New Tory cuts: Rewarding the super-rich, and hammering the poor

photo Paul Mattsson

photo Paul Mattsson   (Click to enlarge: opens in new window)

Alison Hill

Champagne corks popped as Tory-backing hedge fund managers, corporate chiefs and super-rich elite, celebrated the election result.

Shares in posh estate agents, banks, and outfits like Serco and Capita that leech off the NHS and the rest of the public sector, all shot up.

As the financiers began to sober up the Financial Times was outlining likely future Tory spending cuts: “With more than £7 billion of income tax cuts, a pledge to reduce inheritance tax and commitments to increase spending on health while also protecting pensions, schools and overseas aid, the cuts to the rest of the government will be brutal.”

Slash and burn

However, the Tories have been coy about a lot of the detail of their cuts. Chancellor George Osborne had earlier announced £12 billion of cuts from the social security budget by 2017-18.

According to the Tory manifesto this would include freezing the rates of some working age benefits, lowering the household benefits cap and cutting (mainly housing) benefit entitlement for 18-21 year olds.

In other words attacking the poorest, the lowest paid and young people.

But these cuts only add up to about £1.3 billion – where will the other £10.7 billion come from? The Institute for Fiscal Studies (IFS) pondered before the election that this would “entail some very difficult choices”.

The IFS, however, reckons that ‘protected’ areas will get a real increase in spending of £10.6 billion by 2019-20, compared to 2014-15. This will undoubtedly provide many opportunities for the privatising companies to make some juicy profits.

But an increase in spending in one field will mean more cuts in other departments.

The IFS estimates that this £10.6 billion increase will mean over 11% cuts in ‘unprotected’ spending during the next parliament. None of this has been defined so far by the Tories but you can guess who will bear the brunt of it.

It is clear the Tories are preparing a new wave in their battle against the working class and the public services we all rely upon. There is no time to waste in fighting back against this onslaught.