Pensions, Pay Cuts and Tory Hooligans: the rich mans budget

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While hundreds of thousands of civil servants, teachers and health workers are fighting to defend their pensions, the Tory Lib Dem Coalition are preparing further attacks on all sections of the working class. The March 21st budget was a budget by the rich, for the rich.  Pensioners, those on benefits, the unemployed – all will be hit hard, yet the rich are rewarded with tax handouts.

Chancellor George Osborne has also now raised the prospect of regional pay settlements for public sector employees, resulting in further pay freezes or cuts for workers in large parts of the country.  No doubt many will be angered even more by the Tories utter contempt for front line workers in key essential services; essential that is unless you can afford to use private health care, or send your sons and heirs to public school.

The budget presented tax cuts for rich alongside a whole number of attacks on working class living standards. 330,000 very wealthy people will now enjoy a nice bonus as they see their tax rate cut by 5%. Anyone earning over a million will pocket at least an additional £40,000 a year. The excuse given for cutting the 50p tax rate was that too many people are finding ways to avoid paying it – so crime does pay! They will also do well out of the cut in corporation tax to first 24% and then 22%.

The situation for the poor is very different. Benefits are again under attack with another £10 billion in welfare spending to be cut on top of the £18 billion already planned. The raising of the tax threshold will not help the poorest sections of society either since benefits will be cut to match the increase in pay. As usual, the unemployed did not feature in this budget at all and those on the minimum wage will get nothing at all.

A number of tax increases were sneaked through including the imposition of 20% on a whole number of new items including certain take-away foods. The biggest surprise of all was the imposition of a so-called ‘granny tax.’ The ‘reform’ of pensioners’ personal tax allowances will mean over £3 billion being pocketed by the Chancellor at their expense. Over 350,000 pensioners will lose out by £285 a year for starters.  It has also been announced that the state pension age will henceforth be subject to automatic review. According to a pensions expert at Standard Life, this could mean a steady pushing up of the retirement age so that anyone born this year may have to work until they are 80. (Metro March 22)

The implications of Tory policy have become clear to hundreds of thousands of public sector workers. The gloves are off and a series of battles over key issues are taking place that will determine the future of the public sector for many years. It is no surprise that the strike on November 30th was the biggest day of strike action in 85 years; the attacks on the public sector workers are unparalleled in decades. The announcement on regional pay too is designed to break national pay bargaining, freeze or cut pay and make parts of the public sector more attractive for private buyers in the future. The only way to respond to the challenge is by mobilizing the whole of the power of the trade union movement.

The Tories want to cut public sector pay and pensions to dampen expectations in the private sector. They are afraid that the mood is starting to shift and will have noted that the Sparks dispute well illustrates that militant action pays dividends. This won’t be lost on workers in other sectors of the economy where for a number of years the bosses have had the upper hand.

Not only are large numbers of redundancies from the public sector on the cards over the next few weeks but so far only 12% of planned cuts have been implemented.These together with pay cuts and attacks on pensions will merely cut the market further in Britain creating a downward economic spiral that threatens to aggravate the already dire situation where over a million unemployed young people have been thrown onto the scrapheap. Cuts in education and huge hikes in tuition fees are closing off the options to hundreds of thousands of working class teenagers.

To add insult to injury the Tories are now considering charging workers for the privilege of sitting in traffic jams on underfunded congested motorways, while pushing up rail fares and cutting local government funding for maintenance and repairs.

Every time the government tries to solve its problems with a new policy or with further austerity cuts it only undermines its support and makes the situation worse. As in the days of Margaret Thatcher and John Major, the Tory Party will become a party of the South East of England. The Lib Dems on the other hand look like they are heading the same way as the Dodo.

Capitalism has long outstayed its welcome. The government has been revealed to be precisely what Karl Marx and Frederich Engels suggested in the Communist Manifesto; merely the Executive Committee of the capitalist class. Meanwhile the Labour leaders are offering no way out for working people; deliberately offering nothing so that they can’t be accused of failing to deliver if they make it back into office at the next election.

Workers are looking for answers, not vague promises and shallow commitments. The recent debacle over Miliband and Ed Balls’ statements about a public sector pay freeze has angered even previously loyal sections of the party and the trade union movement. Increasingly the trade union movement is going to demand from Labour a political expression of its struggle in the public sector. The arguments of the Marxists for a complete break with capitalism and for a socialist programme have never been more relevant.

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