Budget 2013 - all for the wealthy skivers and city scroungers

Workers' Fight workplace bulletin editorials
25 March 2013

This year's budget was meant to be a growth booster - or so Osborne told all and sundry, after his own statisticians revealed that the economy had been stagnating downwards, over the past period.

But when the likes of Osborne and Cameron talk about "growth", it's not the growth of socially useful production that they have in mind. Nor is it the creation of real jobs which could allow workers to make a decent living. No, what they mean is the "growth" of company profits and shareholders' dividends, period!

So, predictably, the 2013 budget is built around yet another raft of handouts to the capitalist class. To justify the fact that each one of them will cost billions to the public purse, at a time when reducing the budget "deficit" is supposed to be so vital, they are duly portrayed as designed to boost "growth".

But this is just a cynical sleight of hand. Especially at a time when, simultaneously, the poorest section of the population are at the receiving end of a series of welfare cuts, which were announced beforehand and are now coming into force - under the pretext of reducing the same budget "deficit".

Tax haven Britain

The main headline news in this budget is, of course, once again, the larger-than-initially-announced cut in corporation tax, which will result in companies paying only 20% in tax on their profits by 2015.

Osborne boasts that this will be "the lowest business tax of any major economy in the world". Of course he didn't say that it was the working class, including those reliant on the benefits he is cutting, who will pay for this additional boost to company profits!

According to Osborne's own figures, cutting corporation tax from 26% in 2011 to 23% this year, will already put an additional £9bn into company coffers each year. By 2015, the corporation tax bounty will have risen to around £20bn a year!

This huge handout to companies should be compared to the derisory £3bn that Osborne says he intends to recover by fighting tax avoidance. His proclaimed intention to close loopholes through agreements with the "authorities" of Jersey, Guernsey and the Isle of Man, is a farce. As if his government didn't have the powers to read the riot act to these tiny islands.

To assert the City's colonial rule over the Falklands, on the other side of the planet, Thatcher was prepared to send thousands of soldiers and shed blood. But neither Osborne and Co - nor any other British government in the past, for that matter - could bring themselves to send a few dozen HRMC officials to sort out the opaque financial systems of these islands, which are part of Britain and just a few miles off its coasts? Of course not, they wouldn't want to upset their masters in the City!

...And a paradise for speculators

It's not just a tax haven for companies and the wealthy that Osborne wants to build, it's also a paradise for speculators of every description.

For instance, one of the measures announced in the budget, will scrap the tax paid by British-based speculative funds, which is described as creating a "competitive disadvantage" with countries like Ireland and Luxemburg. Of course, the funds based in Ireland manage 50% more cash than those based in Britain, causing much envy in the City. But did this protect the Irish population from the crisis? Quite the opposite: the resulting speculative bubble made it even worse!

Likewise, speculators in high-tech shares in London will no longer pay taxes on their gains. And what does this generate, if not yet more reasons for the capitalists to use their cash to speculate, instead of investing it in production?

Even Osborne's much hailed scheme to boost the housing market has no other aim than to boost real estate speculation. Once again, it's portrayed as a means to help households onto the housing ladder. Public funds will provide some interest-free loans and will guarantee mortgages. But this is primarily a yet another bonanza for lenders which, so far, have refused to lend, despite all previous government schemes, in the hope that better-off families (who will be able to use the scheme to buy a second home!) will boost the housing market. No wonder the share price of developers like Barratt and Persimmon jumped by 7% and 5% within minutes of the budget announcement!

For the rest of us, however, Osborne's "help" to housing will mean a rise in house prices and rents. And since his budget only plans to build 15,000 social homes (if it does, which remains to be seen), the housing crisis is certain to become even worse! Especially for those among us who, at the same time, are facing the punitive attack of the "bedroom tax" and Osborne's benefit cap from this April!