Labour and the budget: same old same old (with a side of pickles)
When Chancellor of the Exchequer John Healey presented his budget on Wednesday October 28th he said: “This is a Budget for the working people of Britain. For British businesses, big and small.” Well, no. It offered little to working people, and plenty to businesses, to the military and to the defence industry.
We were offered the pittance of 86p a week off of electricity bills. In addition, there will be a £100 one-off winter fuel payment for 20 million households in council tax bands A to D. This will almost immediately be wiped out by a predicted rise by £276 in January, to just under £2,000 a year. Another forecast from the EDF energy company, predicted that it might rise higher than this.
Healey introduced a £2 cap on single bus fares in England from January 2027. But, for example, many workers and students in London cannot afford to live in inner London and must make long journeys by bus to get to work and study, because they cannot afford the rail and tube fares.
He also announced the end of gas standing charges, which will save a mere £45 a year, and then only for 60% of households. Healey had already announced that an extra £432 million would be spent on a programme to get rough sleepers in England off the streets. Unpaid carers would no longer lose all of their Carer’s Allowance if they earnt more than 1p over the £204 allowed and instead there would be a tapered payment.
On the other hand, Healey reassured the boss class by stating that he was committed to “prevent regulation from holding back investment by removing regulation and tariffs worth £800m to business.” The banks feared that the corporation tax surcharge would be raised by as much as 8 per cent. In fact, Healey only raised it by six per cent, and smarmed the banks by saying,” I celebrate and am grateful for the role you play”. In fact, this surcharge will only last for 15 months from January. As a result, share prices of the main UK banks increased, after the budget announcement.
The Financial Times, the bosses’ voice, enthusiastically noted that Healey and Burnham wanted to reassure business and the banks.
He promised an increase of £10 billion on economic and military support for Ukraine, in addition to the £25 billion already committed by previous Tory and Labour administrations. He would also make cuts in the budgets of various government departments by 1%to further fund defence spending. As a result, the Warm Homes Plan, would suffer a £1 billion cut. He promised a maximum amount of private investment in defence, including through public private partnerships.
Labour had promised to end discriminatory age bands and to increase the minimum wage for 18- to 20-year-olds to be the same as those over 21 years old. Healey broke this promise with the 18 to 20 years olds earning nearly £2 an hour less. scrapping “discriminatory” age bands, and to increasing the minimum wages for 18- to 20-year-olds so young workers are paid the same as those over 21. Healey broke this promise—18- to 20-year-olds will still earn nearly £2 an hour less. The rate for both age levels will rise by 3.9% but this will be cancelled out by rising inflation.
Labour will use these young workers as a cheap labour force, and is already pushing an unpaid work experience scheme at Sainsbury’s.
Labour is preparing for further attacks on welfare, and Healey promised, “As the Prime Minister and I have both said, we will bring down the welfare bill.” They are eying up attacking the Personal Independence Payment, the major disability benefit. All of this is in the pipeline.
Healey did not remove the Triple Lock on pensions, and this will not happen before the 2030 election, but made the menacing statement that Labour would adjust the Triple Lock after that.
All in all, the budget was low key, with a series of minor announcements. In addition to the above, there was the removal of import tax on some 100 products, meaning cheaper prices for things like, baked beans, gherkins, garlic and marmalade. This was derided widely in the media, as this would save around £21 a year, or £1.75 a month! Parental pay would be extended, so that 150,000 parents will receive two weeks of support of up to £194 a week. Again, this will be wiped out by rising inflation.
So, no real challenge to big business and a massive increase in defence spending, with looming attacks on pensioners, young workers and the disabled. But we never expected anything else from the Burnham administration.
When Burnham assumed the leadership of the Labour Party, earlier this year, he promised to “end 40 years of neoliberalism.” This budget underlines that he, Healey and the rest of the Labour leaders remain committed to fiscal policies, which are exactly what neoliberalism requires in order to function. Nothing then has changed, with lilliputian tinkering instead of the radical change that Burnham promised.
Photo: wikimedia commons. Author: Nikodem Nijaki
