Welfare Cuts for Working People but a Major Boost for the Arms Industry
On Tuesday 18th March Kier Starmer unveiled a package of changes to the UK’s social security system, aimed at saving £5 billion a year by 2030. Here we look at Labour's austerity agenda for workers in comaprison to gifts of money for arms manufacturers, massive tax evasion by businesses, and continuing growth in levels of obscene inequality
Austerity Amid Giveaways
On Tuesday 18th March Kier Starmer unveiled a package of changes to the UK’s social security system, aimed at saving £5 billion a year by 2030. This includes proposals to narrow the criteria for claiming disability support, and cuts to some health-related benefits.
These cuts to services for vulnerable people follow the government’s decision in February to plan for a massive boost to military spending funded by slashing overseas aid. Starmer told MPs that arms spending is to rise by more than £13 billion a year by 2027, with the aim of a further £30bn-plus hike in the next parliament.
Starmer tried to sell this gift to the arms industry as a job-creating policy. At an event organised by BAE systems in March, Starmer told his hosts, “investing in the British defence industry, underpinned by companies like BAE Systems, is at the heart of my government’s commitment to national and economic security as part of our Plan for Change. This investment is supporting good, secure jobs and putting money in the pockets of working people.” If that was his real aim, the money could more efficiently spent by state spending on housing, heating and infrastructure. Of course, that variety of Keynesianism is too ‘left’ for Starmer. Better instead, to boost the coffers of UK-based arms firms BAE, Rolls-Royce, Babcock, as well as Italy’s Leonardo and France’s Thales.
Tax Evasion Downplayed
Also in February, the HM Revenue & Customs produced a report showing that tax evasion cost the UK £5.5 billion in 2022–23. An estimated 81% of tax lost due to evasion in 2022–23 is attributable to small businesses. The report notes that “despite these losses, HMRC does not have a specific strategy to tackle tax evasion. Although it is now HMRC’s objective to reduce the overall tax gap, it does not have a specific objective to reduce the tax lost due to evasion.”
In 1998 then-Labour Minister Peter Mandelson declared himself "intensely relaxed about people getting filthy rich as long as they pay their taxes". Now it seems the government is intensely unconcerned about recouping tax money, while giving it away to armourers and denying it to people in need who pay their taxes.
Tax the Rich? Not Likely
The UK is an extraordinarily unequal in terms of both wages and wealth (savings, properties etc). According to some recent research . by 2023, the richest 50 families in the UK held more wealth than half of the UK population, comprising 33.5 million people. If this trajectory is allowed to continue, by 2035 the wealth of the richest 200 families will be larger than the whole UK GDP. The researchers suggest a relatively modest wealth tax of 4% which would, assuming no evasion etc, raise £18.66bn per year. This, the researchers note, is “enough money to ... give all 5.5 million public sector workers a standard of living preserving pay rise of 10.5%.” Starmer is as unlikely to threaten the wealthy as the fools-parade of Tory PMs before him. Even this kind of modest redistribution is only going to happen through working class struggle.
How will Welfare Cuts Affect NI?
In the wake of the Westminster Government’s decision, Workers Party representative, Nicola Grant, called on the Executive and the Northern Ireland Assembly to give a commitment, that those most vulnerable in Northern Ireland will be protected. Those on benefits now and in the future will suffer a disproportionate impact given the prominent levels of mental health and health inequalities across Northern Ireland.
Nicola also said thirty years of conflict and violence has left thousands of people with both mental and physical disabilities and the proposed changes to Personal Independence Payments and Disability Living Allowance will inflict more pain and suffering.
Making it harder to qualify for these benefits will do nothing to get people into work, but it will cause even greater levels of poverty and deprivations. She continued, “if anything is broken it is the promises Labour made in the run up to the General Election when they claimed there would be no more austerity measures, and they would protect the most vulnerable in society. These proposed draconian changes are austerity measures by another name.”
The Workers Party is calling for political leadership from our elected representatives. They need to act on behalf of all our citizens in Northern Ireland who have suffered more than their fair share of earlier austerity, it is now time for our politicians to step up and say no.