Chancellor’s plans: a threat not a help to the NHS
Before disappearing off to their party conferences, politicians have been back at Westminster for a couple of days, frantically making announcements in the little time they have. RCM Public Affairs Advisor Stuart Bonar shares what recent announcements at Westminster means for RCM members and wider public in his latest blog.
Events have conspired to make this a frantic political week. A series of crises – on the cost of living, energy bills, and the NHS – has been building for months. At the same time, politics has been frozen. The Conservatives took what seemed like an eternity to choose their new leader, and as soon as they picked Liz Truss the sad news came through of the death of Her Majesty The Queen, and with it a suspension of politics.
Today saw a crucial statement to MPs by the new Chancellor. He, along with the new Prime Minister, are breaking with the approach taken by their Conservative predecessors. They are going large on unfunded tax cuts in the hope that it will boost the economy. In turn, they hope, this will mean more jobs and more money in people’s pockets.
But what does this mean for RCM members? Well, having watched the statement and dug into the detail, we can find one bit of good news, a fair amount of bad news, and one bombshell.
The good news. From April next year, the basic rate of income tax will fall from 20% to 19%. So, for every pound you earn above the personal allowance (about £12,500) up to the starting point for the higher rate of income tax (just over £50,000), you will pay 1p less for every £1 you earn. This will apply to England, Wales and Northern Ireland, but not Scotland – which sets its own income tax rates.
The bad news? It does look like the new Prime Minister and her team are not focusing on investment in public services. The Chancellor’s announcements mean the UK needs to borrow, this year, over £70 billion more than planned. This however is being used purely to cover the lost income from all the tax cuts, not to invest more in public services.
But this does make it easier for us to argue for more investment and for better NHS pay.
Let me explain. One tax that was abolished today was the so-called additional rate of income tax. This 45p tax rate is payable on salaries over £150,000 and is only paid by a little over 600,000 people (certainly no midwives or MSWs!). This decision means all those people get a 5p in the pound tax cut on their earnings over £150,000.
How can the Government argue with any credibility that there is no money to give NHS staff a decent pay rise when they can find money for a substantial tax cut to people earning over £150,000?
How can there be no money to employ the midwives the NHS desperately needs when the Government can find over £70 billion to cover tax cuts skewed towards the wealthy?
Indeed, the ambition of the Chancellor’s giveaway announcements – the biggest tax giveaway by a Chancellor in 50 years – stands in stark contrast to the new Health Secretary’s statement to the Commons a day earlier. There was no new money for the NHS, despite the crisis it faces. She mentioned the NHS workforce plan, originally due out in October, but reports suggest it is now unlikely to go to print before the end of the year. We must push the Government on the limpness of their plans for the NHS.
The bombshell was the Chancellor’s announcement that the Government will bring forward a proposed new law that would force unions to hold a ballot of members on any pay offer made by an employer during an industrial dispute. We need to see the detail of this, but it is not hard to see how an employer could offer a series of terrible pay deals to employees in the knowledge that their unions would have to foot the bill to ballot members on them.
This looks like it could be a wrecking measure designed to cripple working people from taking legitimate industrial action against an employer. Trade unions in the UK already face massive hurdles and barriers when taking industrial action, yet the Government seems determined to make it even harder. That’s not on and is a direct assault on working people, like midwives and MSWs, who belong to a trade union.
Tax cuts focused on the wealthy, timidity in the face of the NHS crisis, and an attack on trade unions does not strike us as a recipe for national success. We will need to make our case over the coming months, and louder than ever.