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| The Observer view on spending cuts | The Observer view on spending cuts |
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| Last summer’s European referendum marked a decisive shift in government rhetoric around austerity and public spending cuts. David Cameron’s six-year premiership was dominated throughout by the language of deficit reduction and paying down the national debt. From her very first speech as prime minister, Theresa May instead emphasised her intention to stand up for ordinary working families. The deficit was mentioned just three times in the Conservative party manifesto of a few weeks ago. | Last summer’s European referendum marked a decisive shift in government rhetoric around austerity and public spending cuts. David Cameron’s six-year premiership was dominated throughout by the language of deficit reduction and paying down the national debt. From her very first speech as prime minister, Theresa May instead emphasised her intention to stand up for ordinary working families. The deficit was mentioned just three times in the Conservative party manifesto of a few weeks ago. |
| But if the rhetoric became softer with May’s move into Downing Street, the reality has become much sharper. The truth is that while in government, David Cameron and George Osborne kicked the deepest cuts beyond 2016, while making tax reductions that significantly worsened the public finances. While May might have ditched their rhetoric, her chancellor, Philip Hammond, has enthusiastically embraced the course of cuts charted for him by Osborne. | But if the rhetoric became softer with May’s move into Downing Street, the reality has become much sharper. The truth is that while in government, David Cameron and George Osborne kicked the deepest cuts beyond 2016, while making tax reductions that significantly worsened the public finances. While May might have ditched their rhetoric, her chancellor, Philip Hammond, has enthusiastically embraced the course of cuts charted for him by Osborne. |
| Rapidly increasing inflation means the government will save even more than planned as a result of freezing benefits and capping public sector pay. So, despite claiming to be the champion of working people, May went to the country last month proposing an even meaner set of public sector pay and benefit cuts, which will cost millions of families thousands of pounds a year by 2020. An electorate already starting to feel the pinch of spending cuts and stagnant wages roundly rejected this grim offer. | Rapidly increasing inflation means the government will save even more than planned as a result of freezing benefits and capping public sector pay. So, despite claiming to be the champion of working people, May went to the country last month proposing an even meaner set of public sector pay and benefit cuts, which will cost millions of families thousands of pounds a year by 2020. An electorate already starting to feel the pinch of spending cuts and stagnant wages roundly rejected this grim offer. |
| There are some signs that a prime minister much weakened by a dreadful election result may be forced to think again. This cannot come too soon | There are some signs that a prime minister much weakened by a dreadful election result may be forced to think again. This cannot come too soon |
| Having lost any clear mandate for these cuts, she should have taken the first available opportunity – the Queen’s speech – to send an important signal that her government would be easing the burden on working-age families. Instead, Conservative MPs cheered last week as they narrowly beat a Labour amendment to end the public sector pay cap and reverse cuts to emergency services. | Having lost any clear mandate for these cuts, she should have taken the first available opportunity – the Queen’s speech – to send an important signal that her government would be easing the burden on working-age families. Instead, Conservative MPs cheered last week as they narrowly beat a Labour amendment to end the public sector pay cap and reverse cuts to emergency services. |
| There are some signs that a prime minister much embattled and weakened by a dreadful election result may be forced to rethink her approach. This cannot come too soon. The majority of public sector workers in England have faced two years of pay freezes followed by five years of a 1% cap on pay scale increases, set to continue until at least 2019. This will leave public sector workers such as nurses, firefighters and teachers more than £4,000 a year worse off in real terms by 2020. | There are some signs that a prime minister much embattled and weakened by a dreadful election result may be forced to rethink her approach. This cannot come too soon. The majority of public sector workers in England have faced two years of pay freezes followed by five years of a 1% cap on pay scale increases, set to continue until at least 2019. This will leave public sector workers such as nurses, firefighters and teachers more than £4,000 a year worse off in real terms by 2020. |
| It shouldn’t take the events of the past few weeks – the unprecedented scale of the Grenfell Tower fire, or the terrorist attacks in Manchester and London – to remind us that every day, public sector workers risk their lives to keep us safe, go above and beyond to care for our loved ones, and put in overtime to ensure our children don’t fall behind at school. Yet we are a society that increasingly expects them to work with more stretched resources for declining real pay. | It shouldn’t take the events of the past few weeks – the unprecedented scale of the Grenfell Tower fire, or the terrorist attacks in Manchester and London – to remind us that every day, public sector workers risk their lives to keep us safe, go above and beyond to care for our loved ones, and put in overtime to ensure our children don’t fall behind at school. Yet we are a society that increasingly expects them to work with more stretched resources for declining real pay. |
| This cannot but have a profound impact on their lives. In a survey of more than 20,000 health workers conducted by Unison, one in five said they had used a debt advice service. Some nurses are reportedly being driven to use foodbanks, and young teachers in London are spending more than half their take-home pay on housing. | This cannot but have a profound impact on their lives. In a survey of more than 20,000 health workers conducted by Unison, one in five said they had used a debt advice service. Some nurses are reportedly being driven to use foodbanks, and young teachers in London are spending more than half their take-home pay on housing. |
