Socialist Worker

Gordon Brown's budget: war, privatisation and tax cuts for the rich

by Simon Basketter
Issue No. 2043

Gordon Brown in his budget today has laid down his credentials as Tony Blair's natural heir. His only difference is a little bit of extra Thatcherism thrown in for good measure.

Continuing New Labour's commitment to war, Brown announced £400 million extra for British armed forces engaged in the occupations of Iraq and Afghanistan. He also promised an extra £86 million for the spooks in the intelligence and security services.

Behind the headlines about a 2 percent cut in income tax, the reality is that this a budget for the well off. Brown has scrapped the 10p lower rate of income tax, which means most people will worse off. But those on higher incomes will get far more in their wage packets.

The real winners are big business. Brown's vision is that, 'Britain must champion open markets, flexibility and free trade – an open and inclusive globalisation, not protectionism.'

Brown's message for workers was clear – he would be 'holding firm to our commitment to maintain discipline in public sector pay'. And he announced a £26 billion a year Whitehall 'efficiency drive' – which translates as yet more cuts in the public sector.

The New Labour chancellor confirmed another huge boost for the bosses. He will cut corporation tax – the tax that they pay on profits – from 30 percent to 28 percent.

He boasted that the new corporation tax rate would be 'the lowest of all the major economies' – including the US, Germany, France and Japan.

Not satisfied with a handing over cash to the rich, Brown is also engaging in asset stripping. He is selling off some £18 billion of public assets to the private sector – doubling the extent of privatisation in the public sector.

Disgracefully, Brown has decided to sell off the 'student loan book'. All the debts students run up from their loans at college will now be handed over to the private sector to collect. This was an idea promoted by the Tories in 2004.

Nor should anyone be fooled by promises of 'more cash for schools and hospitals'. This money will be linked to PFI deals and further privatisation – ensuring that the cash goes in lining corporate profits rather than boosting public services.

And despite intensive lobbying from the unions, Brown declined to announce any measures to hold back private equity firms that gobble up and asset strip other companies.

All this is a slap in the face to every worker and should be a wake-up call to anyone who hoped Brown would push Blair in a more left wing direction.

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Sat 24 Mar 2007, 00:00 GMT
Issue No. 2043
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