The Chancellor’s promises would be overwhelmed by a no-deal Brexit

A no deal Brexit would wreck our economy

Britain desperately needs a new deal for workers. Our economy is weak, our public services are struggling after years of cuts, and our labour market leaves too many workers underpaid and insecure.

Today’s spending review was meant to show that the Chancellor was listening to those concerns. But his promises are overshadowed by the threat of a no-deal Brexit that will derail the economy and damage public services. As our submission to the Chancellor set out, a no deal Brexit would mean jobs would be lost, wages would fall, and prices would rise. We would face shortages of food and medicine, chaos at our ports, and a risk of a hard border in Northern Ireland. Nothing the Chancellor said today reduced those risks.

Today’s announcements aren’t enough to repair the damage of a decade of austerity

Today we heard the Chancellor boast about having ‘fixed’ the public finances. But austerity didn’t help the economy – it held it back. Rather than improve the public finances, the initial severity of austerity policies threatened to terminate both the recovery in GDP and the public finances. It was only when the government moderated austerity that growth began to pick up. In the meantime public services have needlessly been damaged, and workers have faced the worst pay crisis for two centuries.

After years of union campaigning, the belated recognition that public services are desperately in need of funding was welcome, but we’re far from repairing the damage yet. In getting to the ‘end of austerity’ we need to look at whether departmental budgets are now protected from further cuts and the extent to which investment in services will restore lost capacity, access and quality since 2010 and meet demands going forward.

Next year’s cash injection of £2.6bn for schools, £6.2bn for the NHS and the £1.5bn for social care - in addition to the extension of the Better Care Fund and Social Care Support Grant - will provide some short-term stability and protect those services from making further cuts.

But even with today’s significant spending increases only a third of the cuts introduced since 2010 have been reversed according to analysis by the Resolution Foundation . They state that the Housing and Communities budget will remain 52 per cent lower next year than a decade ago, Justice will be 31 per cent lower.

And we know that these budget cuts have led to the deterioration of services. In local government, for example, there are over 400k older people who no longer receive funded care to meet their needs. There have been over 500 Sure Start centre closures. The number of libraries has fallen by 14 per cent and the number of councils provided weekly waste collections has reduced by 40 per cent.

Analysis by the New Economics Foundation, commissioned by the TUC, looks at what the funding requirement would be to restore local government funding in order to provide the range of services and access at similar levels we saw in 2009/10. On this basis, they estimate a funding gap today of over £19bn – there’s an awful lot of catching up to do yet.

There’s an equally daunting challenge meeting the demands of a changing and ageing population and the implementation of new technology and service provision over the next ten years. Just looking at education, research by an alliance of education unions and the F40 group calculated that the funding required to restore pupil funding to 2015/16 levels while meeting school cost pressures going forward would be an additional £12.6bn by 2022/23. Today’s announcement on education funding shows that around £9bn of this will be met by 2022/23, leaving funding gaps across early years, high needs, schools and post-16. The school funding gap alone could be around £2bn.

No end to poverty

And today’s announcements will have been little comfort for the millions in insecure work who are struggling to pay their bills. A record 8 million people are in poverty despite being in a working family. This year the number of people on a zero-hours contract rose by 100,000 – with one in nine people now in some form of insecure work. Wages still haven’t recovered from the damage done by austerity – and households are in record levels of debt.

We know that Boris Johnson has said his priority is a £10bn tax cut for the rich . Not ending the benefit freeze pushing people into poverty, or the five week wait for universal credit that’s sending families to food banks.

Today’s announcements did nothing to end the threat of no-deal that’s hanging over the heads of working families, or the threat of no money at the end of the month faced by too many. It wasn’t the new deal that working people needed.