When 14 years of Tory austerity led to declining living standards, support for the ruling party collapsed, and the Labour Party walked the 2024 election. Labour’s plan to undo austerity was to magically grow the economy by repeating the word ‘growth’ over and over. Now that this plan has failed, Reeves is having to justify Labour’s actions, and she’s doing a horrible job of that on both the BBC and Sky News:
Labour chancellor Rachel Reeves rejects the Joseph Rowntree Foundation report that shows British families will become poorer over the next 5yrs & that the poorest families will fall even further behind.
Instead Reeves is "confident" living standards will increase #TrevorPhillips pic.twitter.com/mjiD72pemS
— Saul Staniforth (@SaulStaniforth) March 23, 2025
In this piece we’re going to look at what Reeves had to say for herself. We’re also going to compare what she’s saying now to what the experts are saying (and to what she herself said in the past), as we argue that Labour’s agenda is one of austerity, inequality, and decline.
Labour: austerity continues
Immediately after returning to power, Labour went after elderly people with its cuts to the Winter Fuel Allowance. Now, it’s going after chronically ill and disabled people with its planned cuts to Personal Independence Allowance (PIP) and Universal Credit, as Hannah Sharland wrote for the Canary:
The same day the Labour Party government launched its plans for a sweep of devastating welfare cuts, the Department for Work and Pensions (DWP) published a piece of research quantifying the cost of chronically ill and disabled people to society. Or, in effect, the Labour-led DWP was putting a price-tag on chronically ill and disabled people’s lives – just as it readies to strip some of their benefits, and drastically cut them for others.
All aboard for the disabled people-are-benefit-scroungers-and-burdens-to-society government gravy train to wherever the fuck ministers want to make their killer corporate salaries next.
On Sunday 23 March, Laura Kuenssberg interviewed Reeves, with the BBC summarising one exchange as follows:
Reeves says there are currently 1,000 people per day on Personal Independence Payments (PIP).
Laura pushes back, saying viewers are getting in touch quoting what Prime Minister Keir Starmer has previously said – that the “broadest shoulders should hold heaviest brunt”. Is it really pensioners, the sick or disabled people that should carry that burden, Laura asks.
Reeves says she increased taxes on the wealthiest.
Rachel Reeves is confronted with what voters are saying.
David: "When people voted Labour to remove the Tories, they did not expect a continuation of Tory policies"
Janice: "The broadest shoulders.. is this really pensioners, the sick and the disabled?" #bbclaurak pic.twitter.com/ImF9GNi2cf
— Saul Staniforth (@SaulStaniforth) March 23, 2025
Despite Labour pledging to end austerity, it has unfortunately returned to the same slash and burn politics of David Cameron. This latest U-turn is turning Keir Starmer and his Labour Party into a laughing stock:
'Four years on, he's championing austerity… it literally blows my mind.'
Ahead of the Spring Budget, where the Chancellor is expected to cut public spending, Matthew Wright reacts to a statement made by Keir Starmer in 2021. pic.twitter.com/mlpDrp1G9q
— LBC (@LBC) March 22, 2025
Labour MPs and politicians are among those speaking out:
Cutting our way to growth.
All sounds depressingly Groundhog Day. pic.twitter.com/g7cN70EoSH
— Clive Lewis MP (@labourlewis) March 22, 2025
“The world has changed” says Chancellor on #bbclaurak. Yes it has – so why stick to outdated counterproductive austerity agenda & arbitrary fiscal rules? You can’t cut your way to growth. Taxes on extreme wealth of super rich would be far fairer & more effective than more cuts
— Caroline Lucas (@CarolineLucas) March 23, 2025
It’s not Tory austerity…
In the Sunday interviews, Reeves denied that Labour’s plan to cut benefits, entitlements, and government spending was a return to austerity. Her argument is that it can’t be austerity because the cuts aren’t being made across the board:
Last year, I put £100 billion more into capital spending than the previous government had committed to, we put more than £20 billion into the National Health Service.
That is a far cry from what we’ve seen under Conservative governments in the last 14 years.
The problem with her argument is that it’s still austerity whether it’s targeted against sick and disabled people or whether it’s affecting everyone. Reeves also said:
We’ll set all that out when we do the spending review, but we can’t just carry on like we have been spending on the same things that the previous government spent on.
People want to know we’re getting value for money, when people are paying more in tax that they’re getting more in return.
While the public did object to the Tories wasting money on dodgy PPE contracts, they didn’t object to disabled people having tolerable living standards (the mainstream media objected to that, but that’s an entirely different thing).
