A budget for class war

by Daphne Liddle

CHANCELLOR George Osborne has delivered his third Budget blatantly favouring the very rich and doing nothing useful for the millions who have suffered from the Con-Dem Coalition cuts in the two years since it came to power.

He announced that the 5p per cent rate of tax on the super-rich is to be cut to 45p from April 2013.

He claimed: “No chancellor can justify a tax rate that damages our economy and raises next to nothing.”

Then, pretending to be helping the poor, he raised the personal income tax allowance up £1,100 from the £8,105 level this April to £9,205 from April 2013. This is a confidence trick. It does help low-paid people in that earnings range a little — but not nearly as much as they have lost from inflation.

But it helps the rich a lot more. As their personal allowance rises, so less of their income falls into the higher tax bracket and they save a lot more than the poor from this measure.

If Osborne really wants to help the low-paid he would cut VAT — which everyone has to pay however low their wage or benefit.

Earlier this week the transport union RMT warned that social breakdown and further riots would follow as the Con-Dem Coalition of public school-educated millionaires prepares to widen the gap between rich and poor by handing out tax cuts to the rich while hammering jobs, wages and services in the country’s public sector.


RMT general secretary Bob Crow said: “If all the leaks and spin are to be believed this rotten Government of the wealthy elite is planning to hand out tax cuts for the rich while presiding over attacks on transport and the wider public services that would reduce them to rubble.

“The gap between rich and poor has widened to unprecedented levels in modern times under this bunch of chancers and further concessions to the rich would impact directly on social cohesion and the anger generated could well spill over into further riots on Britain’s streets as the disaffected and disenfranchised lash out at a system that has failed them.”

On Wednesday the RMT joined other unions and protesters for a Budget Day demonstration in Westminster.

Companies were rewarded with further cuts in corporation tax. This tax has been cut regularly throughout the last two decades and is only a fraction of what it was. And even then the giant companies find a way to get out of paying it. Corporation tax will be cut to 24 per cent in April, having already cut to 26 per cent from 28 per cent. It will be down to 22 per cent by 2014.


“This is the biggest sustained reduction in business tax rates for a generation,” boasted Osborne. “It is an advertisement for jobs and investment in Britain.”

Age-related allowances for pensioners to be simplified over time, starting in April 2013, creating a single personal allowance for all but ensuring no pensioner loses in cash terms.

Osborne was full of optimistic predictions for the state of the economy.

The Office for Budget Responsibility (OBR) has revised up its prediction for growth in Britain for 2012 to 0.8 per cent — from 0.7 per cent.

The forecast for 2013 is twp per cent, for 2014 is 2.7 per cent, and in each of the two years after that three per cent.

This is in spite of the Eurozone growth forecast for this year being revised down from 0.5 per cent to — minus 0.3 per cent.

Inflation in Britain is forecast to fall from 2.8 per cent this year to 1.9 per cent next year. How this is supposed to happen when only the very rich will have any money to spend and the number having to claim benefits is rising steadily — and when the rest of Europe is in economic turmoil that is steadily worsening — only the Con-Dems know.

This Budget just proves again that the Cabinet is living in a fantasy world and sooner or later the people of this country are going to give them a real shock. But that shock will be more effective if the working class retaliation is organised and planned. Riots and spontaneous angry gestures leave those who make them isolated and vulnerable to swingeing penalties from this vicious ruling class.

The strength of workers is in our numbers and that can only be effective if we work together, angry but organised.