Opinion: On the eve of the budget, the country needs a new direction

By UNISON general secretary Christina McAnea

There’s been much speculation over the past few weeks as to what might be in Labour’s first budget for 14 years. Two things we do know for certain are that the government has inherited a difficult financial situation and the chancellor faces a challenging task.

The country is in urgent need of a new direction and there will be much interest in what Rachel Reeves outlines when she unveils her much-anticipated autumn spending plan tomorrow.

The Conservatives have left behind a colossal £22bn black hole for the current year that is blighting public finances. The chancellor has also talked of a £40bn funding gap that the government needs to fill over the lifetime of the current parliament to avoid a return to austerity.

Closing this while generating economic growth won’t be a painless experience and there is a clearly a price to be paid for the years of dreadful Tory economic mismanagement. But working people and our public services should be protected along the way too.

In its manifesto, Labour pledged not to raise taxes on working people. But the government now needs to go further by reversing the freeze on the personal allowance, so the lowest earners aren’t dragged into paying higher taxes.

The tax burden on working people is already too heavy, and it’s time to ease that pressure. Instead, ministers should focus on increasing taxes on unearned wealth. It’s also crucial to close the tax loopholes that let non-doms avoid paying their fair share and to prevent oil and gas companies from raking in massive profits while polluting the planet.

We now have a government that recognises the value of public services, and the chancellor has pledged there’ll be no return to the damaging spending cuts of the past. We know well-resourced, effectively staffed services can help grow the economy. But the challenge for the government is to generate the growth to make all this possible.

The budget is a huge opportunity for the chancellor to set the tone and start delivering the resources to invest in and boost the NHS, and other essential services like schools, police, probation and local government.

Ad hoc, panicked cash injections – as we saw under the Conservatives – won’t cut it. What’s needed is a long-term, sustainable plan to see us through the next five years at least, with funding made a priority and the workforce supported along the way.  

Public service employees have kept this country running despite years of pay freezes, below-inflation awards, staffing crises and austerity. They deserve fair wages to reflect the value of the essential services they provide, address the disparity between their income and the cost of living, and help fill the huge number of vacancies.

In addition, pensioners already struggling to get by must have the winter fuel allowance returned to them. Otherwise, such cuts will push the vulnerable elderly into greater hardship, and we must not leave them out in the cold.

Older people are keeping warm in libraries while local councils are considering closing these essential community spaces due to the increasingly perilous state of their finances.

The chancellor must protect local services with a sensible funding settlement, step in to stop closures of key local services and lend a helping hand to local government as more and more authorities struggle to balance their books.

The budget must signal that Labour is serious about growth and that now is the time for a new direction.