£81 billion cuts announced on "axe Wednesday"
So brutal, so vicious are the £81 billion cuts announced by George Osborne on ‘Axe Wednesday’ that nothing short of action of mass dimensions by the organised might of the labour movement is acceptable. These measures, to be implemented over four years, turn back the clock for the working class – particularly for the poorest section of the population – to the 1930s and, for many, in some respects to the Dickensian conditions of the 19th century.
They are the ‘gift’ from their government to the bond markets to prevent them from ending funding of the government’s deficit. Interest payments on the national debt are now £44 million a day or about £270 a year for every man, woman and child in the UK. We should not pay a penny to the bond-market bloodsuckers! The ‘debt’, which is not ours, should not be paid. Break their blackmail of the British people! Nationalise the banks and top finance as a means of controlling all inward and outward movement of capital!
The fact that the Con-Dem government flagged up most of the measures before Osborne’s statement on 20 October does nothing to lessen the bitter anger, the fear and the sense of pervasive insecurity which now affects millions of working-class people. Osborne announced a 3% increase in the pension contributions of six million public sector workers. Given the three-year pay freeze imposed by the government, this is an officially sanctioned government pay cut.
A horrifying £7 billion cut in welfare spending, including cuts to childcare payments of £1,560 a year for families with two children, now looms over millions. This, while the bankers have pocketed £7 billion in bonuses. The ‘heroic’ attacks on the banks have just trimmed their fingernails! A US-style time limit on benefits for those who lose their jobs through illness will also be imposed.
This is against a background of almost three million unemployed that will become four million if half a million public-sector jobs go, as Osborne intends, which will be added to by the half a million private-sector jobs that will also evaporate. This is to be combined with a horrifying 19% across-the board cut in government spending which will force up rail fares, council taxes and rents. Tory and Liberal Democrat councils will pass on the cuts. It will be criminal if Labour councils do the same. The policy of the ‘dented shield’ is now a fallacy. Labour councils must fight! They must follow the ‘Liverpool road’ in organising local communities to resist.
Indeed the measures on the withdrawal of housing benefit and the cutting of council tax benefit will affect millions of the very poorest sections of society. Osborne, in proposing these measures, together with his boss Cameron, personifies the cold cruelty of the British ruling class. Under-35 year-olds will receive benefits for just one room, many forced to live in a modern-day ‘prison cell’. Perhaps this will be followed by the Queen, or even Cameron or Osborne, following suit and occupying one room in Buckingham Palace or their many mansions! Millions of council house tenants will have their lives disrupted, their living standards arbitrarily cut as they are forced to pay up to 80% of their income on rent.
Tenants who have occupied their homes or flats for years and sometimes for generations, will now be ‘encouraged’ to vacate them for richer clients. If the government gets away with this monstrous proposal, a form of ‘social cleansing’, millions will effectively be evicted. One anonymous Tory minister confessed to the London Evening Standard’s political editor that this will be similar to the ‘Highland clearances’ that decimated Scotland and resulted in the crofters and small farmers being driven off the land into the slums of Glasgow and elsewhere while one million sheep took their place! It will be very rich ‘sheep’ who will become the new occupiers of former social housing. New rent strikes, as were seen during the First World War in Glasgow and in England in the 1960s, will result from this.
TUC general secretary Brendan Barber at a protest against job cuts
The most serious cuts are perhaps those aimed at slashing jobs in the public sector, which will severely impact on low-paid civil servants, represented by unions like the PCS. Local government workers are also in line for the chop as "the Department of Communities and Local Government faces a 51% reduction in the budget to £3.2 billion" (Financial Times). Local government cuts are truly eye-watering. Schools, libraries, swimming pools, parks, leisure centres and much else will be axed if Cameron gets his way.
The Institute of Fiscal Studies, which has played first fiddle in the chorus demanding cuts from the government in the period leading up to the general election, now correctly states that, contrary to Osborne’s claim, it will be the poor who will be worst affected. Inequality is the warp and weft of capitalism, woven deeply into its fabric. However the middle-class anger at the withdrawal of child benefit payments will increase when they discover that the cuts will amount to not just over £1 billion but more than £2 billion. Higher education funding has been cut by a massive 40% and there will be a massive increase in tuition fees. One of the meanest measures, in a very mean programme, is the withdrawal of the educational maintenance allowance (EMA) for 16 to 18-year-olds. But significantly, right at the last moment, Osborne did not go ahead with his proposal to withdraw child benefit from the same age group.
This was clearly linked to the fear of the outrage which this would provoke, particularly in view of the explosive events across the Channel in France. It was the occupation of 1,000 colleges by the French youth, together with the colossal strikes of the working class, which contributed to Osborne desisting from this proposed measure. In other words, the actions of young people, in another country, France, were a factor in staying the hand of the government. This lesson must be absorbed by young people in Britain as they prepare, as they must, to confront the government over the cuts inflicted on them.
