£37billion vs £3.50: This Budget shows we need an economy for the many, not the few

Two numbers reveal the Conservatives’ political-economic strategy. £37 billion and £3.50. The former is the cost of the privatised Serco test and trace, the latter the weekly pay rise for NHS nurses, both revealed by the government last week.

Behind the Budget’s slick government and media PR, rhetorical moves away from austerity and increases in overall tax and spend, there lies a simple truth: the Tories will hand out billions to their friends but won’t invest in our public services or protect the living standards of working people.

Beneath the fanfare lurks handouts for the few and hardship for the many. Before being asked to pay a penny more, big business will have £12 billion of tax relief giveaways lavished on them for the next year, which will allow companies like Amazon to pay even less tax than the pittance they already pay. The Bank Levy, introduced in 2011 to claw back a fraction of what we paid to the bankers in the financial crisis, is now “under review”, code for soon to be dropped. These are just some of the benefits awarded to the few.

For the many, hardship is coming down the line. Public sector workers received a real terms pay cut, again. NHS workers were awarded a pitiful 1% after everything they’ve done for us. 1.3 million majority female low paid workers will be brought into income tax as part of a stealth tax rise on the many, alongside a 5% rise in council tax. The derisory extension to Universal Credit is only temporary and there was no extension to legacy benefits. Disabled people, who have made up 60% of the deaths from Covid, have been entirely ignored. The social care system, which supports many disabled people and vulnerable older people, received no additional support. Statutory Sick Pay remains so low that many can’t afford to self isolate if medically required. And those facing rent arrears or debts due to the pandemic got no support, while the stamp duty cut is a handout to landlords that inflates house prices for us all.

The Tory strategy may look different on the surface from the austerity that followed the financial crisis but its logic is unchanged: put the interests of the owners of the economy first.

Sunak and Johnson won’t present their strategy as austerity because the falsehood of its logic and the misery caused by its implementation are too well known. The basic argument of austerity: cut services, support and pay to “balance the books”: won’t be repeated. Instead, some parts of the state, like defence spending, will see more money while this Budget baked in £4 billion of cuts to public services. But austerity was never about shrinking the state; it was about who pays for the crisis. That’s why alongside taking money out of the services we all use, they handed hundreds of billions out in tax giveaways to big business and the richest and dramatically inflated their wealth with quantitative easing.

We won the argument that you don’t cut your way out of a recession. But now progressives and socialists need to win a new argument. Governments shouldn’t be judged on how much they tax and spend in total but who it taxes and who it spends on.

We built a new common sense against austerity and cuts for cuts sake. Now the task of progressives and socialists is to build a new common sense for an economics for the many, not the few.

The UK’s response to the pandemic suggests a path forward. Everyone knows two things about the UK’s handling of Covid: test and trace has been a £37 billion rip off and the vaccine has been a huge success.

Serco’s test and trace is part of a model where private companies use the state as a piggy bank to raid and line their pockets. The vaccine, developed substantially with public money at Oxford University, produced at cost by agreement with AstraZeneca and delivered by the NHS, is a model of public action for the public good.

We need a postwar-like shift away from the state being used to inflate the wealth of the few and rip off the many, to one that puts the people in the driving seat. To have more vaccine-like successes, we need to fundamentally redistribute wealth and power to build our collective capacities and resilience.

We already know the building blocks of that new economics.

We need to tax wealth and properly fund a fully public NHS and create a new National Care Service. We need a public banking system to invest in communities, industries and technologies. We need to expand worker, community, regional and national ownership in the economy, so it can be run in our interests. We need to confront the unemployment the pandemic recession is bringing with a Green New Deal that decarbonises our economy, reduces bills and creates good, unionised jobs. We need public works to build the green homes and the infrastructure a 21st century country needs. We need to transform the mean welfare system into a social solidarity system that provides dignity to all. We need to end the insecurity and isolation of work with a dramatic expansion of trade union rights, full employment rights for every work from day one and a ban on grotesque practices like fire and rehire and zero hours contracts. And we need to make sure all the new institutions, like Regional Development Banks, and old ones, like the Bank of England, are under democratic, transparent control, serving the interests of the whole country and not just the financial elite.

It is up to everyone in our movement to build that agenda, that economics for the many, not the few – and to make it common sense.

Jeremy Corbyn, Founder of the Peace and Justice Project