All budgets are for millionaires

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It’s difficult to find anyone with a good word to say about George Osborne’s latest budget. Ed Milliband claimed it “failed the fairness test” and was a “millionaire’s Budget which squeezes the middle” and was an expression of the “same old Tories[1].

The material attack

Those defending the Budget point to the increase in personal tax allowance to £9,250: i.e. no-one will be taxed on income up to this threshold. Touted as a measure to help “the poor”, in fact this will affect everyone but only by about £14 a month. Taken by itself, one might argue that every little helps – but the reality is that any benefit will be swallowed up by record petrol prices, increasing VAT on “hot food” (which will punish workers who have a main meal at work for example) and the below-inflation rise for the National Minimum Wage (with rates for younger workers frozen entirely). Public sector workers face additional targeted attacks with the proposed introduction of local pay rates. And there was £10 billion which Osborne estimated needed to be cut from the benefits bill, without saying exactly when and how it would be done.

The ideological attack

Predictably, the left leaning press attacked the reduction in the top rate of income tax from 50p to 45p and the decrease in corporation tax and commentators (even those normally considered friendly to the Conservatives) lined up to condemn the “Granny Tax” – a reduction of the tax allowance for pensioners.

The sound and fury of the media is, of course, designed to steer the debate in particular ways and the outrage over the Granny Tax is a good example. There is no question that the erosion of the allowance will cause pain to many pensioners. And, after all, who could be stony-hearted faced with the narrative of ‘hard working’ oldsters, who’ve ‘paid into the system all their lives’ now facing penury in their old age? Against this, another argument is presented: the effects of the crisis have, so far, disproportionately affected young people who suffer from chronic unemployment and low wages, the latter even lower now the age-bands of the minimum wage have been frozen. Shouldn’t older people pay their share?

The masses are thus invited to take sides in a debate about which section of the population should shoulder the burden of the system’s crisis. Class divisions are completely obscured in this debate. No mention is made of wealthy pensioners or young people from wealthy families. They are conveniently forgotten, allowed to carry on in hidden pockets of privilege that are only minimally affected by the various changes, while the rest of society is allowed to fight over the scraps. The fixation on particular items also manages to obscure (without actually hiding) the more draconian elements of the Budget mentioned above.

Of course, the ruling class can’t completely hide the fact we live in a class society. But the rhetoric about the budget being for millionaires once again hides a deeper reality behind a self-evident truth: all budgets are for millionaires! Contrary to the democratic myth, the state is not the expression of ‘the people’ but the highest synthesis of the ruling class, the capitalist class. It rules in the name of the whole population but actually in the collective interest of the capitalists. The state may sometimes appear to be “in hock” to the “business community” or at other times to ruthlessly impose its will upon them, but these are only the surface expressions of an underlying constant: defending the basic capitalist framework of society. Everything the state does – even when it grants concessions to the workers – is done with aim of preserving that framework and the domination of the ruling class.

As long as we allow ourselves to be drawn into arguments about how to manage an economic system in terminal decline, the working class will always lose, no matter what items the Budget contains. Instead, we need to understand the real function of the state in order to destroy both the state itself and the social foundation of exploitation on which the state rests. Only then can society really be organised for the benefit of all.

Ishamael 26/3/12