Chancellor Rishi Sunak was expected to abandon a decade of Tory talk about reducing the deficit and promise extra public spending.
Instead of a previous target of net borrowing falling to 1.3 percent of national income by 2023-24, it was predicted to be on course to rise close to 3 percent.
Such a shift underlines that the way that governments respond to capitalist crisis and stagnation are partly political choices—and the Tories have always favoured the rich.
He will pump out big numbers, but the reality will be much less significant.
There was even talk of a very limited interference with the privileges of the rich.
The entrepreneurs’ relief scheme was in the spotlight.
It is a scam that hands 5,000 rich company owners £350,000 each and costs the Treasury £3 billion.
Sunak hinted he might withdraw it. But even this obvious message upset the bosses.
Some 150 prominent business leaders wrote to the chancellor warning him not to touch it, threatening that start-ups will go to Singapore instead.
The Sunday Times objects, warning the chancellor that business “still has to be convinced that this government is on its side”.
Last Sunday Labour shadow chancellor John McDonnell said that the likely increase in spending will be “nowhere near the scale we need” to help the NHS, action on climate change and to deal with the crisis in public services”.
The budget is likely to include the raising of environmental taxes to achieve the Tory promise to achieve net-zero emissions by 2050. But this pledge already falls woefully short considering the scale of the climate crisis.
The budget is very unlikely to offer any radical solutions for this. And none of Sunak’s measures will tackle the bitter legacy of austerity.
In its budget submission, the TUC union federation pointed out the devastation it has inflicted.
It said, for example, “From 2010-11 to 2017-18, the government reduced spending on the Sure Start programme for children from over £1.5 billion a year to £600 million–a fall of £900 million.”
It called for 500 Sure Start centres to be reopened and for “pay restoration across the public sector”.
A study by the Institute for Public Policy Research last year said that austerity was linked to the deaths of 130,000 people.
It has been rumoured that the proposal of a mansion tax—a tax on expensive properties could be dropped.
Sunak and his wife, the daughter of a billionaire, owns at least four properties. They share a property portfolio spanning Britain and the US that is collectively worth about £10 million.
Income inequality in Britain has increased partly because a freeze in benefits hit the poorest households.
This Tory attack means some household incomes fell for two consecutive years, say official government figures.
The median disposable income for the poorest fifth of people fell by 4.3 percent per year over the two years to April 2019, according to the Office for National Statistics.
Disposable income is what remains after the deduction of taxes and national insurance.
Income fell because of the freeze on some benefits, such as income support and child benefit, which are stuck at their 2016 levels.
Adam Corlett, senior economist at the Resolution Foundation think tank, said income inequality was “driven by policy choices, with gains from higher employment more than wiped out by benefit cuts”.
“The result is that poorer households are no better off than they were in the mid-2000s.”
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