LABOUR has promised to hand more powers to Britain’s capitalist state, and to the OBR, the Office for Budget Responsibility, to hold down wages and benefits, to try to make sure that the working class pays the full bill for the bosses’ crisis.
The move comes after Liz Truss’s mini-budget set out to cut taxes for the rich and to borrow billions more, a move that led to a collapse in the price of the pound and her rapid removal as PM, making for one of the shortest reigns, so far, in the history of the British state.
This episode made a marked impression on the Labour leader Starmer. In a situation where any Labour general election victory – however quickly he gets into bed with the Liberal Democrats – will be seen by workers as the signal to win back all of the gains that have been plundered off them by the Tories, a stronger OBR with greater powers will be needed, he claims.
Starmer now plans to use Office for Budget Responsibility (OBR) to publish forecasts and analysis alongside any calls to cut taxes, or increase spending, and to use the OBR to rule them out as a danger to the state.
If the working class proves to be stubborn and demands wage rises and price cuts, the OBR will set out to do a ‘Truss’ by organising a run on the pound, and collapsing the economy, while blaming the workers for the crisis.
Speaking to the BBC, Labour shadow chancellor Rachel Reeves said that, under Labour, all major tax and spending decisions would by law be announced in November, to reduce uncertainty for businesses and families, and that they will all have to be vetted and approved by the OBR.
Labour plans to allow only very minor policy changes in a spring update to Parliament. They are already warning that anything more drastic will touch off a run on the pound.
The package, which Labour is calling its ‘fiscal lock’, represents an attempt to seize the mantle of fiscal responsibility, by reminding voters of Ms Truss’s mini-budget, and its fate, whose anniversary falls on today.
Some argue that Ms Truss’s decision not to ask the independent OBR to assess her measures in advance, and to get its permission to continue, was a big factor in the economic and political chaos which ensued, as the OBR worked deliberately to bring her down.
If the government feels it has to rush out new measures without the OBR having time to put together its forecasts – for example in response to a financial crisis or another pandemic – the OBR would be given the power to publish analysis rapidly afterwards, for the good of the country, Ms Reeves told the BBC.
‘Never again can a chancellor be allowed to repeat the disastrous mistakes of last year’s mini-budget,’ Ms Reeves added to the BBC.
The OBR was set up by former Chancellor George Osborne, when the Conservatives entered government in 2010.
Responding to the Labour policy, Andrew Griffith, the economic secretary to the Treasury, admitted: ‘The Conservatives created the OBR to curb Gordon Brown’s reckless spending binge.
‘The current Labour Party is on the same, destructive path with their plan to borrow £28bn a year which would fuel inflation and push up interest rates even further.’
A chastened Truss also hit out, saying a ‘25-year economic consensus’ had resulted in the highest government spending for half a century, the highest taxes since World War Two, a national debt of more than £2.5tn, and low growth.
‘It beggars belief that Labour think Britain’s problems will be solved by bigger government and even more powers for quangos,’ she added.
The OBR has already warned that the UK is in a recession, and warned that the economy will shrink even further next year.
It also said that in the two years after that, economic growth will be weaker than previously thought.
The OBR checks the plans and makes economic forecasts covering the next five years. They will be policing Labour budgets should Labour become the government, their task will be to bring Labour down as quickly as possible.
The working class must not be caught by surprise by any such manoeuvre. It must respond with a general strike to go from a Labour government to a workers government that will nationalise the banks and the major industries and bring in socialism
With a huge crisis directly ahead now is the time for workers and youth to join the YS and the Workers Revolutionary Party to organise the victory of the British Socialist Revolution!
