‘I listened to the whole budget speech. Everything was about big business. Virtually every sentence. Nothing about the homeless. Noting about the unemployed. Nothing about the poor. Nothing about the NHS. Nothing about the crisis in social care.’

That was one frontline health worker’s reaction to the Tory Budget. There was more.

‘People are throwing themselves off cliffs and the bodies are getting washed up on the beach. It doesn’t make the national news, but there are local reports. It’s because millions are desperate. There’s the mental illness, the domestic violence, the money worries, with jobs going, people losing their livelihoods, while bills keep going up.’

That was before the announcement of the planned Tory pay cuts – a below-inflation 1% for NHS workers, nothing at all for other essential workers who’ve been ‘working their socks off’ through the pandemic.

The attacks on the NHS are relentless. Incremental rises, which used to be automatic each year, are now to be ‘performance-related’ – i.e. line managers will decide who gets a pay rise and who doesn’t. The purpose is obvious: to intensify the management dictatorship inside the hospitals and to cut costs.

And the privatisation machine rolls on – all through the pandemic. It’s just been announced, for example, that a raft of London GP surgeries have been sold to a US conglomerate.

Let’s just remind ourselves of the history of the pandemic. The Tories locked down too late, and lifted too early, so we had two surges and ended up with a ‘world-beating’ death toll of around 150,000 (a more realistic figure than the official government toll of 130,000). They had spent ten years running down the NHS, so there weren’t enough staff and there weren’t enough beds, or ventilators, or PPE. And then they peddled crony-capitalist contracts to Tory donors in The City who failed to supply the equipment needed or set up an effective test-trace-and-isolate system.

Then comes the Budget. And with the arrogance of ruling classes down the ages, they simply pick up where they left off, restart the profit machine, and piss on the working class. The richest 50 people in Britain have seen their wealth soar by £25 billion, around 20%, during the pandemic. These social parasites are the people the Tories represent. Sunak himself is married into a billionaire family.

Meantime, many of us owe our lives to NHS workers, some of whom have died in service, many of whom are left exhausted and traumatised. The service is reeling and, even if we avoid a third surge like second (and that is just the latest Tory gamble), the NHS now has to deal with a massive backlog of delayed treatments and the new challenge of long covid, which could affect as many as a million with exhaustion, brain fog, chest pains, and breathing problems.

Where is the money to pay essential workers? Where is the money to put right a decade of cuts?

Where is the money to pay essential workers? Where is the money to put right a decade of cuts? Where is the money for proper emergency capacity? This is the essential starting point for any analysis of the Tory Budget – a national economic plan of the rich, by the rich, for the rich.

What they did

The Budget was, in the words of the Financial Times, the in-house bulletin of the British capitalist class, ‘big, bold, and broke many longstanding records for the public finances’.

It was divided into two distinct parts, the first (for 2021-22) reflationary, the second (for 2022-2023) deflationary.

A big spend over the next two years will include: an extension to the furlough scheme (affecting 5 million workers); an extension of support for the self-employed and small businesses (with a further 600,000 brought into the net); an extension of the stamp duty ‘holiday’ on house purchases; and a raft of incentives to business (tax ‘super-deductions’ on new investment, cuts in business rates, cuts in VAT, and ‘restart’ grants). This will add £65 billion to government borrowing, pushing the total for the pandemic crisis as a whole to £355 billion, around 100% of GDP – a level not matched except during the world wars.

But ‘give’ is followed by ‘take’. The furlough and support schemes will end in September this year. Income tax thresholds – the levels at which people are liable for tax – will be frozen from next year, making 1.3 million more people liable for tax, and 1 million more liable for the higher rate. Corporation tax will rise from 19% to 25% in 2023 – the first such rise since 1974. This will amount to a £25 billion annual increase in taxation, pushing aggregate taxes up to 35% of GDP – the highest level since the 1960s.

These are the basics. What does it mean?

Analysis can proceed at three levels. What are the Tories hoping to achieve? How likely are they to succeed? And what are the implications for the working class? To a large degree, of course, the answers to these questions overlap, but it helps to clarify if we try and separate them out.

What are the Tories hoping to achieve?

