As the Guardian reports this morning:
Rachel Reeves is planning to raise taxes, cut spending and get tough on benefits in October's budget amid Treasury alarm that the pickup in the economy has failed to improve the poor state of the public finances.
I did express all my doubts about Reeves before the election. No one can deny that I held back on my concerns.
I was told by Labour optimists to back off. All would be well, they said. Starmer and Reeves would tack left the moment they were in office, I they said.
But I was right, and the optimists were wrong. There will be no change of tack. There will just be plain straightforward austerity.
The Guardian says the planned measures include:
- Raising more money from inheritance tax and capital gains tax.
- Sticking to plans for a 1% increase in public spending even though it would involve cuts for some Whitehall departments.
- Rejecting pressure to scrap the two-child benefit cap.
These are a recipe for these things:
- Declining growth, and even recession
- An ever-falling quality of public services when they are already stretched beyond their limits
- Greater social tension as those who feel they are already left behind in this country do so, evermore
- Rising poverty
- Increasing inequality
Reeves has, then, as I expected, tacked right and not left. The traditional Treasury paranoia about balanced budgets that plagued her before reaching office and which has plagued this country for well over a century, has been reinforced by her contact with the Treasury itself.
The consequence is that Reeves is clearly intent on replicating for herself the disastrous legacy of Philip Snowden, Labour's first ever Chancellor, who eventually held a similar position in the 1931 national government, where his policies created almost unimaginable problems for the country, and most especially the poorest in it.
Is there a way out for Reeves on this? Of course there is. We know that the government could spend more. We know that the capacity for it to do so exists. People would save more with the government if that was what it wanted. Even if she did not wish to issue gilts, demand for National Savings and Investments products is being suppressed at present. In other words, even within her own framework of thinking greater deficits are possible.
They are also desirable, because there is massive need for enhanced public services, and there is an overwhelming necessity to relieve poverty, including by removing the two-child benefit payment limit that has become such a totemic, and absurd, symbol of Labour dedication to Tory policy.
What is more, as I have shown in the Taxing Wealth Report, there are ample opportunities to raise additional tax in the UK economy without in any way imposing hardship on anyone who might be asked to pay more to contribute to a more equitable society.
In other words, Reeves could do vastly better than she is planning to do. She will, then, be failing herself, her party, the people who put her in power, and the country by opting for deep austerity, as appears to be her plan.
Why is she doing so in that case? There can only be one explanation. For any politician co-option into the hierarchy of the Establishment would now seem to be the greatest goal. To do so one has to conform with its desires, which directly contradict those of the country at large. Reeves is indicating that she has made her choice and wants to pass her right of passage into what she thinks to be the society to which she should belong.
I would like to find another explanation, but struggle as I might I cannot do so. Something as absurd as this has to explain why she is doing something she must know to be profoundly harmful, but which she is going to do anyway. We will all pay a very high price for her vanity.
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The “Dark Ages” continue!
Dire.
There is no sign of change here at all.
The abuse continues – the abuse of democracy, the abuse of power and the abuse of us.
Machine politics delivered by a money machine.
So faced with first a moral crisis over child poverty she ducks the issue and a political crisis over water she does the same.
As you rightly point out stoking the fires of Civil Unrest
This is where their daft ambitions fail, I’d think, when the ordinary yeomen of England are rioting in the streets secure in the knowledge there are no jail spaces left to send them to. Let’s see how they try to cope with that.
It is hard to understand the mindset. 14 years of austerity and “tough fiscal rules” have not made the economy better overall. (Arguably it began with Regan and Thatcher).
So we’re going to continue with the same policies. As Einstein said “We cannot solve our problems with the same thinking we used to create them.”
It’s absurd isn’t it! I was shouting out at Labour conference last year. The Tories have tried financing the state via economic growth which they felt they could achieve without any public investment. Why would a different pair of hands with the exact same ideology make any difference? Just ridiculous!
Hello at the time of the general election after listening to the BBC political commentator who claimed that Labour had copied and pasted Tory policies. As a joke I went round telling everyone vote Labour and get nothing,and that is exactly what we’ve got. The problem for Labour is it believes the present economic system is the only one. As Richard as shown and the book ‘The deficit myth clearly shows you can run the economy in a BETTER way. So let’s hope Reeves stops trying to keep her secret backers happy and do something for those who voted for CHANGE!
As you note, this was all predicted, LINO supporters claimed things would be different (based on what? exactly?) & so it came to pass: things playing out exactly as forecast.
Missing from this is any coherent explanation from Reeves (I don’t count her “Jack n Jill went up the hill” blather – fine for LINO imbeciles – but not for those on this blog).
This, ipso facto, shows the core weakness of all democracies: there is no possibility for the cross examination of politicos and their mostly utopian beliefs & the actions, or lack thereof, based on these beleifs.
