YESTERDAY the Tory chancellor, George Osborne, proudly announced that four government departments have agreed to make cuts in their budgets of 8% a year for the next four years –just over 30% of cuts that Osborne is insisting must come off all government expenditure.
The four departments that have fallen over themselves to agree to the cuts demanded are the Treasury and the departments of Transport, Environment, and Communities and Local Government. These four are the first to agree to making massive cuts aimed at slashing £20 billion from government expenditure, cuts that are essential in the Tory drive to ‘shrink’ the state back to the size last seen in 1930s Britain.
This was the time when there was no welfare state, no NHS, no social housing and unemployment benefits and pensions were counted in pennies a week! This was the findings of the Treasury’s own official spending watchdog, the Office for Budget Responsibility, when Osborne first unveiled his plans a year ago to cut government spending to achieve a budget surplus of £23 billion by 2020.
How these four departments intend to make such huge savings is not given in detail but it is obvious where the cuts will be achieved – through job losses and the destruction of public services. Communities and Local Government, for example, has already had its budget slashed by £230 million this year. The new cuts that this department has signed up to will mean local health care provision, home helps for elderly and infirm are ended.
It would mean the closure of local services such as libraries on a mass scale, along with councils forced to survive by selling off public land to developers along with any remaining housing stock. For the Department for Education, which has had cuts this year of £450 million, the cuts it has signed up to will see pre-school and nursery provision, along with post-16 education (whose budgets are not ring-fenced), ended.
These savings can only be achieved by smashing up every publicly-run service and cutting public sector pay and jobs on a mass scale, along with selling off state assets and land. The PCS union has estimated that civil servants, who have seen their pay cut by up to 20% through wage freezes over the past five years, will see up to 100,000 jobs going as a result of these cuts.
Two government departments are reported to be holding out and refusing to make the cuts demanded. One is the Home Office, where home secretary Theresa May is objecting to cuts to the police budget. The other is the Work and Pensions department, where Iain Duncan Smith is threatening to resign rather than cut his universal credit scheme.
Smith, who is notorious for bringing in caps to benefits that force the unemployed and low paid below the poverty level, is baulking at Osborne’s demand for even more vicious cuts. Smith has no qualms about driving claimants into poverty but clearly fears that this will be a step too far and one that could cause a mass uprising.
For once Smith is not wrong. Despite 5 years of savage austerity cuts inflicted by the previous coalition, the budget deficit has continued to rise. Central to this growing indebtedness is the collapse of British capitalism and the terminal decline in manufacturing industry, resulting in government income through taxation and other receipts falling while expenditure rises.
Allied to the massive national debt incurred through bailing the banks out of bankruptcy to the tune of over a trillion pounds, the indebtedness of British capitalism is gigantic and can never be brought down through ‘efficiency’ savings. The Tories know this and are preparing to completely end all social spending on benefits, the NHS and the welfare state, turning the clock back not just to the 1930s but to the 19th century.
The working class won’t stand for this, they must demand that the trade unions stop talking and act by calling a general strike to kick this government and its austerity programme out and replace it with a workers government and socialism.