Savage cuts

By Daphne Liddle

CHANCELLOR George Osborne’s long-awaited spending review contained the expected savage cuts in public spending but also a lot of promises to keep spending on certain sensitive concerns, with arithmetic that just could not be reconciled with those promises.

He plans to cut total public spending by 19 per cent over the next four years and to reduce public sector jobs by nearly half a million. That will result in around three-and-a-half million private sector job losses, according to trade union estimates.

Yet with nearly a million more consigned to unemployment and job-seekers’ allowance, Osborne reckons he can still cut the welfare budget by £7 billion.

His decision to raise the retirement age to 66 by 2020 will also add to the numbers claiming job-seekers’ allowance. And so will his decision to cut university funding and remove the cap on university fees.

He has said that for now pensioners will keep their free bus passes and the winter fuel allowance will be made permanent.

This shows he is more afraid of militant pensioners than he is of telling whoppers.

Experience shows that the pensioners’ movement has more sense than to allow these reassurances to lull them into complacency.

Last June Osborne cancelled the planned Labour programme of urgent repairs to England’s school buildings, wasting hundreds of thousands in planning and preparations.


Now he has set aside £15.8 billion over the next four years to refurbish schools. This shows a serious lack of clarity and consistency in his policies — and that he is susceptible to the pressure of mass campaigns.

School budgets and NHS spending are to be increased every year — but by an amount that will almost certainly be less than inflation and so effectively cuts.

Overseas aid is also protected. This is not out of generosity to the desperately poor of the Third World but because it is always handed out with strings. It inevitably brings back a wealthy profit for British businesses that are eager to privatise and exploit utilities in the Third World. Effectively the money goes indirectly from taxpayers into the pockets of British companies.

Osborne says he plans to build 150,000 new “affordable home” funded by raising council house rents.

The defence budget — currently at £46.1 billion, is to be cut by eight per cent over the fours years — while other departments will be cut by far more. The RAF and Navy will lose 5,000 jobs each, the Army 7,000 and the Ministry of Defence 25,000 civilian staff.


The Harrier jump jets and the Ark Royal aircraft carrier are being axed while the planned Nimrod spy planes will be cancelled. A key spending decision on Trident is to be delayed until 2016.

This will not please Nato nor the US arms manufacturer Lockheed Martin, which looks on the British government as a secure market. Expect a visit soon from a troubled Hillary Clinton and some back-tracking.

The BBC licence fee is to be frozen — a sop to Rupert Murdoch to ensure his continued support of the Con-Dem coalition.

Various projects associated with current London mayor, Boris Johnson, have been spared the axe, including Crossrail and the western extension of the congestion charge.

But one sop to popular appeal — that is not quite as hard as it may seem — has been a cut to the Civil List — the Royal household budget, currently at £33.6 billion. This will be frozen for a year. But the Queen will be given £1 billion in 2012 to celebrate her diamond jubilee.

After 2013 the Queen will get a new Sovereign Support Grant linked to Crown Estate revenue.

There will be £900 million “extra” for chasing tax evaders — that will be hardly noticeable after the civil service cuts. Token bank taxes are mentioned but the banks will ignore them.

But all these plans hinge on things going according to Osborne’s plans, and they are the plans of an amateur sixth-former with dyscalculia (the arithmetic equivalent of dyslexia).

There are no provisions for the vast army of unemployed — and homeless — that these cuts will produce. These people will be angry, and we hope angry enough to take to the streets and fight back. There will be fewer police to prevent them.And worse than that from a capitalist point of view, these newly impoverished people will stop buying stuff. The domestic market will vanish and there will be a new, bigger financial crisis.

Osborne has ruled out another banking bail out — and indeed the country could not afford it. Capitalism will have reached a point when it can no longer continue in the same way, and we must be ready and organised for that point.

Our comrades in Greece and France and many other places are already preparing for that moment.