By Charlie Kimber
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Hunt’s budget promises class war, so let’s strike out the Tories

This article is over 1 years, 3 months old
The Autumn Statement on Thursday laid out plans for £55 billion of spending cuts and tax rises on the poorest
Issue 2832
Tory chancellor Jeremy Hunt is sat at a desk grinning at his computer as he plans the autumn statement austerity budget. There is a picture of Tory politician, Lawson, framed on the wall behind him

Chancellor Jeremy Hunt prepares for the Autumn Statement (Picture: Flickr/HM Treasury)

Chancellor Jeremy Hunt unveiled a new era of austerity in his budget on Thursday. It means intensified class war. He plans £55 billion of spending cuts and tax rises.

It was the fourth budget or quasi-budget this year—or even the fifth one if you count Hunt undoing most of Kwasi Kwarteng’s tax cuts on 17 October.

And it came against a background of punishingly higher energy bills, increased rents and mortgages, soaring food bills and council tax. Real wages and benefits are plummeting and bosses and the state want to hold down pay well into the future.

As Hunt ended his speech, the Office for Budget Responsibility (OBR) said living standards are going to fall by 7 percent over the next two years—and it will be far more than that for many workers.

The fall in living standards next year will be the biggest on record, so since at least the mid-1950s, the OBR added. It’s worse even than the post-2010 austerity drive.

Hunt is sticking with an end to the limit on bankers’ bonuses at the same time as cleaners, delivery drivers and NHS workers are queuing at foodbanks.

Hunt’s real audience wasn’t really MPs, let alone ordinary people. He was dancing to the tune of the unelected bankers that destroyed Liz Truss as prime minister because they didn’t like the 23 September mini-budget.

He tried to deliver for them, although early signs were that they didn’t think he had gone far enough as the pound slipped in value.

The chancellor lied that Britain’s economic problems are wholly the fault of “global factors”, and then demanded workers and the poor pay the price. Hunt claimed that inflation would fall next year, but even on his rosy forecasts it would stay at very high levels. And he added that unemployment is set to rise by 500,000 and that Britain is already in recession.

There was little cheering for Hunt even from his own side because his grim statement reflects a dismal outlook with the system offering only stagnation and deep poverty and hardship.

The budget signalled a slightly higher tax rate for people on more than £125,000 a year rather than £150,000. But that’s only a tiny move.

Much bigger is the decision to freeze the personal allowance and income tax thresholds until 2028. By stealth, that means a big hit on workers’ wages. 

Hunt confirmed that just over four months from now the limit on average gas and electricity bills will rise to £3,000. That’s £10 a week more than at present, another 20 percent increase after energy bills have doubled in a year.

Some people on benefits will be partially protected, but millions of working class people won’t. The £400 energy bill discount will not be repeated. And if people earn £1 over the benefits threshold, they get no additional support.

As cover, Hunt said he will expand the oil and gas windfall tax and levy it for six years. The tax take is supposed to be £14 billion next year. That sounds a lot, but BP and Shell grabbed combined profits of over £15 billion just in the three months from July and September this year.

Scapegoating the poorest, Hunt outlined new measures to pressure 600,000 Universal Credit benefit claimants to take extra low-paid work. At the same time, buried in the footnotes of Hunt’s statement there is a massive tax cut on bank profits. The surcharge will fall from 8 percent to just 3 percent.

There was no extra money for public sector pay. That sets up key battles in the NHS, schools and universities where workers have voted to strike or are balloting for action.

Hunt knows there is no popular support for a message of “accept cuts because the bankers demand it”. The Tories will be wiped out at the next election if they immediately slash funding for the NHS and schools, and there might be social revolt.

So he pushed the biggest cuts into the future, but that still means a shattering assault on health and other key services. The budget earmarks £3.3 billion more for the NHS. That’s much less than inflation, and the King’s Fund health researchers say it needs £10 billion post-Covid. It’s the same story with the “increase” for social care.

Hunt announced the veteran Labour figure Patricia Hewitt, a former health secretary, would be brought in to help identify where to slash spending. After being an MP, Hewitt was an adviser to tax avoiders Alliance Boots, a board director of Bupa and an adviser to private equity company Cinven which bought Bupa hospitals.

Hunt also set a wider trap for Labour. Keir Starmer will come under pressure to say whether he too would “balance the books” in the way Hunt has done. All his instincts will be to make cuts as well. And if Labour does win the next general election, it will inherit an economy in tatters. It will then attack its own supporters in order to resuscitate big business.

The simple message ought to be that, instead of cuts and tax rises for workers, there should be big tax increases on the corporations and super-rich. Workers won’t get that unless the level of struggle escalates.

The Tory record
  • The highest inflation for 41 years.
  • Average real wage less than in 2007 after the biggest wage squeeze for centuries.
  • 16 million people live in poverty.
  • 7. 1 million people on NHS waiting lists in England.
  • 334,000 people died from 2012-2019 austerity.
  • Life expectancy down…
  • …but there is a record number of 177 billionaires with a combined wealth of £653 billion.

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