Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

Link to this page: https://www.socialistparty.org.uk/issue/419/4771

From The Socialist newspaper, 8 December 2005

Brown's low growth, low wage budget

IN THIS week's pre-Budget statement, Chancellor Gordon Brown was forced to admit that economic growth would be far lower than he predicted in his April Budget. He said that the economy would grow by 3% - 3.5% in 2005, he has now revised that figure to 1.75%. That would be the lowest growth for 12 years.

Steve Score

The Labour government has been fortunate in that since they have been in power, Britain has seen a relative boom in the economy. It has been sustained by high levels of consumer spending based on credit (i.e. record levels of personal debt) and the house price boom.

However, there are now signs that these are about to run out of steam. High oil prices are contributing to this growing economic crisis. A downturn in the world economy would cause devastation to the British economy.

This boom is very lopsided, going alongside a massive collapse in manufacturing - a 30% fall in manufacturing's share of the economy since Labour came to power in 1997. High levels of profit have been the result of low pay, cutting the share going to the working class.

Lower levels of growth have a long-term effect on the government's plans for public spending because they reduce the amount of tax the government harvests at the same time as increasing the amount it has to spend in welfare payments. There is an estimated 10 billion - 11 billion "black hole" in the government's finances. This inevitably means they will attempt to further cut public spending and also look for ways to increase tax.

Brown built his reputation by claiming he is the one responsible for Britain's relatively stable economy. This is, of course, a factor making him the almost inevitable heir to Blair's Labour party leadership. But he could take over at a period when the economy is beginning to go into a downswing and when public spending cuts are really beginning to bite.

He has already had to stretch the time period for his own rules on government borrowing over the economic cycle. What growth there has been in public spending in the last few years does not replace that lost in cuts made by the Tories and by himself in the first three years of the Labour government.

Much of the money has gone into the pockets of private companies as privatisation of public services has accelerated - a policy that he has made clear he will continue. Public sector workers get little - Brown told health workers that their pay will only rise in line with his inflation target of 2%, at a time of spiralling prices for fuel etc.

Big business policies

Brown expects to get some money from a windfall tax on oil companies. These companies have yet again made huge profits out of the high oil prices. This is only a temporary measure, and as Britain's North Sea oil begins to run out will not sustain the Treasury in the long run.

He also announced measures to increase the supply of housing including promoting "shared equity housing" schemes with banks and building societies. But this does not solve the massive housing crisis that exists.

Many working-class people cannot afford to buy their own homes and local councils, because of government policies, no longer build houses for rent with 1.5 million people on the waiting list. And although there is some extra money for councils, it is not enough. So, high council tax bills and cuts in services will continue.

Brown told the Financial Times: "The Britain I want is one of enterprise and aspiration". Translated, that means he wants to continue to carry out policies in favour of big business. Against a background of threatening economic problems in capitalism, whether as chancellor or potentially prime minister, he will try to make working-class people pay for them.

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.


In The Socialist 8 December 2005:

Save our NHS!

Strike back at Labour's attacks

Is there a pensions crisis?

Sign up to the campaign

Brown's low growth, low wage budget

Domestic violence: Change in sentencing guidelines a step forward

George Best

Tories elect 'Blair-lite' leader

Now working class and poor must build real socialism

Brazil: Growing crisis over Lula government's corruption scandal

Solidarity with Irish Ferries workers

Victory for Andy Beadle as he wins his job back

Sixth week of caretakers' strike

PCS Left Unity conference backs union leadership on pensions


 

Home   |   The Socialist 8 December 2005   |   Join the Socialist Party

Subscribe   |   Donate  




Related links:

Economy:

triangleNo to Trump's trade war

triangleItaly's political crisis is reverberating through Europe

triangleSocialist nationalisation: what it is and why we need it

triangleTax Amazon movement wins in Seattle

triangleReject the mega-supermarket merger: nationalise to save jobs

Oil:

triangleNo to Trump's climate change chaos

triangle15 years since the invasion of Iraq: what we said

triangleMovement challenges Iranian regime

triangleMovement growing against fracking giant Ineos

Britain:

triangle'Vote Leave' fined: For a workers' Brexit

triangle250,000-strong human tide sweeps London against visit of bigoted billionaire Donald Trump

triangleBritain bakes as water pipelines leak

Labour:

triangleTory crisis deepens - demand a general election now!

triangleUnite conference sees union go in a fighting, socialist direction

Reports and campaigns

Reports and campaigns

17/7/18

Swansea

Victory for Swansea postal workers against management victimisation

16/7/18

Far-right

Confronting the FLA pro-Trump demo - build a workers movement to defeat the far-right

13/7/18

Socialist Students

School students protest and walk out against Trump

11/7/18

National Shop Stewards Network

NSSN conference 2018: Mood for fighting action and coordination

11/7/18

Donald Trump

Hit the streets against Trump and capitalism

11/7/18

The Socialist

Issue 1000 drive shows sales potential

11/7/18

Fighting Fund

Tories fractured... election possibility... give us the resources!

11/7/18

NHS

Yes to NHS - No to PFI!

11/7/18

Leeds

NHS Leeds: Campaigners halt outsourcing... for now

11/7/18

Domestic violence

Women's Lives Matter launched in Leeds to fight domestic violence service cuts

11/7/18

Unite

Unite conference sees union go in a fighting, socialist direction

11/7/18

Tyneside

Tyneside shopfitting plant lays off 61 workers

11/7/18

Huddersfield

Summer of discontent on the cards in Huddersfield bin workers' dispute

11/7/18

Hackney

Hackney traffic wardens strike for better pay and protection at work

11/7/18

PCS

Campaign in full flow to squeeze out every last Yes vote in pay ballot

triangleMore Reports and campaigns articles...


Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party
Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

LATEST POSTS

CONTACT US

Phone our national office on 020 8988 8777

Email: info@socialistparty.org.uk

Locate your nearest Socialist Party branch Text your name and postcode to 07761 818 206

Regional Socialist Party organisers:

Eastern: 0798 202 1969

East Mids: 0773 797 8057

London: 020 8988 8786

North East: 0784 114 4890

North West 07769 611 320

South East: 020 8988 8777

South West: 07759 796 478

Southern: 07833 681910

Wales: 07935 391 947

West Mids: 02476 555 620

Yorkshire: 0114 264 6551

ABOUT US

ARCHIVE

Alphabetical listing


July 2018

June 2018

May 2018

April 2018

March 2018

February 2018

January 2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999