A simpler tax system in a largely neutral budget – what could be wrong with that? Nothing at all, if you believe the Chancellor and the Treasury. But no-one does. The budget robbed the poorest sections of the working class by abolishing the lowest 10p in the pound tax band to fund a small cut in the basic rate of tax. Some workers will be ‘compensated’ by tax credits, the very system that has been utterly discredited, not just because it is so complicated that many of those entitled to it don’t apply, but also because so many of those that did have been plunged into debt when the Revenue decided it had made a mistake which had to be clawed back.
This budget is in line with a major trend in all Gordon Brown’s budgets – attack the poorest and weakest sections of the working class, but disguise it with something that sounds really helpful. The earlier budgets concentrated on the unemployed and those on benefits generally. They said it was “a hand up, not a hand out”. In other words, it was an effort to get as many people off benefits and into low paid work as possible – by subsidising employers, by taking people off incapacity benefit, by insisting single parents look for work, and above all by denying benefits to those under 18. This government has simply continued the attacks of the Thatcher and Major governments before them, and the Callaghan government before that.
Attacks on health service workers and cuts in service provision
The attacks on the health service go on all year, without waiting for the budget to be announced. These are the same attacks that workers are facing everywhere. The pay review body recommended a rise of 2.5% for nurses and 2.2% for junior doctors. With inflation estimated at between 3.6 and 4.2% that is already an effective pay cut, but on top of this the award has been staged, so that staff will get no more than 1.5% in April, and the rest in November.
Workers in the NHS used to think that however hard the work, and however low the pay, this was a job for life. The first indication that this is an illusion came in the 1980s with the cuts in hospital cleaning jobs. A year ago the attack was stepped up as health trusts were forced to balance the books at the year end. After the loss of 20,000 jobs in hospital trusts there are still more job losses to come: 1700 in N Ireland over 4 years, 400 in the Yorkshire ambulance service. And newly qualified staff unable to get a job. Last October an RCN survey of newly qualified nurses found 71% still looking for a job, while speech and language therapists and physiotherapists were worse off with 80% and 93% still without the jobs they had trained for. Doctors are starting to find themselves in the same position.
This is going to get worse. Reports that the NHS trusts took on too many new staff at the end of the 1990s should warn us that the state intends to get rid of a lot more jobs, in the region of 100,000. And pay will be under attack through the ‘Agenda for Change’ in which workers will be doubly attacked: first by having to justify their pay level; secondly by the attempt to divide them up into atomised individuals making it harder to struggle against the attacks.
Where money is spent in the NHS, and it is, it is all about saving money, keeping sick people out of hospital, cutting referrals. This also promises more attacks on pay, jobs and services for the future.
The question is not whether we have a great health service, but how to fight back against the attacks on pay, jobs and the social wage (in this case, health services). It is nonsense to call on workers to defend the NHS, the very state institution that is carrying out the attacks. Workers are clearly angry, as shown by recent votes to reject the pay deal in various health trusts, with some saying they would support strike action. But before we go into this we need to think about who or what we are fighting.
Pensions – who is to blame?
Reports have just come out that show that when Gordon Brown changed the tax regime for pension funds in his first budget, he was warned that this could lead to the very problems we have seen. This, like the loss of the 10p tax band, was a simplification bringing pension funds into line with the rest of industry by abolishing tax relief on dividends paid into pension funds. Undoubtedly this decision contributed to today’s pension shortfall, since it axes around £5 billion every year from pension funds. The problem with this sort of story is that it tries to portray the problems in the economy and all the attacks on the working class as the result of this or that policy, giving the idea that we can put it right by campaigning for a different one or voting in a new government. It leaves out the fundamental question of why every single government orchestrates these attacks. It asks us to forget that pensions are under attack in the US, France, Austria, in fact everywhere there are pensions.
The fact is that the Chancellor of the Exchequer, just like every other bourgeois whether in government, the state bureaucracy or private industry, is in the end the representative of capital. He is forced to make decisions required by the economy whether cutting benefits, wages, jobs or services. This does not mean we cannot defend ourselves – sometimes the decision is made to withdraw an attack because of the danger of struggle. For example last year the German government decided not to bring in a measure increasing the precariousness of employment similar to the CPE in France after seeing the reaction of students there. In fact it shows that the only way for workers to defend themselves is through the class struggle, not by campaigns to defend the NHS, nor by relying on an alternative government. WR 30.3.07