Chancellor George Osborne has unveiled a tax giveaway for the rich, more cuts for the poor, and an admission that his economic strategy is in trouble.
His budget today, Wednesday, also includes a major escalation of the Tories’ war on education and teaching unions.
All of England’s schools are to be made into privately-run academies by 2022 and the school day made longer, at a cost of £1.5 billion in new funding. This is an attack on students as well as teachers.
Osborne pledged to drive corporation tax – a tax on business profits – down further from 20 percent to just 17 percent. That’s less than half the rate charged in the US, and down from 28 percent in 2010.
There’s also yet another tax cut for North Sea oil bosses. The supplementary charge for oil and gas producers is to be halved to 10 percent, and petroleum revenue tax “effectively abolished”.
And a whopping cut from 28 percent to 20 percent for top rate capital gains tax is a gift to rich people who sell assets.
Despite the misery the Tories have unleashed in the name of fixing the economy, Osborne admitted that he had failed to meet his own targets. Under new projections he said he would be back on track by 2019-20.
That’s partly smoke and mirrors.
Osborne moved £1.6 billion in big infrastructure spending planned in 2019-20 forward to massage the figures for that year. He gambled that current low government borrowing costs will continue, saving £5 billion.
He also counts on taking in an extra £12 billion from chasing down tax avoiders and £9 billion from closing tax loopholes. Yet previous promised clampdowns never materialised.
The rest comes from us. Osborne plans an extra £3.5 billion in cuts yet to be announced, plus another £1.4 billion from welfare.
This would mostly come from the benefits of disabled people. The Tories already want to strip up to £150 a week from over half a million disabled people on the Personal Independency Payment benefit.
Osborne is also aiming to rob £2 billion a year from public sector pensions through a change to the discount rate used to calculate payouts.
He claimed this attack on pensioners was about “putting the next generation first” and helping young people with no savings or pensions start to save. But new savings schemes will only help the better off.
And despite the spin, many of the tax changes will not help working class people. Those earning more than £42,000 a year will pay less income tax, and fewer small businesses will have to pay business rates.
But like all taxes on consumption, a £520 million levy on sugar in soft drinks will hit the poor hardest. Though it was won support through playing on real health concerns, this is a regressive tax and is unlikely to reduce anyone’s sugar intake.
An extra £700 million for flood defences won’t do enough to meet a growing threat, especially after years of cuts and the Tories doing nothing about climate change. It is to be funded by a tax hike on insurance premiums that many of the people most at risk already can’t afford to pay.
No major announcements were made on housing or the health service. Tory attacks on housing and the NHS are already causing major damage.
New road and rail projects including Crossrail 2 under London and HS3 between Manchester and Leeds will be a bonanza for private construction bosses. But they won’t address the real problems of public transport—overcrowding and sky high prices.
In any case almost half the transport funding had already been announced in the Autumn statement.
Osborne’s no longer promising a road to recovery, or even a light at the end of the tunnel. This budget confirms that austerity for us is set to continue for years—even as the continuing crisis is used to justify more support for the bosses.
We need to support every form of resistance, and the union leaders have to start a real fightback.
Saturday 16 April, central London. Called by the People’s Assembly thepeoplesassembly.org.uk