IN HIS Autumn Statement on the economy, Chancellor Osborne outlined many more years of severe austerity with billions more in welfare cuts to be made alongside many years of below-inflation ‘wage rises’ for the public sector.
This was after making a fleeting reference to the growing storm and the looming crash of the capitalist economy, which made clear that he was not the master of the situation but a puppet being blown about by the developing gale.
He said, ‘So let’s turn to the future. The warning lights are flashing over the global economy, Japan is in recession, the eurozone is stagnating and the geo-political risks are rising.
‘So I can tell the House that the OBR (Office for Budgetary Responsibility) has revised down their forecasts for global growth this year and in every year.
‘And they note that the slowdown is particularly acute in our main export markets such as Europe where growth is a full 1% lower this year than previously forecast …
‘As one of the most open trading economies in the world, with a large financial sector, Britain cannot be immune to the risks in the global economy …’
Faced with this more-than-threatening catastrophe, Osborne continued to boast that the UK is the fastest growing economy in the G7.
In fact, his growth forecasts fell from a 3% growth forecast in 2014, down to a 2.4% growth forecast in 2015, then 2.2%, 2.4%, 2.3% and 2.3% in the following four years.
This is no economic miracle, this is the continuing stagnation of the British capitalist economy, in a situation of a growing world crisis that threatens to overwhelm it at any moment, as Bank of England Governor Carney has warned repeatedly.
Osborne then predicted inflation to be 1.5% in 2014, falling to 1.2% in 2015, meaning that, leaving out of account the impact that the developing world crisis will have on British capitalism. The situation is one where wages will continue to be cut by inflation.
Osborne stated that borrowing was set to fall from £97.5bn in 2013-14 to £91.3bn in 2014-15. In fact, the government had been estimating a fall to £87bn!
The deficit was then projected to fall to £75.9bn in 2015, £40.9bn in 2016 and £14.5bn in 2017 before reaching a £4bn surplus in 2018 – the world crisis permitting, of course, and also assuming that the working class will put up with permanent austerity measures.
By 2019-20, Britain will have a surplus of £23bn – that is, if you believe in fairies!
He depicted debt as a share of GDP falling in every year until forecast to be 72.8% in 2019-20. This was with tax receipts forecast to be £23bn lower in 2014-5 than predicted.
Then came a few goodies for the supporters of the Tory Party. There is to be reform of residential property stamp duty. This is to be 0% on the first £125,000 then 2% on the portion up to £250,000, then 5% up to £925,000, then 10% up to £1.5m; 12% on anything above that, saving £4,500 on the average priced home.
ISAs are to be transferable to partners tax free, and the 55% death tax that is passed on to loved ones is to be abolished.
For the working class, welfare spending is to be £1bn lower than forecast in March. There is to be a two-year freeze in working-age benefits (first announced in October), while migrants are to lose their unemployment benefits if they have ‘no prospect’ of work after six weeks.
Osborne repeats that the Tories will abolish youth unemployment and organise three million youth as apprentices at £2.87 an hour.
The Osborne message is that the low-wage, slashing-welfare cuts regime is for ever!
The response of the working class must be the organisation of a socialist revolution to put an end to capitalism and to bring in a workers government and socialism.