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George Osborne


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From: Article posted to home page Home, 21 March 2012: Socialist Party news and analysis

Search site for keywords: Budget - Rich - Tax - Cuts - George Osborne

Another repugnant Tory-Liberal budget for big business and the rich

Trying to fit in with the angry mood of ordinary people against bankers' bonuses, bailouts and other windfalls of the rich, Tory chancellor George Osborne in his budget speech called tax evasion and avoidance by the wealthy "morally repugnant".

But comments like this are a smokescreen for the added repugnancy of Osborne's budget, which hands yet more gifts to the rich and promises more pain for the majority.

The rich gain billions of pounds from a reduction from 50p to 45p in the top rate of income tax and from a larger-than-predicted cut in corporation tax.

In a speech that will infuriate millions of working class people, Osborne had the gall to claim that the rise to 50p had been pointless because the rich changed their tax 'behaviour' to avoid most of it.

So why not legislate to stop this particular avoidance? Instead, as a further con, he announced a few other small measures against tax avoidance that will deliver just 200,000 a year to the public finances.

Corporation tax will be just 24% in April 2013 and further cuts will take it to 22% by 2014. This was described as making UK corporation tax "dramatically lower" than in "competition countries".

The consequence of this will be attempts to enforce a corresponding further dramatic worsening of our basic services, public sector wages and to other recipients of public spending.

With this in mind, Osborne will be "publishing analysis" showing that he will "need to make savings in welfare" of an extra 10 billion by 2016 on top of already planned reductions.

Help for the poorest?

But will the majority of people gain by the much acclaimed increase in the threshold for paying income tax, to 9,205 in April 2013? This will bring no benefit at all to the poorest third of all adults who don't pay any income tax.

Other workers will be 220 a year better off as a result of this measure, but this won't compensate for the many rises in the cost of living that people are being forced to bear.

Bankers 'earning' 5 million however, will get an extra 240,000 a year as a result of the reduction in the top rate of income tax, estimated Miliband in his budget response speech.

Furthermore, disgracefully billions of pounds are being taken off future pensioners by worsening their tax allowances.

The government has succumbed to pressure to increase the threshold at which child benefit will be withdrawn, but the result is still the end of this as a univeral benefit, laying the basis for governments to erode it further.

Other budget attacks include paving the way for regional public sector pay deals rather than national, in order to reduce pay.

To share the blame for this across the main political parties, Osborne pointed out that Labour introduced this for the Court Service and has favoured regional benefit rates.

Of course Labour leader Ed Miliband isn't in any position to deny that his party made attacks like this and huge cuts when in government, and now continues to do so in councils around the country.

His budget day remark that "today marks the end of 'we're all in it together'" was paltry and far too late when the cuts already made by Labour and Tory governments are weighed up.

This is another Tory-Liberal budget for big business and the rich and shows that they are determined to push on with imposing austerity on the majority, in the name of improving the public finances.

But the economy continues to suffer very low growth and last month public sector net borrowing was a record high for a February, showing that the policy of cuts and more cuts is not digging a way out of the crisis.

On the contrary, the outlook is one of attack upon attack on the living standards of working and middle class people, unless the strength of the millions-strong workers' movement is mobilised to fight back.

Judy Beishon

See also: Budget: far from 'all in it together' in The Socialist this week.

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