Cooking the Books: Prisoners of the market (2026)

The Cooking the Books column from the October 2026 issue of the Socialist Standard

‘Mounting costs are damaging business investment and undermine the government’s attempts to raise living standards, the CBI has warned’, wrote the Times (9 September), reporting on a document prepared by the employers’ association for the Budget. The CBI’s chief executive, Rain Newton-Smith, argued that:

‘When firms are forced to absorb higher taxes, energy bills, and regulatory costs, the consequences are weaker investment, job losses and less scope to raise wages’.

Employers are always complaining of increased costs due to taxes and stricter regulation, but there is more than a grain of truth in their argument.

‘Absorb’ is a delicate way of saying that, as they can’t pass on the extra costs by raising their prices, their profits have to take a hit. So what Newton-Smith is really saying is: ‘when firms make lower profits due to higher taxes …’ Reduced profits could indeed lead to ‘weaker investment’ (but they could also mean lower dividends for shareholders). Insofar as they do, that does weaken investment. So there is less economic growth. Which, as Newton-Smith pointed out, would undermine the government’s strategy of relying on growth to bring it a bigger tax revenue and so allow it to improve people’s living standard by spending more on education, health, housing and the like.

Irrespective of whether on this occasion the employers are bluffing in order to extract concessions from the government, there is the question of the wider relationship between government and private employers.  The American political scientist, Charles Lindblom, wrote an article in 1982 called ‘The Market as Prison’ in which he argued that, in an economy in which production was in the hands of profit-seeking private enterprises, government decisions were tied to the success of these enterprises. Not only that. If the government didn’t respect this — if it didn’t allow enterprises to make the profits they expected — it would be automatically ‘punished’ by the operation of the market.

His argument went like this: If a government raises taxes too much or imposes too many regulations, companies cut back on investment. This leads to job losses and financial crises. Voters blame the government for this, not the business owners. The government loses the next election. The politicians responsible are punished.

As Lindblom remarked in an earlier book:

‘To understand the peculiar character of politics in market-oriented systems requires, however, no conspiracy theory of politics, no theory of common social origins uniting government and business officials, no crude allegation of a power elite established by clandestine forces. Business simply needs inducements, hence a privileged position in government and politics, if it is to do its job’ (Politics and Markets, p.175).

The market works, he suggested, like an invisible prison in that it limits how far governments can go with social reforms that threaten profits that are business’s ‘inducement’. Anything radical is ruled out. It makes politicians afraid to challenge the ‘privileged position’ of the private sector. They tone down their proposals so as not to scare the market.

A recent example is Burnham’s choice not to appoint Miliband as Chancellor because business perceived him as somehow anti-business. Other examples are Starmer and Reeves’s pre-election statements about Labour being ‘the party of business’ and Burnham’s that his ‘socialism’ is of the ‘business-friendly’ variety.

Politicians in office must help business in its pursuit of profits and certainly not do anything to hamper it. They must serve the interest of business owners.

Cooking the Books: Housing: the market versus promises (2026)

The Cooking The Books column from the June 2026 issue of the Socialist Standard

One of Labour’s election promises in 2024 was to build 1.5 million new houses by the end of its normal term in office in 2029. Actually, it wasn’t a promise that the government would itself organise the building of this number of houses but a promise that it would create conditions in which profit-seeking housing ‘developers’ would.

This made achieving the 1.5 million target dependent on it being profitable for the house-building firms to build that many new houses. Which was why, in an article in February 2025, we expressed scepticism about Labour being able to meet its target as it had no control over which way the market would turn. ‘The 1.5 million target,’ we wrote, ‘will only be met if the market expands enough’. Now, analysts are concluding that the market won’t expand to that extent.

An article in the Times (4 May) by Tom Haywood headed ‘Mayday: distressing signs in housing data’ and subtitled ‘Labour’s 1.5m target may be dead in the water after a steep fall in property enquiries’ is a case in point. Noting that a survey of estate agents covering March ‘showed the steepest monthly drop in new buyer enquiries in almost three years’, Haywood wrote:

‘All of this is yet another blow to Labour’s ambitious target of delivering 1.5 million homes by the end of 2029, which now looks close to impossible. The government needs developers to be busier, not quieter, given that they will only build when they can sell at the price they need to make a decent return for shareholders’ (our emphasis).

Precisely. As further evidence, and more convincing than one month’s figures, Haywood noted that hedge funds are betting that the share prices of house-builders and their suppliers will fall in the future, an indication that these vulture capitalists are not expecting the companies they have targeted to make much profit in the next few years. The betting takes the form of ‘short selling’, in which the vultures borrow shares at their current price, sell them, buy them back at their expected future lower price, then return them to the original owners and pocket the difference. Money, apparently, is also to be made from houses not being built!

Faced with rising costs but falling demand, house-builders are unable to pass on to potential buyers all the increased costs and so ‘are struggling to make the economics of projects in the capital stack up’, but not just in London as one survey ‘found that it was not financially viable to build homes in almost half of England.’

There is not much the government can do to make building houses more profitable. Why, then, does the government not give money to local councils to build more houses, as certain naive reformists are demanding? Well, for a start, it hasn’t got the money to give or, rather, could only take it from profits either through increased taxes (these ultimately fall on profits) or borrow it at a higher interest rate that would have to be paid from profits. Which no government, under economic pressure to give priority to profit-making, as all governments of capitalism are, can do, at least not without making general economic conditions worse.

Under capitalism, where houses are commodities produced for profit, there is no way out. Houses will only be produced directly for use — simply for people to live in — when this is the aim of all production. And that is possible only when the resources to produce what people need cease to be managed by profit-seeking companies pursuing ‘a decent return for shareholders’ and become the common heritage of all under democratic control.

Loose change (2026)

From the June 2026 issue of the Socialist Standard

Change! The single word summary of the Labour Party manifesto presented to voters at the last general election. There was certainly a change to the Party’s fortunes, increasing its number of seats in the Commons from 202 in 2019 to 411. This seeming landslide victory would appear to be an overwhelming endorsement on behalf of the electorate. However not quite so overwhelming in terms of the percentage share of votes cast. This change, of over more than 100 percent in the number of MPs, was achieved through an increase of just 1.6 percent in votes received.

After fourteen years of various Conservative administrations, the official opposition had barely stirred the electorate’s enthusiasm. Rather the falling away of the Tory vote opened the way to the government front benches. A significant element in Tory decline was the increasing popularity of Reform UK. Not a political party, but a limited company. Ironically appropriate as an aspiring administrator of a capitalist society.

The new Labour government found that not only had the Conservatives left the treasury chest empty of money, but had filled it with IOUs. Not that this was a novel situation. The new Tory government in 2010 inherited the same predicament after 13 years of Labour. Government expenditure almost constantly increases. Demands and expectations of the electorate are many and varied, encouraged by the competing political parties seeking votes. Oppositions can afford to sound generous, governments become austere.

The role of governments

It is for government to manage and administer capitalist society. Its fundamental function is to optimise profit making. The contradiction lies in the division between the small minority of wealth holders, the capitalists, and the vast majority, the wealth creators, the workers. While wealth holders recognise the need to maintain workers, otherwise there is no wealth creation, this maintenance is drawn from the wealth accumulated. Therefore, the more that goes to that maintenance, as wages/salaries, pensions, benefits, healthcare, etc, the less the wealth held.

