LABOUR Prime Minister Keir Starmer vowed to ‘embrace the harsh light of fiscal reality’ in a speech delivered in Birmingham yesterday, in what was a pre-emptive defence of Chancellor Rachel Reeves’ budget due tomorrow.
The need for Starmer to come out to defend the budget before details have even been released, speaks volumes of the huge hostility from the working class towards a Labour government that has placed, as its sole priority, rescuing a bankrupt British capitalist economy by forcing workers to make sacrifices to keep it from collapse.
To this end, Starmer’s speech was crammed full of proclamations that every decision in the budget was made with ‘working people in mind’ despite the fact that his Labour government is unable to define exactly what constitutes ‘working people’.
The budget, Starmer insisted, will prevent ‘devastating austerity’ in public services while at the same time getting Britain working by paving the way for reforms to tackle the root cause of economic inactivity.
Starmer placed the blame for this ‘economic inactivity’ squarely on the backs of workers, complaining that the UK is the only G7 country where economic inactivity is still higher than before the Covid pandemic.
The budget will get Britain working and pave the way for reforms to tackle the root causes of economic inactivity, and will contain £240 million for local services to get people back to work.
Workers have already had a taste of Labour’s plans to get people back to work, when health secretary Wes Streeting recently announced that anyone on benefits declared to be overweight must get a weight reduction injection or risk losing benefit.
Driving the sick off benefits and back into low-paid jobs is the preferred method of the Labour government in dealing with the ‘unprecedented’ economic challenges that Starmer is warning about.
Starmer defended Labour’s plan to ‘revive’ a British capitalist system drowning in debt, with a budget that includes billions of pounds’ worth of tax rises and cuts to spending on public services.
He warned of ‘unprecedented’ economic challenges but insisted that the Labour government will ‘run towards them’, promising that Labour’s budget will ‘ignore the populist chorus of easy answers’. The economic challenges Starmer named were ‘weak public finances’, alongside ‘crumbling public services’.
The main plank of the budget is widely expected to be an increase in employers’ National Insurance (NI) contributions. Employers currently pay National Insurance of 13.8% on a worker’s earnings above £175 a week. The anticipated increase to 15.8% would raise an estimated £18 billion a year towards filling the ‘black hole’ of £22 billion that Reeves moans was left by the Tories.
Starmer and Reeves both insist that this is not an increase in tax for workers, but in reality any increase in the tax paid by employers will be immediately passed on to workers through cuts to wages and cuts to jobs.
The bosses will always make workers pay for any costs that threaten their profits, and all Starmer’s claims that it will be a budget for working people will fool no one. Equally, no one will be fooled by Starmer’s pledge that Labour will not follow the Liz Truss route of borrowing from the international money markets to keep the UK from bankruptcy.
Reeves has already announced that she is set to change the government borrowing rules to allow her to increase the public debt by £50 billion, driving up the interest payments to the international financiers and hedge funds.
Reeves has pledged to get the UK’s debt mountain down by the end of this parliament, and the only way she can have even a hope of achieving this is by savage austerity cuts to all the public services while the bosses pass on any tax increases to the working class.
The powerful working class wouldn’t tolerate this from the Tories and it will never allow a Labour government to inflict poverty and destitution to ‘rescue’ a capitalist system that is collapsing and deserves to be overthrown.
The working class must now demand its trade union leaders act by forcing the TUC to call a general strike to bring down the Labour government, and bring in a workers’ government that will expropriate the bosses and bankers.
This is the way forward.