Osborne: in a hole and still digging

by Daphne Liddle

CHANCELLOR George Osborne says he wants to help “hard-working people”. But the budget he delivered last Wednesday is yet another blow to the working class.

Over the past two-and-a-half years his austerity measures have destroyed jobs, devastated wages, thrown “hard-working families” out of their homes and plundered the meagre benefits of the sick and disabled.

And the budget Osborne delivered on Wednesday is yet another blow to the working classes. Government debt is rising, growth forecasts have been halved from this time last year, unemployment has leapt up and shops continue to close on Britain’s high streets because most people cannot afford to buy.

Government departments — already devastated by cuts — are expected to slice another one per cent off. Public sector wages are to be frozen for a year longer until 2015- 16 while inflation rises. The target rise in inflation is two per cent but that is unrealistic — so wage freezes are really wage cuts. Paul Kenny, general secretary of the GMB union, said: “The Tory/Liberal government has not pulled off ‘mission impossible,’ which is to deflate the economy to growth and a balanced budget. “Osborne sticking to plan A after three years fits Einstein’s definition of insanity, which is doing the same thing over and over again and expecting different results.”

The year-on-year spending deficit has come down a little since the massive banking bailouts of 2008-09 but the total accumulated debt continues to rise and is now expected to peak in 2017-18 at 84.8 per cent of gross domestic product.

Last December Osborne was saying it would peak in 2016-17 at 79.9 per cent. The economy is expected to grow at a rate of just 0.6 per cent this year — half of what was predicted in December. Osborne has added in a few cosmetic frills that will be inaccessible to those on low incomes — which is more and more of us every day. There will be childcare vouchers, worth £1,200 per child, to pay part of the costs of childcare but can only be used by those who can afford to make up the difference.

And since the childcare industry is about to raise its prices by around 20 per cent — it is these companies who will get the benefit of these vouchers.

In the same way that the new cap on social care costs for the elderly in residential care homes at £75,000 will rescue those who have more than this in savings from having to sell their homes to pay for care. But most elderly people who have bought their homes will still have to sell-up to meet care costs.

Osborne will invest in some transport schemes to promote growth but not in building desperately needed council housing.

Indeed he has stepped up the policy that has done most to create the current housing crisis for workers on low wages by increasing the discount on the price of their homes to council tenants who want to buy their homes to £100,000.

And under the current level of economic insecurity most tenants who can, or think they can afford to buy will do so. The houses will end up in the private sector — many being bought for profit by private sector landlords who will charge tenants many times more than the council rents. And councils will be left with smaller and smaller housing stock.

Corporation tax is to be cut yet another one per cent to 20 per cent and the capital gains tax holiday is to be extended. Raising the level at which earners start paying tax to £10,000-a-year will help the low waged a little but the high waged a lot as more of their income falls under lower thresholds.

On environmental issues Osborne is going to assist the development of retrieving shale gas (fracking), which, he declares, is the future of British energy policy. Most environmentalists will be wondering how this is supposed to reduce production of carbon dioxide and other greenhouse gases.

Unemployment levels have risen by 7,000 —5,000 of whom were women — over the last quarter to 2,500,000. The Government blames the rise on the numbers of people leaving school and college last year.

But not so many are getting any kind of unemployment benefit, probably because it is becoming harder to get.

It is another shockingly awful budget for workers and for anyone on a low income.