The Labour Budget: An instrument of decline

In the grand pageantry of British democracy, the unveiling of the UK budget stands as an annual ritual. It is presented as the nation’s financial lifeline, a testament to the government’s solemn vow to steward the public good. However, beneath this polished facade lies an uncomfortable reality: the budget, far from being the blueprint of prosperity, is an exercise in institutional inertia, crafted to reinforce the hegemony of a financial oligarchy offering crumbs to the working class. This budget is not a vision for progress; it is an indictment of the economic straitjacket in which the British people are held. Its policies are bandages on the festering wounds inflicted by decades of misguided neoliberal orthodoxy and subservience to the foreign interests of Washington.  

Consider the cornerstone of this budget: extending the freeze on income tax thresholds, which will push working class people into paying higher rates – overturning the freeze placed on thresholds by the former Conservative government in 2021. Other proposals included: £40 billion per year in tax increases, including £25 billion from a rise in employers’ national insurance contributions; a debt-fuelled £100 billion in additional capitalist investment over the next 5 years, with a focus on fixing the country’s crumbling public healthcare and education infrastructure, and an extra £22.6 billion for day-to-day NHS spending. Nevertheless, UK borrowing surged in the wake of Reeves’ budget announcement. The Institute for Fiscal Studies (IFS) warns that the Labour budget, particularly through heightened Employer National Insurance Contributions, will likely depress wages, contributing to stagnation for British workers. This policy, touted as a means to boost fiscal responsibility, will constrain income growth for the average household, burdening the very workers it claims to support. Meanwhile, economic forecasts from the Office for Budget Responsibility (OBR) cast a shadow over the ambitions of the Labour budget, projecting a tepid real GDP growth of a measly 1.1%. Even with a brief peak of 2% in 2025, the economy is expected to settle back to a languid 1.5% growth – an anaemic rate that starkly contradicts the rhetoric surrounding Labour’s supposed commitment to economic revitalisation. Far from the promised catalyst of economic dynamism, these projections underscore a stagnant and backward economy, suggesting a misalignment between Labour’s economic aspirations and the reality of material conditions in Britain. Modelling from the IFS paints a bleak picture for the Labour budget’s impact on living standards, projecting a meagre rise of just 0.4% per year throughout the current parliament, marking one of the worst performances in recent history, surpassed in its dismal trajectory by the lacklustre outcomes of successive Conservative governments. Household income will follow a similar depressing trajectory, with a decrease of 1.25% by the beginning of 2029.  

These grim projections resonate with the working class, who are all too aware of the deepening crisis in Britain. According to a recent survey by More in Common, over ⅔ of Britons report feeling pessimistic about their financial future. When asked how they felt about the impending budget, respondents described their outlook with words like, ‘worried’, ‘nervous’, ‘scared’ and ‘anxious’. These sentiments reveal a collective anxiety that cannot be quelled by political platitudes divorced from the reality of everyday people in Britain. As budget cuts loom, the daily struggles of working people will continue to manifest in hungry children, vulnerable pensioners suffering in cold homes, local councils teetering on the brink of financial bankruptcy and deteriorating infrastructure. In the process of “restoring stability” and “fixing the foundations” of the UK economy, the so-called Labour government has launched a total onslaught against the working class, condemning the majority of this country to further decline and immiseration. What good is a modest rise in public sector funding when the NHS is on the brink of collapse, plagued by chronic understaffing, under-resourcing and decades of economic mismanagement? What comfort is a slight increase in the minimum wage when people’s livelihoods are gutted by rampant rentierism and rising costs? These insignificant gestures are designed not to elevate the conditions of the working class in Britain, but to place a restive population. While billions remain earmarked for military spending and NATO obligation, largely in alignment with US interests, Britain’s infrastructure languishes, starved of adequate investment. Roads deteriorate, hospitals struggle, and public transport falters, all while resources are syphoned to foreign interests. 

The budget, then, is not an instrument of prosperity or progress, it is the financial architecture of a nation adrift, doomed to perpetual decline overseen by a parasitic financial elite reserved in the City of London. Labour’s budget predictably fails to address the plight of the British people, and likewise offers no real remedy for the deepening crises that Britain faces. Instead, it perpetuates an economic model that serves the few while condemning the rest of the country to deteriorating public services, stagnant wages and eroding social infrastructure. In the end, this is not a budget of renewal, but a reaffirmation of Britain’s unyielding march toward decline.