Wed 4 Apr 2018, 04:39 AM | Posted by Guest Blogger
Guest blogger this week is Terry McCarthy
It’s no coincidence that the media’s obsession with alleged anti-Semitism is hiding the bleak future for UK workers and the Marginalised.
Official statistics drive a coach and horses through the statements from the government that we all have a bright future. Figures from the Office for Budget Responsibility (OBR) shows a totally different picture, demonstrating a decrease year-on-year in purchasing power and living standards. The figures also contradict the statement that austerity is about to end.
Although it is true the world economy is on an upward trend, with a forecast of growth in Britain in 2018 of 1.5%, this is based on two factors. The first is a continuation of austerity, putting added burdens on local authorities and institutions such as the NHS, the police, social services, etc. In addition, there is personal debt, as UK borrowing rockets, and with the poorest households now spending 25% of monthly income servicing debts. The UK’s total consumer debt is now £207bn.
The second factor is a rise in revenue from taxation. Hammond hopes, all things being equal, that the government will not have to borrow extra finance and the debt to GDP ratio will to fall. He also hopes that inflation will fall, leading to wages rising above inflation. Of course, Hammond does not use the Keynes model of purchasing power which is all-important to those on low incomes and the marginalised.
But these near-term improvements made little difference to the OBR’s assessment overall and they make the point that while UK growth prospects have been downgraded, those of other major countries have improved recently. Indeed, the OBR expects UK growth between 2017 and 2022 to be 24 per cent slower than that for the Euro area.
A very worrying aspect is that only one-fifth of the £10 billion-worth of cuts announced in the Summer Budget of 2015 – those that directly affect household incomes – have so far been implemented. Further cuts in 2018-19 will amount to £2.5 billion, with that figure rising again – to £2.7 billion in 2019-20.
These cuts will hit the low paid and the marginalised the hardest, of course. By 2022-23, the poorest third of households are expected to be £745 a year worse off than they would have been had no policy changes been made. In contrast, the richest third will be £140 better off, which of course is in line with neo-liberal economic and philosophical dogma.
See Terry’s own blog at:
https://socialiststruggle.com/2018/04/04/tough-times-ahead/