The Johnson government is a regime of the pro-Brexit Tory Right. Political parties are not direct reflections of class interests; they are more accurately described as ‘refractions’ of class interest. The government is a pro-corporate neoliberal regime of the 1%. But they are also the dominant right-wing faction of a traditional conservative party – a paler version of Trumpism – and they have stormed their way to power under the banner of Brexit (nationalism and racism). They represent the imperatives of capital accumulation and the authority of the bourgeois state; but they have their own interests as a political faction.

Traditional Tories – like ex-Chancellors Ken Clarke and Philip Hammond – want to cut spending to ‘balance the books’. This is voodoo economics. In reality, despite the endless chatter about ‘repaying’ the debt, there is no real debt. The government is the sovereign issuer of sterling and can create as much money as it likes. It does this all the time. Private banks do the same. They create money every time they grant a loan.

In reality, despite the endless chatter about ‘repaying’ the debt, there is no real debt. The government is the sovereign issuer of sterling and can create as much money as it likes.

The real dangers are these: a) that private banks can be bankrupted if they lend money they do not have to people who then default; b) that governments issue so much of their own money that they stoke inflation, undermine the currency, and trigger a ‘collapse of confidence’ in international markets; and c) that too much free money swilling around undermines ‘the incentive to work’.

This last point is worth stressing. Marx explained the role of ‘the reserve army of labour’ in Capital. He saw it as an essential feature of the system, not only to provide a reserve of workers to be hired in an economic upturn, but also to act as a brake on working-class militancy – a permanent warning of the unemployment and poverty that threatens, a material manifestation of the fear of the boss that gnaws inside every working person when they have ‘nothing to sell but their labour-power’ and must keep their job or face poverty.

On the other hand, the system is in the grip of a permanent crisis of ‘under-consumption’, and this has been ratcheted up to an extreme degree by the coronavirus pandemic. Following the 2008 crash, the British state pumped £140 billion into the financial system and provided £1 trillion of guarantees to prop up busted private banks. This time, a different kind of crash, a real-economy shutdown triggered by a deadly disease, has required a £355 billion spend to put a floor under consumer demand.

The irony is rich. Neoliberal ideology is based on the mumbo-jumbo of neoclassical economics. It’s supposed to be all about low tax, low regulation, freewheeling ‘market capitalism’. The reality is transnational ‘hollow’ corporations – that is, corporations that outsource everything but cream the bulk of the profit – siphoning wealth to the top on the basis of permanent debt, privatisation, state contracts, and manic consumerism.

The role of the state is crucial. Not only does it provide essential administration, infrastructure, social provision, and political repression; it channels vast amounts of wealth – a combination of debt and tax – to private capital in the form of contracts, subsidies, and bailouts. An increasingly parasitic form of capital accumulation, ever more dependent on a churn of ‘fictitious capital’, is now on more-or-less permanent life-support in the economic ICU unit that is the capitalist state.

The traditional ‘blue heartland’ Tories emphasise one side of the contradiction: state debt and state dependence. The new ‘red wall’ Tories, with their wafer-thin majorities in working-class seats in the Midlands and the North, emphasise the other: the state as essential life-support.

Sunak is gambling. The disease may yet spring fresh surprises. Perhaps the likely third surge will be manageable; perhaps not. Maybe the whole pandemic will gradually subside; or a new variant might emerge and run rampant.

But even if the worst moment of the coronavirus crisis is behind us, the economic damage has been massive – the biggest economic collapse in 300 years – and Sunak’s phase two will deliver a deflationary poleaxe of hefty tax rises. The gamble here is on a post-pandemic ‘bounce-back’. What are the chances?

How likely are they to succeed?

The factors in the balance against bounce-back are heavy. In the immediate, there is the sheer scale of the economic damage, the full impact so far cushioned by the £355 billion state spend. Once this goes, unemployment is likely to double and hundreds of thousands of small businesses to close for good. But there is much more.

Private bosses have been using the pandemic to rip up contracts and drive down wages. This has already resulted in a firecracker of industrial disputes that we can only hope flares into something much bigger. What makes that much more likely is the Tory plan to hammer down public-sector wages.

This, though, is to consider only the consequences of immediate Tory policy. The planned deflation will come on top of more than a decade of austerity in which benefits, pensions, and wages have fallen. At the same time, the ‘social wage’ – government spending on schools, hospitals, local services, etc – has been savaged.

Meantime, wealth has been sucked to the top of society. The billionaire index will suffice as a measure. Twenty-nine British billionaires with a combined value of £58 billion in 2010 had become 54 billionaires with a combined value of £123 billion by 2019. In the year since, their wealth has soared to £157 billion. Austerity and disease are profitable.

