Photo: RonF, The Weekly Bull, flickr

Autumn statement: Tories retreat under pressure, prepare new offensives – and show signs of weakness

The Tories have backed down over tax credits, junior doctors and workfare, writes Colin Wilson. Meanwhile they are on the attack over benefits, education and health –  but they have real weaknesses that campaigns can target.

The autumn statement showed us two things. First, the Tories retreated on several fronts where campaigning has put them under pressure. But, second, Osborne is on the offensive on new fronts, such as bursaries for student nurses, student loans and benefits.

Tories on the retreat: tax credits

Back in July, Osborne was hailed as a brilliant tactician and his first budget without the Lib Dems a “masterstroke” in the Tory press – mostly because he promised a higher minimum wage by 2020, falsely dressed up as a “living wage”. But while the wage increase was coming in 2020, he also cut tax credits next spring – showing what nonsense it is for the Tories to claim they are the party of working people. Up to 8 million people were set to lose out. And press coverage of the cuts made one thing clear – while the Tory press likes to talk about people on benefits as if they were all on the dole, most claimants are actually in low-paid work. Faced with a wave of criticism coming even from the right-wing Spectator and Tory MPs, Osborne retreated.

Tories on the retreat: junior doctors

In last week’s ballot, a remarkable 98% of junior doctors voted for strike action on 1, 8 and 16 December. Last weekend, Health Secretary Jeremy Hunt was still ruling out talks. But after a government U-turn, talks began at ACAS today – even though the strikes are still on, keeping up the pressure on Hunt during negotiations.

Tories on the retreat: workfare

Mandatory Work Activity forced 120,000 unemployed people to work for free for up to 30 hours a week for a month, while Community Work Placements lasted up to six months. Groups like Boycott Workfare have been protesting against the schemes for years, holding protests outside Job Centres and workplaces that exploit people through workfare. Yesterday, an announcement buried in the Autumn Statement revealed that both schemes are to end.

Osborne is betting on prosperity, but still planning huge cuts

The right-wing press were bemused by the budget. “Whatever happened to austerity?” was the headline in the Daily Mail, which claimed that Osborne had gone on a “spending spree”. Telegraph columnist Janet Daley even complained “where were the savage cuts?” Two things have happened. Predictions of government income have increased by £27 billion – that’s predictions of money, as opposed to actual money. So Osborne can spend more now, hoping the cash will actually arrive. It may not, in which case he’s in trouble.

But he’s still planning huge cuts. Osborne was going to cut £21 billion by 2020 – now he’s cutting “only” £16 billion. In the words of the Institute for Fiscal Studies (IFS), “this spending review is still one of the tightest in post war history.” And the government continues to attack those in the greatest need.

Tories on the attack: benefits

Osborne’s calculations assume that he will still be able to save 12 billion by 2020, the amount he planned to cut from tax credits. That’s because Universal Credit, which is being rolled out across the country, pays less than current benefits. The Guardian reported on Wednesday that single parents can currently earn £8,800 a year without losing benefit: from 1 April that figure falls to £4,800, and lone parents will lose £2,600 a year in income – £50 a week. People currently on benefit will be protected, but new claimants lose out. Overall, as the IFS puts it, Osborne “is cutting spending on non pension benefits to its lowest level relative to national income for about 30 years.” The Institute calculates that while some working families will gain from Universal Credit, 2.6 million working families will be worse off, by an average of £1,600 a year.

Tories on the attack: education

Osborne has frozen the earnings threshold at which people have to pay back their student loans. The government promised in 2010 that this would rise in line with average earnings – so in real terms, people on lower and lower wages will have to make payments. Even worse, the freeze will be backdated to include loans to students who started courses in 2012. The IFS calculates that the average graduate will pay back about £3,000 extra, while those on lower incomes will be hit harder. The government’s own document announcing the freeze notes that 4 out of 5 people who responded to their consultation argued that there were equalities issues in freezing the threshold.  Respondents referred to discrimination on grounds of age, race, disability and gender – and the Independent reported on Wednesday that the measure may face a legal challenge on this basis.

Tories on the attack: health

Osborne has given the NHS extra cash, but part of that money comes from cuts elsewhere, such as public health. Relatively small amounts of spending can reduce obesity and smoking, for example, so that people don’t become ill later in life – so these cuts will mean more spending is required later. Student nursing bursaries have also been cut and tuition fees imposed. Student nurse Emma Clewer from London commented, “we’re now going to have to pay tuition fees to train to become nurses – we won’t be paid for working up to 48 hour weeks. Then we’ll graduate into a job that’s incredibly rewarding and important – but where the value of our pay has been falling for five years, and which has terrible working conditions and hours. But now with a huge student debt.” Emma fears that the abolition in bursaries will mean a shortage of nurses in future. “There is no way in hell I would have been able to have done my nursing course were it not for NHS funded tuition and the bursary. That and a massive bank loan and my mum.”

The increase in NHS funding is £3.8 billion – with the total NHS budget over £100 billion that’s around 4 percent. The Institute for Fiscal Studies is unimpressed – back in March, they pointed out that NHS spending needed to rise by 3.5 percent every year to meet rising demand and increasing costs. That comes to an 18 per cent increase by 2020 – but the government is only planning a rise of 8 percent.

Tories beyond a joke: tampon tax

Osborne’s announcement that the £15 million raised each year from VAT on tampons will go to women’s charities has been widely derided – even the Telegraph calls it a “ludicrous proposal”. On the one hand, women shouldn’t have to pay the government money simply because they menstruate. On the other, domestic violence services and other projects providing services for women need ongoing guaranteed funding, not occasional handouts. As campaign group Sisters Uncut make clear, cuts in local councils will mean less money for domestic violence services, particularly smaller specialist projects that meet the needs of BME women. Universal Credit will also trap more women in poverty – and, because it is paid to only one person in the household, will give abusers increased economic power.

Osborne is kicking problems down the road

The clear lesson of the Autumn Statement is that we need to fight the cuts in benefits, health and care – and that fights can force the government back. The junior doctors’ strike vote clearly has the government on the defensive – the NHS has always been a weak spot for the Tories – and action by student nurses can do the same. The Tories’ benefit plans also include a serious potential weakness – billions of pounds of cuts depend on the successful roll-out of Universal Credit, which is now years late and massively over budget.

Finally, Osborne relies time and again on the fact that he’s in the first year of a five year parliament. He relies on the predicted rise in government income becoming reality. He hopes he can come back and cut benefits later. He’s already increased NHS spending by £3.8 billion in one year, almost half of the £8 billion planned for the next five years. He’s not standing and fighting on any of these issues. The fact that he’s not up for a fight should give us confidence.