Sarah Sachs-Eldridge
‘All right, everybody be cool, this is a robbery!’ It’s not Pulp Fiction – its Tory Chancellor George Osborne at the dispatch box and this will be the essence of his budget speech, at least for the vast majority of us.
As we go to press, the day before Osborne delivers his budget, the detail is largely yet unknown but the general picture is all too clear.
The BBC reports that most government departments will face a cut of 2% of their spending over the next two years, amounting to about £2.5 billion.
These cuts follow spending reductions of 3% for the next two years announced in last December’s Autumn Statement.
Even by Osborne’s own standards the cuts aren’t working. Deficit reduction has been a key aim but borrowing is expected to go up this year. 56 months after the start of the first recession in 2008, the UK economy is now more than 3% smaller.
Grim outlook
Roger Bootle, head of research body Capital Economics, said: “In my 30-odd years of analysing budgets, I have never known a situation as grim as this.”
But it’s not just grim in terms of economic outlook – the outlook for people’s living standards is appalling and getting worse.
While hundreds of bankers are piling up million-pound bonuses new figures suggest the average worker will lose around £6,000 by 2014 as a result of wages failing to keep pace with rising prices.
The Lib Dems have argued that they are softening the blows by campaigning for rises in the personal tax allowance, while supporting austerity in the main.
TUC research shows that by 2015 low-paid workers will be losing up to four times more a year from the government’s 2010 increase in VAT than they will gain from the raising of the personal tax allowance to £10,000.
At the same time a further cut to corporation tax is predicted. This would follow a previous cut worth £3 billion a year by 2014.
No wonder ‘them and us’ rage is boiling as low-paid and unemployed workers face the bedroom tax, council tax hikes, pay freezes and a host of other methods of immiseration.
There have been attempts to sugar the pill, bringing the cap on social care costs down and introducing them earlier. But this is a pittance compared to what is being taken from us.
Childcare vouchers worth up to £1,200 sound tempting but only families where no parent earns less than £10,000 will be eligible for the new cash.
So this represents a further blow to the low-paid and those who are unable to find work or full-time work.
Wednesday’s jobs figures are predicted to show a slight improvement in the unemployment figures but this will not represent the end of the crisis of joblessness.
A number of Labour and other pro-big business economic commentators have called for ‘measures for growth’ but none call for an end to cuts.
But there is an alternative
The news of the Cyprus savings theft brought shock and horror to workers across Europe. Here was a government planning to blatantly dip into workers’ savings to bail out the banking system brought low by massive greed and profiteering.
Instead, the owners of the financial institutions and big business should pay for the crisis that is of their own making.
A socialist government could, for example, reverse the decades of corporation tax cuts and impose a 50% tax levy on big business’s hoarded billions.
The banking system should be nationalised under democratic popular control. Only on this basis would it be possible to get rid of the spivs and speculators, lined up behind the Chancellor, who are holding working class people to ransom.
A genuinely nationalised banking sector would be run for the benefit of the majority, rather than for the super-rich.
Those struggling to pay their mortgage could have it converted to an affordable rent; small businesses could get cheap loans, and public works such as a massive house-building programme could be cheaply financed.
The need to build a mass party of working people which stands for this demand as part of a broader socialist programme has never been clearer.