Lower down the social scale, the rich in general and also the middle class have generally done well out of the pandemic. Better-off households have tended to save money, and this pent-up demand is something Sunak is banking on to produce a bounce-back starting later this year or next. We’ll see.

What are the implications for the working class?

Neoliberalism is a 40-year global project to redistribute wealth from labour and the poor to the corporations and the rich. It has been very successful: we are witness to historically unprecedented levels of social inequality.

Sunak’s Budget is the British ruling class’s latest contribution. The furlough and self-employed/small-business support schemes are designed to sustain demand (and avoid social explosions) in the interests of capital. They are also designed to consolidate the reactionary working-class electoral base which delivered victory in the Brexit referendum, levered Johnson into the leadership of the Tory Party, and then secured the 2019 general-election victory. So far so good for the Tories: a combination of state support, the success of the vaccine rollout, and the pitiful failure of Starmer to offer an alternative (see Dave Kellaway’s article on this site) have put the Tories on 45% and Labour on 32% in the latest poll.

Whether this will hold up once the rug is pulled and jobs disappear, businesses fail, evictions rocket and millions face an increasingly desperate struggle to make ends meet remain to be seen.

Much will depend on the resistance. This will have to be built from below. Labour has collapsed into uncritical support for corporate capital and the neoliberal programme.

Much will depend on the resistance. This will have to be built from below. Labour has collapsed into uncritical support for corporate capital and the neoliberal programme. The union leaders, shackled by anti-union laws they refuse to challenge, are almost as irrelevant. The class struggle in the period ahead is likely to take more elemental forms as people are driven by their desperation to fight back. Expect spontaneous explosions.

Expect this because the Tories – despite the cash injections and the ‘red wall’ populism – remain the agents of big capital. The national minimum wage remains at rock-bottom, slated to rise from £8.21 an hour to, wait for it, a dizzying £8.91. The £20 top-up on the miserable ‘universal credit’ is set to go. This amounts to just £325 a month, and there are now 4.9 million households trying to survive on it. So we have 14 million officially in poverty and 10 million using food-banks. The implicit Tory model is a low-wage economy of in-work poverty and out-of-work destitution. Sweatshop Brexit Britain.

Meantime, the government-sponsored carnival of the rich continues. Johnson and Sunak invite the TV cameras to Downing Street to film them clapping for the NHS while selling off GP surgeries to US corporations, doling out crony-capitalist contracts for PPE and test-and-trace, and planning wage cuts for nurses.

Little discussed in the Budget coverage is Sunak’s announcement that freeports would be created – with, as the Financial Times delicately put it, ‘tax and planning advantages’ – at East Midlands Airport, Felixstowe and Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames, and Teeside. These will be deregulated havens for corporate tax-dodgers (and, no doubt, union-busters).

And the planet? In the year when this corrupt neoliberal regime is hosting the COP conference on climate, close to zero, nothing more than mere window-dressing, is happening on the climate emergency.

The dismal failure of the Tories’ green-homes scheme tells us all we need to know. Despite getting 100,000 applications for grants for home conversions, only 3,000 grants were actually made, £1 billion remains unspent in the budget, and the scheme is now scheduled for the axe. The reason? They contracted it out to corporate cowboys who messed it up.

Lenin commented that the ruling class can survive any crisis if the working class lets it. This has been obvious since 2008.

Lenin commented that the ruling class can survive any crisis if the working class lets it. This has been obvious since 2008. The neoliberal crisis is now a permanent state of being, but the rich just keep getting richer while the rest of us get dumped on. The job of socialists is to do everything we can to help detonate an explosion of class struggle from below.

A good start would be to join the pickets and protests that are breaking out. If you’re in the London area, for example, join us next weekend, 2.30 pm, Saturday 13 March, south-east corner of Westminster Bridge (near the old GLC building). We’ll be doing banner drops and photos around Westminster. Slogan: ‘Tory Social Murder: 130,000 Dead. Pay the NHS Workers! Tax the Rich!’ Bring homemade cardboard placards. (The protest will be masked and socially distanced.)

Neil Faulkner is the author, with Phil Hearse, Nina Fortune, Rowan Fortune, and Simon Hannah, of System Crash: an activist guide to making revolution.