Osborne Announces Cuts That Take the UK Economy Back to 1948

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Under Coalition plans, “day to day spending on public services… (will be at) It’s smallest share of national income since 1948”.  George Osborne’s 2013 Autumn Statement on spending plans for the UK government consisted of 7,025 words and took 50 minutes to read – but could have been summed up by that one line in the report of the government’s fiscal watchdog, the Office for Budget Responsibility.

Ideological Austerity

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On arrival in government, the Conservative section of the Coalition government were keen to present austerity as temporary, necessary and purely practical.  Back in 2010, Cameron claimed that he “didn’t come into politics to make cuts”, and that austerity was simply temporary spending restraint based on a necessary effort to cut the deficit, not “some ideological zeal”.

In 2013, ‘Austerity’ is delivering the half century long ambition of the Conservative party:  to revoke the post-war social contract of the United Kingdom.

The modern welfare state: decent pensions, affordable and decent social housing, a publicly funded and managed healthcare system, a reliable and low cost transport system, the guarantee of a decent education regardless of circumstances of birth.  This was the social contract the UK public signed up to in the post war period.  Why? Because these generations had lived through the horrific consequences of unrestrained capitalism; enormous inequality, widespread poverty and destitution, starving and malnourished children, an entrenched class system, the benefits of the hard work of the many enjoyed by a privileged and undeserving few.

David Cameron is taking the country back to those dark days.  Wearing white tie, standing at a gilded lectern, speaking to the Bankers and Brokers of The City of London recently (pictured above) – he stated categorically that Austerity is ideological, and permanent under a Tory government.

The Impact of Austerity

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Osborne’s Autumn Statement was nothing more than confirmation of a status quo with which we should all be achingly familiar by now.  The government provides tax cuts and subsidies to corporations, paid for by public money they remove from public services.  Even the meagre sops to the masses of Free School meals for the first three years of a child’s education, cancelling a rise in fuel duty and a married couple’s tax allowance  were revealed by the OBR as unfunded past 2015 – meaning they are short term pre-election incentives.

Today, Osborne announced a “responsible recovery for all”. Who is he kidding?

Life at the Top

Corporation Tax is lower today than at any time in its history.  Company taxes now constitute only 12.5% (Corporation Tax is just 7%) of the tax revenues of the UK.  In comparison, the people’s taxes, (income tax and VAT) make up more than 60% of the tax income.

UK Corporation Tax in 1984 was 52%.  By 1986 it was 36%.  In 1999 it dropped to 30%.  Under the Coalition, Corporation Tax has been cut from 28% to 20%.

The Top Rate of Tax has been cut by 5% – meaning that someone earning £1million a year will be saving £107,500 a year.

Yet in spite of this largesse from government, tax avoidance is costing us almost £70bn each year.

Only one in four of the UK’s top companies pay their taxes, meanwhile they receive tax credits to the tune of hundreds of millions of pounds by people who did pay their taxes.

The Assault on the Welfare State

The Health & Social Care Act has effectively privatised half of the National Health Service, whilst new competition regulations going live in April open the service up to the highest bidders to take over.

The Academy and Free Schools programmes turn public schools in profit making companies, and PFI debt is transferring ownership of schools from the state sector to banks.

The profit making public asset of the Royal Mail was sold off for less than half its value, gifting a working service and vast profits to wealthy investors while defrauding the taxpayer.

Public sector workers (nurses, street cleaners, teachers, scientists) have had their pay restricted to a 1% rise each year.  With inflation at almost 3% this amounts to a real terms wage cut of 2% for the last three years.

The cut in Council Tax Benefit (which supports the same groups) rolled out this April will mean rise of up to 333% in council tax bills.

Workfare has been imposed which has ended the tradition of a contribution based social security system.  Workfare means despite a person’s contributions, they are forced to work full time for months at a time for corporations in order to receive the social security payment they are already entitled to.  If they refuse, they lose their benefit.

The cumulative impact of the Bedroom Tax, the Benefits Cap and cuts to disability benefit meant 600,000 disabled people losing as much as £131 a week.

Over 90% of all care home provision (up from 61% in 1990) to elderly people is in the independent/private sector after the public sector was encouraged to outsource provision in an effort to cut costs.  The same period has seen an astronomical rise is the cost of care home places.

Life at the Bottom

The cost of living is rising at four times the rate of wages.  In fact UK wages are falling faster than any other ‘developed’ country.

