Another "Bankers’ Budget" From George Osborne

Osborne was briefly inconvenienced by a small group of courageous female protesters

As Chancellor George Osborne prepared to leave Downing Street for Parliament and deliver his budget on Wednesday afternoon, he found his way temporarily blocked by a small group of courageous female demonstrators. The women locked onto each other, compelling police to remove them from the road. Others held a banner proclaiming “Block the Bankers’ Budget”. It was a small taste of what is to come, ahead of the big anti-cuts demo on Saturday.

Of course, it was a bankers’ budget. In the context of vast unemployment, massive cuts to public services, and skyrocketing inflation, it did nothing to alleviate the suffering of millions. Instead, it focused on making those at the top even more staggeringly rich. This much is now expected of the despised political class.

Osborne’s package had been trailed as a ‘budget for growth’, but in the event, the Chancellor cut growth forecasts from 2.1% to 1.7% this year, and from 2.6% to 2.5% in 2012. Even this seems wildly optimistic, given negative growth (i.e. recession) of 0.5% in the last quarter of 2010, and continued speculation about the future of the euro, and the real worth of the banks’ assets.

Money: he has it and you don’t

Naturally, a key aim of all chancellors is to promote economic growth – i.e. the more thorough exploitation of the working class. To that end, he announced that the government is accepting Lord Hutton’s report on public sector pensions, which recommended (in the refreshingly honest words of a Telegraph article) that government employees “retire later and pay more for a less generous scheme”.

Osborne also cheered big business when he proposed a 2% cut in corporation tax and the slashing of red tape (for which read the cutting of regulations which benefit workers and consumers). Ten new ‘enterprise zones‘ will have lower business rates, and looser planning rules. In the US and elsewhere, this type of policy has been linked to poverty pay and precarious employment.

In his televised Budget Statement, Osborne made much of his personal tax reforms, which mean people can earn more before they have to pay tax. But this will be swallowed up by the January VAT rise, a 1% rise in National Insurance contributions, and the current cost of living, when many workers didn’t receive pay rises last year.

Tax on fuel went down by a penny per litre, but with oil prices going up by the week, this will provide little relief for struggling households.

Similarly, the extension of the bankers’ levy is something of an illusion. It is expected to bring in a mere £2.5 billion, which is a tiny fraction of the trillion pounds the Brown government handed over to the financial aristocrats. At best, it is a pin-prick tax, allowing the Coalition to posture as enemies of the bankers, while the recent ‘Project Merlin’ settlement proves the exact opposite.

Despite these relatively minor changes to the government’s plans, it was quite a quiet budget overall, with the big numbers having been announced just a few months ago, in Osborne’s Comprehensive Spending Review.
Some of the anger aroused by the brutal cuts he outlined in November will be felt on the streets of London this coming Saturday. But whatever happens, Saturday must only be the starting gun for a new workers’ movement, which could challenge and ultimately overthrow this bankers’ government.