As George Osborne, the Tory Chancellor, unveiled the last Budget before the election, one message was clear: there will be deep cuts ahead. The Chancellor may have boasted about recovery, but the vast majority of ordinary people have seen little to cheer about, in an economy dominated by exploitative, insecure and low-paid jobs.
Jan Duperre in Elgin, Moray: “I don’t know what planet Osborne woke up on this morning, but it’s not the one I live on. If we are so much better off, why has one in nine people been forced to use a food bank in the last year? Many of them folk who work full time. Zero-hour contracts and minimum wage, 20-hour-week part-time jobs might make his figures look good, but that’s the only thing that does.”
Julia McClelland: “All this saying how wonderful this budget is, but yet again the rich get richer and the poorer get poorer! How can he raise the threshold to pay the higher rate tax, when he is cutting services? Who will suffer? The vulnerable people who rely on care. Yes, wonderful this new savings incentive, if you have any money to save – lots of people haven’t got money to live on!”
These two sample comments from the BBC’s Budget Day website gives a hint of the response that many working class people will have had to George Osborne’s final (we hope) budget presentation.
Recovery for who?
As is now always the case, the Budget was announced in parliament with a wave of surreal statements about a Britain which is now facing a bright future, “walking tall” etc., etc. Tell that to those people stuck in insecure, low-paid jobs, facing an uncertain future, struggling to meet the bills each month. Tell that to the youth coming out of schools or universities, for whom the word ‘career’ has ceased to exist as they look forward instead either to a world of part-time or temporary jobs, zero-hour contracts and low pay, or to trying to avoid being sanctioned by the dole office. Tell that to those reliant on under-threat public services. They live in a different world to that of the Tory grandees at Westminster.
Even the much-touted fall in unemployment is not what it seems. Many people have moved from full-time to part-time work. Others have accepted pay freezes or even pay cuts to keep their jobs. Most telling of all has been the sharp rise in so-called “self-employment” to 15% of the workforce. Many such self-employments are jobs in name only, producing very little actual income. On top of this we have a relentless pushing down of the official unemployment figures by the ruthless implementation of sanctioning, by which hundreds of thousands are being hit each month.
Still, none of this stopped Osborne from his flight of pre-election fantasies. The deficit, which this government obsesses about, was subject to Osborne’s usual sleight of hand. The reality is that the deficit now stands at £90bn rather than the £37bn promised five years ago. The original Tory claim to eliminate the whole deficit within the life of this parliament has long been forgotten. The BBC’s Robert Peston got little response from the Treasury team when he pointed out that they only managed to get the debt down as a percentage of national income because of asset sales.
The Tory press were quick to pick up on such exciting announcements as the increased funding for church repairs (it seems that the Lord will not be providing after all) and the thrilling news that paper annual tax returns will be phased out. Osborne made a lot about cutting back on tax fraud, but given that these people are often Tory backers, expect little actual action on this. The rich also benefited from the raising of the 40% tax band.
Warning: deep cuts ahead
Has any of this actually affected the economy? According to the official report of the independent Office for Budget Responsibility: “The coalition government’s policy decisions in this Budget are not expected to have a material impact on the economy.”
The real aim of this budget has been to try and convince people to vote Tory come 7th May. What happens afterwards is another matter entirely. Hidden away in the small print of the 2015 budget is confirmation that there will be between £20 and £25 billion pounds worth of new cuts on welfare spending. Ian Stewart, chief economist at Deloite, has warned in the Guardian newspaper of 19th March that “… whatever happens on May 7th, a major squeeze on public spending lies ahead.”
The Tory plan is now to have four vicious years of cuts and then, just before the next election (surprise, surprise!), some increase in real public spending. This is entirely dependant on the government’s stated expectations on the economy working out – a perspective which is questionable to say the least, given the crisis on the horizon for the world economy, with stagnation and recession in Europe and Japan, and slowdown in China.
The aim of the budget was also to lock Labour in to an ever more restricted set of spending restrictions. They had no response to this. This is the dilemma of reformism in an age of counter-reforms.
What is needed – and what the current Labour leadership is not prepared to do – is to break with capitalism and its rotten system and carry out a socialist programme that will end this regime of austerity and despair. This is how the budget should be responded to.