Thirty four disabled people have killed themselves, and 32 have died every week while undergoing stressful ATOS ‘work capability assessments’ over the last three years.  Hate crimes against disabled people shot up 25% in 2012.

The number of people reliant on Food Banks tripled in the last year, with 350,000 people unable to feed themselves without charity support.  This winter, the Red Cross will be launching its first emergency food aid programme on UK soil since World War II.

Statutory Homelessness [1] rose by 21% in England and 17% in Wales in 2012[2]. While Rough Sleeping has risen even faster, at 31% in England.  Outreach workers from Homeless Charity Crisis performed a count in London which found a 62% rise in rough sleepers in the capital in just the last two years [3].

The average cost of a single room in a care home has risen to over £27,000 a year.  This is higher than the average UK annual wage (£26,000) and more than double the average annual pension income of £13,208.  In fact since 2011, care home costs have risen at twice the rate of inflation. Yet last year, the regulatory body for the UKs care homes The Care Quality Commission (CQC) published a damning report that showed that more than half of all elderly and people with disabilities in care homes were being denied basic care.

1 in 6 British pensioners now live in poverty, and 24,000 will die this winter because they cannot afford to heat their homes.

Economic Recovery?

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According to George Osborne and large sections of the mainstream media; the UK is in economic recovery.  The economy is scheduled to grow by 1.4% this year, more people are in employment, and the deficit is shrinking.

In reality, the basis of this ‘economic growth’ is an unsustainable rise in private consumption, which can only be temporary as those consumers are using debt to consume. The government know this, it is stated clearly in the report by the OBR.  It is temporary, and debt based.

The government has used benefit sanctions to reduce the numbers of people claiming out of work benefits, and used that to argue more people are in work.  The security and dignity of employment has also been diminished.  Workfare, zero hours contracts, and other non-jobs mean that whilst people appear as employed, that employment is neither secure, nor adequate to meet their living costs or their aspirations.

This is not an economic recovery by any reasonable definition of the term.

What is the point of GDP growth, if the benefits are not increasing the quality of our lives?  The only reason for the public to care about economic growth, is the promise that it equates to a better life for us all.  Hunger, poverty, and homelessness rising exponentially in a time of economic growth, can only ever be a political choice.  Austerity is planned hunger, planned poverty, and planned homelessness.  It is the deliberate destitution of the many, to benefit the few.

If the Coalition stay in power or their spending plans are continued (as Labour has all but pledged) to 2018 – it will have taken them just eight years to roll back the UK welfare state sixty years.  It is long overdue that compassionate citizens presented a credible and committed resistance.  Not only to this renegade chancellor, but an entire political and economic system that has enabled corporations to buy the parliamentary system, neuter any diversity of political voices, and dismantle the promise of a fair chance for all.

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22 thoughts on “Osborne Announces Cuts That Take the UK Economy Back to 1948

  1. Pingback: Here is How the UK Govt Hid 1 million Jobless From Today’s Unemployment Figures | THE SIEGE OF BRITAIN

  2. Pingback: Best frontline blogs this week

  3. When the Tories and their lapdogs came in, despite the ‘need’ to bail out the banks our nation under the last government had positive growth, and a debit balance (National Debt) of 760 billion. As a nation we now owe £1160 billion. So for all the pain, the deaths, the homelessness and marginalisation of large sections of society caused by this ‘austerity’ policy, we now owe more than 50% extra in just four years.

    Check my figures on ukpublicspending where you can note that our National Debt is still historically quite low.

  4. You forget to mention much of the world has similar problems at present and mention nothing of the labour attitude of spending more than you earn that has contributed to this!
    Instead of this rhetoric you spout maybe you should try to come up with some answers. The last labour government didn’t have them, this conservative governemnt doesn’t have them, I don’t have them but you seem to be wiser than most so please take front and centre with a way forward rather than some self obsessed bullshit..
    Regards

    • We have come up with answer, a move towards a more progressive form of capitalism that caters for the dynamics of the 21st Century and the needs of most of the population. I am sure you are aware that it is not doing so and in fact exacerbating the socio-economic divide. The flaws in the system have been pointed out. There has been protest and disquiet and that is leading to change such as caps on energy price rises, transport price rises all of which would have sailed through if it were not for public pressure and discontent. This is the evolution towards controlled capitalism as it should be because in the same way it is better all round if a dog is trained and kept on a lead where it might endanger others. You may not have the answers but the change is already happening as a result of changes in awareness and resulting behavioural change by the three main constituents of society, namely, people, government and commerce. This article is pointing out the degree to which this chancellor wishes to obstruct that progress. However the people are stronger. You talk of taking front and centre. I was protesting with Occupy, I was protesting against the energy companies. I have outlined the solution so I suggest you go back to your cup of tea and slippers and stop your bullshit slating from the sidelines