People aren’t buying the Labour lie that this isn’t austerity:
Before the GE, Starmer & Reeves promised “no return to austerity”
Austerity cuts by Osborne under Cameron’s gov’t were never reversed; benefits, public services & public sector pay have been squeezed ever since
So Reeves’ cuts are ON TOP of austerity V1 – austerity on steroids pic.twitter.com/BYrdqGLAzC
— troovus (@troovus) March 22, 2025
They’re also pointing out that austerity just doesn’t work:
Rachel Reeves warns that her Labour will never agree to the spending increases we saw under Gordon Brown.
Rachel Reeves would do well to read the impact of Gordon Brown’s policies. He halved child poverty, opened 3,600 Sure Start Centres and halved NHS waiting lists.
— Tory Fibs (@ToryFibs) March 22, 2025
Labour announced the changes to PIP on Wednesday 19 March, and polling since then suggest their plans aren’t going down well:
🚨 POLL | Labour *TIED* with Reform
🔴 LAB 26% (-2)
🟣 REF 26% (-1)
🔵 CON 21% (+1)
🟠 LD 13% (+1)
🟢 GRN 8% (-)Via @OpiniumResearch, 19-21 Mar (+/- vs 5-7 Mar) pic.twitter.com/Pocyk0rtyD
— Stats for Lefties 🍉🏳️⚧️ (@LeftieStats) March 22, 2025
Stats for Lefties also had a very good point about the nation’s obsession with benefits:
If someone starts demanding that 99% of disabled people must be starved and punished because of a Daily Mail headline about someone getting a car, then that person is clearly a Nazi. And yet this psychopathic argument is at the core of Labour's cuts. It's the basis of it all
— Stats for Lefties 🍉🏳️⚧️ (@LeftieStats) March 21, 2025
So, if austerity is unpopular ineffective, and unethical, why pursue it?
We’ll explore that throughout this piece.
Reeves’s war on workers
Labour’s austerity proposals are going to mean that we lose jobs in the civil service, but Reeves is being purposefully vague on how many it will mean in practice:
Rachel Reeves is slashing 10,000 civil service jobs and says it will result in better public services #trevorphillips pic.twitter.com/bdV5SmNUr8
— Saul Staniforth (@SaulStaniforth) March 23, 2025
Speaking on on Sky News, Trevor Phillips said to Reeves:
But you have to be straight with people. How many civil servants are going to lose their jobs in broad terms? Okay. I’m not asking you for, you know, 532 or 5,027 – but broadly speaking, is it 5,000? Is it 10,000? Is it 15,000?
Reeves responded:
We’ve said 10-15% by the end of the parliament reduction in admin budgets. … So that includes consultancy. It includes travel budgets. It includes communications, budgets. So it doesn’t all have to be about people.
Phillips came back:
But some of it is going to be about people. You can’t say this is going to be pain free.
Reeves responded:
No. It’s not. But what I am saying is it will deliver better public services, because I would rather we had people employed by the NHS working in our hospitals rather than in a government department. So this is about doing things differently.
Reeves seems to be making the argument that the size of the government currently is the maximum it can be, and that if you grow one part you have to shrink another. Other people argue that we can grow the government by reducing income inequality in this country (i.e. taxing the rich) – something we’ll get to later.
Back to the interview, Phillips continued:
But forgive me chancellor, this is what people say about politicians. I ask you a question that says, broadly speaking, how many roles are going to get lost? I cannot believe that you’re telling your colleagues we need to take 10% out without any idea how many of those are going to be actual jobs. I just cannot believe that that’s what you’re doing.
Phillips is right to push on this. If it’s true that Reeves is pushing these cuts without any plan, then she’s acting in the same reckless fashion as Elon Musk and his so-called ‘Department of Government Efficiency’ (DOGE):
DOGE fired dozens of employees working on nuclear security, including top scientists and engineers.
Elon Musk has no clue on earth what he’s doing.
This isn’t efficient, it’s stupid, dangerous, & irresponsible.
— Public Citizen (@Public_Citizen) March 18, 2025
Strarmer and Reeves doing a Trump. The CS runs our public services along with front line workers. Politicians tell them what the government 's priorities are.
BBC News – Civil Service told to slash running costs by 15%https://t.co/fWT50Jgamu
— lilaclily (@lilaclily4) March 23, 2025
People are also highlighting precisely why Musk is such a dangerous person to appease or imitate:
Musk has amplified a claim that Stalin, Mao, and Hitler didn't murder millions of people – public sector workers did.
What hasn't been noticed is that the claim came from a Russian propaganda account, TheAliceSmith, via another Kremlin tool, Rothmus.
