Has Rachel Reeves DOOMED Herself to the Same Fate as Liz Truss?

Right, so the fallout from Rachel Reeves budget became so readily apparent, panic in the financial markets so immediate, that she ended up having to go on telly later the same night to try and calm the situation down, a move that is a tell tale sign of what is economically a bad budget – goodness knows the people behind such stock exchanges and business dealings know exactly what will kill their fortunes and that of the nation they may be invested in – but given the none too distant memory of the Liz Truss mini budget, such sphincter clenching by the money men has drawn the inevitable conclusions and the far right press – we can hardly just call them right wing, when that is exactly what Labour is – but those far more aligned with the equally economically inept Tories and even worse Reform UK Ltd, comparisons to Liz Truss are a great attack line. Actually, given the market reaction immediately after to the budget, it’s not a bad comparison at this point in time, though still an unfair one given we’re only days into the aftermath and things may be levelling out, not that is particularly good either though.
No, the Reeves budget is less Liz Truss more George Osborne Omnishambles and that shouldn’t come as a surprise when she has sought his advice on previous occasions and what this budget truly amounts to is austerity 2.0. It failed before, it will fail again and it is the very working people Labour is meant to represent that will be harmed the most. Labour is truly dead, we simply have another Tory Party now.
Right, so Rachel Reeves budget has sent the markets into a panic, but quite honestly there’s a big element of them frankly not caring right now either as they are not up for election for sadly quite some time to come, the most unpopular Prime Minister at this point in his tenure in history as Keir Starmer is, and a budget just delivered, that is going to hurt ordinary working class people the country over yet again, when we’ve already been suffering from the pain and misery of 14 years of Tory rule, all kick started by George Osborne’s austerity program, to cut the nations spending to promote growth, pay the national debt down and develop a surplus. Shrink the state, less spending, create a surplus of cash which the country never needs to do, it is not a household budget and it has been disastrous for public services and incomes ever since, never rolled back on and here’s Rachel Reeves now embarking on a second roll of the dice of this nonsense as if repeating the mistake will make any difference.
Where Liz Truss’ mini budget was an unfunded disaster, Reeves is terrifying the markets instead by repeating George Osborne’s penny pinching, but thought she was so clever to make it look like she was protecting working people by going after their bosses instead and of course this is the main factor in this budget, the National Insurance assault on employers, who will pass on their pain to their employees, so it's still an assault on working people, which Labour also seem unable to define, but it’s a very simple concept to come to a realisation on, if the business costs go up, to remain solvent, to remain a going concern, said business must make cut backs or it must raise prices.
The average National Insurance contribution per employee, just shot up by £648 annually, that’s a big chunk of change and it is not necessarily true to say the bigger the company, the more they are affected, because certain industries will be clobbered harder and actually these are industries that have already been heavily damaged under the Tories and especially due to Brexit, which continues to be an elephant in the room regarding damage to the economy.
The two sectors I’m thinking of are hospitality and the care sector and these come to mind because my son is a chef and his partner a care assistant. Both industries already suffer from low pay, but equally require a large number of employees, so they get clobbered disproportionately harder.
All of these National Insurance rises are supposed to bring in some £25.7bn by the end of this parliament, but already that has been revised down as Rachel Reeves has had to scramble around to put in some mitigating measures and has had to factor in the damage to profits, the very growth that Labour keep chirping about that they want, that this move has actually made.
The figure that is now being raised has been revised down to £16.1bn, that’s quite a hefty drop. The reason for that has been that wage rises going forwards will be axed or will be far less than anticipated, other employees may see their hours cut or even their jobs entirely. The government is also facing a drop here due to now putting in mitigating measures for public serve providers, the NHS likely the largest example of this, employing 1.6m people as they do. A £648 average NI bill hike for each every one of them? That’s over £1bn on it’s own!
All of this is less money in ordinary working people’s pockets, more people claiming low income or out of work benefits, all as Labour seeks to clobber them on that front as well in their savage determination to reduce the welfare bill. This won’t be people getting something for nothing as too often get portrayed in our media, these will be victims of idiotic government policy.
