess profits and close tax loopholes like non-dom status. He would increase income taxes on people earning over £125k and use this to increase the NHS budget and give public sector workers a proper pay rise.

“Public service workers are clear,” said Ms McAnea. “The problem isn’t that there isn’t enough money to go round, but that it is being concentrated in the pockets of big businesses and the wealthiest households.

“95% of public service workers think the chancellor should prioritise cracking down on tax avoidance in next week’s budget, and 92.9% want to see higher windfall taxes on oil and gas giants.”

She concluded: “The choices made next week will have a significant impact on everyone who works for and relies on public services, so we’ll be following the announcements carefully. We hope that the chancellor will listen to public service workers who can see the damage that this government has done to local services and economies – if not, then watch this space for opportunities to take action.”

Notes: figures and quotes are from a UNISON survey of 23,644 public service workers, working in education, local government, health/NHS, social care, police and justice, energy, water, environment, and transport.

The article How the budget could fix public services first appeared on the UNISON National site.