CHANCELLOR Osborne’s first Tory government budget hammers the poor, the youth and the working class while lowering Corporation Tax and pledging to NATO an increase in defence spending to 2%.
The budget holds public sector workers to 1% below-inflation wage ‘rises’ for the next four years, a policy that will drive millions of workers into a fury. He pledged, ‘The sale of government assets this year will deliver the largest privatisation proceeds of all time, higher than the previous record in 1987.’
He revealed that ‘the fiscal plan set out in this Budget requires around £37 billion of further consolidation over the Parliament. Today, I set out how we will find just under half of that – £17 billion. We’ve found annual savings of £12 billion from welfare and £5 billion from tackling tax evasion, avoidance, planning and imbalances in the tax system.’
He boasted: ‘We’ve already doubled the number of apprenticeships to two million – now we’re committed to three million more.’ Further: ‘We are going to introduce an apprenticeship levy on all large firms. Firms that offer apprenticeships can get more back than they put in.’ This is while the apprentices will be on £3 an hour! For youth who want to go to university, the budget news is grim: ‘So, from the 2016-17 academic year, we will replace maintenance grants with loans for new students …’
He also pledged Devo Mancs all over the UK with the NHS and Fire Services, and Community Care in the hands of local mayors. ‘In my view, devolution within England has only just begun … I can today announce that I have reached agreement with the leaders of the 10 councils of Greater Manchester to devolve further powers to the city. These include putting fire services under the control of the new Mayor, establishing a land commission in the city, and further collaboration on children’s services and employment programmes.’ This means mass privatisations and the smashing of national terms and conditions of service achieved by the trade unions.
Osborne announced an inheritance tax give-away: ‘The result for families is this. You can pass up to £1 million on to your children free of inheritance tax. No more inheritance tax on family homes.’ While ‘Britain’s corporation tax rate will fall to 19% in 2017 and 18% by 2020.’ He then dealt with the main enemy, the Welfare State.
‘So for those aged 18-21, we are introducing a new Youth Obligation that says they must either earn or learn. We are also abolishing the automatic entitlement to housing benefit for 18-21 year olds.’ After introducing 30 hours of free child care, he added: ‘We now expect parents with a youngest child aged 3, including lone parents, to look for work if they want to claim Universal Credit.’
He announced: ‘We will legislate to freeze working age benefits for four years. That will include Tax Credits and Local Housing Allowance. And it means earnings growth will catch up and overtake the growth in benefits …’ He announced, ‘Taken all together, the freeze in working age benefits, the downrating of social rents, and the focus of tax credits and Universal Credit on the lowest income households will reduce the welfare bill by £9 billion a year by 2019-20 … We will now go further, and reduce the benefits cap from £26,000 to £23,000 in London, and £20,000 in the rest of the country.
‘We are also going to require those on higher incomes living in social housing to pay rents at the market rate’. This means an incredible rise in family rents! Also, ‘In the current tax credit system, each extra child brings an additional payment of £2,780 a year … In future we will limit the support provided through tax credits and Universal Credit to two children. Families who have a third or subsequent child after April 2017 will not receive additional Tax Credit or UC support for this child. Support provided to families who make a new claim to Universal Credit after this date will also be limited to two children.’
A living wage of £9 an hour by 2020 will become under Osborne the maximum wage for the working class as a whole. After the attacks in this budget, many workers will see that the only possible response to Osborne’s budget is a general strike to bring down the Tories and bring in a workers’ government and socialism.