George Osborne said this was a budget for “growth”. That’s true—but it’s growth in profits for the rich, growth in bankers’ bonuses and growth in unemployment.
This was a budget for more cuts, more privatisation and more attacks on the poor.
In an act of pure class spite, Osborne has even gone back on his previous commitment to give council workers earning under £21,000 a year a paltry £250 pay rise.
Rising inflation and higher indirect taxes, along with the freeze on public sector pay, mean huge cuts in living standards millions of workers. And child benefit will remain frozen—a cut in real terms of around 12 percent.
All this far outweighs Osborne’s big idea: raising the personal tax allowance from £7,475 to more than £8,105 in April 2012. This means you can earn more before you pay tax.
This morning the right wing press were making a lot of this “tax cut”, worth £120 to all those earning less than £115,000.
But the truth is that it will be more than swallowed up by the ongoing VAT rise, which will cost the average adult £310, and by the 1 percent rise in National Insurance rates.
On Osborne’s own figures, the cuts have little effect on the state of the economy. The government predicts economic growth for 2011 down from 2.1 percent to 1.7 percent.
Even the government’s preferred economic forecaster, its own Office of Budget Responsibility, predicts that unemployment will be higher than the government expected every year from now.
Meanwhile, the Tories’ plan to merge National Insurance and income tax into one payment is entirely ideological. It is meant to break the idea that money put aside from wages is deferred to pay for the health service and pensions.
And it is a rabid pro-business ideology that means that corporation tax—tax on business profits—is to be cut by 2 percent from April, rather than 1 percent as previously announced.
The tax will now fall by 1 percent in each of the next three years to reach 23 percent. In fact, Osborne promised the rate would go down every year the Tories are in office—to less than half the rate even Margaret Thatcher set in the 1980s.
Osborne’s gifts for business continued. The business rates “holiday” for small firms was extended for another year, for example.
The “battle against red tape” means slashing health and safety and removing a raft of workers’ rights in small businesses.
The Tories are setting up “enterprise zones”. These come with a load of tax breaks and encouragement to employ low-paid workers on Osborne’s planned “work experience” schemes, intended to replace youth employment and education.
Super rich “non-doms” who live here and don’t pay tax will pay a slightly higher charge for the privilege. But other changes to the rules will mean more multinationals dodging tax by moving money around the world.
And the rich who leave their cash to the children get let off paying 10 percent of their already low inheritance if they give money to “charity”.
The Tories’ bank levy of 0.07 percent on their profits is being kept. But Osborne is now proposing to give the money raised back to the banks, to fund 100 percent sub-prime mortgages.
The Tories are also relaxing the planning regulations. Their claims of being the “greenest government” ever are in fact a means of throwing extra money at the nuclear industry.
They still say there is no money for public services. But Osborne did manage to find money from the “reserves” to fund the military assault on Libya.
This vicious budget gives us even more reasons to march against the cuts this Saturday.
Assemble 11am, Saturday 26 March, Victoria Embankment, central London