This is a government focused on serving its capitalist masters. That was one clear message from Labour’s Spring Statement. The second is that the working class must organise to defy the expectation that it will accept that, including cruel cuts to the support needed by disabled people.
Chancellor Rachel Reeves announced welfare cuts of £4.8 billion. Including, for example, that the money paid to new claimants of the incapacity benefit element of Universal Credit will not only be halved but frozen on current levels until 2030. This news, alongside ‘Awful April’s’ bill increases, spells misery for many.
The government also intends to tighten eligibility for Personal Independence Payment (PIP) including plans to raise the age at which young people transition from disability living allowance to PIP from 16 to 18. How people denied the means to be ‘independent’ are supposed to get work she didn’t explain.
The result is at least another 250,000 more people thrown into poverty. Instead of measures to reduce from 4.5 million the number of children living in poverty, these measures are expected to mean 50,000 more childhoods will be haunted by hunger, homelessness and cold in the sixth richest country on the planet.
Government departments will face a huge axe – with details in the coming months. But the cuts to the civil service of a whopping 15% are an indication of what they can expect.
£182 billion total wealth
For context, in 2024, the combined wealth of UK billionaires increased by £35 million per day, reaching a total of £182 billion, according to Oxfam. The FTSE 100 biggest corporations pay out about £80 billion a year in dividends to shareholders.
But instead of identifying this source of revenue for funding public services and welfare, Rachel Reeves sought to show Labour’s unwavering commitment to capitalist economic orthodoxy – in other words attempting to defend private profit by squeezing the working class.
The two fiscal rules that she set out at the October Budget were a ‘Stability Rule’ and an ‘Investment Rule’. But even those who promote adherence to such capitalist rules have warned that Reeves’s plans can’t protect British capitalism. Its weakened state makes it especially vulnerable.
In the days before the Statement, the economic growth forecasts were halved to 1%. One week after Reeves’s statement, Trump will pronounce further on his tariffs on what he’s called ‘liberation day’. So far, and despite Starmer’s begging, no exemptions have been announced for British car exports which now carry a 25% tariff. Forecasters warn that a 20-percentage point increase on tariffs on UK goods and services would cut the size of the British economy by 1% and force Reeves into tax rises this autumn.
The increasing cost of government borrowing is another factor. In early January 2025, interest rates for long-term borrowing rose to their highest levels this century. The Office for Budget Responsibility says that “In 2024-25 we expect debt interest spending to total £104.9 billion. That would represent 8.2% of total public spending and is equivalent to over 3.7% of national income.” This is ultimately an expression of the lack of confidence in British capitalism. Fears of a Liz Truss moment haunt Downing Street – partly whipped up to threaten Reeves not to raise taxes on the super-rich.
Britain is second from bottom in the 38 countries of the OECD in terms of private investment levels. And the OECD average level of public sector investment is almost 50% more than the UK average.
The anger with the Starmer government is growing and expressed by those who have tried to defend it, such as the Guardian paper and right-wing trade union leaders.
Labour MP Richard Burgon said: “If the government doesn’t rethink this policy in relation to disability benefits, I think it would be the mother of all rebellions.” He has since launched a petition demanding a wealth tax instead of benefit cuts.
The Socialist Party fights for the super-rich to be taxed to the hilt. But defending the interests of the working class includes the need to fight for nationalisation of the major companies and banks that dominate the economy as a key part of how to end of rule of the billionaires and banksters and their austerity.
Urgently needed are steps towards building an independent political voice for the working class – which could involve the Labour MPs suspended for opposing austerity and the independent MPs and Jeremy Corbyn elected in opposition to Starmer’s support for the Israeli state’s genocidal slaughter of Palestinians. The key to this lies in the trade unions.
In the general election, 200 MPs received donations worth £2 million from the trade unions. How will those MPs vote in the next months as these attacks come before Parliament? The unions should not leave this to a matter of individual conscience but put the collective responsibility of the over six million-strong trade union movement on them. Those MPs should be called in to meet with the unions’ lay leadership bodies and be given instruction on how to fight for the interests of the working class in parliament.
The mighty trade union movement should lead in building the socialist opposition to Starmer. Important trade union elections will take place over the next months. While nothing is guaranteed, the campaign for new left leaderships or with the left strengthened in large public sector trade unions, such as Unison, PCS and NEU, is on. All leaderships will be tested in the coming battles.
Hundreds of disabled workers and young people protested outside parliament when Reeves was speaking. Trade union leaders have condemned the attacks. Unite general secretary Sharon Graham said: “If the government pushes down a path of austerity mark two, where yet again workers and communities pay the price, Unite will not stand by and watch it happen.” But those hundreds could be multiplied by thousands if the trade unions lead.
Unions must take lead
The trade union movement must not only condemn Labour attacks on the most vulnerable but build on this to take the lead on fighting all austerity measures and unite the working class in struggle. The Socialist Party is calling for the unions to use their huge authority, higher since the 2022-23 strike wave, to call a massive Saturday demo against austerity. That demo must not be a one-off expression of rage but preparation for fighting the attacks ahead.
Reeves and Starmer have also demonstrated their capitalist orthodoxy with a commitment to raising defence spending by £2.2 billion. This is also an attempt to woo Trump. Unfortunately, Sharon Graham also said: “The government is right to invest in our defence in an uncertain global world. Increased defence investment must not come at the expense of our public services and investment in British industry and our industrial infrastructure.”
But this is a mistaken approach. As with fossil fuel industries, the working class must demand a transition to socially necessary production, and opposition to capitalist war across the world. Transition would involve the nationalisation of these companies, while guaranteeing workers’ jobs and income.
The attacks on benefits and the defence nationalism are attempts to whip up division among our class, echoing the Tories’ focus on so-called benefit scroungers. YouGov polling last November found that around half of Britons think that people with a disability (48%) receive too little support, against just 6-7% believing such groups receive too much support from the benefit system. Without a united working-class socialist response, these attacks represent a threat. Starmer and Reeves give legitimacy to Reform and its hate. The organised workers’ movement must take the initiative.
