OSBORNE began his budget address yesterday by admitting the calamitous state of British capitalism saying that recovery would be ‘challenging’ since ‘we’ve had the sharpest fall in output since the 1930s, the highest budget deficit in peacetime, and the largest banking crisis in our entire history’.
Osborne outlined the stormy seas that UK capitalism was having to sail through, saying that ‘All countries have to steer a course between two central risks. The risk of a European sovereign debt crisis on the one hand and on the other the risk that comes from rising global commodity prices.’
He continued to relate the calamity that is capitalism by stating that ‘Food prices around the world have increased by nearly 50% since the beginning of last year. Oil has risen 35% in just 5 months. That is why the Office for Budget Responsibility expect inflation to remain between 4 and 5% for most of this year, before dropping to 2.5% next year and then to 2% in two years time.’
He intends to force borrowing down to £146bn this year, £122bn next year, £101 billion the year after, £70 billion in 2013-14, then £46 billion, and then £29 billion by 2015-16.
The national debt is forecast to be 60% this year, before peaking at 71%, and then starting to fall reaching 69% by the end of the period.
The way it is to be done is by letting rip regulation free capitalism while forcing down pensions and wages.
Public sector pensions are to be cut by linking them to the Consumer Prices Index, instead of the Retail Price Index making for a 15 per cent cut in their pensions, according to the trade unions.
This treatment contrasts to the give-away for the bosses. Osborne said: ‘From April this year corporation tax will be reduced not just by 1% as I previously announced but by 2%. And it will continue to fall by 1% in each of the following three years taking our corporate tax rate right down to 23%. 16 per cent lower than America, 11 per cent lower than France and 7 per cent lower than Germany, the lowest corporation tax rate in the G7.’
In further aid to the bosses: ‘£350 million worth of specific regulations will go including the Equality Acts costly dual discrimination rules; Lord Young’s recommendations on health and safety laws will be implemented in full, the no-win no-fee legal services that prey on employers will be restricted.’
He added a sweatshops charter: ‘And from April, we are going to impose a moratorium exempting all businesses employing fewer than ten people and all genuine start-ups from new domestic regulation for the next three years.’
He continued: ‘Councils are spending 13 per cent more in real terms on planning permissions. . . . We will introduce a new presumption in favour of sustainable development, so that the default answer to development is yes.’ This will include ‘the first time ever auctions of planning permission on land.’
He declared: ‘Let Britain be the home of enterprise in an age when people can invest all over the world.’
He continued: ‘I am clear that the 50 pence tax rate would do lasting damage to our economy if it were to become permanent.’ He is to begin its demolition by reducing it to 45 pence from next year.
‘Helping all parts of our country succeed is also the purpose behind the new Enterprise Zones we launch today. Today I confirm that instead of 14 we will fund 21 new Enterprise Zones.’
Businesses will get up to 100% discount on rates, new superfast broadband and the potential to use enhanced capital allowances in zones where there is a strong focus on manufacturing.
Government evidence is to be published on the case for introducing local public sector pay with the option for government departments to move to local pay structures for civil servants when the current wage freeze ends. This means savage pay cuts for millions of public sector workers.
This budget combined with the Health and Social Care Law makes for an all-out attack on the working class the middle class and the Welfare State. It must be met with a general strike to bring down the coalition and bring in a workers government.