The operative phrase is “cross examination”. Questions in the House of Elected Fools/Punch & Judy don’t count. Neither does appearing on “the telly” (propaganda). Perhaps we need a People’s Tribune (or their appointees) – empowered to publicly question our elected fools – quietly and forensically exposed them for the corrupt talentless imbeciles that they mostly are (I use the word corrupt in its widest meaning – e.g. morally, intellectually and …etc).
As you aptly say the Lino imbeciles will be clutching at straws to explain how their chosen administration is much different than the previous fourteen years. No doubt the Guardian Polly Toynbee’s of this world will be working hard to find excuses!
Hello what Reeves and anyone in the Labour party needs to look at is history. Beginning in 1923 and again in 1931 the governments with the best of intentions coming into conflict with an economic system that doesn’t serve everyone. My belief which I hope I am wrong about is Reeves will come stuck and Starmer will use the state to curtail freedom to disagree. This will pave the way for a right wing Tory party to gain power and all because Labour failed to deliver change. What everyone needs to do is write to your MP go on PEACEFUL demonstrations and in May vote for anybody but Labour or the Tories if Reeves keeps pushing ‘re-cycled Tory policies.
I’m not sure I agree that there is no possibility for the cross examination of politicos in any democracy. There’s none in ours, but I’m sure we could come up with a system that would provide proper scrutiny and a proper dialogue between society and our elected reps.
Adding – & relevant to the other post on Reeves:
https://aurelien2022.substack.com/p/what-can-you-do-when-you-dont-have
extract:
“the inability of western political classes to communicate ideas competently, to discuss and debate, and to convince electorates of the wisdom of their policies. Instead of that, these classes communicate with their electorates from a position of unreflective superiority, like parents to children or teachers to students. Rather than seeking to persuade, they seek to intimidate and bully, to insult the electorate into voting for them, and to suppress and censor, as far as possible, the opinions of those they disagree with and that they do not want us to hear.”
The above (& comments in another post by Col Smithers) fits Reeves & many of LINO perfectly, small people, with small ideas, unwilling at any point to engage with anybody outside of their circle. In short, pathetic people.
Spot on
My view is that they are not even talking to us.
They are – instead – signalling to their financial backers and markets that they are keeping to what they have discussed behind closed doors, and seeking to help create markets where they leave gaps or create problems.
[…] have already noted this morning a Guardian article making very confident budget predictions, which are, I am sure, based on […]
In a reply to one of my comments last week, Colonel Smithers stated that most people in this country wouldn’t believe the extent to which money/the rich have captured the state in the UK (although many readers of this blog would, I’m sure). Call that entity the ‘Establishment’ if you prefer, but Reeves’ behavior is a clear sign of that, as is the behaviour of Starmer and New Labour 2.0 (for that is what we have) in general. The Blair/Brown governments were similarly inflicted. What we see now is history repeating itself: Power corrupts. Absolute power corrupts absolutely. And as that’s the position of the ‘Establishment’ expect nothing more, except the odd tit-bit from the high table to keep the masses, and many of those who ought to know better on side with promises of things that might be to come (but never will).
It’s corrupted remarkably quickly in this case…
On 29 August 1953, in reviewing a biography of William Cobbett in New Statesman, the late historian AJP Taylor wrote: “The Establishment draws in recruits from outside as soon as they are ready to conform to its standards and become respectable. There is nothing more agreeable in life than to make peace with the Establishment – and nothing more corrupting.”
Very true
OK, so civil unrest it is then. I’d rather It weren’t violent though. Let’s start by huge campaigns of writing to our MPs & tackling them in their constituencies. Make clear to every single MP that present direction of travel is unacceptable.
Also raise objections on every radio phone-in and in every possible TV opportunity.
Now someone please come up with more ideas.
She is just a pawn in a larger autocracy. Politicians don’t understand the system and rely on this higher authority to guide them. Ultimately she has become their spokesperson a spokesperson for a Neo liberal agenda. That is why out political system has become singular in ideology. Put simply our politicians are dumb and rely on the civil service (autocracy) to guide them.
I thinks there’s a significant element of truth in what you say. I stood as a candidate in the last general election ( and the one before that). If I’d been elected, I’d have had no clue how Parliament works and what to do as a new MP. I’d have been vulnerable to influence by ‘the establishment’ despite my radical politics. In my experience, many candidates are significantly less political than I am, so easy to influence.
I understand that civil servants can not get a pay rise without a transfer to another department. This means that they are all incompetent in the job they are doing.
I think you seriously overstate your case
In fact, I would suggest you’re wrong
Some are on a learning curve
As a matter of fact, we all are, all the time
So, your point is?
Do I take it that Reeves is just very stupid. As you say, her adherence to policies which maintain austerity, economic decline and possibly civil unrest, then who on earth would want to elevate her to a higher social position? She will have proved to be a complete failure and a disaster for the country.