Governments have to try and balance maximising profit while sustaining a stable, productive society. Any government action or crisis upsetting that balance impacts on the financial markets, threatening national bankruptcy. No matter how popular a government is in terms of electoral support, its options for action are constrained by the market. The market trumps the ballot box.

A common complaint amongst the electorate is that governments do not listen to them. Voters subject to the machinations of capitalist economies more often than not find their aspirations are not going to be met. Reasonable, even modest wishes for economic security and stability, decent housing, efficient healthcare, good education and a generally comfortable lifestyle, are frustrated. Instead, there is widespread discontent and frustration, often coalescing into cynicism.

Politicians are seen as remote and unsympathetic, concerned only with their own advancement. Daily experience does little or nothing to dispel such notions. Rather there is only a sense of powerlessness, which periodic voting does nothing to assuage. Indeed, the main political parties seem so similar that replacing one with another makes little significant difference. ‘They’re all the same’ is a commonplace. And the fact is they have to be because, despite minor differences, overall they must deal with an economic system that remains dominant, capitalism.

This does not mean the appearance of the political situation cannot change. The grip of the two main post-Second World War parties, Conservative and Labour, has been significantly loosened. An inkling of this change occurred in 2010 when the outgoing Labour government was replaced by the Tory/Liberal Democrat coalition.

Giving Reform a go

The 2016 Brexit referendum saw cross-party alliances on either side of the argument. And also the sowing of the seeds of a rising populist movement that scored a remarkable success in the 2026 local government elections. Media vox pops in places where Reform UK have displaced en masse whole swathes of councillors, replacing long-established Labour fiefdoms, often appeared to feature change by weariness rather than enthusiasm. The prevailing response seemed to be giving Reform a go, largely on the grounds that they couldn’t be any worse than the ‘present lot’. This is not to say there aren’t those who are enthusiastic, though not of course racist, as they will insist. Having effectively, in 2024, seriously weakened the Conservative Party at national level, at local level they have now humbled the presiding government.

The prime minister came under threat – still in office at time of writing – with his supporters in parliament and the cabinet demanding loyalty. This is a little rich considering the pernicious use of accusations of anti-semitism to bring down Labour’s previous leader and purge his supporters. It is the very nature of capitalism to be competitive and combative. It is hardly surprising, therefore, that it spawns politics which reflect this. Because none of the parties can challenge capitalism, they must fight each other.

Cost of living crisis, illegal immigration, benefits culture etcetera become raw material from which to manufacture political advantage. That they are issues in the first place shows how capitalism simply does not, cannot, meet people’s needs. That Reform UK is a limited company seems fitting as their scope for giving people what they require is limited. Their councillors will quickly find that 80 percent of their council’s funds is already legally spoken for; social care and special educational needs. Are they really going to start turning old people out of care homes to fend for themselves? Will parents enjoy seeing their special-needs children flounder unsupported in already overworked and underfunded schools?

Yes, change is needed

The desire for change is perfectly reasonable. The problem for the electorate is that the many present difficulties people encounter daily cannot be voted away. Neither is there a party or leader to be elected who can do it for them.

The Prime Minister may well be dismissed, but then there will just be another one, equally unable to make any significant difference. Whether a populist ultra-conservative demagogue or a reasonable, left-of-centre sympathiser, the problems won’t go away.

If people really want change they will have to accept responsibility for playing their individual parts in the collective action to bring it about. Capitalism cannot be reformed into being benign; better trying to train a tiger to become vegan. Society can be organised so that everyone’s needs are met. We have the technology to make this practical. The rub is that the technology must be wrested from the grasp of capitalism, along with all means and methods of production.

The democratic process is fundamental to bringing this radical change about. But it will require so much more than just putting an X against a name every four or five years. The first big change must be in how people think about constructing a better future for all.

D. A.

Editorial: Burnham’s plan to rearrange the chairs

Editorial from the August 2026 issue of the Socialist Standard

The new Prime Minister seems to have borrowed the argument for his flagship policy from the Welsh and Scots Nationalists. Their mantra is that the problems faced by workers living in their geographical area are due to political decisions being made in London rather than in Cardiff or Edinburgh. Burnham’s variation is that the way to solve the problems that workers in England face is to transfer more decision-making powers from London to regional mayors.

These proposals are based on the assumption that governments are able to control the way the capitalist economy works. All the evidence shows that this is not the case. Governments don’t, and can’t, control how capitalism works. It is, rather, the other way round. The capitalist economy generates economic laws which limit what governments can do in that the only choice they have is between giving priority to profits or provoking an economic slowdown.

If you believe that governments can control the economy you will mistakenly conclude that solving the problems facing workers is a matter of government policy and that the policy pursued by those who decide what governments do is the key factor. But, as in fact governments can’t control the way the economy works — can’t overcome its basic economic law that profits must come first — then who makes or where the decision is made to give priority to profit-making is unimportant. Whether this decision is made in London or Cardiff or Edinburgh or Manchester or Midsomer Norton is not going to make any difference. Capitalism will get its way, and as capitalism is the cause of the problems workers face, wherever they live, those problems will continue.

In any event, most decisions concerning the economy are not made by governments, national or regional, but by private enterprises whose goal is to maximise profits for their owners. None of the conventional parties challenge this. So their policies have to be ‘business friendly’ as it is private enterprises in pursuit of profits that decide what is produced.

Burnham’s claim isn’t even that devolving powers to regional mayors would directly benefit workers. It is only that it would, supposedly, benefit them by promoting ‘growth’ which would provide more jobs and extra tax revenue to improve education, the health services and public amenities (after paying more for ‘defence’). Growth, in the sense of the accumulation out of profits of more capital, is what capitalism is all about but it is not something that a government can make happen. The most that a government can do is to maintain or create favourable conditions for profit-making for whenever those in charge of private enterprises see a prospect of making a profit.

It’s not who makes decisions or where they make them but what they decide that is important, and what they decide is imposed by the economic laws of capitalism. We confidently predict that Burnham’s ‘Manchesterism’ won’t work, either to bring about capitalist growth or to solve workers’ problems. It’s no more than rearranging the chairs.

SPGB Snippets: Rough reality (2026)

From the Socialist Party of Great Britain website 

July 26, 2026

Andy Burnham pledged ‘to finally end long-term rough sleeping across the UK’. He previously aimed to prevent rough sleeping in Manchester by 2020, and in 2019 the Conservative Party manifesto committed to ending ‘the blight of rough sleeping’. Instead, in 2025 the number of people estimated to sleep rough on a single night in England was the highest recorded, at nearly 4,800.

Rough sleeping is not just about housing. Rough sleepers are among the most marginalised and victimised in capitalist society. Support services, however ‘well-funded’, can only ever offer limited palliatives as they are working within a system that pushes people into homelessness – why previous attempts to end rough sleeping have failed, despite Burnham’s ambition.

Editorial: The same difference (2026)

Editorial from the July 2026 issue of the Socialist Standard

So Andy Burnham, the Mayor of Greater Manchester, has won the Makerfield by-election and can now challenge Starmer for the leadership of the Labour Party. If he wins, he will become the new Prime Minister. So what?

Marx famously pointed out that governments are ‘a committee for managing the common affairs of the whole bourgeoisie’. In Britain the Prime Minister is the chairperson of this committee which doesn’t have to be composed of actual capitalists. In Marx’s day most British Prime Ministers were not capitalists but landed aristocrats but this was acceptable as long as they managed things in the general interest of the capitalist class. In the course of the last century committee members and chairs came to be drawn from a pool of professional politicians who could come from any background. This, too, was acceptable and is the norm today.

