George Osborne’s spending review, on 5 December, is due to cut another £10 billion from welfare, by cutting benefits in real terms (i.e. chopping the inflation-linked increases which would otherwise come).
He will try to balance this with a “tax-dodging clampdown” which he promises will raise another £10 billion from the rich. That £10 billion, however, will be a matter of promises and hopes, whereas the £10 billion taken from the poorest is clear-cut arithmetic.
Despite, or rather because of, all the cuts, the government’s budget deficit is increasing, not decreasing. In January-October 2012 it was £5 billion higher than in January-October 2011.
When he was running for Labour leader in 2010, Ed Balls denounced the Tories’ cuts policy sharply. His prediction that cuts would lead to slump rather than recovery has been confirmed. But now, as Shadow Chancellor, he has softened his message rather than sharpening it.
In an article for the Sunday Mirror (2 December) Balls does not mention Osborne’s well-trailed benefit cuts, or the crazy Tory plan to axe housing benefit for under-25s from which Osborne seems to have been deterred only by Lib-Dem queasiness.
Balls proposes only to:
• build 100,000 affordable homes (over what period? Remember, Tory housing minister Harold Macmillan got 300,000 new council homes a year built in the early 1950s)
• guarantee a job to every young person out of work for over a year (but what sort of a job? Balls adds, menacingly, “a job they’ll have to take or lose benefits”)
• restore some of the deep cuts to tax credits for working families
• cut VAT temporarily
• set up a British Investment Bank.
That falls far short of measures which would reverse the crash in working-class conditions since 2008, like restoring trade-union rights and rebuilding the NHS as a public service.
Instead of expropriating the banks — taking high finance into public ownership, with democratic and workers’ control — Balls proposes only to nibble at the outer fringes of the spiralling wealth of the super-rich, by using funds from the 4G auction of mobile airwaves and taxing bankers’ bonuses.