This week’s Budget comes at a time of unprecedented uncertainty – about Brexit negotiations, about UK economic resilience and productivity and about the global impact of accelerating technological change.
For too many working people, that uncertainty brings real anxiety about their wages and living standards. That’s why we need a budget that strengthens public services and stimulates investment across the economy. A budget which reflects an understanding that we need to change the rules of the game and make capitalism work for all, not just a financial or hereditary elite.
Have we learned the lessons from the conditions that created the crash in 2008? It is difficult to conclude we have, when stagnant wages are being offset by personal borrowing. Debt is not a substitute for earnings. We cannot squeeze working people further and expect demand in the economy to be firm. Wages need to rise in both the public and private sector and worker voice through expanded collective bargaining needs to be heard again.
Repairing the damage done to our public sector by years of wrongheaded austerity is an urgent priority. A strong public service provides the platform for a successful private sector.
There is overwhelming evidence that underinvestment in staff is causing skill shortages which are jeopardising our security and prosperity. The crisis reaches way beyond the NHS and schools, into every service and agency.
Last month, the Defence Safety Authority warned that key civilian shortages in the Ministry of Defence were increasing the risks faced by our forces. In September, the Institute for Government reported that the Animal and Plant Health Agency, having lost over a quarter of its staff since 2010, faces a “dramatic” increase in workload as a result of likely changes to customs and border arrangements after Brexit. In July, the Science and Technology Facilities Council, which has a critical role to play in the UK’s industrial strategy, admitted that it was struggling to “attract and retain staff in Science Engineering and Technology roles due to lack of competitiveness on pay”.
The 1% pay cap has to go. But, it’s also clear that asking public sector employers to fund pay rises within existing strained budgets won’t work. We must ensure our public bodies are properly funded to provide the services and employ the staff we rely on every day.
Prospect will also be looking closely at any changes made to the tax treatment of employees’ pension savings, which some reports suggest the Chancellor might target to fund “giveaways” in other areas, and of freelancers and the self-employed, who make up a growing share of our membership.
“Repairing the damage done to our public sector by years of wrongheaded austerity is an urgent priority”
Again we are mindful that the government can’t just pass the buck on to ordinary people who have already faced years of tightening their belts. It likes to talk about its need to “balance the books” – but working families need to balance their books too. Any new ‘stealth taxes’ are only going to add pressure. Families are already having to deal with rising inflation and interest rates, alongside slowing average wage growth.
Stimulating growth and strengthening the productivity of our economy means government working with employers and unions for the long term. That means investing in the institutions, innovation, industries and infrastructure upon which our competitiveness and prosperity depend. So the Chancellor should be looking at where more resources are needed and supporting a new industrial strategy.
Yet the immediate conditions are worrying. Research and regulatory bodies from Natural England to the Vehicle Certification Agency will be critical to navigating the changes that Brexit will bring. The fall in sterling has blown a hole in the defence budget, creating knock-on uncertainty in our shipbuilding, aerospace and manufacturing sectors. The government has promised more funding for science, but as its recently published Life Sciences strategy made clear, not yet enough to close the gap with competitors on R&D spending. Businesses are united in their call for greater investment in essential transport, communications and energy infrastructure (with clarity on the long-term future of the Carbon Price Floor critical for the last of these).
The Treasury needs to think value, as well as cost, otherwise the government’s industrial strategy which we also expect to be launched shortly, will be nothing more than warm words and vain hopes.
And the risks to our economy and our country in the years ahead will increase. But if we support and invest in the expertise and excellence we can see across our public and private sectors, then we can face the future with confidence and mitigate the uncertainties that challenge us.
Mike Clancy is General Secretary of Prospect, a union representing a 140,000 professionals, working in both public services and in the private sector