The government attacked trade unions and benefits claimants while giving tax cuts to the rich and letting bankers’ bonuses soar, as chancellor Kwasi Kwarteng announced his mini-budget on Friday.
On strikes, Kwarteng told parliament, “At such a critical time for our economy, it is simply unacceptable that strike action is disrupting so many lives. Other European countries have minimum service levels to stop militant trade unions closing down transport networks during strikes. So we will do the same.
“And we will go further. We will legislate to require unions to put pay offers to a member vote, to ensure strikes can only be called once negotiations have genuinely broken down.”
Benefits claimants will also be “encouraged” to find jobs, by having their benefits cut.
“With more vacancies than unemployed people to fill them, we need to encourage people to join the labour market. We will make work pay by reducing people’s benefits if they don’t fulfil their job search commitments,” Kwarteng said.
Bankers, meanwhile, will get to have unlimited bonuses. Kwarteng said: “All the bonus cap did was to push up the basic salaries of bankers, or drive activity outside Europe. It never capped total remuneration, so let’s not sit here and pretend otherwise. So as a consequence of this, we’re going to get rid of it.”
Kwarteng also cancelled a planned rise in corporation tax. “We will have the lowest rate of corporation tax in the G20,” he said.
The top rate of tax, paid by the highest earners, will be cut from 45% to 40%.
He said: “This will simplify the tax system and make Britain more competitive. It will reward enterprise and work. It will incentivise growth. It will benefit the whole economy and whole country.”
The budget was slammed by trade unionists and left-wingers, and welcomed by right-wing think tanks.
John McDonnell MP, former shadow chancellor said it was, “A budget truly for the 1%. Abolishing the 45p rate of tax benefits the richest 1% in our society. Combined with lifting the cap on bankers’ bonuses and threatening to cut the benefits of the unemployed this forms the most socially divisive budget in a generation.”
Sharon Graham, general secretary of the Unite trade union, said it was, “unashamedly a budget for the rich, big business and the City… Billionaires and city bankers will once again be considering which tax haven they will stash their money in, whilst millions of ordinary families continue to struggle to make ends meet.”
Mark Littlewood, director general of the Institute for Economic Affairs – an opaquely funded neoliberal lobby group with links to the government – called the budget, “refreshing”.
“This isn’t a trickle-down budget, it’s a boost-up budget,” he said. “The government has announced a radical set of policies to increase Britain’s prosperity… If this was the Chancellor’s ‘mini’ budget, I look forward to the ‘maxi’ budget.”
Simon Childs is a commissioning editor and reporter for Novara Media.