With his autumn statement, the chancellor has declared class war: a Tory assault on the public sector and the poor
Class war, generation war, war against women, war between the regions: George Osborne's autumn statement blatantly declares itself for the few against the many. Gloves are off and gauntlets down, and the nasty party bares its teeth. Here is the re-toxified Tory party, the final curtain on David Cameron's electoral charade. No more crocodile tears for the poor, no more cant about social mobility or "the most family-friendly government" or "we're all in this together". Forget "vote blue go green", with this mockery of husky-hugging. Let the planet fry.
Exposed was the extent of pain for no gain, exactly as Keynesian economists predicted, a textbook case. Things are "proving harder than anyone envisaged", says Cameron. But precisely this was envisaged by Nobel-winning economists. Extreme austerity is causing £100bn extra borrowing, not less, while everything else shrinks ? most incomes (the poorest most of all), employment, order books and exports. Pre-Christmas shopping ? already discounted ? heralds more imminent company collapses, and the only high street growth is in pawnbrokers, charity shops and Poundlands filling up the black gaps. For all the flurry of small announcements to kickstart business, infrastructure doesn't create jobs fast enough to replace the 710,000 more public jobs to go. The iron envelope of public spending is unchanged. Osborne learns nothing from experience.
What was missing from his list? Not one penny more was taken from the top 10% of earners. Every hit fell upon those with less not more. Fat plums ripe for the plucking stayed on the tree as the poorest bore 16% of the brunt of new cuts and the richest only 3%, according to the Resolution Foundation. Over £7bn could be harvested with 40% tax relief on higher pensions, while most earners only get 20% tax relief; £2bn should be nipped from taxing bankers' bonuses, but the bank levy announced was nothing extra. There was no mansion tax on high-value properties, though owners don't even pay their fair share of council tax, and property is greatly undertaxed compared with other countries.
Worse still, two-thirds of properties worth over £1m now change hands while avoiding all their 5% stamp duty, by using offshore company accounts. But not a word passed Osborne's lips on tax avoidance and evasion. Another 12,000 tax collectors are losing their jobs while some £25bn is evaded and £70bn avoided. In a time of national emergency, Osborne had no breath of rebuke about the responsibility of the rich not to dodge taxes, no threat to curb the culture of avoidance. Despite the High Pay Commission report on out-of-control boardroom pay ? which even the Institute of Directors has called "unsustainable" ? the chancellor said nothing. How adamantly he ruled out the Tobin tax on financial transactions, called for by those dangerous lefties Nicolas Sarkozy and Angela Merkel.
Instead came the great attack on public sector employees on the eve of the biggest strike in memory. This was a declaration of open class war ? and war on the pay of women, 73% of the public workforce. After a three-year freeze, public pay rises are pegged at 1% for two years, whatever the inflation rate. That means this government will take at least 16% from their incomes overall. But the plan to abolish Tupe ? the rule that ensures public workers are not paid less if their service is privatised ? is outrageously unjust, and will lead to mighty resistance to all privatisation from senior as well as junior staff.
As bad is the plan for reduced public pay rates in poorer regions. What draws good teachers and doctors to work in hard places is the same pay with a lower cost of living. Cut public pay in the north-east or the most impoverished places and their economies will plummet, making them poorer still. This will drive a yet deeper divide between north and south.
But the direct assault on the poor is almost beyond belief. Watch how the big, powerful charities on Tuesday expressed uncharacteristic outrage. Along with the Children's Society, Save the Children is fiercer than I can ever recall, calling this "dire news for the poorest families ? both in and out of work"; "A major blow", says 4Children; while Barnardo's calls it "a desperate state of affairs when the government's own analysis shows that a further 100,000 children will be pushed into poverty as a result of tax and benefits changes announced today".
That 100,000 is added to the 300,000 that the Institute for Fiscal Studies already expected to join the numbers of poor children from Osborne's previous cuts. The increase in the number of two-year-olds getting nursery schooling is excellent, but why pay for it by taking from the tax credits of those families supposed to benefit? Households that gain are commuters, higher up the scale: few in the bottom 25% have cars or use trains. Meanwhile, the young are hit, the cut in the education maintenance allowance causing fewer to attend college at 16, and there are signs of a serious fall in university applications.
Politically, how will this feel? The outrage of respected charities is telling: worms are turning. The government has deliberately and unjustly provoked the whole public sector ? from headteachers to hospital cleaners. Cameron and Osborne's record for serious miscalculation is formidable ? from the economic effect of their austerity to their unravelling NHS debacle and the precarious work programme.
The gap between what they say and do is now exposed. The injustice of how the pain has been shared is breath-taking. A windfall taking just one year's bank bonuses would pay for all the cuts in youth services and the EMA for the next 23 years. That's just one example. Osborne is fatally wrong on the economy, as his deficit target slips by two years in just the past eight months. But even if his straitjacket were necessary, the pain would be politically acceptable only if justly shared. The Bullingdon budget tears the last veil of deceit, leaving the nasty party naked for all to see. But every school will get its King James Bible with Michael Gove's presumptuous foreword: is prayer all that's left?
www.guardian.co.uk/commentisfree/2011/nov/29/osborne-class-war-autumn-statement