TORY chancellor George Osborne started his budget speech last Wednesday with a confession that British capitalism is totally impotent in the face of the world economic crisis and that both he and the government have absolutely no control over the economic collapse that is engulfing the country.
Osborne was forced to admit this, saying: ‘I want to be straight with the country: another bout of economic storms in the eurozone would hit Britain’s economic fortunes hard again.’
This admission of impotence rendered all the talk that followed in his speech, about how the huge national deficit is being brought under control and how British business is now well placed to compete on an international level with Germany and France, as just so much hogwash.
In its weakness and desperation, Osborne outlined the coalition’s preparations for an all-out assault on workers’ pay and trade union rights and changes to the state to ready it for war against the working class.
The centrepiece of his attack is the slashing of a further £11.5 billion from government spending and the freeze on public sector pay being extended beyond 2015.
This means public sector workers will have had a pay freeze for over five years with private sector workers being forced to accept the same pay cuts.
According to official figures across industry the average worker’s pay will be cut by 2.4%, £630 a year.
Pay progression in public services – this is the incremental increases in pay that workers and professionals like doctors are awarded as they progress in a job from new entrants to fully trained, after which they go on the main pay scale – will be abolished.
Alongside slashing pay and the Welfare State, Osborne set out the priority for the coalition when he stated his objective is: ‘Building a modern reformed state we can afford.’
Given that British capitalism is bankrupt, the only state that Osborne can afford is one that doesn’t spend any money on the Welfare State and that pays poverty level wages to its employees.
That doesn’t mean that the state will somehow shrink away; on the contrary, the coalition has made clear that the state is very much involved in the control of the working class, as witnessed by their drive to set up secret courts and the introduction of a ‘star chamber’ for newspapers – a move that will have virtually no effect on the media empire of Murdoch with its hordes of lawyers but which will be used to silence workers’ papers that offend the capitalist class.
Osborne also proposed another radical change in the capitalist state with his announcement that the Bank of England is to get an ‘updated remit’ that ‘recognises that the Monetary Policy Committee may need to use unconventional monetary instruments to support the economy while keeping inflation stable’.
Huge powers will be handed to the unelected head of the Bank. Instead of pulling the strings in the background, the bankers will now be directly in charge of the country, while parliamentary democracy becomes even more of a farce.
As for the trade unions, Osborne made it clear that in the ‘reformed state’ there is no place for workers’ organisations.
When he talked of ‘supporting enterprise’, the enterprises he had in mind were those envisaged by Heseltine in his recent report where central money is handed over to Local Enterprise Partnerships run by privateers along the ‘partnership’ model pioneered by John Lewis where workers are ‘partners’ and have no trade union rights or representation.
Osborne’s budget speech amounts to a confession that British capitalism is weak and at the mercy of the world crisis, a situation that requires the most desperate measures against the working class as a remedy.
With the cat now well out of the bag, now is the time for the working class to bring down this weak, divided, but desperate government and the bankrupt capitalist class and system that it serves.