Last week’s Budget was further proof that the Tory government and its Lib-Dem hand-raisers are waging a vicious class war against the working class on behalf of their wealthy friends and backers.
Dubbed a “Budget for Growth”, its lustre was diminished instantly when Osborne downgraded his own 2011 growth forecast from 2.1% to 1.7%. But they hope to turn the crisis into an opportunity. Restructuring British capitalism and reconfiguring the British state, making the system and its components fit for profiteering — that was the real rationale for this Budget.
This was clear from the favours Con-Dems did for the rich. The bosses aren’t expected to pay for the recession they created. Instead they will get a nice tax break.
Corporation tax will be cut by 2% in April, not 1% as previously planned, and the tax will be cut by 1% in each of the next three years, reducing it to 23%. Osborne boasted how it was lower than in other major capitalist states, begging international capital to toss him some crumbs ahead of Britain’s major competitors.
While oil firms and the banks received a little prod to allay some flack about petrol prices and bonuses, their profits and their prospects for more were left intact. And energy capitalists avoided a windfall tax on their escalating profits, while fuel poverty grows.
Small capitalists with fewer than 10 staff will not face new regulations for three years. Lord Young’s attack on occupational safety and health will largely decimate the safety inspectorate and leave employers free to maim and injure workers with barely the possibility of redress.
What of the so-called “non-doms” levy of up to £50,000 on someone resident in the UK for 12 years? For a millionaire that’s 5% — and these people don’t consider six zeros to be a fortune. A government could happily tax them 95% and still leave plenty to live on. The 50% tax on incomes over £150,000 will be subject to review, a prelude to scrapping it — when they think they can get away with it. So those who currently pay £50,000 tax and get to take home £100,000, will get to keep even more.
Probably the most pernicious attack on the working class in this Budget was on pensions. The Tories announced in October they intend to make public sector workers pay 3% more contributions to occupational pensions. That’s £500-£1,000 a year for many workers.
Now they’ve accepted Lord Hutton’s recommendation to make workers in the public sector work five or more years longer than expected — thereby paying more pension contributions (and taxes). But it’s not just the inputs. The value of pensions paid out will be diminished by using consumer prices (CPI) to uprate contributions rather than retail prices (RPI). The difference is £50-£100 a year, and grows over time.
And as if that were not enough, Osborne also accepted Hutton’s demand for career-average rather than the current and higher final salary schemes. If pensions are deferred pay, then the pensions robbery is the biggest sustained slashing of wages seen in the history of British capitalism.
In the Budget, Osborne did what was expected of him — he represented the millionaires. The labour movement has to be transformed and made ready to fight for the millions of working class people on the receiving end of these attacks.