I was having a conversation with a fellow Labour Party member and friend recently. He was telling me what a great Chancellor Reeves would make because of her experience at the BoE. I asked if he felt we had been well served by the brand of economics to which Reeves subscribes, and it’s institutions and he had to concede that we had not. I asked why therefore did he feel someone so intimately associated with ‘establishment economics’ would be a good chancellor and he was stumped.
The Labour right believes that ‘grown up’ politics is about proving to big business and big money that you are a ‘safe pair of hands’. Look how excited they get when they get the nod of approval from a wealthy businessman or corporate institution.
Of course real ‘grown up politics’ requires an honest appraisal of the issues facing society and the level of change required to solve those issues, not an infantile belief that business can solve all our problems or the dogmatic delusion that there is no tension between the wants of the very rich and the needs of the rest of us!
Thanks
Alas Joe, I’ve been having similar conversations, and ones about foreign and national policy, to the collective plugging of ears and shifty denial. There are two or three coexisting versions of ‘Labour’. One is the grassroots organisation that used to co-opt non-members until Starmer succeeded to the throne. The second is the pseudodemocratic structures that contribute to Conference, regions etc. The third is the National structure where policy is decided by the donors, by the City, by Blair, even by influences from abroad, but above all, by the rich. The first has become a submissive partner of the second and third, and both the latter are run by the centre right (or Blairites as I prefer).
“I would like to find another explanation, but struggle as I might I cannot do so.”
Could Rachel Reeves be afraid of Reform and Nigel “Lord Farquhar” Farage gaining traction because voters really do not understand MMT, the issues like immigration, climate change plus the real causes of the housing problems in the UK?
But why is ‘the establishment’ so stupid?
Surely it would be in their interest if inequality were be kept within reasonable bounds so that lower income groups had enough to live on and could afford accommodation? And it could well be within their interest if public services and NHS were funcitonaing reasonsably well – as in 2010. The top one percent would still have vastly more income and wealth than they needed .
Even if the ‘Establishment’ cant see it themselves – they might be open to be persuaded by a slightly more enlightend chancellor – such as Brown – as he was from 2000 to 2008 ? Labour rebuilt the NHS , and did quite a few good things – – although overshadowed by PFI disaster and Iraq etc.
Starmer and Reeves may be desperate to ascend into the realm of the blessed, but continunig to bash the ‘benefit class’ – and burn the NHS will end in disaster – quite quickly – within a year? Surely someone is telling them that?
They are stupid…
Teresa Harding
Why anyone would think Reeves with her background would attempt any radical policies is beyond me.
We have no meaningful democracy in this country, we may as well allow civil servants to run the country. I ended my Labour Party membership of over 30 years some time ago as I realised membership was never going to achieve anything. I then joined the Green Party at least to ensure I was voting for policies I agreed with.
I do not know how we can alter this and I realise it does seem negative , I really wish there was at least some recognition that we could do things differently.
I think there are the germs of that recognition and even pockets of practice, but they are very much an edge phenomenon as yet and it’s probably safe to forecast that the mainstream mythologies and hypocrisies, coupled with a large bulwark of short- sighted self-interest, will keep their expansion at bay until the apocalyptic horsemen of climate, resource depletion, extinctions and inequity force the collapse of the status quo and consign us to an unmitigable wasteland.
I suppose, for a while, it will allow her newfound corporate and City chums to delude themselves she is acting in their interests and rewarding their support. In the end, it will be just another nail in the coffin of their Buchanian mythology, but when your eyes are fixed on tomorrow’s market indices or the quarterly corporate fabrications …
Come back Kwasi Kwartang all is forgiven!!!
I truly give up…..at the age of 77 all my hopes and dreams for a radical government have finally been laid to rest.
I dont believe for one minute these People are stupid . There are far better words to describe them. Here is a few … Detached , Thoughtless , Unsympathetic , Callous , Heartless , Unmoved , Cold , Indifferent , Unconcerned , Uncharitable , Aloof …. the list could go on . They know exactly what they are doing … I am reading a book called Vassal State by Angus Hanton at the moment and it beggars belief what they done . i wont go into it here but if everyone one read this book , like me they would be deeply distressed.
Thanks
I’ve just finished reading “The Populist Right” by Jon Bloomfield and David Edgar (Byline Books). Their (to me) convincing analysis of our current position goes something like this: the very wealthy are seeking to extirpate whatever is left of the post-1945 consensus by pitting the working class against the “woke liberal elite” and by stoking disorder and xenophobia. Foreign interested parties are said to be abetting. Chaos enhances opportunities for private profiteering. This, or something like it, may already be obvious to you.
How can Rachel Reeves not see that the route out of this distressing state of affairs is to invest in public services, infra-structure and poverty relief with money that Richard has explained in detail is easily available?
I have read that
It is very good
Recommended by me as well