‘TAX rises are inevitable’ warned economists yesterday, barely 12 months after Labour’s election pledge of ‘No tax rises’. This is after PM Keir Starmer’s approval of totally inadequate public sector pay rises of 3.25 to 4.5 per cent for public sector workers, with just 6 per cent for junior doctors.
However, the Treasury is understood to have told government ministers that it will only fund pay rises up to 2.8 per cent. It is threatening cuts to all other services or big tax rises to fund any shortfall.
The Prime Minister’s spokesman said the cost of pay deals would be £6.9billion by next year.
Ruth Gregory, formerly of the Office for Budget Responsibility, said that further tax rises ‘are starting to feel inevitable’.
The contradictions in Starmer’s cabinet are sharpening to explosion point over the poisonous combination that is emerging of more taxes as well as more public spending cuts to social benefits.
The cabinet is split over the NHS, following a leaked memo from Angela Rayner, Deputy PM, which called on Chancellor Rachel Reeves to increase taxes rather than public spending cuts to reduce the massive, unrepayable public debt.
The government is attempting to placate a rebellion by scores of Labour MPs who are totally opposed to further cuts on benefits and social spending after the local election wipeout at the hands of the Reform UK party.
Ruth Gregory, an expert at Capital Economics, has warned the government: ‘This will only add to the Chancellor’s dilemma over how to deal with increased spending pressures in an environment of low economic growth and high interest rates.’
The Treasury is being pressured to ‘claw back’ the remaining ‘benefits’ from the working class.
Angela Rayner has also urged Rachel Reeves to consider restricting access to the state pension for recently arrived immigrants.
The Deputy PM has also suggested making it harder for immigrants to gain access to Universal Credit and raising the fee they must pay for using the NHS.
Attacks on child benefits and immigrant pensions were revealed on Thursday when Angela Rayner urged Rachel Reeves to strip middle-class families of child benefit payments.
Parents can currently claim £1,355 a year in child benefit for a first child, and £897 a year for any additional child.
Lowering the child benefit threshold from £60,000 to £50,000 annual salary for the highest family earner would cost some families £3,000 a year – according to the leaked memo from Rayner.
These attacks on the working class will not be tolerated, and trade unions are mobilising against these super-austerity cuts with strike protests and strike votes up and down the country.
The financial crisis is unresolvable under capitalism. Labour’s attempt to attract Reform UK voters reveals a shift towards a national government to impose the most drastic and intolerable poverty on the working class, by force, with Reform’s Nigel Farage as Labour’s partner.
The working class is now fighting for its life, with all of its basic rights and gains under savage attack by the ruling class and this government.
Trade union leaders who strive to dampen their members’ struggle against the cuts must be removed and replaced by leaders who will organise a general strike to bring down Starmer’s Labour government.
It means smashing all the anti-union laws and bringing in a Workers Government and socialism to abolish backward capitalism and replace it with a nationalised and planned socialist economy, that will engage in planned production to satisfy people’s needs.
There is not a moment to lose! Join the Workers Revolutionary Party and the Young Socialists today to carry out this vital task!
