The irresponsible mini-Budget of last week will inevitably lead to a new age of austerity with savage public expenditure cuts across the board. This may be exactly what some of the extreme ideologues behind the Truss Government want: a ‘small state’, widespread privatisation and taking on the public sector trade unions.
Even before the mini-Budget chaos in the markets, we were facing major public service cutbacks. In August, the Independent Institute of Fiscal Studies pointed to a £44 billion gap in public expenditure totals over the next three years as the plans had been based on the inflation rate of last year of around 3%. The IFS stated that without further funding Whitehall budgets “face being overwhelmed by rising cost pressures”. These departmental totals are directly relevant to Scotland, Wales, and Northern Ireland as the allocations to the devolved Governments are based on them (using a mechanism called the Barnett Formula). The Treasury has already confirmed that these inadequate spending plans will be “strictly” adhered to for the rest of this Parliament.
The market chaos following the bungled mini-Budget, primarily caused by the unfunded tax cuts programme, has forced the Chancellor to declare that a “medium-term fiscal plan” will be announced on 23 November, reviewed by the independent Office for Budget Responsibility (OBR). In order to settle the markets, Ministers are talking tough on public expenditure. Unless the mini-Budget is scrapped (unlikely), the only way to reduce borrowing is through further massive public expenditure cuts which will threaten our pensions and benefits as well as vital public services.
We cannot emphasise enough that we are at a critical juncture in terms of both the pensions and the public services we rely on. This week, the Bank of England was forced to make a major £63 billion intervention in order to prevent a number of private and occupational pension schemes becoming insolvent. This shows how fragile the markets are, and also how vulnerable older people are to this new age of austerity.
Silver Voices has been getting our retaliation in first, to voice the concerns and anxieties of older people, while the likes of Age UK undertake timid surveys and fail to stand up robustly for our hard-won benefits. The following comment article in the Daily Express covers some of these worries, including the threats to pension schemes.
On the Triple Lock, speculation was rife on Wednesday night that the lock was under threat because the Chief Treasury Secretary, Chris Philp MP, had indicated that the policy was “under consideration”. Silver Voices put out an immediate press release indicating how seriously such a U-turn would be viewed by older people, which was covered in the Daily Mirror (below). Our actions helped to flush out the Chancellor, Kwasi Kwarteng, into stating that the Government would stick by its promises to restore the Triple Lock. However, we will remain alert and cautious until the actual figures are announced in Parliament. The uprating of benefits, including pension credit, is still very uncertain.
https://www.mirror.co.uk/news/politics/pension-triple-lock-fears-campaigners-28116790
Write now to your MP to express your concern about the threats to public services, pensions and benefits caused partly by the mini-Budget, and send the link to the above articles to illustrate your worries.
1 October 2022
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