The Telegraph newspaper has revealed an internal letter from Labour chancellor Rachel Reeves’ Treasury department ordering cabinet ministers to be ‘ruthless’ in identifying public spending cuts.
This internal letter from Darren Jones, the Chief Secretary to the Treasury, was sent out to Labour cabinet ministers on December 12.
It detailed the approach Reeves would take in the next spending review due in June.
This review has been dubbed Phase Two of Labour’s plan to rescue the British economy, and it follows Phase One which was Reeves’ disastrous Autumn budget.
This budget was supposed to raise £40 billion for the government mainly through tax increases on companies. Of course, these increases were immediately passed on to workers through price increases, wages freezes and increased cut backs on employment.
The budget also set off a panic amongst the international financiers who buy government debt, causing them to drive up interest repayments on the debt to levels not seen for thirty years – at a stroke destroying Reeves’ plan to save billions to ‘grow’ the economy out of recession.
It places even greater pressure on Reeves to make even more savage cuts to public spending that the letter sent one month ago insisted upon.
In this letter, Jones told ministers that ‘Spending Review 2025 cannot be a business-as-usual spending review’. Instead, he insisted that government departments must find savings in their budgets with a ‘ruthless’ focus on priorities.
Jones spelt out that austerity cuts would go hand in hand with privatisation.
He wrote: ‘We’re bringing the private sector right into the heart of government and the Spending Review, so that we can embrace their ideas, expertise and innovation to further our public services.’
The only expertise and innovation the privateers are expert in is how to screw millions out of the NHS and other vital public services while handing out massive bonuses to their chief executives.
Starmer’s Labour government is preparing to throw all the public services open to privatisation while allowing private companies to pick out those services they regard as unprofitable and therefore can be defunded and closed down.
At the weekend it was revealed that Reeves intends to slash billions of pounds from disability benefits as she instructs the Treasury to get ‘tough’ on spending by ‘unprotected departments’, particularly the Department for Work and Pensions.
For the Labour government, the disabled and sick are just another drain on the capitalist economy and therefore ripe for having their benefits slashed or replaced with vouchers – another idea reportedly under consideration by the Treasury.
The Guardian paper reported yesterday that Reeves held meetings with business leaders last week to convince them of Labour’s commitment to ‘work in partnership’ with the bosses, with a senior Treasury source saying that business firms had been asked to submit their plans for ‘growth’ to Reeves.
Starmer’s Labour government has dropped even the pretence of being anything other than a government for the bosses and bankers whose only plans to rescue their profits is to drive the working class into the gutter.
Number one target for the bosses is to demand that Starmer ditch the election pledge to reform workers’ rights, including banning zero-hour contracts and introducing employment rights on day one of a job.
All TUC general secretary Paul Nowak could do was to issue a pathetic call for Labour to ‘stick to its guns’ on its pledges – pledges only made as a sop to the trade union leaders and which are being shredded in the name of ‘saving’ bankrupt British capitalism.
With the Labour government intent on bringing in the private companies to run the economy and extract billions in profit from those public services that remain after Reeves’ brutal cuts, the TUC leaders are reduced to begging Starmer not to destroy every right won by the working class.
The working class has the power to see off this Labour government and put an end to a British capitalist system that is crashing into recession and collapse.
The TUC leaders must be sacked and replaced with a leadership prepared to organise a general strike to bring down the Labour government and bring in a workers’ government and a socialist planned economy.
This is the only way forward.
