A Budget for the 1%
One of the things you can guarantee about the Budget is that well before the Chancellor shuffles in his shiny shoes to the dispatch box you will know at least half, if not three-quarters, of what is about to happen. The ground is always carefully prepared by the government spin machine well in advance so there are few real surprises. This time is no different; it looks pretty inevitable that the 50p band of income tax will be abolished and the only compensation for this will be a further increase in the threshold, a move which effectively delivers a double tax cut for the richest in society.
Of course, there will be the continuation of austerity for the many and more borrowing to fund the pipe-dreams of government ministers. Also, our public sector looks set to bear a further burden, it is reported today that George Osborne will end national public sector pay rates. This is a further attack on wages that have already been lashed in real terms by the pay ‘freeze’.
As well as being ethically contemptible it is economically barking mad. Forcing the public and private sector into a dire race to the bottom of the income pit will only hammer consumption and increase the size of the already huge household debt mountain. Prices are also still sky-rocketing so expecting that people to increase consumption and stimulate the already mythical private-sector growth-led recovery is to expect the profoundly unexpected and actually impossible. How can households consume more buried under a debt mountain, faced with falling incomes, and suffering rising prices for not just luxury items but also those pesky essentials like food, shelter, travel and clothes?
The answer is, of course, they can’t and if you add in the introduction of increased costs, due to creeping privatisation, of things like healthcare you are creating a perfect storm which will send tens of millions of British households irretrievably into the red. This Chancellor doesn’t care about that though, he has abandoned sense and reason to serve not the people but the vested interests who bankroll him and his Party. It is a government for the 1%, by the 1%. In its response Labour should make this plain and place itself firmly on the side of the 99% – the real wealth creators, and entrust the task of recovering our shattered economy to them, not City spivs who are the ones who actually trashed it totally in the first place.