The same is true of the changes which are to be inflicted on the most vulnerable, the one million sick and disabled people judged capable of returning to ‘some work’ in the future. They will have a one-year time limit placed on their claims for employment and support allowance. If they refuse Osborne’s ‘offer’, then they could be left £50 a week worse off. Yet a 10-year-old child could understand that in Britain today there are no jobs available for anyone who is unemployed, whether they are able-bodied, sick or disabled.
This comes on top of the £11 billion cut in welfare announced in June. In the light of these measures, nobody now – not even the capitalist media – accepts Osborne’s mantra, "we are all in this together".
20 October revealed that the ‘big society’ of Cameron stands for ‘big business’ and a ‘big axe’ at national level combined with little axes in local councils. And what is going to be the reaction? As Polly Toynbee in the Guardian points out, newspapers and TV will show “pensioners losing housing benefit evicted from their homes. Sick people queuing for admission on A&E; trolleys will suddenly show that NHS ring-fencing was bogus".
Sure Start, the child-centred proposals of the last government, will be cut. She further states: “Sure Start is not saved: without ring-fenced funds, it will be left to local councils to wield the axe. Schools will cut teachers and teaching assistants, while a 10,000 cut in police will be blamed for any local crime". But she also correctly warns: “Try closing even one under-used library and hear the local protests, let alone leisure centres, school sports and youth clubs." And this could be just the beginning. Tom Clark, also in the Guardian, draws a comparison with the poll tax: "I’m tempted to say that I predict a riot".
The ranks of the Tory/Lib Dem gang – represented by the cabinet of multimillionaires – seem oblivious to the likely results of their measures. Warned by their leaders not to cheer the cuts too loudly, their MPs could not restrain themselves as they bayed and cheered as Osborne wielded his axe.
But this bravado masks the deep unease infecting even the government’s ranks. Philip Stephens, chief political commentator of the Financial Times, commented that one of the chancellor’s colleagues "already predicts a ‘bloodbath’ for the Tories and Lib Dems in next summer’s Scottish, Welsh and local elections”. He reveals, moreover, that it was Mervyn King, the governor of the Bank of England, and the permanent secretary at the Treasury, Sir Nicholas Macpherson, who "pressed" the government into the savage measures announced on 20 October. But "another of Mr Cameron’s cabinet colleagues has taken to referring to the twin pillars of the economic establishment as ‘1930s fiscal fundamentalists’". Is this the same Mervyn King who was invited by Brendan Barber to address the September conference of the TUC where he appeared to be ‘sympathetic’ to the trade unions’ concerns over cuts?
In reality, Osborne’s programme is not just for economic reasons. There is undoubtedly a political raison d’être, but also an ideological aspect, to his measures. Cameron wants to go further than even Margaret Thatcher in ‘shrinking the state’. This government actually believes that the ‘private sector’ can step in and replace the role of the state in jobs and services. The fact that the private sector – read capitalism – has utterly failed to historically fulfil this role, vividly underlined in this crisis not just in Britain but worldwide, is airily discounted. The purpose of the mass privatisation – for that is what looms – means handing over current council and central government services to the privateers as a way to provide the capitalists with a new source of super-exploitation and thereby boost profitability. Even dyed-in-the-wool pro-capitalist writers like Martin Wolf of the Financial Times consistently warn against the consequences of Osborne’s measures.
Wolf has pointed out that the current government deficit is not appreciably higher than in similar periods of economic crisis that prevailed in Britain or worldwide. Osborne’s measures cannot fail to deepen the deflationary, not to say depressionary, features already evident in the British economy. In other words, Osborne’s cure will compound the disease rather than relieve it. The deficit will actually increase, the more his measures are implemented. For instance, a lengthening dole queue means a much bigger welfare bill and a cut in the tax receipts of central government. It costs roughly half a billion pounds to the government for every 100,000 people out of work.
Therefore this programme is a guarantee of unparalleled social upheaval in Britain in the next period, as the Socialist Party has consistently warned. The attack on pensions will infuriate pensioners and those who are looking forward to retirement, as lesser measures have already done in France. Five million people will be affected by the decision to increase eligibility to start claiming the state pension to age 66 in April 2020. This will eventually save the government £45 billion. The equalisation of state pension age for men and women at 65 will be brought forward to 2018.
Scale of cuts
The government’s measures amount to the biggest single attack on the living standards of the British working class for 80 years. The Independent, basing itself upon the figures of the Institute of Fiscal Studies, claims they are the deepest cuts since the 1970s. But this is not true. In 1976, to receive an IMF loan of £2.3 billion, the then Labour government cut £2.5 billion from public expenditure, equivalent to no more than £20 billion today. Osborne wants to impose an £81 billion slash and burn programme over four years.