All the governments there have been in Britain, whether Conservative or Labour or, earlier, Liberal, or a coalition of two or all three of them, have managed the common affairs of the owning class in the interests of that class. The first duty of any government is to guarantee and enforce the ownership rights of capitalists over the means of production. The second has been to ensure that priority is given to the making and accumulation of profits. These — class ownership and production for profit —are the basis of capitalism and no government has ever challenged them.

Governments have a free hand on narrowly political matters such as the structure of the state machine or what is a crime but, when it comes to the economy, its power is limited by the nature of the capitalist economy as one that runs on profits. If, in its taxation or trade or tariff or employment policies, it goes against this, then sooner or later it will provoke an economic downturn and the risk of the resulting popular discontent leading to it being voted out of office and a rival set of politicians taking over. This is enough to keep governments in line with the general capitalist interest. The Labour Party learned this the hard way while the Conservative and Liberals didn’t need to be taught it. The Green Party has yet to learn it.

If the government has to respect and apply the economic laws of capitalism then it is not all that important who is the chairperson of the board of directors of UK Capitalism PLC. It is true that there can a bad government from a capitalist point of view — one that doesn’t competently manage the common affairs of the capitalist class — and an incompetent chairperson, such as the over-confident Truss or the bumbling Starmer, can contribute to this. But that’s a problem for the capitalist class, not the workers.

Whether Starmer or Burnham is Prime Minister is not going to make the slightest difference to the workers’ subordinate position in society nor solve the problems this brings them.

SPGB Snippets: The merry-go-round (2026)

From the Socialist Party of Great Britain website

 

June 24, 2026 

So Keir Starmer has resigned and Andy Burnham is likely to take over. Will it make any difference? It probably will to Labour’s standing with the electorate. For most people, perception of a leader’s personality seems, unfortunately, to be the key element in what passes for political thinking.

But will a new leader be able to do anything different to resolve the problems of the crisis-ridden system we live under? The answer to this has to be a resounding no. There will only be any difference to speak of when we decide collectively to scrap that system and replace it with an entirely different one that uses the abundant resources that already exist to satisfy all our needs the world over.

SPGB Snippets: Watch out Makerfield, you’re about to be conned again! (2026)

From the Socialist Party of Great Britain website

June 10, 2026

In the coming UK parliamentary by-election in Makerfield, apart from the two confessed jokers, candidates will all be putting out the same message:

‘Trust me, I have a plan that’s guaranteed to make life better for you’

Some will add a rider that there will be challenges ahead, there’ll be sweat and tears, but in the long run it’ll come right.

The plans will differ slightly, of course, but they will all have this in common – they’ll ignore the inescapable reality of the capitalist system, in which the profits of the minority will always take precedence over any other considerations, precedence over any of the needs or desires of working-class voters.

SPGB Snippets: Starmer’s “on the side of working people” (2026)

From the Socialist Party of Great Britain website

May 13, 2026

. . . and he’s “fighting” for the millions of people on low pay and insecure jobs. “Millions of people who don’t get the dignity. The respect. The chance that they deserve, to go as far as their talent and effort should take them. Millions of people held back because the status quo in this country does not work for them.”

Yeah, but your figures and your scope are wrong, Starmer. Billions of people around the world are ensnared for life in wage labour, all being held back because capital must, and will, keep them permanently on the edge of destitution. How else could they be forced to provide the profits on which the capitalists depend?

World Socialist Radio - Peter Mandelson: Arch Labour Party Careerist (2026)

Adapted from the March 2026 issue of the Socialist Standard

Peter Mandelson: Arch Labour Party Careerist byThe Socialist Party of Great Britain

Peter Mandelson exemplifies a lifelong “careerist” within the Labour Party. His political trajectory was driven more by personal advancement than by principled commitment to socialism. He rose through the party not from grassroots activism but via roles in communications and media management, becoming a key architect of “New Labour.”

This episode uses Mandelson as a case study to criticise Labour, arguing that figures like him demonstrate how the party is dominated by professional politicians focused on power and status, rather than pursuing genuine socialist change.

Taken from the March 2026 edition of The Socialist Standard.

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Peter Mandelson: arch Labour Party careerist (2026)

From the March 2026 issue of the Socialist Standard

A friend and former Labour councillor reported to me how Peter Mandelson spoke at an online seminar. He had been impressed by one comment, summed up as: ‘If you have a good idea, don’t bother asking everybody, just go ahead and do it’. This seems to sum up all that was wrong with the New Labour project, even if you are achieving good results, not asking people makes them feel divorced from the outcomes. Even worse, it can lead to disastrous and unintended consequences, as those who know more could warn you about in advance.

Mr. Starmer thought appointing Mr. Mandelson as ambassador to Washington was a good idea, and he just went ahead and did it. The consequences have been disastrous for him.

Mandelson’s biography is well known. Grandson of wartime Labour Home Secretary Herbert Morrison, he had a natural ‘in’ into the Labour Party and movement, beginning his career (much like many Labour figures, including Jeremy Corbyn) as an employee of the trade union movement, working for the TUC.

It’s not necessary here to reprise his whole biography: it is widely available. Suffice to say that, apart from a short stint working in television, he worked as a Labour movement staff member, specifically in charge of communications. Once in parliament and then in government, he twice stepped down as a cabinet minister: once for taking an unsecured loan from a cabinet colleague, Geoffrey Robinson, for a house worth (at the time) £475,000. The second scandal was around him intervening in the passport application of billionaire businessman Srichand Hinduja. Although in both instances formal inquiries cleared him of any wrongdoing, the perception was that he was into palling around with – and getting favours from and doing favours for – very wealthy people.

It’s notable, now, that he lives in a £12 million house. This was paid for by the infamous revolving door of government ministers going into private lobbying and well-remunerated directorships after leaving office. While a well-known phenomenon, thanks to the publication of all of the notorious paedophile Jeffery Epstein’s correspondence, we now get a glimpse of the process working in practice.

Epstein advised Mandelson on how to apply for directorships, including with Deutsche Bank, that could have been worth $4-10 million per year. In the end, Mandelson didn’t want to work full time, and so got a job with a firm called Lazard for one day a week, worth a mere $1 million per year. He also set up his own lobbying firm, Global Counsel, which, as Mandelson said in one email to Epstein, paid his expensive mortgage. Epstein advised him on how to find clients for that firm. Global Counsel has had firms such as JPMorgan, Palantir and Anglo-American as clients.

These roles sought were, in part, to avoid regulation around former ministers taking jobs that relied on their former political roles or were intrinsically linked with them: and it is clear that what was for sale was general political, not financial advice, how to get things done, including introductions and network access. This is clearly not an uncommon situation. Epstein, it seems, also gave similar advice to former Israeli Prime Minister Ehud Barak. After all, as we have written in these pages before, this was Epstein’s business, helping manage other people’s wealth, for a cut.

Itch to live like them

It is, perhaps, not surprising that people who find themselves rubbing shoulders with the fabulously wealthy should not feel the itch to be able to live like them, especially as, when entering the room as government officials they are functionally treated as peers of the wealthy: individuals of power and respect. It is equally understandable that the wealthy should want to encourage such feelings and throw a few crumbs to the politicians to win their loyalty.

