TORY Chancellor Philip Hammond delivered not so much a Spring Statement to parliament yesterday as a half hour of self-congratulation and boasting about how the Tories have rescued British capitalism from collapse.
Twice in his speech Hammond trotted out the line that there is now ‘light at the end of the tunnel’ for austerity, but at the same time insisting that there would in fact be no end, only the promise of permanent austerity with maybe some relief in years to come.
What Hammond did insist on was that the Tories are absolutely committed to supporting the capitalist market economy, supporting the bosses through even more reductions in the business rates, and being the champions of those who create the wealth – the entrepreneurs and bankers. About the working class, who actually create the wealth, Hammond had very little to say except to stress that he would not use any excess money from tax receipts to end the crisis of funding that has brought the NHS and education, and indeed the whole public sector, to breaking point. All he would promise is that a spending review would be held next year.
The great bulk of his brief speech dealt with how well the UK economy was performing according to the latest forecast from the Office for Budget Responsibility (OBR). He crowed over the fact that the OBR had upped its forecast for economic growth by 0.1% to a pathetic 1.4% this year, and grew positively ecstatic over the reduction in the budget deficit. His wild optimism about the state of British capitalism was not, however, shared by the very OBR whose forecasts he based it on.
They said: ‘The economy has slightly more momentum in the near term, thanks to the unexpected strength of the world economy, but there seems little reason to change our view of its medium-term growth potential. And while the budget deficit looks likely to come in almost £5bn lower this year than we expected in November, the explanations for this imply smaller downward revisions for future years. As a result, the Government’s headroom against its fiscal targets is virtually unchanged.’
In his reply to Hammond, the Labour shadow chancellor, John McDonnell, said that Hammond’s complacency was ‘astounding’, pointing to the fact that: ‘We face, in every public service, a crisis on a scale we’ve never seen before.’ He went on to accuse Hammond of not listening to doctors, nurses, teachers, police, carers and even his own councillors who are saying they can’t wait for the next budget but are telling him to ‘act now’ to end the austerity cuts to pay and services.
McDonnell pointed out that for workers there was no economic recovery. He said: ‘Wages are lower now – in real terms – than they were in 2010 – and they’re still falling and there are three million people in insecure work. According to the Resolution Foundation, the changes to benefits due to come in next month will leave 11 million families worse off. And – as always – the harshest cuts are falling on disabled people.’
While McDonnell is absolutely correct that Hammond was just peddling lies about the health of British capitalism, where he is dangerously wrong was revealed when he said: ‘People know that austerity was a political choice – not an economic necessity. The Conservatives chose to cut taxes for the super-rich, corporations and bankers – paid for by the rest of our society.’
Austerity isn’t a political choice by the Tories that can be reversed by appeals to the Tories. It is an absolute necessity for the capitalist class to dump the world crisis on the backs of the working class. The banks and bosses demanded that they were bailed out after 2008 through precisely the cuts to wages and spending that the Tories have carried out and are determined to continue carrying out in order to keep a bankrupt capitalist system from collapse.
The answer to Hammond’s statement is not to appeal to him to act now to end austerity but for the working class to act by demanding a general strike to kick out the Tories and advance to a workers government that will expropriate the bosses and bankers and replace capitalism with socialism.