Musk has repeatedly… pic.twitter.com/peZnnzAYrz
— Nick Reeves #RejoinEU #NAFO #FBPE (@nickreeves9876) March 15, 2025
A point that Phillips doesn’t bring up is that stable and well-paid government jobs have a positive effect on the job market. When people can secure rewarding work-for-life roles in the public sector, businesses have to offer better conditions to attract workers. Musk and Reeves are pushing to reduce the number of these jobs because their friends in the private sector want this state of affairs to end.
The Rowntree Report
Kuenssberg also questioned Reeves on a recent report from the Joseph Rowntree Foundation (JRF).
We all know this isn’t working. By 2030, every UK family will be worse off — and the poorest hit hardest. Trying to squeeze growth from this sclerotic economy is like throttling a corpse.
Time to build something different, something new, something democratic. pic.twitter.com/BZyL8tAogL
— Clive Lewis MP (@labourlewis) March 22, 2025
As summarised by the Observer:
In what it describes as a “dismal reality”, the JRF said its detailed analysis shows that the past year could mark a high point for living standards in this parliament. It concludes that the average family will be £1,400 worse off by 2030, representing a 3% fall in their disposable incomes. The lowest income families will be £900 a year worse off, amounting to a 6% fall in the amount they have to spend.
The JRF also said that if living standards have not recovered by 2030, Starmer will not only have failed to pass his No 1 milestone but will also have presided over the first government since 1955 to have seen a fall in living standards across a full parliament.
Comparing 2030 with 2025, it said the average mortgage holder is set to pay about £1,400 more in mortgage interest annually and the average renter about £300 more in rent a year, while average earnings are set to fall by £700 a year. The JRF said the poorest third are being disproportionately affected by rising housing costs, falling real earnings and frozen tax thresholds.
Reeves’ and Labour’s takeaway from this seems to be that growing poverty means we need more austerity, rather than that austerity causes poverty. She’s also dismissing the JRF report out of hand:
Labour chancellor Rachel Reeves rejects the Joseph Rowntree Foundation report that shows British families will become poorer over the next 5yrs & that the poorest families will fall even further behind.
Instead Reeves is "confident" living standards will increase #TrevorPhillips pic.twitter.com/mjiD72pemS
— Saul Staniforth (@SaulStaniforth) March 23, 2025
In the video above, a stuttering Reeves says the following when Trevor Phillips highlights the JRF’s findings that living conditions will continue to worsen under Labour’s austerity regime:
I-I-I reject that.
It’s weird that Reeves thinks she can cut her way to prosperity now, because the following posts show Reeves once understood that austerity doesn’t work:
Austerity has failed.
If you stunt growth by cutting government spending, discouraging businesses from investing and allowing productivity to stagnate, you choke off the growth that we need to raise living standards. pic.twitter.com/l1MRFzIFbh
— Rachel Reeves (@RachelReevesMP) March 12, 2020
Not for the sake of it.
But because it is the only way to make sure we can spend money on our crucial priorities – like schools, hospitals and tackling the climate crisis – making Britain the best place to grow up in and grow old in.
— Rachel Reeves (@RachelReevesMP) September 26, 2021
Would you believe that Reeves has literally criticised the effects of austerity on PIP?
Inadequate answers to questions on changes to PIP from PM today. Parity of esteem being sacrificed to pursue penalising austerity agenda
— Rachel Reeves (@RachelReevesMP) March 1, 2017
The Observer interviewed the JRF’s director of insight and policy who is pushing against further cuts, arguing:
There is no doubt the government is facing an unenviable list of economic pressures and uncertainties, ranging from the domestic to the international. But how you manage these risks is a matter of political choice..
It is wrong, and ultimately counterproductive, to try and rebuild the public finances through cuts to disability benefits. Instead, government should be addressing hardship and raising living standards directly, as part of their strategy for growth.
Fiscal pressures should be met through tax reform. There are a number of options to raise revenue from those with the broadest shoulders, while also supporting growth by removing perverse incentives in the tax system and staying within the government’s manifesto commitments.
The Inequality Agenda
As noted above, Labour claims to have increased taxes on the wealthiest. If you live in the UK, you may have missed this happening. While it’s true that Labour has made some changes here and there, there’s still much more which must be done to end the income inequality which is destroying the very fabric of society.