If Reeves had instead had the guts to do what many people wanted and uprate capital gains tax thresholds in line with income tax thresholds, that’s £15bn on its own. That’s money made from means other than employment, other than waged work, that would not have hit ordinary working class people in the manner her assault on National Insurance will now do.
A woman on Question Time last night who employs 60 people called the government out very well for this, because what Reeves’ budget has done is pass the buck onto employers to be the bad guys. She told Chief Secretary to the Treasury Darren Jones that having promised not to put National Insurance up on them, instead they have put it on their boss, which, not knowing her business so I can’t judge, but certainly this will be reflective of many businesses, particularly small and medium businesses, but her point was it now puts her in the position of having to make the tough decisions the government refused to, the government cowardice to not go after rich, instead taking the easy way out of punching down, but not even having the courage to do so openly, forcing the employers to do it, through job losses, cut hours and a reducing wage going forward across this parliament. As this woman told Darren Jones, this budget has made her and employers like her, the villains of the piece now.
If perhaps you’re not feeling particularly sympathetic towards this story for whatever reason, I chaired a finance and general purposes committee meeting last night, I’m a town councillor as some regular viewers will be aware and we’re affected as employers of staff too, from office staff to our grounds maintenance crew. That directly impacts our budget for stuff we want to do in service to the town now and that’s a story that will be reflected in councils the country over as well.
As for the markets having the jitters over another George Osborne signature budget, because frankly you can see his fingerprints all over this, such is his clear impression upon Rachel Reeves, government debt borrowing has shot up too, which is where those Liz Truss comparisons are coming from, a surefire sign of a bad budget, but Reeves continues to defend it.
She claims she said there would be consequences when confronted with the truth about the impact on ordinary people’s wages, but that is all after people voted Labour in a landslide on a manifesto pledge that there would be no rises in income tax, national insurance, or VAT. That manifesto pledge was broken when all of a sudden, post election, Labour added on working people to that statement, implying employers don’t work themselves. I know exactly what doesn’t work here in this scenario and that is this Labour government for the people of this country, the ultimately lie to that statement of all being the fact that taxes on ordinary working people are going to go up as these costs get passed on.
You are now more expensive to employ, no matter who you are or what you do, a bigger assault on working people, people who earn a wage as Keir Starmer said, there has never been and the rich are laughing all the way to the bank as they still pay les tax proportionally than we do, there was no wealth tax, their hoarded wealth, the majority of the nations wealth as that is, remains stagnant wherever it is kept, not working and therefore not driving the economy, not healthy for the economy which is how the economy should be measured in and not by growth, which is always going to be finite, but when ordinary people spending what they’ve got is what drives the economy most, buying goods, paying tax on that, helping businesses to grow, creating jobs, all Rachel Reeves has done is throw a stacking great spanner into that, in a manner that will kill growth off stone dead and where she defends the consequences as she sees them of her actions, people’s incomes taking a bit of a belt, actually the ramifications could well be far worse than that.
The minimum wage increase will be something Reeves defenders will point to, but taken against the NI hikes, that doesn’t touch the sides and is still below the level of the national living wage. A penny of a pint of beer is what Labour spent cash on social media advertising as a good news story, but if that’s honestly the best they can do, it really should be causing alarm bells for people.
This budget served the rich, it threw ordinary people under the bus, a bus that will also now cost more to get on, again impacting the wages of the lowest paid who tend to use buses more. In that regard, I suppose Rachel Reeves’ budget is just like a Liz Truss one, but also a George Osborne one, because it still serves the same people at the expense of all of us and Labour should be damned for it as I’m sure it will when reality bites for more and more people.
Rachel Reeves essentially declared class war on the British public with this budget and I went into much more of the other parts of the budget in my own coverage of it in the immediate hours following. If you care for my reaction on that please do check out that video here as my recommendation as your suggested next watch and I’ll hopefully catch you on the next vid. Cheers folks.