The government’s budget last week was an assault on the poor. It was a budget for more cuts, more privatisation and more attacks.
In an act of pure class spite, Tory chancellor George Osborne has even gone back on a commitment to give council workers earning under £21,000 a year a paltry £250 pay rise.
Rising inflation and higher indirect taxes, along with a freeze on public sector pay, mean huge cuts in the living standards of millions of workers.
Existing benefit cuts mean that 18 million households will be at least £1,000 worse off each year.
And child benefit will remain frozen—a cut in real terms of around 12 percent.
Cuts in child tax credits starting next month will see half a million lose some £440 a year.
The Tories claim they are out to “reshape” public services. In reality that means getting rid of at least three quarters of a million public sector jobs.
The knock-on effects will mean at least 500,000 private sector workers will follow them.
Osborne ignored the £83 billion he is slashing from the public sector and gloated about tax cuts for the rich.
The Financial Times noted that, “After nearly a decade of lobbying, business has got most of the changes to the corporate tax regime that it was seeking.”
That is an understatement. Corporation tax—tax on
business profits—is to be cut by 2 percent from April, rather than 1 percent as previously announced. This will save the bosses £4.2 billion over five years in tax.
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 boasted that the profits tax would be “16 percent lower than America, 11 percent lower than France and 7 percent lower than Germany.”
His generosity to the rich is endless.
A super-low rate of corporation tax of just 5.75 percent will be dangled in front of major multinationals chosen for a Treasury list of top companies especially welcome in the UK.
And the business rates “holiday” for small firms was extended for another year.
Osborne’s “battle against red tape” means slashing health and safety and removing a raft of workers’ rights.
His new “enterprise zones” bring back Thatcher’s failed tax scam from the 1980s.
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.
The rich who leave their cash to their children get let off paying 10 percent of their already low inheritance tax if they give money to “charity”.
Osborne points to the bank levy as tackling the rich. The levy is just 0.07 percent on their profits—less than they pay out in bonuses.
But Osborne is now proposing to give the money raised back to the banks, to fund 100 percent sub-prime mortgages.