Osborne Reveals Real Aim Of Austerity: Public Sector To Be Cut To 1930’s Levels In Next Four Years

003 Scott BrownGeorge Osborne’s Autumn Statement today has deftly underscored a point we have been making at Scriptonite Daily since 2010 – Austerity is not a temporary measure to balance the books, but an ideological commitment to remove the NHS and the rest of the post World War II welfare state. According to the Office for Budget Responsibility, Osborne’s latest round of planned cuts will reduce public spending to the levels of the 1930’s.

Austerity is Ideological

004 rushOn 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 2014, ‘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.

Osborne’s Autumn Statement has revealed that this mission will be complete by the budget of 2019/20 if their current budget plans remain unchallenged.

Austerity’s Broken Promises

003 Scott BrownIn 2010, Osborne presented Austerity as the solution to our budget deficit – it was an unpleasant but necessary short term measure to restore stability.  It would take just one parliament, he said.  But what has austerity actually delivered?

In 2010, Osborne promised public borrowing would have fallen to £76bn – it stands at £91bn this year.  The UK government is currently borrowing £2bn a week just to meet it’s spending commitments, this is up 10% on last year when it should have fallen 12%. As a result, Britain’s national debt is not falling, but increasing. The national debt has now hit 87.2% of GDP, worse than the EU average and rising at a faster rate.

In 2010, Osborne promised the deficit would stand at just 1.2% of GDP, it stands at almost 6%.  This is incomprehensible, when compared to the performance of the Eurozone. The eurozone’s deficit has fallen through the same period, down to just 2.9% in 2013.

What economic growth there has been has come at the expense, predominantly of working people – in the form of pay cuts and drastic reductions in terms and conditions.  In short, it is not true economic growth.  While companies have increased their profits, the associated rise in wages and living conditions has not happened.  Why? Because these profits have been made by cutting wages and living conditions of employed and unemployed people.

The Results of Austerity

003 Scott BrownIf Austerity hasn’t delivered falling public borrowing, or eliminated the deficit, or increased the living conditions of the UK population – what has it actually achieved?

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.

Osborne’s Latest Austerity Promise

003 Scott BrownFor every new wave of disaster caused by the ideology of neoliberalism, it’s proponents prescribe more neoliberalism to ‘cure’ it.

Osborne’s neoliberal Austerity has delivered nothing to the UK expect ever deepening economic inequality, and destitution for the poorest and most vulnerable communities in the country – so what did Osborne announce today?  Four more years of it.   He said today:

“Do we squander the economic security we have gained, go back to the disastrous decisions on spending and borrowing and welfare that got us into this mess?”

But it was none of those things that caused the Financial Crisis.The crisis was caused by the derivatives market of the Financial Services industry.  It was also entirely foreseeable, and was predicted by critics of neoliberalism.  The world’s second richest man, Warren Buffet warned us in 2003 that the derivatives market was ‘devised by madmen’ and a ‘weapon of mass destruction’ – and when it blew up in 2007/8, government’s used public money to plug the hole.

In the bailout of 2008/9, the UK government guaranteed funding to the banking sector of 101% of GDP.  That is, the UK diverted over £2trn of tax payer money from public expenditure, to a handful of banks.

This is equivalent to almost 3 times its entire annual budgettwenty years of NHS spending (£106.7bn a year); forty years of education spending (£48.2bn); or five hundred years of job seekers allowance (£4.9bn a year).

This is what punched a hole in the nation’s finances, not on an overgenerous welfare state and public spending programmes.

Worse, the next financial crash is moving ever closer as the behaviours that caused it (and went unpunished) continue today.

The news that should have us all worried is: the derivatives market contains $700trn of these debts yet to implode.  As global GDP stands at $69.4trn a year, this means that (primarily) Wall Street and the City of London have run up phantom paper debts of more than ten times the annual earnings of the entire planet.

What are Osborne and co putting in place to prevent this? Nothing. More public spending cuts, more tax cuts.

The OBR’s report on Osborne’s budget plans makes the stark warning that 60% of the spending cuts have not yet been implemented in this parliament, and Osborne’s planned cuts will mean that by the end of the next government (if the Conservative parties lead said government) public spending is projected to fall to its lowest level as a proportion of GDP since the 1930s. A decade in which we had no public education system, no National Health Service, no council housing.  Something will break – either the public finances, or the public services…and you already know exactly what solution Osborne will recommend then.

