Austerity for Workers Alone in British Budget

24/06/10

With Britain’s Stormont administration aiming to implement £128 million [€156 million] in cuts following last month’s British government emergency budget, on top of £370 million [€451 million] in cuts agreed in the Six County assembly last September, the budget report on Tuesday [June 22] by the new Tory-led government was never going to bring much good news.

In his speech in Westminster, British chancellor of the exchequer George Osbourne said his “tough but fair” budget would focus primarily on spending cuts as a means of addressing the deficit, with a round of tax increases on the way as well.

Osbourne plans to cut spending by £32 billion [€39 billion], including £11 billion [€13.4 billion] in welfare, along with a 25 per cent cut in government department spending, except health.

Among the announcements there was:

• A rise in VAT rate from 17.5 per cent to 20 per cent
• A two-year pay freeze for public sector workers earning over £21,000 [€25,600]
• State pension age to be raised to 66, and state pension will now be based on earnings
• A freeze in child benefits for the next three years
• Sure Start maternity grants to be restricted to the first child only, the health in pregnancy grant to be abolished, the baby element of child tax credits to be abolished and child tax credits to be reduced for families earning over £40,000 [€48,800]
• A cap on housing benefits to a maximum of £400 [€488] for a four-bedroom house
• Corporation tax to be reduced from 28 per cent by 1 per cent a year until it reaches 24 per cent
• The partial privatisation of Royal Mail
• The introduction of a bank levy expected to raise around £2 billion [€2.4 billion] per year, though bankers’ bonuses will remain untouched [City of London bonuses amounted to around £5 billion [€6.1 billion] last year].

Trade unions have reacted with anger at the plans contained in the British budget. Dave Prentis, general secretary of Unison, said: “This budget signals that the battle for Britain’s public services has begun with the government declaring war. Public sector workers will be shocked and angry that they are the innocent victims of job cuts and pay freezes.

“Freezing public sector pay when inflation is running at 5.1 per cent and VAT is going up will mean a real cut in living standards for millions of ordinary workers and their families already struggling to pay rising bills.”

Osbourne has also said that he will publish a paper on ‘balancing’ the Six County economy at some point later in the year. Given that the main thrust of the Tory budget is an attack on the public sector and on social welfare, the Six Counties being more dependant on both than anywhere in Britain should be a cause of major concern to all working class people.

Rúnaí ginearálta éirígí Breandán Mac Cionnaith said: “Despite the rhetoric from the Tories that we are all in this together, it’s clear from the British government budget that the wealthy will only feel a brief prick while working class people will be left suffering for years to come from these measures.

“There has been a neo-liberal, Thatcherite consensus among the Stormont parties over the past few years. The introduction of private finance into various public services is a clear example of that. With the Tories wielding power again this process will without doubt be accelerated. Stormont’s finance minister is already talking of introducing water charges, an obvious prelude to the privatisation of that essential resource.

“It’s clear though that the Stormont parties are not concerned by these issues. When Stormont agreed its £370 million of cuts last year, the DUP and Sinn Féin went to Downing Street asking for £1 billion [€1.2 billion] to take care of the PSNI, while not a peep was raised about financing vital services such as health and education.”

Mac Cionnaith concluded: “It falls to the rest of us then, to the working class people who have nothing to gain from the political representatives of the British capitalist class at Westminster, to take a stand and resist these draconian measures. Our only chance is to organise ourselves in our workplaces and in our communities, while we still have them to organise in.”