  5. Pingback: Govt cuts that take the economy back to 1948. Information worth reading. | Doug Wright Save YOUR Services

  6. Thank God for this glorious ecomonic summer. The slaves in the galleys and the poor in the slums rejoice in the prosperity of the rich and pray that they enjoy to the full God’s blessings for their labours. How hard the rich work to provide us with all the good things we are so eager to buy.

  7. We don’t need a social care infrastructure. We need a viable population. If people are born who are not economically viable they should not have been born. As citizens we have the right to work. If you’re unemployed for six months you should be sterilised. After a year as a parasite euthanasia would be the appropriate course, so much better than starvation. And, as Swift said, the poor can always eat their children. They’re not good for much else.

  8. Pingback: Osborne Announces Cuts That Take the UK Economy Back to 1948 | Research Material

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  10. I am not espousing the politics of greed and envy – I have more in common with the “toffs” in terms of income. I do however hate consumerism, which the govt encourages, and I do have compassion which appears to be sadly lacking in Parliament.

  11. Are you sure you are left wing Michael? You do not sound it. Corporation tax – yes it might actually be better to increase VAT rather than corporation tax since both are passed on to the consumer anyway but it is harder for corporations to wriggle out of paying it like they wriggle out of corporation tax. However everything else is irrelevant. First, you are right bedroom tax is not a tax but it is a way of reducing benefits to vulnerable people For many there are no suitable smaller flats to move into so they are stuck with high rents and no state help. The only advantage of PFI is to make the books look better. The state could borrow that money to improve schools and hospitals without involving the private sector but that would increase public sector borrowing which does not look good. What PFI does is the equivalent of maxing your credit card. You end up making repayments for far longer than the life of whatever you bought and end up paying 20 times what it was worth. And because the private company is running things it is much harder to make changes to the structures if they are needed a year or two down the line. The NHS is not being privatised, you are right. However, private providers will take on the profit making bits leaving the state to manage the chronically ill, the old, the mentally ill and anything that does not make money. People who can will take out private health insurance to protect themselves and those who can’t will be left with a Medicare type service covering the basics if they are unlucky enough to get sick with a non lucrative condition. As far as debt, this country’s biggest problem is personal debt – unlike other parts of Europe where government debt is the problem. The government is encouraging home buyers to take on big mortgages and encouraging the rest of us to spend since this leads to “growth”. Except that growth is illusory, based on debt and does nothing to counter the real problem which is lack of investment in real businesses.

  12. As per usual an excellent analysis and dissection of the desired ideology of the tory elite-austerity used as a means of dismantling the state as an effective and valuable asset. This is a spiteful and dishonest government driven by its idolatry of austerity enforcement of pain and despair throughout the mass population. All under a minority government with the assistance and collusion by the lib dems and their power obsessed leadership. I continue to remind people who care to listen to me how much a Clement Atlee government achieved and aimed for under much more severe financial limits! It was all about a belief in wanting to do what was right for the greater good of the mass population and what sort of vision of a society Atlee and his government desired. The people were the priority. Osborne and Cameron are driven by profits for the privileged few, the financial gains for corporations and businesses that all are the supporters and promoters and protectors of conservative self interest.

  13. Time for a General Strike to bring this government of elites to their knees. I am ashamed that the improvements to our society made by a generation that fought for our freedom is being torn to shreds by people who think it is their god given right to destroy ordinary people’s lives. They are driven by their own fear that they will never have enough and its time we turned this fear against them and stood up in a united front to get them out of power before it is too late.

  14. Excellent as usual. Unfortunately the credible and passionate resistance is not forthcoming. Passion is there a plenty but protests are too varied, too chaotic and shortly to be illegal. Where is the Nigel Farage of the left, with the compassion, the charm and rhetoric to win over the apathetic, and importantly, the financial clout to make herself heard? JK for PM?

  15. Your accumulated posts constitute the best demolition of government policies across the board of any that I have read, including those of distinguished academics and columnists. Keep at it, more people are reading and listening.

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