“Open for business.” These were the words spoken by
chancellor George Osborne as he delivered the most vicious anti-working class
budget for generations – a budget for big business indeed! Not since the slash
and burn days of the National government in the 1930s, or indeed the Thatcher
regime of the early 1980s, have so many cuts been presented in one day. Indeed
in outlining a target of 25% cutbacks in many areas of government spending, the
coalition has gone way beyond anything attempted by previous chancellors in
The budget was presented as being fair for all. This is a
lie. These measures are intended to hit the poorest hardest. Firstly by linking
benefits to the Consumer Prices Index (CPI) rather than the Retail Prices Index
(RPI), this will reduce the rate of increase by at least 2% – a cut in effect.
Some benefits such as Child benefits will not rise at all. Other benefits are
being abolished or cut back. The introduction of maximum limits on housing
benefit will prove to be especially damaging.
Then we come to the rise in VAT – this is a regressive tax,
which will proportionally hit the poorest sections of society the hardest. No
wonder this was one of the few taxes that Thatcher chose to increase time and
again during her time in office.
Disability benefits will also come under attack with a new
regime of medical assessment being brought in with the clear aim of booting
people out of benefit. According
to today’s edition of the Guardian, shadow work and pensions secretary, Yvette
Cooper has calculated the effects of the cuts as follows: “… the changes will
lead to a £130 cut in the value of child benefit and a £500 cut for severely
disabled people. The change in benefits upratings from RPI to CPI means
severely disabled people will lose £285 from the disability living allowance
and £235 from the employment and support allowance by 2014.” The report adds
that families will face overall cuts of £3 billion. Very few will benefit from
the raising of the tax threshold, as what is given in one hand will be yanked
away with the other, only doubly so.
Of course, the coalition has chosen to target public sector
workers in particular. Salaries for all but the very worst paid will be frozen
for the next couple of years at least, pensions will be undermined and many
will end up losing their jobs. This in turn will affect public services in an
unprecedented way. There is no way
that essential services can remain unaffected. The government has a hatred of the
public sector and wants it cut back in any case, with the few remaining
profitable bits going to the private sector.
Of course, not everybody is unhappy about the cuts. Business
leaders and the City of London have lined up to praise the measures. Although
Osborne said that the burden of reducing the government deficit would hit the
rich as well, in truth they are getting off very lightly. Corporation tax is to
be cut by one per cent each year making it the lowest in Europe. The planned increase in employers’ NI
payments has also been stopped. Bankers will be happy that, despite having
helped cause the crisis in the first place, there will be no new taxes in their
nice bonuses. The proposed new bank levy set at £2bn is far less than expected
and will hardly be noticed by these people.
This budget – alongside those cuts and cancelled projects
already announced – represents just one step in what is a ruthless attempt to
make the poor and needy shoulder the burden of paying for the bosses crisis.
Next will come the spending reviews in September where the targets will be
tuned into actual cuts. But it doesn’t stop there. More cuts will come next
year and the year after. Having supported the Labour governments bailouts to
the banks and business, the Tories are now pretending that it was nothing to do
with them. This is a government of the rich for the rich. It was a Tory budget
with the Lib Dems there to act as fig leafs for Cameron and Osborne. To call this budget progressive is a
very sick joke on the part of the government.
It looks like the time has come to cut capitalism – a system
we can no longer afford. The whole Labour and trade union movement must
mobilise to fight these cuts, both on behalf of their members and in defence of
the working class as a whole.
Angry words will not be enough, action is now needed to present this
bosses government with the one force that can defeat it.