“The Chancellor failed in all areas. The consequences will be disastrous”

By Jon Trickett MP

Our economy is broken. It simply does not work for working people. The current cost of living crisis is an acute reminder of this.

It was announced today that inflation now stands at 6.2%, up from 5.5% last month. It is predicted to rise further this year to 7.25%. And for those on the lowest incomes, some predict inflation will reach 10%. Pay and social security are falling in real terms. Millions of families are struggling.

Of course, there have been forces at play which have been beyond our control such as the Covid pandemic and now a Russian war of aggression, but the government can and must act.

Firstly, to help reduce the burden of living costs immediately and secondly, in the longer term, to restructure the British economy to make it more resilient, rebalanced and ultimately removed from the grip of the vested interests of global capital.

They have failed in both tasks. According to the Office for Budget Responsibility, the Conservative Government is presiding over the biggest fall in real terms of household income in 65 years.

The measures announced today will only offset a third of the fall in living standards for the average person. And rather than structural change, all we got was papering over the cracks.

We needed the Chancellor to provide emergency financial relief to protect families from rising inflation. Where bills have risen the fastest, we needed an increased energy rebate funded by a Windfall Tax on oil and gas profits, alongside VAT on energy being dropped.

We needed a real terms public sector pay increase this year for the key workers who got us through the pandemic, as well as a significant increase in the National Minimum Wage to £15 an hour. This policy was endorsed by the Labour Party Conference in September.

We needed social security and pensions payments to be uprated in line with inflation, for the £20 a month cut to Universal Credit to be restored and the increase extended to legacy benefits. Those subsisting on means-tested benefits face a cost of living increase of 10% but their benefits will rise by just 3.1%.

We needed additional support for parents with childcare needs, on in three of whom spend more than a third of their income on care for their children.

And we needed the Chancellor to protect the more than 20 million people living in rented accommodation who are struggling to keep a roof over their heads.

The Chancellor failed in all these areas. The consequences will be disastrous.

Let us not forget what the cost of living crisis is really about. It is about the Conservatives’ long term strategy of transferring wealth from working people to the super-rich. We saw it with austerity, the Covid pandemic and we are seeing it again now. 

Global corporations are pushing price rises onto customers in order to line the pockets of their shareholders. For more than 40 years our economic system has been moulded to serve the interests of the wealthy. Unprecedented inequality is the damning result.

Today’s statement should act as a lesson to working people across our land that we cannot look to the Conservative Party for help.

Working people will only resist this latest assault on living standards if we get organised and support each other. The work of trade unions, community groups and campaigners will be crucial in the months and years to come.

A great deal of responsibility now falls on the shoulders of the Labour Party. We must speak for the people of our country who are being failed by this Conservative Government. Labour must provide real solutions, and only a radical long-term programme for socio-economic change can address the crises we face.

The Chancellor announced a number of tax changes, but he left the richest alone so they can continue to accumulate astronomical levels of wealth and further drive inequality. The truth is that taxation needs to be rebalanced so it falls on those with the broadest shoulders. It’s time for Labour’s leadership to support permanent increased taxation of profits, capital gains, and dividend income – as I argued in my recent Wealth Tax report.

Not only will this create a fairer and more equal society, it will provide key funding for the necessary public investment required in new projects. We need a Marshall Plan for held-back areas – where the Conservatives’ so-called ‘levelling up’ agenda is failing. This is the only way to create well paid jobs in the industries of the future.

We can change public sector finances, and cut out the waste of payments to private shareholders, if we adopt a programme of public ownership in key sectors, such as care, energy and transport. These policies have been endorsed by the Labour Party conference and polling tells us they’re strongly supported by voters. It’s time that the Labour leadership advocated for them.

And we must empower workers to defend themselves from parasitic capitalism. If the sacking of P&O workers has shown us anything, it is that we need a complete overhaul of employment legislation in this country. Labour’s ‘New Deal for Working People’ policy is a good start but as well as banning Fire and Rehire, Labour’s leadership should commit to scrapping all the anti-trade union laws that shackle working people and provide succour to bad bosses.

The Conservatives have already shown they are on the side of the wealthy, Labour now needs to show it is on the side of everybody else with a bold and radical economic programme.

Image: Jon Trickett. Source: https://api20170418155059.azure-api.net/photo/g2eLCe7R.jpeg?crop=MCU_3:4&quality=80&download=true. Author: https://en.wikipedia.org/wiki/Chris_McAndrew, licensed under the Creative Commons Attribution 3.0 Unported license.

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