CATCHING UP WITH THE LABOUR AUTUMN BUDGET 2024

 I have been steering clear of political blogposts since the electorate in the UK showed the door to the Tory Party in the July election this year. There was no surprise that at last the British voters realized that there was something rotten in the Party that had been misgoverning us. In my less analytical moments, I have been known to mutter that Donald Duck could have won that election if he had been standing as the leader of the Opposition Party. Instead it was Sir Keir Starmer who became the prime minister, the man who lied his way into winning the leadership election within the Labour Party by claiming he was a supporter of Jeremy Corbyn's ten principles. In your dreams! One savage and toxic brand of neoliberal politicians who believe in prioritizing the market and the pursuit of profit has been replaced by another type of politician, less nasty but still in tow to capitalists who look down on those they exploit. The water companies are still safe in their privatized industry as they pump our sewerage into our rivers, knowing that this new government has refused to renationalize the water industry. Remember, this so-called Labour government has also declined to end the two-child benefit cap introduced by the Tories that means over a million children living in poverty - and they have actually ended the universal winter fuel allowance which will lead to some impoverished pensioners dying as they juggle choices between food and heat.  

Donald Duck - the inevitable PM?

I am a member of Transform, a new political party formed a year or two ago to challenge the Tory maladministration. This blogpost was triggered by the mailing I received today from them. Here it is:

Hi Rob,   Welcome to issue 14 of the Transform newsletter. This newsletter was written before the results from the American election started to come in. Like millions around the world, we await the outcome, and what may follow from it, with fear and anxiety.

