With the recent so-called emergency budget it is becoming clearer by the day just how nasty our new coalition government is. Despite a few lollipops here and there - designed as a sop to keep the LibDems on board - the overall package is one of cuts in the income of most people, with severe cuts in public services still to come.
And despite the government’s best efforts to portray the budget as ‘fair and even handed’, further analysis shows just how unfair and regressive the budget actually is. The Financial Times has churned over the figures and come up with this chart to show the effects of the budget on different income levels.
What the chart shows is that people with the lowest income will suffer a net reduction of nearly 8% in their income. On the other hand the richest 20% of the population will only see their income reduced by less that 3%. Unusual idea fairness! H/t to Richard Seymour for putting up this chart on his blog.
The coalition has of course been unrelenting in ramming home its message that there is no alternative. The country is living beyond its means we are told, and without these swingeing cuts the markets will punish us. Nick Clegg was on the radio this morning churning out this nonsense - that the government had no alternative as we are threatened with a fireball coming from Europe. When asked what he meant he could only come up with the lame and months old example of Greece. It is important to nail this one on the head. There is no market threat to UK government debt. In the first place the borrowing figures are a little less than expected - no doubt due to the stimulation measures taken by the previous Labour government. Secondly, in contrast to Greece, at least two-thirds of UK government borrowing is financed internally. And most importantly, most of the debt is long term and not due to be repaid for another 10 - 12 years. So there is no ‘emergency’. And as Samuel Brittan points out in this article in the FT; “an expanding economy itself generates most of the savings required to finance Budget deficits, and much else.” However, by severely cutting back on public spending the government is putting the recovery at risk and we now face the prospect of an even deeper recession.
But why? Here is where it becomes very difficult to avoid using the word nasty to describe both the motivations of the government and the government itself. As Richard Seymour puts it in his post mentioned above: “This is the ruling class in full battle cry - bail out the banks, pay off the bond traders, keep the basic infrastructure working, and make the poorest bear the cost.” For it will be the poorest who will suffer the most. Not only is it pretty nasty to impose such burdens on the poorest off, but the way in which the government is going about all this is even nastier. First of all is the deceit about the need for all these cuts. Secondly there is all this banging on about how ‘we are all in this together’. How much suffering will be felt by those in the boardrooms of UK plc? Or even by those around the cabinet table? What impact will the budget measures and the cuts to come have on the Cameron, Osborne and Clegg households? Then there is their proposal to involve public service workers in deciding what should be cut. How nasty can a government be!
Finally to cap it all, it seems that in the future we are all going to have to work longer. The government are now proposing to raise the state retirement age to 66 from the year 2016, eight years earlier than proposed by Labour. All because some of us now live longer and healthier lives. What should be something to celebrate and rejoice in has now become something to bemoan and use as an additional weapon with which to beat working people. Nasty is almost too kind a work to use about this lot in charge.
When we link this proposal with the continuing dreadful news of more and more deaths in Afghanistan is is hard to avoid the conclusion that working people here in the UK are being asked to work longer for less pay in order to enable the UK military to kill even more Afghans. Nasty indeed.