CHANCELLOR Osborne yesterday moved his ‘emergency budget’.
He outlined the gravity of the situation by saying that ‘Questions that were asked about the liquidity and solvency of banking systems are now being asked of the liquidity and solvency of some of the governments that stand behind those banks. . .’
He added: ‘The formal mandate we set is that the structural current deficit should be in balance in the final year of the five-year forecast period, which is 2015-16 in this Budget.’
Osborne added to the disbelief of listeners that ‘Consumer price inflation is expected to reach 2.7 per cent by the end of the year before returning to target in the medium term.’ The Bank of England is getting ready for inflation to leap above 5 per cent by the end of this year!
Again fatuously he declared, with 200,000 public sector workers about to get the sack, that, ‘unemployment rate is forecast by the Office for Budget Responsibility to peak this year at 8.1 per cent and then fall for each of the next four years, to reach 6.1 per cent in 2015.’
His cuts are to be made up of a 77 per cent cut in spending and a rise in taxation of 23 per cent. This is to reduce the public spending deficit from £149bn this year to £20bn in 2015-16.
This is to be achieved through savage cuts, and the destruction of the Welfare state so that ‘As a share of the economy, borrowing will fall from 10.1 per cent of GDP this year to just 1.1 per cent in 2015-16.’
State owned assets to be sold off include ‘our shareholding of NATS, the air traffic control services. We will aim to sell the student loan book, and look at options around early repayment for individuals. And we will resolve the future of the Tote – at last . . . and will also facilitate a private capital injection into the Royal Mail Group, something that has been long overdue.’
On pensions he said: ‘I know there are many dedicated public sector workers who work very hard and did not cause this recession – but they must share the burden as we pay to clean it up.
‘The truth is that the country was living beyond its means when the recession came. And if we don’t tackle pay and pensions, more jobs will be lost.
‘That is why the Government is asking the public sector to accept a two-year pay freeze. . . . The Government will also accelerate the increase in the State Pension Age to 66. . . . We will focus our benefits more towards those in need. . . . So from next year, with the exception of the state pension and pension credit, we will switch to a system where we up-rate benefits, tax credits and public service pensions in line with consumer prices rather than retail prices.’
These pensions and benefits are to be savagely cut at a time of rampant inflation! The move to CPI will ‘save over £6 billion a year’.
As well, ‘In time for the next Budget we will also publish proposals to move the indexation in the tax system from RPI to CPI in a way that protects revenues.’
The coalition is also ‘to target tax credits’ and reduce payments to families. As well, he announced with crocodile tears: ‘Sadly, there are further benefits which the country can no longer afford.’
‘So we will abolish the poorly-targeted Health in Pregnancy Grant from April 2011.
‘At the same time we will restrict the sure start maternity grant to the first child only.
‘And we will expect lone parents to look for work when their youngest child goes to school.’
Women and children are to be cut, cut and cut again.
As well ‘We have decided that we simply cannot afford to extend the Saving Gateway and we have also had to take a difficult decision about child benefit.’
The disabled are also to be savaged.
However, missing from his budget was any estimate about how much the imperialist war in north Africa will cost the British working class or how many hospitals will have to be closed to pay for it! Clearly the only way out of this crisis for the working class is through a socialist revolution to get rid of capitalism and its ruling class of idlers and profiteers.