A Budget for working people ?   Many of you will have heard reactions like these: “I was relieved - it wasn’t as bad as I was expecting”, “It’s a good start”, “It’s a move in the right direction”, “It felt different from the Tory budgets that we’ve been used to”.   When Rishi Sunak, the richest man in Parliament, is shaking with anger, it’s hard to avoid thinking that there must be something good about the Budget.   There were positive things in the budget. As we shall see, not all of these are as positive as may at first appear; and on all the big tests the Budget fails. It makes no serious attempt to mend broken Britain, make real progress in tackling poverty and inequality, fix the crises facing the NHS and the public sector, push forward on the green agenda, or rebuild our economy. They’ve bought Reeves and Starmer a little bit of time; but barring a radical change in government policy the chances are high that the government will be dragged into deep crisis long before the next General Election.   The public sector and the unions   Even before Budget Day, Unison General Secretary Christine McAnea was telling members that “We now have a government that recognises the value of public services”. The TUC and Labour-affiliated unions have been strongly supportive of the budget, saying that it marks an end to 14 years of Tory misrule and sets us on a path to national renewal.   It doesn’t take a genius to see what’s going on here. Union leaders are falling over one another to show support for the government because they’re desperate to see the Employment Rights Bill get on the statute book without any watering down of manifesto commitments. While the Bill is being fought over, union disaffiliation from Labour is effectively off the agenda.   The reality that faces our public services is rather different. The IFS point out that “after 2025-26 we have day-to-day public service spending rising by a miserable 1.3 per cent a year. That may not even be enough to avoid cuts to some departmental budgets.” Could this change ? Unlikely: ministers have boxed themselves into a corner by ruling out raising taxes on the rich.   The NHS is supposedly the big winner. But Siva Anandaciva, Chief Analyst at The King’s Fund, commented “The Chancellor has said that ‘change must be felt’, but the health spending announced today is unlikely to be enough for patients to see a real improvement in the care they receive,” stressing the need for more funding to be provided in next year’s Comprehensive Spending review. RCN general secretary Nicola Ranger said that “The crisis in nursing remains unresolved after today’s budget.”   Some cherries were given to local government, including a £1.3bn finance settlement, and £500m for potholes. At the same time, councils are losing funding. Council chiefs are pleading with the government to be exempted from the rise in National Insurance contributions. The overall picture is one of a government tinkering at the edges, while councils up and down the country are in crisis with some in danger of going under.   Labour MPs have been banging on for years about the scale of the crisis affecting our public services. And yet, after 14 years of opposition, Labour have failed to come up with a plan that even begins to resolve the crisis. Public services have been squeezed for fourteen years by Tory governments determined to reduce the size of the state - but in a developed and complex society such as ours this will result in people suffering. We need to tax the excess wealth of a tiny few so the rest of us can live decent lives freed from poverty. There is enough wealth to go round if only it is redistributed.    Welfare benefits   The increase in the National Living Wage to £12.21 in line with the Low Pay Commission recommendation was the least that the government could do. A government that was serious about helping the poorest families would also have abolished the two child benefit cap and ditched cuts to winter fuel payments, but we saw none of that from the Chancellor.   The cap on Universal Credit deductions is reduced from 25% to 15%. This has been welcomed as a progressive measure, but to be clear: if you have debts, you’ll still have to repay them in full, and for as long as you’re doing so, you’ll still have to live on lower than benefit levels.   Changes to the Carers Allowance mean that the threshold of what carers are allowed to earn before losing their entitlement to the benefit has increased. It’s better than nothing, but the Allowance needs to be fundamentally reformed. Until this happens, carers will still be stuck with ridiculous eligibility criteria.   Meanwhile, it appears that the Government is pushing ahead with plans to reform Work Capability Assessment to achieve billions of savings. They haven’t yet set out how they’re going to achieve this, but people with disabilities fear that it could cost them as much as £400 a month in benefits while doing little to help them into employment.   Poverty and inequality   This was not a redistributive budget. A government that was serious about doing something about decades of rising inequality would have increased taxes on the highest income earners. Instead, the Chancellor increased taxes on employers through National Insurance - a measure that she herself has admitted will drive down wages.   Despite the furore over the impact on low-earning farmers, the main issue with the changes to Capital Gains Tax is their lack of ambition. Reeves boasted that the UK will still have “the lowest capital gains tax rate of any European G7 economy.”   With few exceptions, people don’t feel any richer. The rising bus fares are symbolic of a more general failure to address cost of living issues. Rising costs of energy, water and essential services are one of the biggest reasons why socialists argue for nationalisation of utilities - a policy to which Starmer is fundamentally opposed.   The Child Poverty Action Group tweeted that “The Chancellor brought good news on breakfast clubs and universal credit deductions but this was not a Budget of bold action on child poverty… The spending review next spring will have to deliver much more to make a significant difference for children in poverty.”   The Joseph Rowntree Foundation revealed that under its modelling based on Budget figures, both poverty and inequality are set to increase. “The analysis shows families with children will see the biggest hit to their disposable incomes, with 100,000 more children set to be in poverty by October 2029 compared to today along with 300,000 more working-age adults. The average family will be £770 worse off in real terms. Alongside this inequality is set to rise. The poorest third of households will see their real disposable incomes fall by 3.3% between today and October 2029, while the highest income third see a fall of 1.7%.”   None of this should come as a surprise. Labour’s election manifesto, while decrying food banks as “a moral scar on our society”, contained no plans for eradicating poverty and the need for food banks. Just a reminder of the causes and consequences of the existential crisis that any government worth its salt would be prioritizsing.   Climate crisis   Transform member Hugh Barnes writes: “In opposition - and during this summer’s election campaign - Rachel Reeves boasted that she would be the green chancellor. Her first budget was our first opportunity to put Labour’s spin to the test. And once again it showed that the party leadership has been taken hostage by a false narrative about climate change and the kind of green policies needed to tackle it.   In addition to the failure to redistribute wealth by taxing the rich appropriately, Reeves’s decision to freeze petrolhead fuel duty and keep the 5p cut made by the Conservatives in 2022 is utterly dispiriting because that tax relief has raised UK greenhouse gas emissions by 10% since 2010. In other words, Labour is doing completely the wrong thing for the climate, at the same time as raising the bus fare cap from £2 to £3 and rail fares by 4.6%, as if subsidised - indeed free - public transport was not a no-brainer climate-wise.   If you care about climate change, then this is totally the wrong way to address the problem because we need to be moving in the opposite direction towards a system that makes the greenest ways of getting around the cheapest and most convenient.   On the related topic of Labour’s green investment plan, that is just another policy cul-de-sac. Labour’s fetish about growth (as opposed to redistribution) of wealth is a category error as far as green economics goes. We need to stop thinking about growth as the summum bonum of politics. We need to start thinking in a positive new way about the possibilities of eco-socialist degrowth, reducing production and consumption in industrialised countries in order to achieve environmental sustainability, social justice wellbeing, bringing us back into balance with the living world while distributing income and resources more fairly. Rachel Reeves’s budget had nothing to say to that.”   What do Transform say ?   Nothing less than a fundamental transformation of our economy is needed to make it function in the interests of working class people. This would mean changes to the tax and benefits systems, and nationalisation of key parts of the economy.   Transform is also committed to working with others who share our values to fight for what can be won in the here and now. We applaud the joint statement on the Budget by Independent, Green and Plaid Cymru MPs and nearly 100 progressive politicians.

   

I am at one with that kind of socialist thinking. What do you think? 

Look out for my next two blogposts in November - the next one will be focused on the Devon Quaker singer-songwriter, Mark Waistell; and then follows one that explores issues around ageing that has been sparked by Marie de Hennezel's book, published in France in 2008 and then translated and first published in the UK in 2011, under the title: The Warmth of the Heart prevents your Body from Rusting.