The Budget: A Wasted Opportunity 

When Labour came to office in July, they pledged to ‘fix the foundations’ of Britain and not to tinker around the edges, but it appears this Budget did just that. Keir Starmer’s record of dishonesty, from breaking every single one of the ten pledges upon which he became Leader of the Labour Party, to the false promises of ‘change’ in his election campaign, means we should hardly be surprised that this Budget constitutes another round of austerity and missed opportunities. 

There is no sugarcoating that the situation Labour inherited was dire. The Conservatives left a record of drastically underfunded public services, industrial disputes not resolved, record-breaking NHS waiting lists, and poor educational outcomes, to name a few. With such a weak inheritance, you can point to some successes in the Budget. An increase in the minimum wage, pay rises for key workers, and a tripling in funding for breakfast clubs are all important steps in counteracting Britain’s cost-of-living crisis. Capital spending in education, healthcare and housing is much needed to lessen the effects of the UK’s productivity and housing crises, by investing in a healthier and more socially mobile population, alongside more funding for local governments who will help implement this. Therefore, the Budget is not a complete catastrophe as the Daily Mail or Telegraph would have you believe.

However, Starmer and Reeves have failed at such a crucial first test of leadership in being bold enough to challenge the austerity narrative and implement a genuinely social-democratic alternative to redistribute power and wealth in the UK.  They have created a false dichotomy between different groups in society by arguing that there is a fiscal ‘black hole,’ and that they have no choice but to make ‘tough decisions,’ yet they are making a deliberate political choice regarding where to allocate funding and where to cut back. Scrapping the Universal Winter Fuel Allowance, according to their own research, will lead to the deaths of 4000 pensioners, and increasing bus fares saves a negligible amount of money, whilst increasing costs for ordinary working families that Labour claim to represent. There is money to both fund the investment needed and not become hugely unpopular in the process, so a true Labour government that isn’t on the side of its private donors would reverse these cuts and transition the economic model back to one which rejects neoliberalism, inequality and environmental degradation. 

There is an abundance of policies the government can pursue to do this. According to the Child Poverty Action Group, 4.3 million children in the UK live in poverty and of these, 900,000 miss out on free school meals, so the government has a duty to abolish the cruel two-child benefit cap of the Cameron-Osborne era and reintroduce universal free school meals - which Sadiq Khan has already delivered on in London. Labour has committed to capital spending in many public services, yet they are still investing in a broken, privatised model, with money leaking out of the NHS in wasteful private sector contracts, and energy/water CEOs ripping off consumers (making lucrative profits and bonuses in the process). For example, according to the We Own It Campaign, since privatisation, water companies have accumulated over £60 billion in debt, whilst the average CEO salary is £1.7 million per annum. A Labour Party serious about preventing this rampant profiteering and cutting bills for families would support the re-nationalisation of these public services, rather than U-turning; U-turns and deceitfulness being a cornerstone of Starmer’s political project. 

A question often posed is how to finance this and who should pay for it. A glaring error made in Labour’s Budget was to reduce the threshold at which firms start paying National Insurance. All this achieves is shifting the tax burden onto smaller businesses, many of whom are already paying extortionate business rates as they attempt to compete with huge online multinational companies. Daily commuters were also hit with an increased bus fare of £3, which while sounding minute, behaves like a tax rise of £480 a year. Labour is still punishing workers and small businesses, while not having the ambition to go after Corporate Britain, big business and multi-millionaires/ billionaires. It is telling that the party meant to represent the people maintains the Conservatives’ removal of the cap on bankers’ bonuses while ruling out abolishing the two-child benefit cap because ‘tough decisions’ must be taken. The Equality Trust highlights that between 2020 and 2022, billionaires’ wealth increased by almost £150 billion, yet a wealth tax and equalisation of CGT with Income Tax have both been ruled out. The narrative should be less about ‘tough choices’ as the sixth richest country in the world by GDP, but more about ‘What measures can we introduce to tax wealth fairly?’ – and this Budget failed to acknowledge this, thus being a wasted opportunity for Labour. 

The stark reality is that the election was not a win for Labour, it was a default victory because of the sheer unpopularity of the Conservatives. It was, however, a win for Reform, who swept up over 4 million votes on the back of discontent. If Labour fails to create a genuine social-democratic alternative to neoliberalism, by moving away from broken privatised models, reversing its cuts with regards to bus fares and pensioners, and removing previous austerity measures like the two-child benefit cap, then that anger will materialise in support for the far-right. This Budget was a wasted opportunity to tax wealth and improve living standards, instead making Labour more unpopular, with its false dichotomies between pensioners and public sector workers gaining a pay rise. The moral political choice is to support all groups in society, or risk emboldening the far-right.  

Tyler Kay

Contributor

21st November 2024