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24 thoughts on “Osborne Reveals Real Aim Of Austerity: Public Sector To Be Cut To 1930’s Levels In Next Four Years

  1. Pingback: Surviving the savagery of peace | Creators not Consumers

  2. Pingback: The sacrifice of innocents to austerity | Creators not Consumers

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  6. How about changing the way MPs are selected, so that they can truly be understanding and representative of their constituents and not tied to party ideologies? Simon Killane has just launched this:
    http://www.makingwiltshirebetter.co.uk/ .
    It’s a way to fill Parliament with people like him who really understand and respect constituents, rather than with planted, independently wealthy MPs.

  7. How about changing the way MPs are selected, so that they can truly be understanding and representative of their constituents and not tied to party ideologies? Simon Killane has just launched this: http://www.makingwiltshirebetter.co.uk/ . It’s a way to fill Parliament with people like him who really understand and respect constituents, rather than with planted, independently wealthy MPs.

  8. How about changing the way MPs are selected, so that they can truly be understanding and representative of their constituents and not tied to party ideologies? Simon Killane has just launched this: http://www.makingwiltshirebetter.co.uk/ . It’s a way to fill Parliament with people like him who really understand and respect constituents, rather than with planted, independently wealthy MPs.

  9. Propagandist Paradigm BS. Admit like me you’re a loser and a slacker, then get the help you need to set yourself up for this ‘austere future’ so you won’t be a selfish, greedy little socialite with your haughty self-assessed puffed up ‘working-class’ Mortgage brought to you by Mme Thatcher and the Property Ladder. Socialism is done. So is Capitalism because humankind is flawed. Are you through though?

    • “let them die and reduce the surplus population”. Wait till you’re old and it’s *your* turn on the chopping block.

  10. Government is Antoinesque.
    Politics is broken.
    Democracy is dead.
    Parliament is not fit for purpose.
    Government has become the enemy of the People.

    This government is corrupt.
    The corruption is absolute, lead from the top down, and out of control.
    Being rotten to the core and from the core, everything it touches it taints.
    Having neither the will nor ability to change, outside intervention is indicated.

    Any persons who fail to act appropriately when faced with corruption,
    or condone in any way the actions of those determined as corrupt,
    become, by definition, corrupt themselves.

    There comes a time when, for the sake of humanity, society and civilisation,
    it is not only the choice of a person to throw out corrupt governance,
    but a duty.

    The banksters are but one part of ‘the establishment ‘ that depends upon corruption to exist.
    The inextricable entanglement is both endemic and systemic.

    It is those in power who are the terrorists, having destroyed our society from within.

  11. A coalition government which according to you seeks to end the post war consensus on the welfare state is it seems so utterly incompetent that it’s borrowing still rises, borrowing to sustain in part the welfare state you claim it’s seeks to destroy. Mmmmmm

    • Read it again, you’ve missed the whole premise. The borrowing increases but is not being spent on the things that would drive an economy that serves the country – infrastructure, education, healthcare etc – it’s being used to leverage private financial services industry interests in the form of PFI, private contracts and so on. Diverting funding from actually doing things, to commodifying them.

  12. For me this was the Tory austerity agenda from the start, now completely transparent. This budget reflects a class war being waged to minimise the value of the social wage, to further maximise the surplus value accrued to the capitalist class and also minimise that accrued to wage labour. This not rocket science, ideology or hegemony but a conscious strategy ongoing since 1979, taking us back to 1930’s levels of social equity (the dreaded means test, now back in place albeit in a different guise) and eradicating the remnants of the post war gains form 1948 onwards. The Tories needed a coalition to legitimise their intent and the contemptible, renegade Lib Dems. desperate for legitimacy obliged.
    However it is the lack of real opposition and real alternatives over these three and a half decades, which has proved most decisive. New Labour have nothing to do with socialism, they are completely compromised and indeed the Bliar third way (who hears about that anymore) further opened the floodgates of privatisation through PFI’s etc for which we continue to pay; as with Gorgon’s rescue of finance capital in bailing out of the banks, for which we continue to pay; as with all of their crisis ridden, profit driven system, for which we continue to pay. The cost however is now far too steep and with a million public sector job losses on the horizon, I see a sleeping giant waking up through nature driven necessity; beginning to grow conscious of itself, and conscious of its own self interest as a class.
    I have no idea about what the future forms of organisation and struggle will be, no one has a crystal ball but I also see an embryonic emerging awareness, in the occupation movement for example, that we find self empowerment and ultimately self emancipation through radically different forms of organisation, expression and contexts than those existing, though some of these existing institutions and structures will have to suffice for now- the trade unions for example. I didn’t intend to go on like this but like many I have been sidelined and silent too long.