As the case of Mandelson demonstrates, it does not have to be the naked bribery of plain brown envelopes. Continued loyalty (in his case as Business Secretary in the UK, and Trade Commissioner of the EU) can be generally rewarded by these advisor roles, directorships or other supposed jobs where the ultra-wealthy can name the price. We’ve noted before that the book-publishing and speaking-tour game is a simple way to transfer substantial sums to former politicians in ways which no set of rules could ever stop. Any attempt to ban such channelling of funds will always simply be circumvented, as Mandelson and Epstein managed to do.

Epstein gives us a great example, in one of his emails, where he leadenly says ‘supporting [Gordon Brown] will be seen as bad form commercially’: Mandelson’s own interests in the subsequent selling price of his skills and contacts depended on him being seen as helpful to commercial interests. That he had the lack of sense to forward secret and commercially sensitive government documents to Epstein will certainly come to be seen as bad form commercially. It is inconceivable that other ministers through the ages have not, in private conversations and communications, given wealthy friends and acquaintances tips and winks about what was coming up, but that would never be provable. There have just never been email dumps like this one before to let the cat out of the bag. And even if, again, Mandelson is formally cleared, his misjudgement in leaving evidence behind will be remembered.

What should also be remembered is that all of this flows, not just from personal cupidity, but structurally, from a society of immense inequality. A society in which a handful live in luxury, and can spare some of their wealth to tempt and buy whomsoever they please. Journalists have come out, after Mandelson’s fall, with stories of how he would threaten their jobs because he knew their boss (shades of the Savile playbook). Where people depend for their livelihood on their job, such threats have power.

His wealth of money and connections fed back into his ability to influence the machinery of the Labour Party, and restore it as a party safe for capital. But, again, it is not him alone as some sort of cuckoo in the nest – any party that seeks to manage an unequal society will inevitably end up being run for the benefit of the people who benefit from that inequality.

Pik Smeet

Cooking the Books: The best laid schemes (2026)

The Cooking the Books column from the January 2026 issue of the Socialist Standard

Before the budget on 26 November speculation was rife as to what might be in it. In opposition Rachel Reeves, as Shadow Chancellor, had promised that the priority of a future Labour government would be growth, growth, growth.

But what is ‘growth’? She seems to mean a growth in Gross Domestic Product which is a measure of the inflation-adjusted price of all the goods and services produced in a year. The trouble is that this is not something that a government can bring about. As she herself pointed out in her budget speech, ‘private investment is the lifeblood of economic growth’. So, her plan is to create the best conditions for private investment for profit, one of which in her view is government investment in infrastructure projects. This, however, has to be paid for. As she doesn’t want to rely too much on borrowing she has had to increase taxes. Not that increased government investment will necessarily encourage more private investment; it might for a short while but in the end the only encouragement is the prospect of making a profit.

Capitalism is a system of production for profit where the aim is not growth as such but making profits which, when reinvested, bring about an increase in the production of wealth. It is a result of what Marx called ‘the accumulation of capital’.

Marx himself pointed out that, when it occurs, the more rapid the accumulation of capital, the more jobs there are and the higher are wages due to employers competing for workers. These days, it would also mean an increase in tax income for governments. Reeves seemed to be making the same point when she described ‘economic growth’ as ‘the best means to improve wages, create jobs, and support public services’.

But there is a difference. Marx never expected the accumulation of capital to be continuously onwards and upwards. He saw the process of capital accumulation as ‘a series of periods of moderate activity, prosperity, over-production, crisis and stagnation’ (Capital, vol 1, ch. 15, section 7). Despite all the evidence to the contrary, Reeves believes — and not only her but all the parties that aspire to manage capitalism — that, if the government gets it right, there can be a permanent boom.

A government might be lucky and be in office during the ‘prosperity’ phase of the cycle but not even the government’s own advisers at the Office for Budgetary Responsibility are predicting that. They are currently estimating that ‘growth’ over the next four or five years will be only 1.5 percent a year. Which is slow by previous capitalist standards and won’t bring about many more jobs or higher wages or enough tax revenue to honour Labour’s promises to improve public services.

In any event, the OBR forecasts are little more than a guess. The fact is that economic forecasts, especially over a longer period, are hardly worth the paper they are printed on as nobody can foretell how the capitalist economy will move. If they turn out to be correct, it will have been a lucky guess.

What will happen in practice over the next few years is that the government will merely react to whatever the workings of capitalism present it with. They will just be muddling through, or, to use the nautical language governments do when they seek to explain their failure by having to ‘face strong headwinds’ or being ‘blown off course’, they will just be navigating by sight.

Classic Reprint: Income tax and the wage struggle (2026)

A Classic Reprint from the January 2026 issue of the Socialist Standard

Given the recent budget from Rachel Reeves and the debate about income tax rates and thresholds, we reprint this article as it will have some resonance.

It is popularly supposed to be a virtue in a government not to impose income tax on low-wage workers. So each government tries to claim credit for having made alterations in the income tax which have the effect of freeing some workers from tax liability entirely, or at least of reducing the amount of it. This claim was made by the Labour Party following its six years in office after 1945 and was repeated by the Conservatives at the 1959 election.

Both the claims are so framed as to be distinctly disingenuous.

It was quite true, as the Conservatives claimed, that the raising of the tax allowance exempted millions of people from tax, but it was equally easy to see that, as wages rise, the exempted millions came into tax range again. And when the Labour Party Handbook 1951 claimed that a youth earning £3 a week in 1951 was paying less income tax than would have been levied on a wage of £3 in 1938 it would have been appropriate to point out that £3 in 1951 would buy only about half what it would have bought before the war.

And both governments refrained from stressing the fact that since the war income tax (Pay As You Earn) has been brought down to lower pay levels to take in millions more wage and salary earners than before the war. The number of people paying tax was under four million in 1938, 12 million in 1945, over sixteen million at the end of Labour’s term of office, and up to nearly twenty million in 1961-2. The Tory budget of 1963 removed nearly four million from liability but with every wage increase some will be coming into the range again.

So if it is a merit not to make workers pay income tax neither the Labour Party nor the Tories can match up to the performance of the National Government in 1938; and none of them can compare with the governments in the nineteenth century which exempted practically the whole of the industrial workers and clerks from liability. An article in the summer number of Public Administration, by Mrs. Olive Anderson, shows that in the middle of the century the minimum level of pay liable to tax was about £3 a week, while the wages of even the most highly skilled craftsmen were under 30s. a week, and clerks’ wages were under 40s. a week.

Interest attaches to the comparison because during the Crimean War tax reformers campaigned to get the taxable level brought down so that the mass of workers would be brought in, one suggestion being to make the tax payable on all wages of 6s. a week and over. One of the arguments was that as it was the town workers who were so keen on the war, why shouldn’t they help to pay for it through income tax?

The proposed changes were not adopted, chiefly because of the difficulty and cost of collecting small amounts of tax from millions of individuals, many of whom often changed their jobs and moved to different towns. Below a certain level the tax costs more to collect than the yield to the government.

Later on tax collection became more efficient and more and more people were brought into tax liability by the twofold movement of the lowering of the exemption limit (from £160 in 1899 to £130 in 1915) and the upward movement of prices and wages.)

