OBR official demands cuts to benefits and war on migrant workers to ‘save’ British capitalism from debt crisis


WHEN the then Tory prime minister Liz Truss launched her notorious mini-budget in September 2022 that came close to crashing the UK economy, one of the main charges against her was that she had by-passed the Organisation for Budget Responsibility (OBR) when making her unfunded multi-billion pound tax cuts to the rich.

The OBR is the official, independent body responsible for overseeing government spending.

Truss in her arrogance didn’t bother to seek the advice of the OBR, which would have been that you can’t give massive tax cuts to the bankers and shareholders without having a policy of making the working class pay.

Clearly, leading members of the OBR are not prepared for the latest Tory prime minister, Rishi Sunak, to make the same mistake.

David Miles, an executive member of the OBR and a former Bank of England rate setter, wrote in The Daily Telegraph yesterday telling Sunak that the only way to cut the massive national debt, that is strangling British capitalism, is to cut workers’ benefits to force the sick and unemployed back to work.

This must be accompanied by savage cuts to public services, according to Miles.

Miles wrote: ‘Most estimates of the long-term trajectory of UK government debt relative to GDP, assuming unchanged policies on tax and that public services and welfare payments evolve in line with a plausible estimate of demand, suggest that the fiscal situation will become unsustainable.’

Put simply, bankrupt British capitalism can no longer afford benefits to workers or to keep funding services like the NHS. Of course, being an economics professor Miles is not so crass as to openly call for a class war to cut unemployment benefit, instead calling for ‘welfare reforms’.

Similarly, he does not spell out slashing the spending on services like the NHS, instead calling for a ‘fall in the rate of growth of government spending so that it rises less fast than demand for public services and for welfare payments’, but this is what he is demanding.

Along with driving 9.25 million workers and youth who are unemployed into work (including the 2.8 million unable due to ill-health) Miles targets foreign workers as the main obstacle to the revival of UK capitalism.

Miles dismisses the idea that legal migrant workers who pay their taxes and perform vital work in services like the NHS are a positive for the economy.

Not so, he claims new immigrants on work visas ‘may generate a favourable balance of extra tax revenues’ but what happens when they get too old to be exploited in low paid jobs or have families?

Then they become a burden to the state, driving up spending on the NHS and education with no return for the capitalist class. Although Miles wouldn’t dream of suggesting this himself, this is the kind of justification that right wingers in the Tory government will seize upon to demand expelling all migrant workers and their families.

His entire article is designed to provide the economic arguments for a wholesale attack on benefits and all those designated as a drain on the economy and a barrier to massive tax cuts for the giant corporations, the speculators and bankers that he insists are the only answer to the debt crisis engulfing British capitalism.

It is a clarion call for the Tories and the leadership of the Labour Party to drive the working class back to the conditions of the 1930s when the Labour prime minister, Ramsay MacDonald, joined with the Tories to form a National Government that cut unemployment benefit (the dole) by 10%, with workers forced to undergo a Means Test before they were eligible for any benefit.

This is not the 1930s and the powerful British working class will never accept being driven back to these conditions in order to rescue a bankrupt capitalist system from collapse and keep the bankers and bosses in profit.

The working class and youth will demand that their trade union leaders take action by forcing the TUC to call a general strike to bring down the Tories and put capitalism out of its death agony by going forward to a workers government and socialism.

Only the WRP and Young Socialists fight for this revolutionary programme – join today to build up the leadership required for the victory of the British Socialist Revolution!