TORY Chancellor Jeremy Hunt is preparing to deliver a Spring budget on Wednesday 6th March which he has signalled will concentrate on tax cuts to the wealthy and large corporations.
This has provoked a series of dire warnings from organisations responsible for trying to ensure some semblance of stability in a UK economy drowning in debt and being run by a Tory government that is imploding into chaos.
All talk of tax cuts is reviving the spectre of the 2022 mini-budget of Liz Truss and her Chancellor Kwasi Kwarteng.
Their tax hand outs were unfunded, with Truss deliberately refusing to submit her budget to scrutiny by the independent Office for Budget Responsibility (OBR).
Bond markets delivered their verdict by immediately dumping UK bonds, sending the country into an economic collapse only averted at the last minute by the Bank of England buying up the government bonds that provide the funds required by the government to survive going bankrupt.
This massive buying spree by the Bank of England completely derailed the policy of cutting back on printing worthless paper money and ended all hopes of the Bank cutting interest rates, plunging the UK even further into recession.
The international financiers and bankers proved who was really in charge of British capitalism and Truss was swiftly deposed as prime minister.
Now the same forces are delivering an equally strict warning to Hunt.
James Smith, a market economist, told the Guardian that funding tax cuts today with unrealised and potentially challenging spending cuts tomorrow may ‘raise a few eyebrows among investors’.
He said: ‘Talk of tax cuts inevitably triggers memories of the 2022 mini budget crisis, where UK government borrowing costs rose precipitously following a package of unfunded measures designed to boost growth.’
The Institute for Fiscal Studies (IFS) weighed in yesterday morning with its own warning to Hunt.
The IFS pointed out that UK taxes are heading to record high levels when measured against the size of the overall economy, while warning that public finances face an ‘unhappy outlook’ with debt high and rising.
The IFS said: ‘Unless the Chancellor is willing to spell out where the cuts will fall, the temptation to scale back provisional spending plans further “to pay” for new tax cuts should be avoided.’
In January, the International Monetary Fund (IMF) issued a warning of its own to Hunt and Sunak in its latest assessment of the world economy.
The IMF report ‘advised the UK against further tax cuts’, saying that preserving public services and investment implied higher spending than was reflected in the Tories’ current plans.
None of these organisations are opposed to tax cuts for the rich and large corporations – in fact, they all agree that the way to ‘solve’ the economic crisis strangling the UK is to give massive payouts to the capitalist class to encourage them to ‘innovate’ and invest.
Of course, the only innovation the bosses and bankers will use this money for is in more and more inventive ways to speculate on stocks and shares to bolster their own wealth – all paid for by the working class through savage austerity cuts to every public service, alongside cuts to the real take home pay of workers.
It is this lack of a concrete plan by the Tories to carry out a class war to the finish, to force the powerful working class to submit to the destruction of the NHS, education and the entire welfare state, that is behind all these warnings to Hunt.
The capitalist class is demanding a programme to drive the working class back to the ‘Hungry 30s’ to ensure the wealth of the bankers and bosses.
The time has come for the working class to make its own demands by forcing the TUC to call an immediate general strike to bring down the Tories and bring in a workers’ government that will expropriate the bosses and bankers and go forward to a socialist planned economy.
TUC leaders who refuse to take up this fight must be removed and replaced with a new leadership prepared to lead the struggle to end bankrupt capitalism with the victory of the British Socialist Revolution.