But what is there in the common belief that the working class as a whole gain from a lowering of income tax and would gain still more if they were entirely exempt? The answer is, nothing at all! The condition of the working class, apart from possible short term effects when changes are introduced, is not the result of taxation whether in the form of income tax or the so-called indirect taxes, Purchase Tax, etc.

To start with, were the working class better off in 1938 when most of them were exempt from income tax and the rate was only five shillings (1s. 8d. on the first £135), than they have been since the war when nearly all of them are within the tax range and tax is at a higher rate? The evidence points to the fact that as a class they were rather worse off in 1938. And to go further back, were they better off in 1900 or 1850 when they paid no tax at all? Again, the answer is No!

In the latest year for which figures are available there were about 23 million wage and salary earners (including company directors) whose total income was about £14,000 million and who paid a tax of £1,200 million. If we take the industrial workers and shop assistants only, with a total wage bill of about £9,000 million a year, the amount of tax might perhaps be in the region of £300 million to £400 million a year.

Of course those who now have tax deducted would find their take home pay correspondingly increased when the deduction was reduced or ceased, and would for a while be better off; but in the general struggle between workers and employers over wages, this reduction of tax would be a factor in stiffening the attitude of the employers. In the situation of recent years, with fairly continuous low unemployment and increasing prices, such a reduction of tax would operate like any slackening in the rise of prices, it would make it that much more difficult for wage claims to make headway against the employers’ resistance.

Conversely, changes which have brought more and more workers into the tax range, or have increased their rate of tax. had consequences similar to rises in the cost of living: they have stiffened the pressure of the workers for higher wages especially when unemployment has been low. In other words now that millions of workers have tax deducted they have come to think in terms of ”take home pay” and to struggle for the maintenance or increase of that, rather than to look at the wage before deduction.

Mrs. Anderson, whose article has already been referred to, has found that a similar situation may have existed during the Crimean War. One of the reasons why income tax was not then extended to take in wage earners was that with the shortage of labour caused by the war it was feared that to whatever extent tax was levied on the workers the employers would be forced to raise wages to keep take home pay at its former level.

In short, struggling to raise wages is in line with working class interests, campaigning over taxation is not.

H. (November, 1963)

Editorial: Labour sinks even lower (2025)

Editorial from the December 2025 issue of the Socialist Standard

Somebody has said, ‘What Powell says today, the Tories say tomorrow and Labour legislates on the day after’. There is some evidence for this, going back to 1968, the year Enoch Powell delivered his notorious ‘rivers of blood’ speech. The Labour government of the day then brought in the Commonwealth Immigrants Act to end the free entry into Britain of people from the old Empire. Extending the colour bar to Commonwealth citizens required careful drafting to avoid keeping out ‘white’ people. In the end Labour found a solution — that only those whose father or father’s father were born in Britain would have free entry.

It was in that same speech that Powell talked of the ‘existing population’ finding themselves ‘made strangers in their own country’. A refrain taken up by Starmer in his notorious ‘island of strangers’ speech last May, given in response to the rise of the latter-day Powellites of Reform UK. Now, in a bid to stop losing more votes, the Starmer government has decided to steal Reform UK’s clothes and introduce legislation making it even more difficult for refugees to obtain permanent residence; some are going to have to wait twenty years just to apply (instead of five as now) and during this period will be liable to be sent ‘back to where they came from’ at any time. This, in addition to previously announced measures to make it more difficult for ‘strangers’ to become a British citizen.

No capitalist state is going to allow free entry — and socialists are not so naive as to expect them to. States seek to control entry in accordance with the requirements of the labour market and so as to decide who can come in and who can’t. Most European states, as they have an ageing population, do currently need working-age immigrants to keep production and profits flowing.

They need immigrants, but who? That’s where choice — and prejudice — come in. As in 1968, the Labour government has chosen the path of prejudice.

The Home Secretary, Shabana Mahmood, has said it is her ‘moral responsibility’ to bring in the legislation. What sanctimonious humbuggery! The Labour leaders and most of their MPs are unprincipled careerists whose main concern is to stay in office or at least keep their seats. Dragging morality into it just makes them more despicable. And then there is the sheer vindictiveness of some of the proposed measures. Why keep individuals living for twenty years in fear of deportation?

It is true that, by clever propagandising and media help, many have become convinced that there is ‘mass immigration’ and that stopping ‘too many’ immigrants would lead to an improvement in their life. But it wouldn’t, because the problems they face over housing, health care, and education derive not from there being too many immigrants but from the fact that meeting these needs is not a priority under capitalism where the aim and driving force of the economy is to make a profit. Even if all immigration were stopped and all ‘illegal’ immigrants rounded up and deported these problems would remain.

All socialists now? (2025)

From the October 2025 issue of the Socialist Standard

That august publication the Daily Mail recently ran the headline ‘Another Day in Starmer’s Socialist Utopia. When Did Britain Become North Korea?’. It reported that Starmer was ‘hiring a raft of high tax fanatics’, was ‘threatening ‘ID cards for all’, and that ‘fury erupted’ when armed police arrested the writer of Father Ted ‘over online comments about transgender activists’.

It goes without saying that no one with the slightest good sense or judgement could fail to see this for what it was – a pile of breathless and exaggerated bilge. The comparison to the repressive, authoritarian dictatorship that is North Korea was particularly ludicrous, as was the assumption that that regime is somehow ‘socialist’. Equally mind-boggling was the notion that Starmer’s government is socialist too (a ‘socialist utopia’ in fact) and thus to be equated to North Korea, when neither set-up has anything to do with socialism.

Socialism: what does it mean?

What gives impetus to such sneering declarations, intellectually empty as they are, is the fact that Labour and its supporters are themselves fond of talking about themselves as socialist, even though the real task they are involved in is finding ways of running capitalism. It’s true that Starmer himself has not uttered the ‘s’ word for some time, but others in his party have, and do so continually. The Labour MP Dawn Butler, for example, recently stated that ‘the Labour Party is a socialist party’ and that ’socialism isn’t a dirty word’. That moved this writer to email her and ask the question ‘Since socialism can be such a confusing word, can you please explain how you see it?’ Receiving no response at all, I thought I would try putting a similar question to another ‘socialist’ MP, Zarah Sultana, who had actually just left Labour to join Jeremy Corbyn in the setting up of a prospective new party (currently calling itself ‘Your Party’). I wrote: ‘I very much sympathise with what you say, in resigning from the Labour Party, about the failure of governments to deal with poverty and inequality and note your point that the issue at the next election will be “socialism or barbarism”. But, since socialism can be such a confusing word, can you please explain what you mean by it?’ I did at least get a response from her, but only the standard acknowledgement of receipt (‘Thank you for contacting me. Please read this automated response to your email, which confirms that I have received your correspondence’) and nothing thereafter.

The unfortunate thing is that, whether in the Labour Party or outside, MPs and others throw the ‘s’ word around without having a clear notion – and sometimes no notion at all – of what it means other than a vague wish for wealth to be spread more evenly and reforms to be brought in which will make life easier and less uncomfortable for those lower down the earnings scale – all with a view to somehow making things more ‘equal’. It rarely if ever crosses their minds that such changes, even if they were possible or feasible, would not change the basic structure of the system we live under which determines that production and distribution of goods and services takes place for profit not need, with overall dependence on money and buying and selling.

