Tory chancellor George Osborne announced in last week’s Autumn Statement that the coming years will require “very substantial savings in public spending”.
But his own figures show that the cuts will be far worse than that.
The head of the free market think tank the Institute of Fiscal Studies (IFS) summed it up. “There are huge cuts to come. How do we get to this sunlit upland in which we have a budget surplus? Spending cuts on a colossal scale is how.”
Total public spending is projected to fall to 35.2 percent of gross domestic product in 2019-20.
This takes it past the previous post-war lows reached in 1957-58 and 1999-00 to the lowest level in 80 years.
But Labour remain committed to Tory spending cuts and did nothing but criticise the government for not being “tough on the deficit”.
According to Osborne’s figures, “Between 2009-10 and 2019-20, spending on public services, administration and grants by central
government is projected to fall from £5,650 to £3,880 per head in 2014-15 prices.”
For that to happen, more than 60 percent of the cuts will come after the 2015 general election.
The Tories’ cuts have already had a devastating effect on working class people—and now Osborne is coming for more.
He unveiled spiteful plans to freeze the Universal Credit (UC) work allowance for a further year.
That’s the amount that low-paid workers are allowed to earn before their UC starts to get reduced.
It is an in work benefit that encourages low pay.
The Office for Budget Responsibility estimated that the current freeze would reduce low-paid workers’ incomes by £600 million a year by 2017-18.
Osborne now says that prolonging the freeze until April 2018 will cut spending by £115 million in 2018-19.
That cash comes straight out of the pockets of low-paid workers.
The government also projects that wages growth will slow down in coming year.
But wages are low already and they will only creep back to where they were when the banks crashed by 2020.
Osborne’s tax allowance changes will also benefit the rich. Wealthy people on a higher rate of tax will grab £172 a year from the allowance changes, but workers paying a basic rate will get £52 less than that.
Much of the media heralded Osborne’s changes to stamp duty, but it will have zero impact on the housing crisis.
In fact, the changes are likely to stoke the housing bubble and spiraling prices.
The government admits that all the talk of deficit reduction improving Britain’s economic situation is meaningless.
It said that, “Just over 80 percent of the reduction is accounted for by lower public spending,”
But the bit of deficit reduction cash that’s not from cuts is coming from VAT—a tax that hits poor people hardest.
Osborne will have slashed more 1.5 million public sector jobs by the time his plan is finished.
He’s already cut 500,000—so there’s more than a million job losses to come.
And a further £15 billion of cuts in 2019 simply aren’t accounted for or explained at all.