George Osborne has been warned by the Institute for Fiscal Studies (IFS) that his Fiscal Charter will require him to impose even more painful austerity measures on British citizens.
Weak growth and forecasting over-optimistic tax receipts could force the government to make “sharp adjustments” in public spending, in order to hit the deadline.
But the IFS has warned Osborne about something he is well aware of. In fact, the very purpose of the Fiscal Charter is to enshrine austerity into law in order to legitimise squeezing the public sector further.
The Fiscal Charter compels the government to run a budget surplus by 2019-20 and continue this pattern in “normal times” – an arbitrary deadline which artificially makes austerity an economic imperative.
It makes no economic sense for the British public. Austerity only plummets us further into perpetual debt; Osborne has piled on more public debt than every Labour government combined since World War II. At the same time, public debt is relatively low historically – at 80% of GDP compared to 225% of GDP in 1945, when we founded the NHS and built over a million new homes. And post-war investment did not skyrocket public debt like relentless austerity does. By 1980 public debt was down to just 45%.
If Osborne really wants to learn how to run a budget surplus, he should look to progressive Scandinavian governments.
Sweden, Norway, and Denmark were all running budget surpluses before the 2009 financial crash – not after reckless cuts but on the back of a robust public sector and strong welfare state. At a time when we should be investing in infrastructure, public institutions, and people, Osborne’s Fiscal Charter encourages the opposite. Public spending – other than health – is at its lowest since the 1940s.
However, the Fiscal Charter makes a whole lot of sense for the profiteering private sector. The arbitrary deadline acts as an artificial stranglehold on public debt, creating the impression that Osborne is forced to sell off our assets to the private sector.
This is the aim of his charter: a wealth transfer from the poor to the rich.
Osborne sold off a record-breaking £26bn of our assets in 2015, at a huge loss to the public sector. Private companies close to the government relish in bargain prices and the long-term profits yielded from owning these institutions, all while ordinary citizens are robbed from enjoying these profits in the future.
The Independent’s coverage on this focuses on “fiscal headaches” for the Chancellor, when really it is the British people who will suffer the biggest headaches. Osborne just took away free school meal grants for some British children, and we’ve just learned that Iain Duncan Smith has confiscated the mobility vehicles of nearly 14,000 disabled people since April 2013.
But it isn’t just the poorest and most vulnerable who will feel the cuts. Osborne’s looming March budget is likely to take aim at the middle class too.
The fact that historically low long-term interest rates are on offer for the government confirms that the Fiscal Charter is a scam. The IFS said it was “odd” that Osborne is not making use of this prime opportunity to invest in infrastructure and institutions, failing to recognise that the Chancellor only works for the public insofar as we pay his salary.
Osborne is only really interested in enriching the private sector, not in sorting out public finances. And he is orchestrating the biggest robbery in history from right under the noses of the British people.
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