Osborne’s declaration of war on the people
The cuts to government spending over the next five years will significantly exceed those made in the last five. Be warned: the austerity we’ve seen so far was only the warm-up for the main event. Gerry Gold reports
The scale of future cuts proposed by the Tories is so vast and almost unimaginable that it’s impossible to envisage any government carrying them through without provoking massive social and civil unrest. In effect, the ConDems yesterday declared all-out war on the people.
Left unstated by chancellor George Osborne, the political choices are as stark as a further 60% reduction in the state’s budget the chancellor set out in his autumn statement. Osborne was short on detail. No wonder. The Tories are talking about taking government spending back to the levels last seen in the 1930s, when a global slump prefigured a second world war.
So politically, the choice is coming down to either outright dictatorship to reduce the population to paupers to pay off the state’s debt or a revolutionary change that would involve repudiating the same debt and starting over again.
Despite the half decade assault on public sector jobs and the mounting demands for benefits and declining services, Osborne’s previous budgets have failed to make any impact on the government’s annual budget deficit – the gap between revenue and spending. So its total outstanding debt has continued to grow to £1.5 trillion – around 90% of GDP.
That’s partly because the continuing downward spiral in real wages – the longest sustained fall since the 1860s – has reduced the government’s tax income. So the wishful thinking of five years ago of a balanced budget by now has been pushed back – by another five years.
And it’s only the historically low interest rates globally and locally that stand between the UK and state bankruptcy. Any global shock events could send them soaring. That’s quite a gamble.
But never mind, whether it’s Conservatives or Labour in Westminster after the next general election, the policy direction will remain the same. However loud the protests may get, austerity for the 99% is the key to restoring the fortunes of the capitalist corporations and it is set to intensify.
In the run up to the 2015 election, the statement does contain some minimalist populist gestures made in response to widespread anger against tax-avoiding corporations and profiteering banks.
The so-called “Google tax”, a 25% levy on profits which are generated in Britain by transnational corporations, is only expected to raise a paltry £360 million a year. There is no detail that explains how that can be made to work. A reduction in the banks’ ability to offset tax on profits against previous losses is expected to raise £4 billion. Small beer when measured against the accumulating debt.
But any such gains will be offset by the main rate of tax on corporations which is to be reduced yet again next year from its current low 21% to 20%.
What are the real prospects?
According to the Office for Budget Responsibility the so-called recovery has run its course, having failed to make up the ground lost in the crash. And that’s without factoring in the impact of the deflationary recession already tightening its global grip.
Oil prices have been dropping since June. Fracking companies in the US face bankruptcy, as do the banks lending to them. The eurozone is teetering on the edge of recession, as is Russia, while China’s economy is burdened with debt and over-production.
Austerity is patently self-destructive – of people’s lives and livelihoods, jobs and services. But it’s all capitalism can come up with. It’s a self-devouring beast. If we want to put an end to the Osborne-led madness, then we have to terminate the system he and others at Westminster represent.
First and foremost, that means creating democratic alternatives to the present parliamentary system because that too has clearly failed. Westminster speaks only for the ruling classes, the financial markets and the corporations and is well past its sell-by date. So, to cite, Cromwell, in the name of God, go!
4 December 2014