‘Smoke and mirrors’ sums up Rishi Sunak’s Spending Review

Rishi Sunak announcing the spending review enhanced
Steve Topple

Chancellor Rishi Sunak’s Spending Review was a fine bit of electioneering, if you’re a Tory. Otherwise, as one person pointed out about a key policy, it was all a bit “smoke and mirrors”. Because buried in the detail was a damning admission: that austerity round two had effectively begun.

“Smoke and mirrors”

First up, and it was Richard Vaughn from the iPaper who called Sunak’s national living wage rise “smoke and mirrors”. He is increasing it by 19p an hour to £8.91. As the Resolution Foundation pointed out, this is:

the smallest rise since 2013

So, actually – in real terms (when you factor in inflation forecasts for 2021) this may end up being about 1%:

But people who the Tories will definitely be cutting money from are social security claimants.

Divide and conquer?

The Mirror reported that people on so-called legacy benefits like Employment and Support Allowance (ESA) will see a mere 0.5% rise in their payments next April. This is a real terms cut, if inflation rises as forecast.

Public sector workers didn’t fair much better. Sunak is freezing the pay for most of them next year, except for around one million NHS staff. He is going to give 2.1 million public sector workers who earn below the median wage a £250 a year pay rise, though. But, as Liam Young pointed out:

But Sunak’s agenda around workers was clear. HuffPost noted he said:

unlike workers in the private sector, who have lost jobs, been furloughed, seen wages cut, and hours reduced – the public sector has not

Divide and conquer, much? The Canary’s editor-at-large Kerry-Anne Mendoza thought so:

And there was more divide and conquer on the horizon.

Levelling up? Who?

Sunak’s £4bn “levelling up fund” for local infrastructure projects is interesting. He said that:

Any local area will be able to bid directly to fund local projects.

And that:

This is about funding the infrastructure of everyday life: a new bypass, upgraded railway stations, less traffic, more libraries, museums, and galleries.

But crucially, the government will only give the money to a local area if its MP approves. The Liverpool Echo‘s political editor Liam Thorp spotted a potential issue:

As BBC News reported, Robert Jenrick was caught up in a scandal over him signing off on funding for a fellow minister’s constituency. That fellow minister then signed off on funding for Jenrick’s constituency. The latter is in charge of the Ministry of Housing, Communities and Local Government – the department that will partly control the new levelling up fund. Nothing to see here, obviously.

And if that wasn’t enough “smoke and mirrors” for you – then here’s a bit more.

Sunak fibs

Professor Richard Murphy had this to say about Sunak’s borrowing claims:

What Murphy means is Quantitative Easing, or QE – where the Bank of England effectively creates electronic money. In other words, Sunak’s hasn’t gone cap-in-hand to a payday loan company. The Bank of England has created the cash for him.

Green Party politician Sian Berry was not impressed with the chancellor’s housing plans. These include a £7.1bn national home building fund. But as Berry noted:

And Helen Barnard from the Joseph Rowntree Foundation broke down the reality of education spending, where Sunak said another £2.2bn for schools in England would be spent:

Paying the price

But overall, Sunak’s Spending Review was a con. Because it was actually a return to austerity; if not in name, then financially. The Resolution Foundation’s Torsten Bell number-crunched, and for many it may well look like a cut to public sector spending:

So, a smoke and mirrors review it was then. And at some point, the Tories will expect even this reduced amount of spending to be paid for. If it goes the same way as the aftermath of the last financial crisis – it will be the poorest people, who are still living with the consequences of austerity, who will continue to bear the brunt of financial and social misery

Featured image via ITV News – YouTube

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  • Show Comments
    1. 19p? Ask Rees-Mogg what he would think of an extra 19p an hour. Such is the condescension of capitalism to the people who keep it going. Borrowing of £394 billion? Pay it back over 30 years, interest rates are almost zero, servicing the debt out of a GDP of nearly 2,000 bn is easy. Like paying a debt of £15 a month out of an income of £2000. The points is, the international finance system sucks the blood out of the economy whose wealth is made by the work of those millions who are getting less than £10 an hour. Finance needs to be made to serve real needs rather than the reverse. As usual, the Tories are seizing the chance to punish the public sector as they pretend to be anti-State. Such is their mythology. In fact, the history of capitalism is that of the use of State power in defence of the rich. Their putative belief in the free market is a fantasy. A free market in labour would result in a huge rise in wages, which why their is a panoply of anti trade union laws to prevent a market in labour operating. The Tories are statists. They love the State when it defends the rich, makes life hard for the poor and prevents the common folk from organising to further their interests. In so far as the left accepts the ideology which proposes the Tories as defenders of free markets, they let them off the hook. The statist nature of Toryism needs to be pointed out consistently. Take Thatcher. Her two insignia policies? The Falklands War and the miners’ strike. Both examples of the use of State power, and the latter its use to oppress a section of the British people. If the State had refused to intervene in the miners’ strike, the miners would have won hands down. What has been done today is the use of State power against key workers. Nothing to do with the market.

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