.353ZyesDon’t believe Tory anti-austerity propagandaBy Michael Burke
There has been a concerted effort by the mainstream media to portray this government as radically different from its predecessor, even to suggest that it will reverse austerity. But the evidence we have so far suggests exactly the opposite:
- A lobby to provide the NHS with extra funds as it faces potentially its worst winter ever has been brushed aside
- Philip Hammond has offered £2 billion of extra funding for housing (as well as soft loans to small builders) over 4 years, when £30 billion a year is needed to meet the housing shortage
- The planned cut in the cap on social security from £26,000 to £23,000 has just been implemented, and down to £20,000 outside London
- A large number of other cuts to pensions, to social security and working tax credits have also been implemented
- The government has just announced the postponement of work to electrify the Great Western rail network in south-west England, a £2.8 billion project.
- The Northern Powerhouse remains a slogan, not a project
- Hammond did announce £2 billion package to combat cyber-crime, specifically motivated as ‘this could lead to war’
There is a fundamental reason for this. The Tories have not implemented austerity because they are ‘the Nasty Party’, although they are. The entire austerity programme, the cuts to public services and pay, cuts to social welfare, cuts to business taxes, further privatisation and cuts to public sector investment all have one central purpose. This is not, as stated, to eliminate the deficit, otherwise the Corporation Tax rate would not have been cut and costly privatisations made, such as Royal Mail or the sale of Lloyds Bank shares.
The purpose of austerity is to restore profitability and this has been a failure. Economic weakness from Brexit is sure to hit profits too. In all likelihood the main effort to restore them will be through increasing the rate of exploitation.
Brexit will make matters worse. Last March the Office for Budget Responsibility forecast (pdf) that GDP growth would be effectively 2.1% per year over the next 5 years and that the public sector deficit would become a surplus by 2018/19. Public sector debt was forecast to fall every year as a proportion of GDP, beginning this year. The real costs of Brexit should be reflected in much more pessimistic forecasts from the OBR on all these fronts.