YESTERDAY morning Labour chancellor Rachel Reeves gave an unprecedented pre-budget speech designed, she said, to address ‘speculation’ about what she would be announcing in her official Autumn Budget on 26 November.
The speculation is that Reeves is preparing to tear up all the ‘cast-iron’ pledges in Labour’s election manifesto to not spend more than the government can afford and never raise taxes.
Reeves said she would be taking ‘painful decisions’ in this month’s budget and refused to rule out increased taxes for workers, saying: ‘I will set out the individual policies of the budget on 26th November. That’s not what today is about. Today is about setting the context up for that budget.’
The ‘context’ that Reeves is determined to establish is that the working class can expect an awful lot of pain as she warned that we all ‘have to do our bit’ to save British capitalism from crashing into bankruptcy.
She refused to rule out hiking up income tax, VAT or National Insurance in an effort to plug the financial black hole in public finances caused by government income from taxation and other sources being inadequate to fund the day-to-day spending required.
This ‘hole’ according to Reeves is now around £30 billion. Overshadowing this £30 billion hole is the national debt pile which Reeves said had reached £2.6 trillion which means that £1 in every £10 coming into the UK government is spent on debt interest payments.
In fact, the UK national debt today is estimated to be even higher, standing at £2.71 trillion.
Reeves tried to portray the savage austerity cuts she will be putting forward to make even a dent in this debt pile as being for the future benefit of workers. She said: ‘The less we spend on debt interest, the more we can spend on the priorities of working people.’
Workers have no doubts about the priorities of Reeves as she demonstrated in the mini-budget last year, which proposed cutting the debt pile by slashing benefits to the most vulnerable sections of the working class, the disabled and children.
That attempt was defeated by Labour MPs, driven by the anger of the working class, resulting in a humiliating climbdown by Reeves and Starmer.
A year on and Reeves has returned with the promise to the international financial markets – relied on to buy government bonds on which they charge huge amounts of interest – that this time the Labour government is prepared to dump all its election pledges about protecting the rights and welfare provisions for workers and their families.
Reeves is insisting that the economic crash engulfing weak British capitalism is the result of the world crisis and all the decisions made by previous Tory governments, and that now the Labour government must take ‘hard decisions’ to rescue the bankers and bosses.
The fact is that increases in taxation will in no way match the enormous scale of the debt crisis, providing at most just a few billion pounds that will quickly be eaten up as UK productivity continues its collapse and unemployment surges.
Reeves’ speech is intended to prove to the capitalist world that Labour is now prepared to do what the Tories failed to do; that is to take on slashing all public spending on the entire welfare state, from pensions to benefits and the NHS.
Behind all the waffle from Reeves yesterday was a pledge to the bankers and bosses that the Labour government is prepared to wage a class war to the finish to force workers to bear the cost of British capitalism crashing into recession – a class war carried out by a Labour government that is detested and hated by the overwhelming majority of workers and youth who are rising up and rejecting a government that serves only the interests of capitalism.
Now is the time to put an end to this Starmer government by demanding the TUC immediately organise the strength of the working class in a general strike to kick it out and replace it with a workers’ government and socialism.