Sunak Budget – tax cuts for banks and corporations – poverty for working people

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TORY chancellor Rishi Sunak yesterday unveiled the government’s spending plans in a budget he billed as preparing the country for a new ‘age of optimism’, assuring his Tory colleagues that he ‘will deliver a stronger economy for the British people.’

With British capitalism stagnating and teetering over the brink of recession, with the country gripped by an inflationary spiral that is fast spinning out of control, while looming over is the massive national debt of over £2.2 trillion, Sunak’s attempt to inject optimism has nothing to do with reality.

The only note of realism came when Sunak stated that he was changing the fiscal rules to ‘keep this government on the path of discipline and responsibility’.

Sunak intends to cut the public debt saying that if this failed then ‘everything else must fall’.

He insisted that all day-to-day public spending will have to be funded from taxation not from borrowing, saying: ‘In normal times the state should only borrow to invest in our future growth and prosperity.’

Later on in his speech, Sunak made clear that the taxation would be extracted from workers, certainly not from the bankers and corporation owners.

While the working class has already been hit with the increase in National Insurance and increasing council tax, corporations and banks kept the tax breaks that the Tories introduced to bail them out at the start of the pandemic while the business rates for businesses were cut.

Replying to Sunak’s budget, Rachel Reeves, Labour shadow chancellor, said: ‘Taking £6 billion out of the pockets of the poorest people in scrapping the Universal Credit uplift, then expecting them to cheer today for £2bn to compensate’, demonstrated the ‘arrogance’ of the Tories.

Reeves was referring to the announcement that Sunak left until the end of his speech that the ‘taper’ rate for the Universal Credit cut would be reduced from 63% to 55%.

For those people who are out of work or on the lowest pay relying solely on UC, the £20 a week cut will remain in place. The same sleight of hand by Sunak was demonstrated over the much trailed increase in the living wage to £9.50 an hour next April.

This increase is way below the demand by workers for a £15 minimum and has already been wiped out by inflation running at over 4% and projected to increase to over 5% shortly.

On public sector pay, Sunak confirmed that the freeze introduced by him last year would end next year, with increases returning to the pay review process.

This was attacked by GMB general secretary Gary Smith, who said: ‘Saying you will lift the pay freeze that has ground down public sector workers is meaningless if we don’t even know if wages will increase above inflation.’

He added: ‘Public sector workers must be guaranteed a proper real-term pay rise if the Conservatives are to start making up for their ruinous decade of austerity.’

What emerged clearly from Sunak’s budget is that he intends to cut the UK debt mountain by driving down the living standards of every worker, at a time when inflation is already destroying the lives of millions.

Sunak expressed his fear about inflation but made it clear that he has absolutely no idea how to deal with it, instead he said he had spoken to the governor of the Bank of England that morning and told him it was the Bank’s responsibility.

This means giving the Bank the green light to increase interest rates – which in turn will drive up the cost of repayments on the national debt along with overdraft, mortgage and credit repayments of workers.

As Sunak admits, driving up the national debt means that ‘everything must fall’, including capitalism.

This was a budget for the corporations and banks that holds only the pledge of a savage austerity war on wages, benefits and jobs for the working class to rescue a bankrupt capitalist system from collapse.

The only way forward for the working class is to demand the TUC call a general strike to bring the Tories down and bring in a workers’ government that will expropriate the banks and corporations and advance to a socialist planned economy.