| Capping public sector pay isn’t just mean: it’s a false economy. In the next few years, private sector pay is expected to increase much more rapidly. According to the Institute for Fiscal Studies, this will reduce the average differential between public and private sector pay to the lowest it has been for at least 20 years. | Capping public sector pay isn’t just mean: it’s a false economy. In the next few years, private sector pay is expected to increase much more rapidly. According to the Institute for Fiscal Studies, this will reduce the average differential between public and private sector pay to the lowest it has been for at least 20 years. |
| The independent pay review bodies have warned this risks compounding the existing recruitment and retention problems that already exist in large parts of the public sector. There is currently a shortage of 30,000 nurses across the English NHS, and the number of GPs has fallen in recent years. | The independent pay review bodies have warned this risks compounding the existing recruitment and retention problems that already exist in large parts of the public sector. There is currently a shortage of 30,000 nurses across the English NHS, and the number of GPs has fallen in recent years. |
| NHS leaders have warned that low-paid health workers are quitting the NHS for jobs in supermarkets because the pay is better. Retention in teaching is the worst it has been for years: a quarter of teachers now leave the profession within their first three years. | NHS leaders have warned that low-paid health workers are quitting the NHS for jobs in supermarkets because the pay is better. Retention in teaching is the worst it has been for years: a quarter of teachers now leave the profession within their first three years. |
| The poorest fifth of working-age households will find themselves more than £3,000 a year worse off by 2020 | The poorest fifth of working-age households will find themselves more than £3,000 a year worse off by 2020 |
| Staff shortages have a deep impact on the quality of our public services. The independent inquiry into the scandal at Mid Staffs NHS Trust found inadequate staffing was a key culprit in the shocking standards of care patients received, including being left unfed and in soiled sheets for hours on end. Shortages leave public service managers scrabbling to find temporary cover, which can be much more expensive than paying permanent staff properly in the first place. Spending on agency staff has increased both in the NHS and the schools system since 2010. The situation will be made even worse by tougher migration controls, and the fact that Brexit is already putting off European-born workers from coming to work in the UK. | Staff shortages have a deep impact on the quality of our public services. The independent inquiry into the scandal at Mid Staffs NHS Trust found inadequate staffing was a key culprit in the shocking standards of care patients received, including being left unfed and in soiled sheets for hours on end. Shortages leave public service managers scrabbling to find temporary cover, which can be much more expensive than paying permanent staff properly in the first place. Spending on agency staff has increased both in the NHS and the schools system since 2010. The situation will be made even worse by tougher migration controls, and the fact that Brexit is already putting off European-born workers from coming to work in the UK. |
| May must also shift her approach to working-age benefits, which have been frozen since April this year. Families will gradually be moved from tax credits to the less generous universal credit over the next few years. The poorest fifth of working-age households will find themselves over £3,000 a year worse off by 2020 as a result of the government’s tax and benefit changes since 2015. Meanwhile, despite the pressures created by an ageing population, the NHS faces its tightest-ever funding settlement, and schools will see per-pupil funding decline by 7% by 2021. The costs will be felt in cancelled operations, growing waiting lists and schools with fewer support staff. | May must also shift her approach to working-age benefits, which have been frozen since April this year. Families will gradually be moved from tax credits to the less generous universal credit over the next few years. The poorest fifth of working-age households will find themselves over £3,000 a year worse off by 2020 as a result of the government’s tax and benefit changes since 2015. Meanwhile, despite the pressures created by an ageing population, the NHS faces its tightest-ever funding settlement, and schools will see per-pupil funding decline by 7% by 2021. The costs will be felt in cancelled operations, growing waiting lists and schools with fewer support staff. |
| These cuts have always been presented as a necessary evil: as a price we must pay to get the public finances in order. But they are a political choice. By 2020, Conservative chancellors will have made over £40bn worth of tax cuts a year, including over £20bn of income tax cuts that have disproportionately benefited more affluent families. While the prime minister couldn’t find the cash to lift the public sector pay cap or benefits freeze, she easily cobbled together the £1 billion of spending demanded by the DUP in exchange for its support of her government. | These cuts have always been presented as a necessary evil: as a price we must pay to get the public finances in order. But they are a political choice. By 2020, Conservative chancellors will have made over £40bn worth of tax cuts a year, including over £20bn of income tax cuts that have disproportionately benefited more affluent families. While the prime minister couldn’t find the cash to lift the public sector pay cap or benefits freeze, she easily cobbled together the £1 billion of spending demanded by the DUP in exchange for its support of her government. |
| An ageing population and generous state pension protections mean that a rising proportion of public spending is being taken up by pensioner benefits. Taken together with the hugely expensive tax cuts introduced since 2010, this leaves us with a slimmed down state outside of pensioner cash benefits – characterised by pared-back public services and a much meaner safety net for low-income working families and people with disabilities. If Theresa May persists with the cuts for which she no longer has any mandate, this is the miserable reality that awaits. | An ageing population and generous state pension protections mean that a rising proportion of public spending is being taken up by pensioner benefits. Taken together with the hugely expensive tax cuts introduced since 2010, this leaves us with a slimmed down state outside of pensioner cash benefits – characterised by pared-back public services and a much meaner safety net for low-income working families and people with disabilities. If Theresa May persists with the cuts for which she no longer has any mandate, this is the miserable reality that awaits. |