Tories plan to double cuts

Submitted by Matthew on 12 November, 2014 - 11:21 Author: Editorial

The Tories’ declared budget plans mean more and more cuts, and at an accelerating rate, in 2015-20.

On top of the £25 billion cut from annual budgets between 2010-11 and 2014-5, they would cut another £48 billion from those budgets by 2018-9.

The Financial Times estimated the numbers from official statistics and the Tories’ declared intention to have the government budget in overall surplus (current income covering both current and capital spending) by 2020.

The Tories plan to do that by cuts, not by taxing the rich. They have offered tax cuts to the rich, on inheritance tax for example. They may increase taxes hitting the worse-off, such as VAT, but have announced no plans for that.

The Financial Times conclusions are in the same ballpark as a 19 September study by the conservative Institute for Fiscal Studies, which estimated that Tory plans mean they would “cut spending by government departments by a further 10.6% in real terms (or £37.6 billion) between 2015–16 and 2018–19. This is on top of the £8.7 billion cut that has already been set out for 2015–16”.

Both the IFS and the FT debunk David Cameron’s claim on 30 October that Tory plans imply much milder cuts in 2015-20.

To make the £48 billion cuts just from administration expenses of government departments would imply virtually shutting down some departments, drastically cutting civil service wages, and passing on even sharper cuts to local councils.

Even the Tories are unlikely to do all that. Tory chancellor George Osborne has said that some cuts will come through reducing welfare benefits for working-age people even more.

Probably the Tories will increase their benefit cuts, take cuts into benefits for pensioners (so far less affected), and scrap or subvert their supposed ring-fence for health, schools, and overseas aid. Already the NHS is stretched because the “ring-fence” assumes large “savings”, does not allow for increased medical costs and an ageing population, and does not allow for the extra admin costs coming with the Tories’ drive for contracting-out to private profiteers.

The Lib-Dems, anxious to differentiate themselves from the Tories in the run-up to the general election, have said they want a looser budget-balancing target.

So have Labour. But the Labour leaders, terrified by opinion polls showing most people say the Tories are more “economically competent” than Labour, still say they will continue cuts, only more softly.

At the Labour Party’s National Policy Forum in July 2014, all the big unions joined with the Labour leaders to vote down a move from constituency activists to commit a Labour government after 2015 to refusing cuts.

In fact, economic depression calls for increased public spending rather than cuts. And what budget-balancing is necessary should be done by taxing the rich, whose wealth is spiralling, not by freezing wages and cutting services and benefits for the majority.

The union leaders sometimes echo that message, and should be made to fight for it.

The Tories’ policy is only a more extreme version of what is being done across Europe. In some countries, unions are now fighting back.

In Belgium, 120,000 workers joined a demonstration on 7 November against the cuts plans of the new right-wing coalition government. As the Catholic union confederation says: “We make everything, they make nothing. Everything they have, they have stolen. Redistribute working hours, redistribute wealth!”

The social-democratic union confederation (Belgium has two “TUCs”) plans regional strikes between 24 November and 8 December, and a national one-day strike on 15 December.

In Italy, a million people marched on 25 October against prime minister Renzi’s attack on job-security laws. The metalworkers’ federation FIOM has called a series of regional protest strikes between 14 November and 27 November.