Behind Brown’s pre-election Budget


THE Budget, presented by Chancellor Alistair Darling last Wednesday, was clearly part of Brown’s re-election campaign. In three months time, after the general election, most of this budget will be put in the shredder.

The incoming Labour, Tory, or coalition government will have to reduce public borrowing and the record levels of government debt to save British capitalism, through draconian cuts in public spending, the like of which have never been seen before.

This is driven by the ongoing and deepening world capitalist crisis, which is having the most devastating effect on British imperialism. The Budget expresses the political crisis of the ruling class and the Labour government because it was directed at two constituencies which are totally opposed to one another.

On the one hand, Darling was appealing to millions of workers and middle-class people to vote Labour in the forthcoming general election. On the other hand, it was addressed to the international financiers and multinational corporations which the Blair and Brown governments have served loyally and determinedly.

In presenting the Budget, Darling opened by referring to the world crisis, but then proceeded to ignore it. He said that ‘the UK economy is emerging from the deepest global recession for more than sixty years’.

He continued: ‘We had to decide whether to intervene to rescue the financial system or stand on the sidelines.’ He said: ‘The task now is to bring down borrowing in a way that does not damage the recovery or the front-line services on which people depend.’

Darling made great play of the fact that the budget deficit for financial year 2009-10 would be £167bn, less than the £178bn projected. This involved dressing up the worst budget deficit in history as a good thing!

Then he said: ‘(The Budget) will set out how we stick to our plan to halve the deficit within four years.’ This means reducing the deficit from £167bn (11.7% GDP) at present to £84bn (5.8% GDP) by 2013-14.

The when and how this would be achieved were a virtual blank. Darling highlighted only £19bn in tax rises and identified £9bn of spending cuts, leaving a total of £38bn to find. The Institute of Fiscal Studies has worked out that real spending cuts will have to amount to 10 per cent overall if the Budget targets are to be achieved.

In addition, Darling did not address the fact that by 2013-14 the total national debt is expected to have risen from £527bn in 2007-08 to £1,400bn by 2013-14, more than 100 per cent of GDP.

In the wake of the Budget, the credit rating agencies, Fitch and Standard and Poor, said: ‘The big market reaction will come after the election, with sterling waiting for political uncertainty to be removed.’

What millions of workers and middle-class people should focus on, particularly in the public sector trades unions, is the £38bn black hole at the centre of Labour’s Budget. They will be made to pay for it through hundreds of thousands of sackings, pay cuts and the decimation of vital services.

Already Darling has targeted them for pay cuts, with salary rises held at one per cent while the official rate of inflation is already three per cent.

It has been reported that 135,000 posts will go in the NHS, with the closure and running down of hospitals.

Local councils have been instructed to make £1.5bn in so-called ‘efficiency savings’ through slashing the workforce by about 70,000 nationally.

The Education budget is due to be cut by £2bn, with fewer teachers, books and equipment and universities face £570m in cuts, with the axing of 15,000 lecturers and 220,000 young people losing university places.

The strike by 250,000 PCS trade union members in the Civil Service on Budget day signalled the attitude of the working class to Brown’s economic policies – a determination to fight them!

Whichever government tries to impose draconian cuts to save British capitalism will have to be defeated by a general strike of the whole trades union movement to bring down that government and go forward to a workers government.

Join the Workers Revolutionary Party today to build a new leadership in the trades unions that will organise such a struggle!