John Williams, Cardiff Socialist Party
There’s been much speculation about Labour’s Budget (put to parliament after the Socialist goes to press). It’s been chaotic to say the least!
It’s obvious that the government was planning to increase the basic rate of income tax. The first time a British government would have done so in 50 years! But that policy had to be scrapped very quickly as its clear unpopularity would have mostly likely led to the end of Rachel Reeves as Chancellor. Although if you look at the polls, nothing can save her or Keir Starmer now.
Instead, one of the things it appears they will do is to freeze current tax thresholds. Essentially freezing the rate at which workers begin to pay tax and move up to the next bracket. It’s estimated that freezing the thresholds until 2029-30 will raise an extra £8.3 billion a year. Four million more low-paid workers will start paying tax at a lower rate. This is known as ‘fiscal drag’; when your income goes up but the tax thresholds stay the same, you end up paying more tax without the government technically raising tax rates. With inflation and the ongoing cost-of-living crisis (energy bills going up as one example!), this hurts low-paid workers the most.
This stealth tax was used by the Tories when they were in power. They hoped, as Labour do now, that by not actually changing policy this would not end up an electoral liability.
But this is Starmer’s Labour. Everything they do is an electoral liability. Low-paid workers won’t just be pissed off about how much tax they pay, some for the first time. Workers and young people are angry at Starmer’s support for the Israeli state’s assault on Gaza, them watering down their workers’ rights bill, and a whole set of right-wing measures. Meanwhile, the wealth of the richest in society will remain largely untouched. This is what this Labour government and their Budgets for the bosses will mean.
And for low-paid workers, young people and all those trying to make ends meet, the time we can be rid of these bosses’ politicians can’t come soon enough.
