The aim of the ConDems is to roll back all the post-war achievements of the welfare state. This is confirmed by the fact that the Office for Budget Responsibility says that if the governments meets its target, spending as a proportion of total national income (GDP) will be the smallest since 1948.
The short-term view (leaving out spending commitments beyond the election) disguises the necessity for further huge cuts and intensification of austerity after 2015, when the optimistically forecast limited “growth” is expected to decline.
Chancellor George Osborne announced a cap on the total welfare budget, to be voted on each year (daring Labour to oppose, which it won’t), further cuts in public spending and also brought forward the plan to make people work longer before they can get a pension.
That’s if they can hang on to a job until they’re 70. As Caroline Abrahams from Age UK commented: "Far too many people are losing their jobs in their 50s and 60s." Osborne’s plans will leave them penniless for a decade.
He ratcheted up the threat to withdraw benefits from the young unemployed claimants unless they took workfare jobs dressed up as “training”.
Another £3 billion of spending cuts are to be piled on top of the major reductions still to be fully felt as local councils, in particular, struggle to reduce their budgets by 25% over the lifetime of this parliament with their tax powers frozen.
There will be even fewer resources for councils following Osborne’s concessions on business rates for small firms, who were handed out all sorts of tax breaks by the government.
Despite the window-dressing of new tax-avoidance plans, these will leave untouched the global corporations like Amazon who “offshore” their payments, leaving the UK with precious little revenue from the major transnationals’ activities. Meanwhile, fracking firms drilling for shale gas are going to get even more tax concessions on their first profits.
At the same time, the sale of social housing will be accelerated and more and more people made dependent on unaffordable private housing, either to rent or, if they are extremely well off, to buy in a market that produced soaring prices.
The real story is an economy desperate to attract inward investment from China for infrastructure energy and transport projects.
Making the UK more attractive to corporations and sovereign wealth funds held by China and other countries in deteriorating conditions worldwide comes at immense, unbearable cost to increasing numbers of hard-pressed households huddling up over the winter, with many dependent on foodbanks, and others have to choose between heating and eating.
Osborne and the ConDems fool no one. The burgeoning trade gap is due to the fact that the so-called “recovery” is driven by consumer borrowing and cheap (for now) mortgages. With productivity stagnant, the conditions are being set for rapid inflation and a house price asset bubble.
Already price increases continue to outstrip earnings, leaving ordinary people far worse off than before the recession. The UK has equal highest inflation rate among 28 European Union countries and despite the measures to cut fuel bills, they will still rise above inflation next year.
What we saw today was the confident determination of a line of front-bench millionaires insistent on reducing benefits to those on low-pay, in increasing the proportion of part-time, zero-hour contracts and striving to overcome falling profit rates for the global corporations.
Despite Osborne’s boast about reducing spending, the long-term, underlying “structural deficit” has barely changed since 2010. So behind all the public relations bravado, the ConDems plan is for austerity for as far as the eye can see.
Their ambition is a market economy where workers are totally at the mercy of the employers and the state. Ending austerity not only involves removing this government. It must also suggest alternatives to a capitalist system that offers only pain and more pain to the majority of its citizens.
Gerry Gold and Paul Feldman