‘Your Party’

But despite getting no meaningful answer from the MP calling herself a socialist who had defected to Corbyn’s party-to-be, when I found out that there was to be a local gathering, open to all, to discuss the nature and setting up of the new ‘Your Party’ organisation, I decided to go along to observe, to listen, and maybe to speak. The turnout was 60-70 people, biased towards the older age group but in gender terms pretty much even. Yet if I was expecting to hear talk of socialism, in any of its possible conceptions, that’s not what I got. Most of the hands that shot up were from members of small left-wing groups or parties damning the current Labour government and seeming to envisage some kind of ‘entryism’ into the new party. There were also some non-affiliated attendees with apparently good intentions and maybe looking to find a home in a new ‘caring’ party. But what virtually all the contributions from the floor had in common was talk of the need to press for reform measures of various kinds: eg, nationalisation, higher taxation for the wealthy, expansion of the NHS, more funding for education and other services, ending of anti-protest measures, action against pollution and climate change. Only one speaker stood apart in saying that the main problem was that most young people nowadays have no idea what socialism means and a priority should be to fix that. I agreed with this, even though I doubted whether that person’s conception of socialism coincided with mine.

As for a contribution of my own, my hand wasn’t among those pointed to by the chair and I had to accept that. But had I been chosen, I would have said that I agreed with the idea that a clear view needed to be established of what socialism means. I would have added too that, as far as I was concerned, socialism didn’t mean ways of ‘fixing’ capitalism (impossible anyway) or trying to make it more palatable. Instead, it meant getting rid of the whole system of production for the market and buying and selling and replacing it with a moneyless cooperative society of voluntary work, free access and democratic control worldwide. I would have also said that, short of this, the ‘real change’ Jeremy Corbyn has said his new party will bring is destined to be the same mirage as all previous attempts at radical reform of capitalism have been, ending up as a predictable recycling of the status quo.

HKM

Zarah Sultana spoke at a meeting in Raynes Park (South West London) on 10 September. She said that the new party’s aim was to ‘materially improve people’s lives’. The Labour Party, she said, had betrayed its past principles and was ‘dead’; Starmer should be sent to the Hague for trial as a war criminal. She was in fact surprisingly radical for someone selected and elected as a Labour candidate, calling for the new party to support demonstrations and strikes as well as to get MPs and councillors elected. She favoured the new party being called ‘The Left’ and said it should be organised democratically with provisions for One Member One Vote.

She also said the new party should be ‘proudly socialist’, and that she wanted to ‘bring our country to socialism’ and that the election of local councillors would ‘pave the way to the socialist challenge’. But she didn’t explain what she envisaged socialism as being. The rest of her speech suggested it would be capitalism reformed into a less unequal society with properly funded public services and state-owned utilities and that put people before profit. As she was pretty approachable after the meeting, I could have asked her about it but she was surrounded by people wanting to take selfies with her.

ALB

I went along to a Your Party meeting at a pub in my local seaside town, to find around 40 people, a few youngish but most of retirement age. Many of them were undoubtedly keen for a left alternative to what they saw as a right-wing Labour government. Quite a few others, like wolves at a Bambi picnic, were predatory undercover Trots keen to get themselves on the group’s steering committee. Two facilitators spoke at length, one in an inaudible drone, the other in a grating whine, to the effect that this was to be a workshop event, in which small groups would discuss and then feed back their responses to the questions: (a) what the priority of the new party should be, (b) what name it should have, and (c) what the immediate focus of the local group ought to be. It occurred to me that my answer to all three questions would be the same, and very likely not appreciated by anyone present: abolish capitalism.

The assembled gathering dutifully knuckled down to the task, while I fell into conversation with an enthusiastic ‘socialist’ who believed that China and Russia had a thing or two to tell us about how to run an economy, and wasn’t our government just as fascistic as them nowadays anyway? He left before the end, to catch the football, but accepted a leaflet and promised to look us up. I also bailed out, having regretfully concluded that no open debate was likely, that reformism was the only item on the agenda, and that this new left surge was history repeating itself in a kind of desperate and perpetual amnesia.

PJS

The Greens too?

The Green Party has just elected a former LibDem candidate as their leader. He too says he’s a bit of a ‘socialist’, as this report of the launch of his leadership campaign recorded:

‘One member asked whether Polanski thought the Green Party was “explicitly a socialist party”. His response was, “On a personal level I agree with the majority of socialist principles”, and said that, “we are a left wing, left of centre party”. But he also clarified, “The reason why I wouldn’t say explicitly, yes, we’re a socialist party kind of in public and as a slogan is I think that’s going to unnecessarily put people off”. He went on to argue that in defining the Greens as a socialist party there would be a need to, “appeal to all the socialists and kind of struggle with all the people who are anti socialist who might have voted Green if we didn’t say we were socialists.” Instead of describing the Green Party in this way, Polanski instead argued that Greens should be talking about a “fair, equitable society where we make sure that everyone is looked after”, and advocating policies like a Universal Basic Income.’

He is in fact on record as having described the Green Party explicitly in public as a ‘socialist party’. In a video debate in February this year he argued that there was no need to set up a new left party as ‘there is, after all, a socialist party in the UK already: it’s the Greens’ .

He doesn’t say what he means by ‘socialist principles’ but it is certainly not a socialist principle to not say you are a socialist in case you lose votes or to seek the votes of anti-socialists. He does, however, give a hint as to what he thinks ‘socialism’ is when he mentions a ‘fair, equitable society where we make sure that everyone is looked after’. That’s probably what he said was his aim when he was a candidate for the LibDems. Which party doesn’t promise that? More important is how such a desirable if rather vague end is to be achieved — by trying to reform capitalism or by making the means of wealth production the common ownership of society under democratic control?

Polanski has also described himself as an ‘eco-populist’. That sounds about right.

ALB

Labour’s Department of War (2025)

From the October 2025 issue of the Socialist Standard

Many people are surprised and disappointed by Keir Starmer’s Labour government. Yet, it is a typical Labour government. Fundamentally, it is a belief in state action to co-ordinate the market economy that characterises them in power. Thankfully, any association between this belief and socialism has long since been dispelled.

Indeed, to their credit, this government is faithfully carrying out the objects set out in the Labour Party’s rulebook, which commits the Party to work for:

‘A DYNAMIC ECONOMY, serving the public interest, in which the enterprise of the market and the rigour of competition are joined with the forces of partnership and cooperation to produce the wealth the nation needs and the opportunity for all to work and prosper with a thriving private sector and high-quality public services where those undertakings essential to the common good are either owned by the public or accountable to them’ (Clause IV.2.A).

And:

‘Labour is committed to the defence and security of the British people and to cooperating in European institutions, the United Nations, the Commonwealth and other international bodies to secure peace, freedom, democracy, economic security and environmental protection for all’ (Clause IV.3).

No-one can pretend that the present Labourites have not been up-front with this commitment, at least: anyone voting for them without illusions should have known.

We can see this in action in the way that Downing Street announced the UK taking part in the NATO agreement to spend 5 percent of GDP on Defence.

‘Marking a step change with the approach of previous governments, the National Security Strategy directly answers to the concerns of working people, aligning our national security objectives and plans for economic growth in a way not seen since 1945’.

The reference to ‘working people’ is labour-washing this strategy, which will be about making phenomenal amounts of profit for defence contractors and arms manufacturers. As the NATO press release on the agreement notes:

‘Research and development (R&D) costs are included in defence expenditure. R&D costs also include expenditure for those projects that do not successfully lead to production of equipment’.

