Chancellor Rishi Sunak’s latest budget was a budget for the bosses. He promised tax cuts and giveaways for bosses and the rich — and threatened austerity for ordinary people in the future.
Contrast a 21p increase in the minimum wage and a temporary boost to universal credit with £65 billion in support for businesses.
He boasted of giving bosses “the biggest business tax cut in modern British history.” He promised businesses a “super deduction” in their tax bill in return for investing in machinery.
Under the plan, businesses will be able to claim tax relief on profits by up to 130 percent of the cost of investment for the next two years. That will be worth £25 billion to bosses.
That offsets massively the small rise in corporation tax (still one of the lowest amongst developed nations).
Sunak said corporation tax would rise to 25 percent. But only businesses with profits of more than £250,000 — just 10 percent of companies—will be taxed the full amount. And even then, the rise isn't set to come into place until 2023.
Tony Danker of the bosses’ CBI organisation. He said there would be a “sharp intake of breath” from bosses at the idea of paying any more tax. But he was soothed by the prospect of more giveaways. “The boldness of the chancellor is to be admired,” he said.
Workers will pay for government debt
So if businesses aren't really going to pay for the massive debts being run up by the government, who is?
Hidden in the small print, Sunak slashed an extra £4 billion a year from day-to-day spending on public services from next year.
This comes on top of the cuts he made at the spending review last November when he slashed £10 billion per year from departmental budgets from this year onwards. Local government will, again, be particularly hard hit.
Sunak has also raised taxes for the lowest-paid workers by stealth. He is freezing the income tax threshold at £12,750 until 2026.
The threshold means anyone earning less than this doesn’t have to pay tax. But if wages rise above it along with inflation, fewer and fewer low-paid workers will be exempt.
On top of that, many local authorities plan to raise council tax by up to 4.9 percent, blaming low funding from the government.
And while bosses get tax cuts, health and public sector workers don’t get a real pay rise.
Unions attack the budget
Union leaders slammed the budget. General Secretary of the Unison union Christina McAnea said, “The chancellor had much to say on how to revive the economy but was strangely silent on public services.
“There was no extra money for a social care system on its knees. Staff are highly skilled but lowly paid and barely earn the legal minimum. No mention of cash to raise the morale of exhausted NHS workers and grant the pay rise they’ve more than earned.”
Patrick Harrington, General Secretary of Solidarity union, said: "The question before this budget was 'Who will pay for all the subsidies and debt ran up in the budget?'. Now we have our answer - it will not be big business but the ordinary worker. We will pay through reduced public services, increased council and national taxes, and pitiful public sector pay increases. This budget was a budget for the bosses."