In response to Reeves’ latest appearances, some people highlighted this interview with union leader Mick Lynch from 2024:
“I just don’t understand why Rachel Reeves and the senior team have said we’re not going to ever use these levers of taxing people appropriately.” Wealth tax is essential to ensuring growth for the UK.. #SocialistSunday I follow back..pic.twitter.com/7DhQJwOeFP
— Dick Mackintosh🌹#StopTheWar (@DickMackintosh) March 23, 2025
Lynch isn’t the only one highlighting the problem. Groups like the Equality Trust and Tax Justice UK are explaining the extent of inequality in the UK and the harmful consequences of it continuing to grow. As The Equality Trust notes:
By 2023, the richest 50 families in the UK held more wealth than half of the UK population, comprising 33.5 million people. If the wealth of the super rich continues to grow at the rate it has been, by 2035, the wealth of the richest 200 families will be larger than the whole UK GDP.
£466 billion – Wealth of the richest 50 families in the UK
£466 billion – The combined wealth of half of the UK population
The group lists the following ‘impacts’ of inequality (you can read more on each impact here):
- Economic – Less equal societies have less stable economies. High levels of income inequality are linked to economic instability, financial crisis, debt and inflation.
- Social Mobility & Education – Unequal societies have less social mobility and lower scores in maths, reading and science.
- Crime – Inequality increases property crime and violent crime. A reduction of inequality from Spanish levels to Canadian levels would lead to a 20% reduction in homicides and a 23% reduction in robberies.
- Health – Living in an unequal society causes stress and status anxiety, which may damage your health. In more equal societies people live longer, are less likely to be mentally ill or obese and there are lower rates of infant mortality.
- Trust, Participation, Attitudes & Happiness – Inequality affects how you see those around you and your level of happiness. People in less equal societies are less likely to trust each other, less likely to engage in social or civic participation, and less likely to say they’re happy
Tax Justice UK highlights ways in which we can make tax fairer in the 21st century:
- New taxes on wealth – We’re campaigning for a new wealth tax: a 2% levy on individuals who own assets worth more than £10 million – it would affect 0.04% of the UK population and would raise £24 billion a year. We’re also campaigning to apply national insurance to investment income, raising up to £10.2 billion a year.
- Reform existing taxes on wealth – Those who get their income from stocks, shares and other assets often pay far less tax than those who work. We campaign for the tax rates on these forms of income to be equalised with income tax. So we all pay the same rates. It could raise £16.7 billion a year.
- Clamp down on tax havens – Hundreds of billions of pounds are lost every single year to tax avoidance via tax havens. We campaign for global action against tax havens. We’re demanding more transparency – and global minimum rates of tax, so countries aren’t undercutting each other.
Former DWP minister professor Helen Goodman wrote to the Guardian to highlight some other areas where Labour could target the broadest shoulders:
We should take a deeper look at the tax system. There remain big loopholes and unfairnesses: because capital gains tax is lower than income tax, people like Rishi Sunak pay 23% on a £2.2m income – equalising these rates is worth £14bn; bringing the tax relief on pension contributions for high earners back to the standard rate would bring in £13bn; tackling the tax and national insurance loopholes on City lawyers’ partnerships could be worth £8bn; the failure to tax internet giants is unfair on high street retailers, as noted by Iceland boss Richard Walker; and basing council tax on a property valuation that is more than 30 years old fails to take any account of the huge north-south disparity in house prices that has arisen.
Another person with a lot to say on inequality is economist Gary Stevenson:
Gary is currently asking his viewers whether he should conduct an interview with Labour, which is something the party is now requesting following his meteoric rise to prominence. You can have your say on that under the following video.
Instead of getting any of the above, however, it looks like Labour is going to cave to demands from Trump:
Rachel Reeves – as per Mandelson – signalling forthcoming digital services tax, which hits Meta, Amazon et al could be scrapped
This a Trump demand – as part of the price to avoid additional tariffs
It generates £1bn a year – a big further black holehttps://t.co/K3A9MBBPWs
— Sam Coates Sky (@SamCoatesSky) March 23, 2025
Austerity is a snake that eats itself
Let’s remind ourselves on what the Equality Trust said on how inequality affects health:
Living in an unequal society causes stress and status anxiety, which may damage your health. In more equal societies people live longer, are less likely to be mentally ill or obese and there are lower rates of infant mortality.
It’s not a coincidence that growing inequality combined with increased job insecurity is leading to more people being signed off work for stress. It’s also not rocket science to work out that we could reverse this trend by reversing the trajectory of inequality.
What’s happening in the UK is austerity worsens living conditions, politicians use declining standards to justify more austerity, and then austerity makes things even worse. It’s a snake eating its own tail, and it won’t stop until we make it clear that we won’t tolerate it any longer.
Featured image via the BBC
