Friday, 7 December 2012

Hammering the poorest again

Britain continues to be an economic basket case. This was confirmed in the Chancellor of the Exchequer’s Autumn Statement.

Savage cuts to public services and jobs will continue to be imposed – in fact, they will be increased –and will last, at the very least, until 2018.

If you listen to George Osborne MP, the multi-millionaire Chancellor of the Exchequer, the country is in this mess because ‘we’ spent more than ‘we’ could afford over many years, and the debt now has to be repaid. I don’t remember spending more than I could afford, so it must have been you. No? Who, then, is the ‘we’ to whom Mr Osborne refers?

It was, of course, spivs and speculators in privately-owned banks and financial institutions within the City of London. But if the banks are privately-owned, why are ‘we’ paying the debts they accumulated through their greed-motivated dodgy deals? Well, that is because, as the politicians tell us, ‘we’ are all in this together.

The Labour Government of Gordon Brown used billions-of-pounds of public money to bail-out the failed private banks. The result of which was that private debt became public debt. The Tory-Lib Dem Coalition Government carried on with the same strategy and, as Osborne confirmed last week, things are going from bad to worse.

In theory the private banks will repay the public money that was used to prevent them going bankrupt, but I wouldn’t hold your breath while you wait for that to happen. Meanwhile, the unscrupulous bankers and dealers continue to rake-in lottery-winner levels of cash through inflated salaries and bonuses.

Against that background, the Chancellor said his Autumn Statement was fair, but it wasn’t.

Osborne announced that the poorest people in the country, those on state benefits, would have rises to their income pegged at 1% in each of the next three years. That figure is well below the rate of inflation, which means the poorest will actually receive a cut to their income, making them even poorer. In 2010, when the Chancellor changed the economic index to which benefit rises were linked, the Institute for Fiscal Studies (hardly a bunch of Lefties) stated that the move would drive an additional one-million British children into poverty. The latest cut for benefit recipients will exacerbate that situation further.

Reacting to the Autumn Statement, Anne Marie Carrie, Chief Executive of children’s charity Barnardos, said, “Yet again it is children from impoverished families who are unfairly suffering most under the government’s austerity measures. By effectively breaking the link between benefits and inflation in his Autumn Statement, the Chancellor has ensured a bleaker and bleaker future for Britain’s poorest families. We know that children growing up in low income households are more likely to suffer from chronic illness, do less well in education and struggle to find work on leaving school.”

George Osborne also announced that wage rises for public sector workers – the people who deliver the services we all use and need – will also be pegged at 1%. Again, as the figure is below the rate of inflation, this means a real-terms pay cut.

Elsewhere in the Autumn Statement it was revealed that the UK Government will impose cuts totaling £5.18bn to welfare spending, which is in addition to the £18bn of cuts already announced.

None of the people on the receiving end of these devastating cuts was responsible for creating Britain’s economic mess.

So, what of those at the other end of capitalism’s pyramid, the fat-cat business elite who deal in the same murky world as the bankers and financial speculators? For them, the ‘fair’ Autumn Statement brought a cut to the rate of taxation paid by their companies. Osborne announced Corporation Tax would be immediately reduced by 1%, and slashed by a further 2% over the next two-years. Proudly the Chancellor of the Exchequer boasted, “This is the lowest Corporation Tax rate of any major Western economy.”

Britain’s right-wing newspapers were only too happy to take-up and repeat the Tory-Lib Dem spin of a ‘fair’ Autumn Statement, citing as evidence the Chancellor’s commitment to secure £2bn from corporations who currently don’t meet their full obligations under the taxation system. What both the UK Government and their supporters in the media chose to ignore, is the actual figure lost to the country every year from tax avoidance and evasion by corporations and company directors – a staggering £120bn. This figure was calculated by staff within HM Revenue & Customs, workers who would happily go after those who don’t pay their fair share in taxation. But, like every other public sector organisation, HMRC has been devastated by cuts to funding and job losses, which mean staff no longer have the time or resources to pursue the tax dodgers.

The reality is that if the rich paid their fair share (the £120bn they currently keep every year), ‘we’ could create 4.8-million new jobs paying £25,000 a year.

‘We’ did not spend money ‘we’ didn’t have, and ‘we’ are certainly not all in this together.

The capitalist system is corrupt and works only to make a very small group of people extremely wealthy at our expense. In their pursuit of more and more wealth, the rich caused Britain’s economic crisis, yet it is the poor who are paying for it.

Capitalism cannot be amended to make it fairer, its core principle is unfairness. Those at the top of the capitalist pyramid can only accumulate wealth by exploiting the majority through paying us less than the value of our labour, and then charging us inflated prices for the goods and services we produce.

Capitalist political parties – Tory, Labour, Lib Dem, even the SNP – will never change the system that rewards their big donors. If we are to create a truly fair society by putting the needs of the people before the interests of profit-driven corporations, we need socialism.

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