Article from the November 2005 issue of the Socialist
newspaper of the Socialist Party, Irish section of the CWI

Hains budget means

Higher taxes and worse services

By Gary Mulcahy
SECRETARY OF State Peter Hain is busy making himself a hate figure for working class people in Northern Ireland. His unpopularity hit a new peak with the announcement that householders are to be hit with a 19% increase in regional rates next year followed by a 6% rise the following year on top of water charges.

It is estimated that the current combined average household rates bill is £509 per annum. With the average water charge estimated to be £340, a 19% increase in the regional rate would mean most households will be expected to pay over £900 a year in rates and water charges.

But this is only the tip of the iceberg. While working class communities are being told to pay up, services are being cut to the bone. During a speech in Belfast on 25 October, Hain outlined the main targets included in the Northern Ireland Draft Priorities and Budget 2006-2008 - a plan for demolition of public services.

He proclaimed that £16 billion will be invested in public services by 2008. But on closer inspection, the draft budget states services will continue to be privatised through PPP and PFI deals, which accounts for the bulk of "investment" in public spending.

After announcing that the NHS is to receive £450 million by 2007-08, we are told "that additional expenditure must be accompanied by the reforms to health provision and administration." In everyday language this means that the majority of the £450 million investment will go to private companies for taking over the running of health services.

Likewise in education, private companies are to be encouraged to build and manage schools and employ non-teaching staff, and in return will be rewarded with lucrative PFI contracts. Hain also plans to close schools, claiming that there are 50,000 empty places in schools. He also admits that 24% of the working population has no qualifications whatsoever, compared to 15% in Britain as a whole.

New Labour are also privatising the roads. Major PPP contracts worth over £370 million are to be awarded to private companies to construct flyovers, dual carriageways and roads. It cannot be ruled out that private companies will be allowed to rip-off motorists through toll charging.

Public transport is also being prepared for privatisation. De-regulation of the bus services is currently being examined, allowing private bus companies to compete with Translink which, without a serious opposition by the unions, would inevitably lead to the privatisation of Translink.

Hain insists that the money which would have been raised through water charges now needs to be raised through cuts in services and civil service jobs. The postponement of the introduction of water charges for a year until April 2007 is being used as an excuse to increase rates and make cuts of 3-4% in the budgets of all government departments.

The response of the main political parties has been opportunist in the extreme. While they claim to be opposed to the increase in rates and water charges, the reality is that they started this process when they were in power in the last Assembly.

The main four parties all signed up to the Re-investment and Reform Initiative which allowed for the Assembly to borrow extra money from the Treasury on the condition that the rates go up, water charges are introduced and public services are sold-off.

However, one politician did admit they did not oppose the content of the budget. After Minister David Hanson gave a presentation on Hain's budget to MLA's at Stormont, Sinn Fein MLA Mitchell McLaughlin stated: "I have no doubt that parties present this afternoon will be in broad agreement on a number of these crucial fiscal matters."

We need to resist Hain's attack. Verbal opposition from the trade unions is not enough. On the ground people are fighting the cuts, organising against privatisation and preparing to resist water charges. The unions should now call a day of action linking all these struggles. Properly organised, this could be a massive show of strength and the beginning of a campaign that could force the New Labour overlords to pull back.