Liam Fox’s ‘jihad’ against public spending

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SPEAKING on BBC radio yesterday morning the LibDem business secretary, Vince Cable, described proposals being put forward by senior Tory MP Liam Fox as amounting to a ‘jihad’ against public spending.

What prompted Cable into the use of such an emotive term was the content of a speech delivered by Fox, the former defence secretary, to the Institute of Economic Affairs.

In this speech Fox, a noted right-winger, demanded that the coalition government abandon what he sees as their softly, softly approach to cuts in spending, especially on welfare and the NHS, and launch an all-out war on government expenditure and for the money saved to be used to fund tax cuts for the rich.

One week before the budget, Fox demanded a five year ‘freeze’ on all public expenditure.

According to him, this would represent a cut of 2.5% in government spending, as opposed to the 1% Osborne will propose, which he estimates would save £345 billion which could then be used to help pay off the government debt to the bankers and make it possible to abolish capital gains tax for businesses.

He attacked the posturing of Osborne and Cameron that they had somehow ‘ring-fenced’ spending on the NHS and schools, and called for an end to all ‘protected spending’, in other words the huge cuts in real spending on education and the NHS are not enough for the Tory right-wing. they are baying for a full-blooded slash-and-burn attack on the welfare state.

Fox was clear about what he wanted: ‘creating a society that is sustainable for the future in a way that our current – welfare-dependent and debt ridden economy is not.’ In other words, he is openly calling for the smashing up of the NHS, ending all benefits and handing the money directly over to the banks and capitalist class.

But what of Cable, supposedly at the other end of the political spectrum within the coalition?

In the same interview, in which he denounced Fox’s ‘jihad’ against public spending, he also called for an end to the ‘ring-fencing’ of health and education, arguing that it did not make economic sense in this crisis.

Cable argued that money saved by increasing the cuts on welfare should be used by the government to finance infrastructure projects, road and house building etc, and so kick-start the collapsed capitalist economy out of its catastrophic collapse.

Stripped of the normal bourgeois economic jargon about ‘trickle-down’ effects, Cable’s plan amounts to nothing more than handing over the budgets of the NHS, education and the entire welfare state to private companies, in the vain hope that they will do something other than line their own pockets with all these billions.

At a time when manufacturing industry is not just on its knees but face down in the gutter, when output is contracting at record levels, not just in Britain but in every country as the world crisis deepens, both Fox and Cable have only one solution, to smash the welfare state, cut pay, and hand all these ‘savings’ over to the banks and private companies.

The only difference between them is that Fox is enthusiastically for all-out war while Cable likes to pretend he is reluctantly pushed in that direction by ‘economic reality’.

In this, Cable is close to the leadership of the Labour party and it is no accident that he finds himself in agreement with Miliband and shadow chancellor Balls on the question of making token increases in taxes for the rich.

The working class must answer both Fox, Cable and the Labour party by taking action to defend the welfare state from every cut, by occupying every hospital and school faced with closure and by organising a general strike to bring down this coalition and advance to a workers government and socialism.