This is the NATO agreed definition of defence expenditure. The agreement is for this figure to reach 3.5 percent of member states’ GDP, with an additional 1.5 percent of GDP to be spent:

‘annually to inter alia protect critical infrastructure, defend networks, ensure civil preparedness and resilience, innovate, and strengthen the defence industrial base’.

So, NATO states are preparing to fiddle the figures by defining as much as they can as defence expenditure (see for example rumours Italy is looking at designating a transport bridge as defence expenditure).

Of course, the US has long done this, with a substantial veterans benefit system: spending about $300 billion annually, 90 percent of which is split between income support for veterans (including pensions) and medical costs. This is itself part of the economic conscription of workers to fight in the armed forces for the people who own the country.

Starmer’s government wants to use its military spend as part of its drive to generate planned profits for capitalists through that ‘dynamic economy.’ According to the MOD 463,000 jobs (about 1 in 60) are supported by the defence industry (that includes 272,000 jobs supported by military spending – 151,000 directly and 121,000 indirectly) on top of the 181,890 serving military personnel.

However, as the Institute for Government notes:

‘The single largest cost to the MoD is the Defence Nuclear Enterprise, which is responsible for the procurement, maintenance and disposal of the UK’s nuclear submarine fleet. This was allocated 38% of the 2023-2033 Equipment Plan, or 20% of total defence spending’.

That is, maintaining the UK’s capacity to launch a nuclear device at any nation in the world. Interestingly, they also note that:

‘Most additional UK defence funding between 2015/16 and 2023/24 was allocated to capital spending, to acquire or maintain fixed assets like equipment and land. This element of spending increased by 95.5% in real terms over this period’.

Depending on how you count it, the UK is the 5th or 6th biggest-spending military country in the world. This expenditure is necessary to give continued diplomatic clout.

This comes at a cost. Those tens of thousands of service personnel are removed from the workforce and from doing any potentially useful work (neither generating profits for capitalists, nor creating use values for the community).

The jobs and industries supported by defence spending do produce profits for the companies involved, but those profits are essentially transfers from elsewhere, as they are paid for by taxes extracted from the profits of other capitalists.

Defence does bring in some profit. ‘UK arms exports: Statistics’, a House of Commons report from July this year notes that ‘the UK won defence orders worth £14.5 billion in 2023. This is a 39 percent increase in real terms on the previous year’. Over 50 percent of this was aerospace. This would represent a poor return on all that defence investment, but in fact it also reflects the UK geostrategic interests, as shown by where the sales went to:

‘Europe was the largest market for UK defence exports, accounting for 34% of total exports over this period, followed by the Middle East (32%), North America (18%), the Asia Pacific (7%), Latin America and Africa (both 1%). The remaining share (8%) was exported to a mixed or unidentified region’.

There are other defence spin-offs in terms of new technologies. The recently published government document, ‘Defence industrial strategy: making defence an engine for growth’ notes: ‘The Spending Review confirmed that MOD’s research and development budget will be over £2 billion in 2026-27 and will rise each year’. This includes a mandate to spend 10 percent of the MOD’s procurement on novel technologies, including AI-driven solutions.

Finding new and inventive ways to kill people seems a very roundabout way of creating wealth, but it is a way which has to exist in a society characterised by a tiny minority controlling the productive resources at the expense of the majority.

Pik Smeet

The state of the state’s finances (2025)

From the August 2025 issue of the Socialist Standard

Politicians love talking big numbers: ‘We’re spending £5 million to stop The Thing.’ Or ‘We will spend an additional £20 million to increase The Pittance by a penny.’ When Starmer and his chums came into office they mummered and howled over discovering the astronomical £22 billion ‘fiscal black hole’ left in the public accounts by the Tories. Of course, for the majority of people living on pennies at a time, such figures represent unimaginable amounts. Eking out a few quid from week to week and making every pound work is the lot of most people, so such sums seem like an unforgivable profligacy.

Everyone in politics knew there was a gap in spending plans, and that Labour, despite all its promises not to increase taxation, would have to find a way to close this spending gap. The Tories had arguably laid a trap for Labour, in the form of the Office for Budget Responsibility (OBR), a supposedly apolitical authority that marks the UK government’s financial homework. The problem is, if politicians and press just ignore it, it doesn’t do much good.

It does provide useful data, though. Its Brief Guide to the Public Finances provides a lot of the clarity regarding government spending that is missing from much of the daily rhetoric. The key piece of data is the total spend by the government: ‘In 2024-25, we expect it to spend £1,278.6 billion, equivalent to around £45,000 per household or 44.4 per cent of national income.’ Against that background, £22 billion is a rounding error that could easily be sorted by knocking a few invoices into the next financial year.

The issue is that the income for the state is expected to be ‘£1,141.2 billion, equivalent to around £40,000 per household or 39.7 per cent of national income.’ This is the infamous deficit of £137.3 billion. This means adding to a rising national debt: ‘in 2024-25, we expect debt to be equivalent to 95.9 per cent of national income. It is equivalent to around £2.8 trillion or £98,000 per household’. This is significant, because the government has to pay interest on that debt: ‘Net interest payments on the national debt are expected to cost £105.2 billion in 2024-25’.

To put that in perspective: ‘The biggest items [of public spending] are health £193.3 billion, education £89.2 billion and defence £37.6 billion.’ Whilst, in theory, the state is immortal and need never pay back its total debts (when particular debts fall due, it can just roll them over and borrow more money to pay its creditors), servicing the interest bill can become expensive, especially if confidence in any particular government falls and creditors demand higher interest rates to cover their risks. This means the government has to manage the size of its debt: this is why deficits become such an all-consuming obsession.

Politicians, however, point to the difference between capital spending and current spending. The government invests ‘£146.1 billion – 11 per cent of the total – on capital investment such as roads and buildings and on loans to businesses and individuals’. This spending is backed by physical infrastructure and leads to ownership of assets. On top of that it spends ‘£450.7 billion on the day-to-day ‘current’ running costs of public services, grants and administration. This is 35 per cent of public spending’. Additionally, the government spends £313.0 billion on welfare payments (£150.7 billion of which is pensions).

The government thus prefers to look at the current deficit which: ‘counts all receipts and all current spending, but excludes spending on net investment’. The current deficit stands at £60.7 billion.

This accounts for why Labour made politically disastrous decisions, such as freezing winter fuel payments and cutting Personal Independence Payments (for a paltry £5 billion in savings, which is tiny compared to overall spending, but one twelfth of the current deficit).

They can, if they are lucky, rely on economic growth (which raises tax receipts, and lowers welfare costs) to cover much of the gap: but the plan is to have a current surplus, which gives the Chancellor of the Exchequer space to either cut taxes or increase spending in fresh areas. The expectation is to have £9.9 billion of such headroom by the next election: so the strategy is pain today and jam tomorrow.

As the OBR notes in its Economic and Fiscal Outlook – March 2025:: ‘The tax-to-GDP ratio is forecast to increase to a post-war high of 37.7 per cent of GDP in 2027-28. Part of this increase is driven by the policies announced at the previous Budget, including the increase in employer National Insurance Contributions and increases to capital taxes’. From the point of view of the capitalist class, in general, that money going to taxation comes from their available profits and lowers the amount of money available for their profitable capital investment. A record high tax rate, especially one fuelled by an effective employee tax (National Insurance employers’ contributions) will be concerning for them in terms of international competitiveness.

