TALK of impending tax cuts is now rife in Westminster. Chancellor Jeremy Hunt claims that lower state borrowing figures give him room to reduce taxes this year.
There is even speculation that he may make two tax-cutting announcements over the course of the coming months.
His motivation is obvious. The depressed and divided Tory Party needs something to rally around, and tax cuts would give it a point of unity.
Cuts would also provide an election message for a government barren of achievements and devoid of a vision for the future, with Rishi Sunak trying out a different approach every few weeks.
And they would put Labour on the spot. Starmer has prioritised fiscal rectitude above all other considerations. Already, his economic policy is stamped “made in the Treasury.”
Together with shadow chancellor Rachel Reeves, they have prioritised appeasing the speculators who made short work of the demented premiership of Liz Truss.
So any reductions in taxes would confront them with the choice of either committing to reversing them, or pruning their modest spending plans still further to ensure the books remain balanced.
The politics for Hunt are therefore irresistible, even before one acknowledges that many working people would welcome a reduction in basic income tax, if that is where any cuts fell, amid a continuing cost-of-living crisis.
Nevertheless, the plan should be rejected by anyone concerned for the state of Britian’s public services or infrastructure.
Already, the National Health Service is in a state of permanent crisis, with too few doctors and nurses and no sign of the 40 new hospitals promised by Boris Johnson.
Already, local authorities across the country are teetering on the edge of bankruptcy following more than a decade of eye-watering central government-mandated spending cuts.
Already, the justice system is on the point of collapse, with prisons crumbling and overcrowded and courts subject to unconscionable delays.
Already, infrastructure neglect is at crisis point. The cancellation of HS2 was simply the most signal example of a failure to invest properly.
Already, public-sector workers in one service after another are stressed, overworked and underpaid, as the recent strike wave has shown.
The list could continue. So the choice is clear — if the public finances have now sufficiently recovered from the Kwarteng shock of 2022, should tax cuts or public spending be the priority?
The answer is obvious. But it may not be obvious to what convention compels us to describe as the “official opposition.”
The only spending increases Starmer and Reeves appear committed to are for the military, and in that too Labour merely echoes the Conservative position.
The electorate at very least deserves a choice on these questions. It is one of the political victories of neoliberalism that very few politicians are prepared to advocate for tax increases, so the ratchet is remorselessly downwards.
Yet people also demand properly resourced public services. The route out of the conundrum is not that complicated — it lies in increasing taxes on the rich and big business, as Jeremy Corbyn and John McDonnell proposed.
That in turn depends on taking a class approach to dealing with the problems besetting society by challenging those who have profited handsomely through the last 40-plus years of free-market politics.
Starmer and Reeves do take a class approach. It is alas that of the ruling class, standing watchful guard over the interests of the rich and capitalism as a whole.
Labour is above all concerned with its respectability in the eyes of the elite. Hunt’s tax gamble may prove that yet again, and it is public services and public servants who will foot the bill.