  13. Pingback: 4 December, 2014 – Osborne Reveals Real Aim Of Austerity: Public Sector To Be Cut To 1930’s Levels In Next 4 Years - True Scot News .net

  14. Has no one ever explained to the Tories that the British could get away with not re-distributing wealth back then because it has an Empire to lift resources from at well, which would counteract the general stagnation of homegrown wealth? We do not, in fact, have an Empire anymore, so we have to liven up our native economy ourselves now. That means making sure that the great majority of the population have money to spend, and are healthy and well-enough educated to do the work that we can’t force colonial slaves to do for us any longer.

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  16. Time for the people to rise up and throw out the traitors masquerading as leaders of the country and confiscate their ill gotten gains. Enough is enough, this state of affairs is an outrage.

  17. Pingback: Plan to cut public sector to 1930s levels – Scriptonite Daily | Vox Political

  18. “We the People”

    We the people of this blessed island
    Give notice to “Cameron the Brigand”
    That we the people have had enough
    Of austerity, greed and corruption
    But most of all this unelected junta.

    We the people give notice to all MP’s
    Including the unelected corrupt Lords
    Who are pillaging like common thieves
    Must go from our Parliament post haste
    Before we the people, chuck them out
    On their greedy putrid cursed face.

    We the people have suffered great violence
    With persecution of the poor and innocent
    In a reign of terror reminiscent of Fascism
    That flourished from 1939/45 in Germany
    Those responsible would have stood trial
    For crimes against humanity, just as 1945
    In the docks of the Haig, then put to death.

    Nuremberg was a water-shed for murders
    We the people demand the same treatment
    Be metred out to those who caused the death
    Of thousands of defenceless, innocent souls
    Who’s only earthly crime was to be born poor
    Disabled, old and mentally sick and unemployed
    Trusting corrupt MP’s was there biggest mistake.

    All 650 foul and deranged MP’s must vacate the
    Halls of Crime and corruption and be barred from
    Ever holding office ever again and we the people say
    That all of them be investigated and their bank details
    Scrutinized for the slightest sign of ill-gotten fortunes.

    We the people demand that the place called Parliament
    Be closed down and be turned into a monument to crime
    Injustice and corruption and that a Parliament be erected
    In the centre of England and a second chamber built to house
    An elected body of common men and women and the title
    Of Lord be discarded into the dustbin of history

    So say “We the People”

    (Peter the poet Wicks)

  19. Your article is, as always, completely accurate in terms of its analysis of our present position, and, as always, I applaud your clarity of thought and devastating accumulation of evidence. I hesitate, therefore, to criticise your final statement about the 1930s, but I feel it must be pointed out that we did have public education in that decade and quite an amount of social housing. There was even something called the doctor’s Panel, which gave access to some level of healthcare to poorer people. The early foundations of the welfare state were in fact laid before World War One. The destruction taking place today is therefore undermining the work not just of 60 years but of over a century.

    • Thanks for the positive feedback. Lovely to have you reading.

      I’ve put together a detailed history of the NHS here http://www.scriptonitedaily.com/2013/07/05/the-nhs-at-65-the-coalition-are-retiring-our-public-health-service/ – there was no NHS prior to 1948, and what patchy coverage there was bears no equivalency to the NHS.

      I also draw the distinction between the scattered and inadequate social housing of the pre-ww2 period and post in the second section – it was ad hoc, mostly led by the third sector/philanthropy and not coordinated based on the premise of housing as a right, and a need.

      I agree that the destruction taking place today dismantles the work of over a century, but it would be amiss to draw the distinction of the pre and post war welfare state.

  20. Great article, hope you are getting over the loss of your pussy cat, I feel for you. Your article speaks so much truth, I try to distance myself from what you have written because it it so realistic, It is actually happening under our noses.it scares me to death. Who are these bloody tories aliens maybe ?

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