Indicating his determination to push through his brutal measures Osborne has let it be known that there is no ‘plan B’ to fall back on if his proposals are not accepted. This is bravado on his and the government’s part. But the British ruling class has a tried and tested policy of bending with the wind. Whenever they have confronted a determined mass movement which is prepared to go to the end of the struggle against them they have often retreated.
Sometimes, they throw overboard the ‘general’ whose plans have been thwarted. This was the fate of Margaret Thatcher in the mighty poll-tax battle which she lost and as a result was subsequently ejected from office. Such an outcome in this battle is not to be excluded. This is a government of liars, who have no mandate – the Liberal Democrats are doing exactly the opposite of what they promised before the general election – and deserves to be driven from office. But on the other hand this is only possible on the basis of determined policies matched by bold leadership.
However this is not evident – to say the least – in the posture of the General Council of the Trades Union Congress (TUC) which refused to sanction early and decisive action in the form of mass demonstrations before Christmas at its last meeting. The PCS leaders together with the RMT and others demanded early action. TUC leader Brendan Barber and the TUC right wing advocate a policy of prevarication. To wait five months to the end of March for a demonstration, as they propose, amounts to a lifetime against the background of the scorched earth policy of Cameron.
This is at a time when the French people are storming through the streets – a combined total of 17 million on the demonstrations in recent weeks – with six general strikes in Greece and massive general strikes in Spain and Portugal, etc. Indeed, the tops of the British labour movement have almost become figures of fun in the eyes of foreign correspondents domiciled in Britain who are bemused at the inactivity from above in response to the government’s attacks.
There is growing visceral hatred of the rich and their government generated by the 20 October cuts. Despite the organic scepticism and pessimism of the trade union tops, a call to action, particularly now that the government has shown its hand, would produce a massive display of support from below. France shows that when the working class is determined to fight capitalism’s attacks, it draws behind it not just the downtrodden layers but also significant sections of the middle class as well. In opinion polls, 70% of the French population support the strikes and 54% are in favour of a ‘general strike’!
If the right-wing donkeys of the TUC do not move, the left trade union leaders and executives must come together in a council of war to prepare the ground to unite workers and students in mass demonstrations before Christmas. The Socialist Party has been at the head of demands for such a demonstration at the same time as warning about ill-prepared and ineffective action which has been the hallmark, almost a conscious policy, of the leaders of the movement in the past period.
Careful preparation – mass propaganda of a written and spoken kind – is still essential. But there is little doubt that in the light of the government’s measures there will be a response from the British people. If the left makes the call now it is possible that a sizeable demonstration could take place which would exert pressure on the trade union tops from a radicalised and mobilised base to prepare for more decisive action.
Wishful thinking is fatal in this situation. This hard-faced government of the rich and bankers is impervious to ‘dialogue’ and ‘logical’ argument. The old adage of weakness inviting aggression is doubly true in this situation. If they are to be dissuaded from their present course it must be by a demonstration of working-class anger and power. The trade union movement has enormous latent power which must be mobilised in the situation. Young people are champing at the bit against the savage financial impositions in the form of the withdrawal of benefits, the astronomical university fees, the cuts in education spending, etc. They can be mobilised, as their counterparts have been in France, once the organised trade union movement moves into gear.
Salvation in this struggle does not lie in the Labour Party, as many of the trade union leaders maintain. The new leader of the Labour Party, Ed Miliband, has already displayed his timidity, refusing to turn up to the TUC rally on 19 October – as he had promised to do – on the eve of Osborne’s announcements. All workers, all trade unionists, must be aware that Labour’s opposition to the cuts is bogus. Alan Johnson, the new shadow chancellor, made clear that Labour’s difference with the government is one of timing and not on the cuts themselves. Moreover, Alistair Darling, previously New Labour’s chancellor, has admitted that the cuts that would have been inflicted if New Labour had been re-elected would have been more severe than Margaret Thatcher’s when she was in power.
Protests against cuts in Westminster, 19 October
From the outset, this government has pursued a policy of ‘shock and awe’. There are many who naively believe that these are always ‘somebody else’s cuts’, in a situation like this. But once the cuts impact, a period of unparalleled upheaval will unfold in Britain, similar in content if not in every detail as in France and other European countries.
But leadership is decisive. We must press for the summits of the labour movement to do their duty and unleash the power of the organised working class movement. If they fail to do this the leadership must come from elsewhere, from the left trade unions and from the base of the union movement itself.
· For a mass demonstration before Christmas!
· For a public sector one-day strike to be prepared now!
· If the government does not relent and back down, organise a 24-hour strike of all workers!
· For mass anti-cuts committees in every town and city to resist all cuts in jobs and services, and national co-ordination together with those trade unions willing to fight!
· For a democratic socialist planned economy, which will open up undreamed of plenty in place of the ‘eternal austerity’ of capitalism and its parties!
· For a mass workers’ party to provide a real socialist alternative!