Over 65% of cuts to come

Submitted by Matthew on 12 March, 2014 - 11:55

According to the Institute of Fiscal Studies, 65% of the Government's already decided cuts to public services are still to go through, and 42% of its cuts to benefits are yet to come.

Yet in the Budget on 19 March, Chancellor George Osborne is set to announce even more planned cuts.

Although he claims that Britain is now in an economic recovery — and for the rich, it is — he says he will keep on adding cuts if the Tories are re-elected in 2015.

In order to win votes for 2015's election, Osborne hints he will cut income tax. He may raise the income-tax threshhold — the level of wages below which you pay no tax — and claim that as a great boon to the low-paid.

However, much of the benefit of a raised threshhold goes to the higher-paid (the amount they pay tax on decreases); quite a few low-paid workers are now below the threshhold anyway; and those low-paid workers who do gain from the raised threshhold will lose much more through Osborne's cuts.

Some Tory MPs are pressing Osborne instead directly to cut income tax for the higher-paid, raising the limit for the 40p bracket or reducing the 40p rate to 35p.

Missing is any clear Labour alternative. In February both Ed Balls and Ed Miliband said that a Labour government after 2015 would continue cuts, only slower than the Tories.

Ed Balls now proposes taxes on bank bonuses, bank balance sheets, and the most expensive houses, to fund a youth jobs scheme. But the amounts are token compared to total taxes and total cuts; and the money would subsidise bosses, by enabling them to employ young people without paying wages because the state pays instead.

The labour movement should demand that the rich be taxed heavily, that the banks and high finance be taken into public ownership and democratic control, and that benefits, services, and useful, properly-paid jobs be restored.

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