MAJOR splits have emerged in the Labour government Cabinet over PM Keir Starmer’s and Chancellor Rachel Reeve’s class-war plans to raise income tax rates in this month’s budget, while Home Secretary David Lammy’s ‘incompetence’ in allowing a mass release of jailed prisoners has made him into a laughing stock!
Following weeks of an even more strident campaign in the media and parliament by bankers, industrialists and international financiers, Reeves has openly kow-towed to bond market demands to plug the estimated £30 billion ‘black hole’ in Britain’s public finances to ensure the government repays the interest and principal of their loans.
Rachel Reeves has now confirmed to the Office for Budget Responsibility (OBR) watchdog that she does intend to raise income tax in the upcoming Budget on 26 November, thereby breaking Labour’s manifesto pledges and its repeated promises not to increase income tax, National Insurance or VAT.
Instead, the Treasury is considering a 2p rise in income tax, with a possible limited cut in NI of 2 per cent which targets pensioners.
A desperate Reeves is attempting to plug a £30 billion black hole in the public finances caused by increased government borrowing, weaker than expected productivity growth and recent U-turns on welfare cuts.
However, Lucy Powell, Labour’s new deputy leader has warned Reeves not to increase income tax in the Budget. Powell said it was important to keep to manifesto promises because ‘trust in politics is a key part of that because, if we’re to take the country with us, then they’ve got to trust us’.
The Labour deputy leader said: ‘I think the fundamental thing here is that we are a Labour government and therefore we want to make sure that ordinary working people are better off as a result of this Labour government.’
She added: ‘It’s really important that we stand by the promises that we were elected on, and that we do what we said we would do.’
Meanwhile, the Cabinet has split over Deputy Prime Minister and Justice Secretary David Lammy’s ‘incompetent’ and ‘cowardly’ handling of the mistaken release of a second convicted sex offender, despite his claims of ‘toughest ever’ checks for prisoner releases.
One Cabinet minister said of Mr Lammy’s response to the mistaken prisoner release: ‘It’s cowardly. He should have fronted up and owned it. He left it to a junior minister to do the broadcast round. The handling is terrible.’
In reality though, the big crisis of the government is its failure to force the working class to pay up for the utter bankruptcy of the UK state finances and the collapsing British economy.
Whereas the £30-odd billion UK deficit in 2000 was not a problem, the £2.6 trillion deficit 25 years later is an absolute catastrophe.
A further warning came from the Bank of England (BoE) on Thursday which held the bank rate at four per cent in the face of unrelenting pressure to reduce it to lower borrowing costs, fearing a surge in inflation, already standing at four per cent.
BoE Governor Andrew Bailey warned that fears over Reeves’ looming tax raid will weigh on growth well into 2026, blaming higher taxes and employment costs for a stagnant jobs market.
However the plans of the crisis-ridden ruling class are dependent on the success of its counter-revolution to drive the working class back to the living conditions of abject poverty, disease and misery of the 1930’s.
Nowhere is the working class tolerating these attacks on jobs, living standards and health and social services. Strikes up and down the country, from the Birmingham binmen 6-month action to resident NHS doctors refusing a paid exam fees bribe, are just a part of a mass movement totally opposed to Labour’s cuts and tax increases.
The victory of democratic socialist Zorhan Mamdani in New York’s mayoral election points the way forward for the UK workers.
With the mass support of New York’s workers, Mamdani defeated both Republican and Democratic party rivals, in a seismic shift in working class politics in the US. Trump’s cutting food stamps to 42 million low-income and unemployed American workers and obscene $1 trillion pay packages to billionaires like Elon Musk are not being tolerated by the masses. The American revolution has begun.
British workers must be inspired by their American cousins! So intense are the social tensions between the classes in Britain that even a small dispute such as a strike or riot can ignite a mass uprising against the government and capitalism.
The hour has come for workers to force the TUC to call and organise an indefinite general strike to bring down this government, and go forward to establish a workers’ government and socialism, nationalising the banks and industry and setting up a planned socialist economy to provide all the means of life for the working class.
Join the WRP and the YS now to organise the British socialist revolution!
