Billions for big business and the wealthy - all paid for by the working class

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11 December 2012

The Autumn Statement was all about turning the screw of austerity even further. This time, however, Osborne felt it was necessary to prove that his "we're all in it together" slogan isn't a total flop.

So, he told us that he was "reducing the deficit in a way that is fair", adding that "those with the most should contribute the most, and they will". And the usual flood of incomprehensible figures which comes with government speeches was duly tailored to show that the rich would pay as much as the working class majority.

But will they? Of course, not!

Anti-tax evasion con

Osborne claimed, that due to his new measures, the wealthy would be paying £8.5bn more over 6 years. The bulk - £7.5bn - is meant to come from clamping down on tax evasion. So, with the help of the media, some foreign companies, like Microsoft, Amazon, Starbucks, Google, Twitter, etc., came under the spotlight for failing to pay taxes on the profits they make in Britain. Lib-Dem Treasury Secretary Danny Alexander even declared a personal boycott of Starbucks!

Sure, these companies are cheating. But which company, foreign or British, doesn't? Isn't there a whole industry to help them to cut their tax bills? Doesn't it include British accounting giants like PriceWaterhouseCoopers, DeLoitte, KPMG, etc..? Is Osborne planning to read them the riot act? No, instead the government pays for their services!

The master stroke of Osborne's "anti-evasion" plan, however, is a tax "treaty" with Switzerland, which, he claims, will bring in £5bn over 6 years. Really? Why is it then that his "Office for Budget Responsibility" says it will only bring in £1bn?

Quite simply, because there's no compulsion for the wealthy, holding an estimated £40bn in Swiss banks, to pay anything. They're offered an amnesty for a one-off payment (at a rock-bottom price compared to the taxes they owe) followed by regular annual payments. However, not only will the tax-evaders be able to remain anonymous, but all this is based on voluntary self-assessment. Why would they give even a penny to the Treasury?

Hypocrisy at its peak

Despite all this posturing against tax evasion, Osborne then went on to create the biggest tax loophole of all - one which is not just legal, this time, but completely above-board. By cutting corporation tax by another 1%, down to 21%, on top of the 2% cut already announced in April, the government is handing over an annual £6bn bonus to companies on a golden plate - meaning £36bn over six years, more than 4 times what he promises to recoup from tax evasion.

Osborne claims this is to encourage businesses to invest in order to create jobs. What a farce! If business investment and job creation are at rock-bottom level today, it's certainly not due to high taxes paid by companies - which were already among the lowest in the rich countries (corporation tax is 40% in the US for instance!).

No, it's just that the bosses are using their profits to line the pockets of their shareholders or to speculate on financial markets. And what does Osborne plan to do about this? Nothing, of course!

We shouldn't pay for these handouts!

The so-called "contribution" of the wealthy to Osborne's austerity measures is just petty cash. But the turn of the screw on the working class is not. Capping most benefit increases at 1% over the next 3 years means a serious fall in living standards for all benefit claimants.

Of course, Osborne was quick to claim that his increased personal tax allowance would make up for these cuts and all the other austerity measures.

But that's a lie. First, because many claimants already earn too little to pay income tax. Second, because those who pay income tax will see their means-tested benefits reduced, due to having a higher after-tax-income. And third, because even those who are in neither of these two categories, will only gain peanuts from Osborne's increased allowance - just 94p per week!

On its own, the 1% benefit cap is meant to "save" £3.75bn/year by 2016 - meaning a lot more over the next 6 years than the so-called contribution by the wealthy. Why not "save" £6bn, by not cutting corporation tax? Already the poorest section of the population earns 40 times less than the richest!

There's no "fairness" here. But then there won't be any "fairness" in this society until the working class takes control of the wealth it produces - yes, out of the hands of the capitalists and their self-serving politicians!