RACHEL REEVES’S Budget marks a positive change from the Conservative budgets of recent years, raising wages, taxes and spending in key sectors, especially education and health.

But her failure to target the real concentrations of wealth in Britain means Labour is still imposing severe hardship on some of the poorest in order to avoid ruffling the feathers of the richest.

The Chancellor dwelt lengthily and accurately on the harm done by successive Tory administrations to public services and ordinary people’s incomes.

But there were winners as well as losers over the last 14 years.

So-called austerity is best understood as a massive transfer of wealth — from public to private, from the many to the few, as the fortunes of the super-rich ballooned while Britain endured the longest wage squeeze since the Napoleonic wars.

This is a grotesquely unequal country in which big banks and energy giants post the largest profits in their history, in which the richest 1 per cent own more than the poorer 70 per cent of the population put together, in which millions rely on foodbanks while the number of billionaires increased by a fifth during the Covid crisis alone.

When Reeves gives with one hand and takes away with the other — as PCS leader Fran Heathcote notes she does by offering a 1.7 per cent increase in departmental spending, while setting a 2 per cent savings target for those same departments — she cites pressure on the public finances that could be relieved easily through higher corporation tax, a financial transactions tax or a wealth tax. As Unite’s Sharon Graham notes, a 1 per cent tax on the richest 1 per cent would raise £25 billion, filling the so-called “black hole” in the budget at a stroke.

It is a choice to keep children in poverty with the two-child benefit cap, to pick pensioners’ pockets with the winter fuel payment cut and to continue Tory “reform” of the work capability assessment — estimated to cost over 400,000 people with mobility or mental health problems over £400 a month.

It is a choice to echo Tory hysteria over benefit fraud, when the amount lost to this is less than goes unclaimed in social security payments people are entitled to. Giving the Department for Work & Pensions power to remove money directly from bank accounts will likely increase non-take-up of benefits by people who need them but understandably fear their personal finances being exposed in this way.

And it’s a choice to hike the cost of a bus ticket by 50 per cent while maintaining a fuel duty freeze — when governments across Europe are making public transport cheaper because it is essential to reduce greenhouse gas emissions.

None of this means Labour is making no difference. Increased funding for the NHS, education and local government is extremely welcome. The rise in the minimum wage is significant. Changed borrowing rules to fund £100bn in capital investment can, if directed appropriately, contribute to delivering industrial renewal and a green transition.

Some of the tax increases fall on the right people — in particular, higher capital gains tax and targeted measures like the 50 per cent increase in air passenger duty for private jets.

But the big money has been left untouched. As Matt Wrack of the FBU says, having the lowest corporation tax in the G7 is nothing to boast about. Nor has it attracted productive industry to our country, which has the lowest private investment rate of any G7 country.

So the labour movement cannot afford to swallow Reeves’s rhetoric on “tough decisions” and gratefully welcome every pound in additional spending. 

We will not rebuild public services or reverse years of shrinking wages without a reckoning with the super-rich elite who have had it their way for far too long. Under Labour, we need more union militancy — not less.