|The News Line: Editorial
Thursday, 22 March 2007
BROWN IN BLINKERS IGNORES THE ECONOMIC CRISIS
BROWN’S ‘big’ budget speech yesterday was an anti-climax, since it was an obvious attempt to ignore the worldwide capitalist economic crisis, and the completely indebted state of the British capitalist economy, in favour of an attempt to sneak into the premiership, unscathed by catastrophe.
Brown also pulled back from his comments, made earlier in the week, about more private companies running state schools, and that his premiership would see many more privately-sponsored City Academies. Whilst announcing increased expenditure on education the ‘Iron’ Chancellor turned opportunist yellow and did not reveal how much of the increased spending would go to private companies and to privatising education.
Likewise, the ‘saviour of the NHS’ ignored the crisis that the government has created in the service.
Brown was crudely selective in relation to the statistics that he used, refusing to mention the RPI rate of inflation of 4.6 per cent (this includes mortgage interest rates), in favour of focussing solely on the CPI rate of 2.6 per cent, pledging that it would be reduced to the Bank of England limit of two per cent in the period ahead.
He however made it clear that fighting inflation meant cutting wages – ‘holding firm to our commitment to maintain discipline in public sector pay’ with two per cent increases – and selling off to the privateers £36 billion of state assets, including the book of £6.0 billion of student loans.
Also targeted are the Employment Tribunals which big business wants to see abolished.
Brown reported: ‘And here the right policy is to combine the most modern and flexible competition regime including, as announced today, the further extension of risk-based regulation – into employment tribunals – with the most effective incentives and support for British investment and British innovation.’
Brown had to admit that: ‘Our forecasts of the current balance from 2007-08 to 2011-12 are affected by one major change in the last year – the sharply lower levels of production and yet higher costs in the North Sea – which have this year reduced tax revenues from £13 billion to £8 billion and for each year into the future cut them by an average of £4 billion a year.’
Gambler Brown continued: ‘However, with an estimated growth in the economy of between 2.3 per cent and three per cent we are, however, on track in the new cycle to meeting the golden rule, with figures from 2007-08 of -£4, +£3, +£6, +£9 and +£13 billion.’
He added: ‘Compared to a deficit equivalent of over £100 billion in a single year in the early 1990s, the figure for this and future years will be £35 billion – over 1 billion less than forecast at the Pre Budget Report – then £34, £30, £28, £26 and £24 billion – borrowing over the cycle not for current consumption, but for essential investment in our future.’ This is £177 billion of debt ahead!
For the rest Brown lowered the basic rate of income tax from 22 to 20 pence, while abolishing the lowest rate of 10 pence, and cancelling out the first cut, by increasing the income tax paid by the poorest people.
The poor were also caned by big increases in taxation on beer and cigarettes.
For big business, however, corporation tax was slashed from 30 to 28 pence, and there were numerous other tax breaks.
Meanwhile, ‘Our Budget for security and intelligence, which was just £1 billion in 2001, will now be for 2007-08, £2.25 billion’ – a massive increase in spending on state power.
Tory leader Cameron reacted to Brown’s lame and evasive performance by demanding a general election, while the Liberal Democrat, Campbell made clear with his fawning congratulations to Brown on his 10 years at the Treasury that a general election and a coalition with Labour was what was on his mind.
For the trade unions the issue is clear. The only way to prevent a return of the Tories is to take action to bring down the Blair-Brown government and bring in a workers’ government that will carry out socialist policies.
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