In their eyes, then, government indebtedness is preferable, as it forms a means of funding the state under the control and discretion of the rich, with interest rates being a kind of vote of confidence in the way a government handles the debt. The money from interest payments is also welcome to those of them who lend the government money.

The March report also notes that the government is committed to ‘increase defence spending to 3 per cent of GDP over the next Parliament, which would be equivalent to £17.3 billion in 2029-30’. This would in part be paid for by a £6.8 billion cut in overseas development spending (this simply represents a change from soft to hard power). This unplanned shift in spending priorities shows how the government’s carefully laid plans to generate a current surplus can easily be thrown off course.

All this wealth, though, was originally produced by the efforts of the working class. How much better and more efficient would it be if that effort was directly focused on human needs, instead of producing taxable money?

Pik Smeet

Labour has failed: give socialism a chance (2025)

From the August 2025 issue of the Socialist Standard

One thing the Chartists understood was the importance, to bring about social change, of first winning control of political power as the power to make and enforce laws. They campaigned for universal suffrage (at least for men) as they rightly saw the vote as the way to political control. Once the workers had the vote, they reasoned, they could use it to send delegates to parliament who would pass laws to improve their social and economic situation.

They weren’t wrong about the need to win political control to bring about social change or about the vote as the way to win such control, but the vote has its limitations. It can’t change the way the capitalist economic system works, based as it is on minority class ownership of the resources society needs to survive and on production for profit.

For over 150 years now, a majority of the electorate in Britain has been made up of workers: those who, excluded from ownership of the means to produce wealth, are forced by economic necessity to sell their mental and physical energies to some employer for a wage or salary in order to live. From time to time voters have elected Labour governments but, when in office, these have accepted capitalism, only trying to reform it to make things better for workers.

The theory was that a series of successive Labour governments would gradually transform capitalism into a more equal society by extending nationalisation and the welfare state to be paid for by redistributing wealth away from the rich. But what happened was that, instead of Labour gradually changing capitalism, capitalism gradually changed Labour, the final result being what we see today under Starmer: a party that proclaims itself the ‘party of business’ and which openly seeks to govern as such by putting profits (and military spending) before people’s needs and welfare.

As Starmer has put it: ‘Our job is to work with businesses to create the best environment that allows them to thrive’ (The Times, 29 January). Businesses ‘thrive’ of course on making profits. All Labour governments have been forced to do this but this is the first one to have openly proclaimed this from the start and to have acted on it so quickly.

Understandably, many who have supported Labour up to now no longer have any faith in it. There are calls to set up a new leftwing party, with Jeremy Corbyn as figurehead. That the Labour Party is a pro-capitalist party is now plain for everyone to see, but it is important to understand why the original Labour project of gradually replacing capitalism with a more equal society prioritising people’s needs failed — and was bound to fail. Otherwise, the same mistake will be made again.

The Green Party is already making this mistake of imagining that capitalism can be gradually transformed by a series of reform measures into something else, in their case into a more environment-friendly society. If they ever get the chance to form the government, they too would fail just as all Labour governments have. So would any new leftwing party if it adopts, as have previous breakaways from Labour, the same gradualist and reformist approach that the Labour Party once did. The plain fact is that capitalism just cannot be made to work in any other way than it does, ie, it puts profits first.

The Labour project didn’t fail because of the betrayal or incompetence or lack of determination of its leaders. It failed because it set itself the impossible task of making the capitalist leopard change its spots. Capitalism is an economic system which functions according to its own economic laws that impose themselves on those who run governments as well as on those who run businesses. Capitalism is driven by the quest for profits. It is a profit-making system that can only run in the interests of the profit-takers and never in the interests of workers whose labour is the source of profits. No government can overcome these laws and all governments have to apply them on pain of provoking an economic downturn.

What is needed is an understanding that capitalism cannot be reformed so as to work in the interest of majority. That understood, it follows that what is needed is a political party based on a different strategy from that pursued by Labour in the past, a party committed not to tinkering with capitalism’s effects but exclusively to abolishing it altogether and replacing it, in one go, by a society based on the common ownership and democratic control of resources with production directly to meet people’s needs and not for profit. In a word, socialism.

Once a majority want this they can use the vote to win political control with a view to carrying out this revolution in the basis of society. Given this, and that currently most people seem to see no alternative to capitalism, the urgent task of socialists is to convince more people that socialism is the way out.

Adam Buick

Editorial: Jeremy Corbyn’s new ‘real change’ party (2025)

Editorial from the August 2025 issue of the Socialist Standard

Let’s be clear: as socialists, we don’t necessarily dislike Jeremy Corbyn. Indeed, some things he says we’d agree with. Where we differ explicitly is on how our society can achieve ‘real change’.

We agree ‘poverty, inequality and war are not inevitable’, but to be rid of these troubles — and not merely partially, or only for a brief time — we contend that their root cause must be effectively dealt with. No tinkering. No sticking plaster solutions. What’s needed is major surgery.

The aggressive, deadly cancer killing and immiserating humankind in every country is the existence of the divisive, worldwide, capitalist system, so ignore nitwits who say North Korea, Venezuela, China, etc have ‘socialism’ or ‘communism’. They don’t. The current profit-driven system is the undeniable cause of poverty, inequality, war and so much else.

Where Jeremy Corbyn, Zarah Sultana and others on ‘the left’ go wrong is thinking capitalism can be reformed, incrementally or otherwise, so that it becomes useful and beneficial to the majority. Not only will reformism never bring about socialism, far worse, it misleads people into thinking their problems can be solved. Voters led to believe their difficulties can be reformed away will be diverted and put off from considering the ‘real alternative’ — real socialism.

All reforms tend to do is smooth over some problems but create or worsen others. Even when capitalism causes something appalling like the 2008 financial crisis, reforms that were rushed in to solve a crisis can then, over time, be gradually amended, weakened or even ignored because businesses will always be under pressure to cut expenses and increase profits.

Because the fundamental function of capitalism is for capitalists to make profits (otherwise they can go bust), and a fundamental function of government is to assist the capitalist class to make profits (otherwise the economy can go bust), this means even a Corbyn-Sultana government would have to give capitalists what they need to succeed and compete.

So when the going gets tough (which seems to be a never-ending situation now under capitalism), whether Corbyn and Sultana accept it or not, the needs of a profit-seeking few would have to come before the needs of the working-class many. This is why we reject reformism completely.

And nationalising industries etc — which is not socialism — is not a solution. State-run firms must still be profitable, and competitive in markets, so workers’ wages still tend to be the ‘going rate’, which often means little more than enough to pay for all of the essentials.

Therefore, when Corbyn says ‘hope’ is ‘something that is desperately missing from our broken political system’, in reality, the suffering majority has no hope of being freed from poverty, inequality and exploitation by a new left-wing party because the political system isn’t ‘broken’ — it’s biased — towards the asset-owning class.

To prevent a capitalist economy getting into trouble even left-wing governments put the needs of the asset-owning class ahead of the working class. The fact is both right- and left-wing governments have been hostile to the working class struggle for ‘real change’ in the past, and will be in the future. Corbyn says ‘real change is coming’. We say, only if the majority reject reformism and replace capitalism with socialism – the common ownership and democratic control of the resources society depends on to survive and where production directly to meet people’s needs will replace production for profit.