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The mini-budget delivered Robin Hood in reverse: tax cuts for the rich – pay cuts for working people

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Kwasi Kwarteng, the latest Conservative Chancellor of the Exchequer, stood up today to deliver what was billed as a ‘mini-budget’. Instead, he announced a series of sweeping changes, which followed the pattern set by George Osborne: tax cuts for the rich and big business, pay cuts for everyone else.

The Chancellor was clear that he wants all brakes off for the wealthy. The cap on bankers’ bonuses was scrapped, alongside the 45p rate of income tax, paid by those earning over £150,000 a year – five times average earnings. George Osborne already lowered this rate from 50 to 45p. None of that wealth gained by top earners trickled down then. It won’t now. Scrapping National Insurance increases, and cuts in the basic rate of tax – to come in in 2023 -will also benefit the wealthy most.

There’s no sign that big corporations will be asked to pay their fair share either. There was no new windfall tax on the oil and gas giants making record profits from the energy price crisis. The boss of BP has described his business as a ‘cash machine’: the government is happy to let him keep on taking our money out. Instead business got another corporation tax cut. In the last decade George Osborne slashed the UK’s Corporation Tax rate to the lowest in the G7 and growth and investment flatlined. Today Kwasi Kwarteng today cancelled planned increases in corporation tax from 19 to 25 per cent – doubling down on a failed strategy.

In stark contrast to the boom for the wealthy, workers’ pay was once again under attack. The government has spent £45bn on tax cuts, but apparently can’t afford to boost the pay of nurses, refuse workers, civil servants and other public sector workers who are being offered pay rises well below inflation.  There was no mention of workers on the minimum wage, who saw a real terms cut in their pay last year. And no more help for families facing energy bills which even after the price cap will be twice as high as this time last year. Workers were left facing a tough winter alone.

Trade unions have provided hope for working people throughout this year, proving that when workers join together they can negotiate and win better pay rises. Now the Government wants to make that harder too. Confused plans announced today to introduce minimum service levels and tie pay negotiations up in further red tape are designed to make it harder for workers to negotiate better pay and conditions. They’re wrong, unworkable, and almost certainly illegal too.

The government’s message to struggling workers was clear – try harder or we’ll make you poorer. Announcing new rules and even tougher sanctions for those claiming Universal Credit while in part time work, will do nothing to help people into decent paid jobs. Instead it will place further pressure on workers struggling to make ends meet, is likely to be particularly damaging for women and those with caring responsibilities working part time.

The last twelve years of Conservative government have delivered the longest pay squeeze in 200 years, rising in work poverty, and huge gains in wealth at the top – and the worst growth record in generations.

The message today was that this government thinks that more of the same medicine will somehow deliver a different result. But it’s working people who will be left poorer when once again they’re proved wrong. 

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