CHANCELLOR Osborne was forced to make a humiliating retreat over working tax credits in the House of Commons yesterday after facing massive resistance to the tax credit cuts. The government was forced to publicly reveal its feet of clay.
The tax credit announcement means millions of low-paid workers will not now have their benefits cut in April, as Osborne had originally planned. The cuts in credits will be dropped but workers will still be hit very hard by the Universal Credit system when it comes into operation, abolishing many benefits. There will also be no cuts in the financing of the police service.
This was another forced retreat, with police chiefs insisting that with the anti-trade union legislation coming in, the state will need all of the police manpower that it can muster to enforce the new draconian legislation that will illegalise 90% of strike actions.
Osborne is proceeding with his £12 billion of welfare cuts, to further hit the poor, and his plans to slash state spending amidst warnings that the growing world crisis of capitalism leaves him with no alternative.
In his Autumn financial review, Osborne announced that he would end local government control over education, creating 500 more academies and allowing all sixth form colleges to become academies, with pupils having access to student loans that would have to be repaid.
As well, government funding for education will not make any positive allowance for poorer areas and pupils – they are to be equalised for the benefit of the better off. In fact, education is to be privatised.
Osborne pledged a huge fall in state funding with 25 per cent cuts in government departments, that will mean hundreds of thousands of civil service sackings. For the NHS, there are to be £22bn more of NHS efficiency savings as well as 25% cuts in the financing of the Department of Health to drive forward NHS seven-day working, closures and privatisation.
As part of the change, nurses are to be victimised with the ending of free nursing training and the introduction of tuition fees, and loans that will have to be repaid. Housing benefit for new social tenants is to be capped at the same level as the private sector. At the same time, £2.3bn is to be handed to private developers to build 400,000 new starter homes for sale to the better off. These homes will be available to the under-40s who can afford a 5% deposit and will be rewarded with a 20% discount!
Local authorities are to be allowed to levy a new precept of up to 2% on council tax so that councils will raise £2bn to take over care for the sick and the elderly from the state. These local authorities will also be allowed to dispose of their assets and keep the proceeds to create areas fit for the elite to live in.
In fact, the government revealed that total spending is to rise from £756bn this year to £821bn by 2019-20. That state spending is to be slashed to 36.5% as a share of total output, in five years – down from 45% in 2010. Overall day-to-day departmental spending is to be cut by £20bn, equivalent to 0.8% of total expenditure each year by 2020.
Transport, environment and energy are to see their budgets falling by 37%, 15% and 22% respectively.
As well business department funding is to be cut by 17%
• 26 new non-union enterprise zones to be created
• Elected mayors are to be allowed to raise rates under certain conditions
• An apprenticeship levy set at 0.5% of the employer wage bill, with £15,000 allowance for eligible firms and a figure of three million ‘slave labour’ ‘apprentices’ envisaged.
British capitalism cannot find a way out of the crisis as it deepens except to smash unions, smash the welfare state and state education and bring in Chinese-style New Economic Zones!
The working class in the period ahead will make its mind up that the only way to deal with British capitalism is to overthrow it with a socialist revolution to go forward to socialism.