So said women in Deptford in south east London interviewed by the BBC after the coalition government’s 22 June emergency budget. ‘An admirably tough-minded statement of intent,’ said The Economist, noting that sterling and gilts had strengthened, demonstrating the City’s approval of the attack on public spending and on the working class (26 June 2010).
‘Overall, everyone will pay something, but the people at the bottom of the income scale will pay proportionately less than the people at the top. It is a progressive budget,’ claimed Chancellor George Osborne. This brazen lie was quickly exposed even by the ruling class’s own Institute for Fiscal Studies and the Financial Times.
The emergency budget will cost £113 billion by 2014-15, that is £4,300 a year on average for every household in the country. But the cost will not be borne equally; the incomes of the poorest fifth of the population will decline by approximately 8%, those of the middle fifth by 4% and the richest fifth by less than 3%. We are not all in this together: the poorest are being pushed into complete misery to try and maintain the capitalist system.
From Latvia to Spain and Portugal, from Germany to Italy, France and Greece welfare benefits and services are being slashed to enhance profits and try and revive capital. Capitalism is in crisis – this is class war.
Osborne described the Child Tax Credit system as ‘unsustainable’. Child benefit is to be frozen for three years and payments to families earning collectively £40,000 and over will be restricted. Disability living allowance will be curbed, housing benefits will be cut. Public sector workers earning over £21,000 will have a two year pay freeze.
From 2011 a raft of benefits, tax credits and public service pensions will follow the Consumer Price Index and not the Retail Price Index. The Treasury forecasts the CPI for June 2010 to be 2.8% and the RPI to be 4%. By realigning the benefits and pensions the government expects to save £11 billion; that is £11 billion taken out of the pockets of people least able to go without it. This is the refined cruelty of the British bourgeoisie.
From January 2011 VAT will rise from 17.5% to 20% – this is the most regressive tax and hurts poorest people most. A levy on banks, presumably a crowd pleaser, will gather from £1.5 – £2.5 billion; small change to the trillion pound behemoths of the City. Corporation tax will be cut from 28% to 24%; the lowest tax on profits in any advanced capitalist country.
Labour had already planned to cut departmental spending by £52 billion by 2014-15. The coalition government intends to cut £84 billion. On 20 October 2010 the Treasury will produce a four-year spending review detailing where the cuts will be made. If the NHS and international aid are protected, as the government states, cuts will be from 25-33% across education, defence, transport, the environment, culture, energy and climate change, the Home Office, the Welsh, Scottish and Northern Ireland Offices etc. It will be year after year of cuts followed by cuts.
Osborne said this was ‘unavoidable’. It is sheer idolatry: devotion to the markets and mechanisms through which the vast accumulations of wealth of monopoly capitalism rule over us.
If the coalition government proceeds with these plans there will be resistance. Millions more people will be driven into poverty. The poorer sections of the working class will suffer most, the middle classes and better paid workers will see their life-styles become more pinched and mean; unemployment will soar in parts of the country and rise everywhere.
The coalition government says it wants to put a sign on the door of the country saying ‘Open for business’ – be assured, that sign will say ‘Closed’. Public sector workers, the poor and the dispossessed must form their own coalition to repulse this ruling class assault and break the government.