South Wales Evening Post
When Rishi Sunak stood up in the Commons to deliver his Spending Review, he had two options: he could have announced spending plans to stimulate the economy, or he could have reverted to cuts and pay freezes that make any recovery longer and harder. He chose the latter and it’s a choice that will cost our communities dearly.
In my Aberavon constituency I’ve seen proud, resilient communities come together to tackle this crisis. Community groups old and new sprang into action to help the most vulnerable residents. Public sector workers like NHS workers, teachers, council workers and many more have put themselves in harm’s way to keep us safe. In the private sector we’ve seen shop workers keeping our shelves stocked with essential items, postal workers along with delivery drivers ensuring we receive our items, and businesses reconfiguring their work to help with efforts to produce personal protective equipment or safety equipment.
Everyone has pitched in and played their part, but they have been let down by this Spending Review.
Many key workers are now facing a pay freeze which comes on top of the worst decade for pay growth in eight generations. A pay freeze will see many tighten their belts and spend less in small businesses that need consumer confidence to return. The minimum wage was due to rise by 5.6%, but the Chancellor lifted it by only 2.2%, compounding the problem. Sunak’s failure to boost public spending will be a blow to our high street and the exact opposite of what is needed.
Then there is the Government’s abject failure to invest properly in retraining workers who have lost their jobs during the pandemic. We need a UK-wide programme with a relentless focus on jobs, jobs, jobs so Britain can build back better.
Businesses have worked tirelessly though this pandemic and they have jumped through hoops to meet the guidance to allow them to operate. It’s been a tremendously difficult period and there has been great uncertainty around changes to the furlough and self-employed schemes, with the Chancellor often making changes at the eleventh hour. As the chief executive of the Principality Building Society warned, the pandemic and end of the Brexit transition period has left businesses ‘surviving not thriving’.
The Chancellor failed to provide clarity for business on what targeted support they’ll receive as they continue to grapple with restrictions that are expected to continue as we manage the crisis. There was also no mention of how prepared his government is for Brexit less than 40 days before the end of the transition period.
While businesses have stepped up to the plate the Conservative government has wasted and mismanaged public finances on a massive scale, awarding contracts to companies with political connections and spending millions on unsafe testing kits and facemasks that couldn’t be used.
It’s clear from the Spending Review that people in Aberavon and right across the country will have to pick up the bill for this pandemic and the billions of pounds of waste and mismanagement the Conservatives have presided over during this crisis.
There was still no mention of action to help those excluded from the government support schemes. Newly self-employed, PAYE freelancers and directors of limited companies in my constituency have all been in touch with me because they’ve not been eligible for support since the March lockdown started. Yet the Conservative government is stubbornly refusing to acknowledge there is a problem and provide those excluded from the schemes with support.
The Chancellor is refusing to make the fixes to Universal Credit, which have been advocated by Labour, to aid the self-employed. The suspension of the minimum income floor meant self-employed people were eligible for the support earlier this year. The reinstatement of the income floor is a heavy blow to many of them.
He’s created uncertainty for families after failing to ensure the £20 a week increase to Universal Credit is continued beyond April 2021. As this crisis continues more and more people are struggling to make ends meet and are relying on Universal Credit. More than 7,100 people in Aberavon rely on Universal Credit, we must support families not pull the rug from beneath them. It is wrong to ask struggling families to shoulder this cut.
The Conservatives have made much about ‘levelling up’ but the announcement on the UK Shared Prosperity Fund falls far short of this. It also fails to honour their longstanding commitment that the people of Wales would not be worse off outside of the EU and is a power grab on devolution in Wales. The EU structural and investment funds are worth around £375m annually to Wales but the pilot programme is worth £220m across all UK regions, falling well short of what we would have received from the EU. Communities like Aberavon have benefited from this money, so it’s vital that the UK government must honour their commitment and guarantee that the Shared Prosperity Fund budget will not be a penny less than current and projected EU funding, and that the devolution settlement will be fully respected: not a penny less, not a power lost.
The economic figures make for bleak reading. What we needed was ambitious actions from the Chancellor to stimulate growth, maintain demand and kickstart the recovery. Instead what we got was a Conservative government defaulting to a failed economic policy of austerity. They have not learnt the lessons of the last 10 years and this decision will make the path to recovery longer and more difficult. What we know from the last 10 years is it’s communities like Aberavon that will end up paying the price.