In order to reduce the government’s funding deficit by an extra £30 billion to 2018, the Tories and their little LibDem helpers would slash spending on public sector services, wages and pensions by £13bn and on benefits by £12bn. The cuts would be twice as deep over the next two years as this year and previously.
The other £5bn would be found from feeble measures to tackle the tax dodgers.
In other words, more than twice as much would be squeezed from welfare claimants and the poorest one-fifth of the population who own no net wealth at all, than from the richest 1 per cent of the population who are hiding somewhere between £2,000bn and £4,000bn in tax havens around the world.
Any Tory or Labour government serious about closing the public finances deficit could do it at a stroke by placing a modest 2 per cent wealth tax on the richest 10 per cent of the population and abolishing the tax haven status of Britain’s crown dependencies and overseas territories from the Isle of Man to the British Virgin Islands.
But instead of slapping a windfall tax on the monopoly profits of the banks, supermarkets, energy utilities and arms companies, Chancellor Osborne hands out more than £1bn in tax relief to the oil and gas corporations and boasts that tax-dodging multinational companies here pay less tax on their profits than almost anywhere else in the developed world.
However, the biggest winners from this Budget may turn out to be the very City of London crooks and spivs who fund the Tory Party. Osborne announced today that the same vultures who mis-sold workplace pensions and payment protection insurance can now sink their claws into annuities sold by today’s as well as tomorrow’s pensioners.
Behind Osborne’s bluff and bluster, the reality is that the Office for Budget Responsibility forecasts a slow-down in Britain’s economic growth from 2.5 per cent this year to lower rates all the way to 2019-20. Even that presumes that this new round of public spending cuts doesn’t strangle economic recovery as they did after his 2010 emergency budget.
Far from the Tories and LibDems reducing inequality and raising everybody’s living standards, last week’s survey from the right-wing Social Market Foundation indicated that the wealthiest one-fifth of the population are 64 per cent better off than a decade ago, while the poorest one-fifth are 57 per cent worse off.
The tragedy is that the Labour Party leadership has largely swallowed the Tory line that austerity is more important than investment in public services, public ownership and planning when it comes to health, education, housing, energy and public transport.
Even so, it is now clearer than ever that victory on May 7 would be taken by the Tories as the signal to make far deeper and quicker cuts in public services and the welfare state than Labour would, supplemented by more privatisation and a new barrage of anti-trade union laws.
That is the real substance of this Tory-led government’s ‘long-term economic plan’ and why it must be derailed at the forthcoming General Election.