This year’s Budget takes place on the 40th anniversary of the 1984-85 Miners’ Strike. I represent a coalfield community. The destruction of the coal industry and the miners’ fight to save it left deep scars, and we are still living with the consequences.

Sunak’s and Hunt’s central economic logic is rooted in the Thatcherite ideology which brought about the strike. Four decades on, the neoliberal philosophy is still the same: increase the power of big corporations; reduce the power of working people; redistribute wealth from the bottom to the top. What has this achieved?

Look around the country today, not just at the former mining communities. Nothing seems to work for ordinary people anymore. Public services no longer function, our infrastructure is crumbling, our town centres are boarded up. In recent years working people have experienced the biggest fall in living standards since records began. At the same time, the wealth of the richest has exploded and inequality has reached levels seldom seen before. The wealth of Britain’s billionaires has risen from £53.9 billion in 1990 to more than £684 billion in 2023. The least wealthy 10 percent of households, on the other hand, have a household wealth of £15,400 or less. 

Today’s Budget announcements will continue our country down the same unequal path. Research from the Institute for Public Policy Research (IPPR) has found that the Chancellor’s flagship plans to cut 2p off National Insurance contributions will cost £10.4 billion. Almost half of that giveaway would end up in the pockets of the richest fifth of households, while only 3 percent would benefit the poorest fifth. Londoners would benefit the most (£608 on average), while those in the North East would get less than £1 per day (£342 on average).

Another report from IPPR, State of the North, reveals the stark regional dimensions to inequality in Britain. In 2010, total wealth per head in the North stood at 84 percent of the level of England, and 64 percent of the South East, the wealthiest region. By 2030, wealth per head in the North is projected to stand at 79 percent of the level of England, and just 55 percent the level of the South East. The North of England and Midlands were once the industrial heartlands of the world. Now they are held back by an economic system that is past its sell-by date.

The Tories may wish to evade their responsibility for the current state of the economy, but it was already languishing before the body blow inflicted by the warped Truss experiment. The British Establishment has also sought to hide its guilt by talking about a ‘cost of living crisis’ as though it was something that just happened, inflicted by some invisible hand. But the crisis facing millions of British homes was and remains a consequence of the neoliberal economics that governments continue to embrace. The Truss experiment was therefore not an aberration, as the present administration pretends. It was the ideological distillation of all that the Conservatives have come to stand for in the post-Thatcher era.

Hunt and Sunak have themselves decided to react to the inflationary problem using conventional economics, introducing further fiscal tightening with the highest taxes on working people in more than a generation. The government’s allies in the Bank of England then gave things a more vicious twist by introducing monetary tightening too. The net effect was massive downward pressure on household budgets. The Governor and the government both warned against wage rises and did their best to suppress industrial action by the working class.

Today’s Budget is simply a continuation of this neoliberal orthodoxy. Of course, in fiscal terms, it is nonsense. The real meaning is political and poses a particular challenge to Labour’s front bench. The truth is that Sunak and Hunt expect to lose the upcoming general election. Faced with an oncoming political force consisting of millions of voters, the Budget is their political response. It is designed to lay a trap for an incoming Labour government.

A comparison might be made with Napoleon’s invasion of Russia. Leading an army of 500,000, Napoleon went deep into Russian territory en route to Moscow. The Russian army retreated, but in doing so it applied scorched-earth tactics, burning anything the French Army might want to use. The French supply chain then proved too long and its soldiers could not be fed or munitioned.

The Tories are laying waste to the public finances, public services, and the earning power of working people in the same way, making a clear attempt to hobble the incoming administration. Tax revenues cut, services slashed, the deficit at record levels. They are trying to ensure that further impoverishment is the only future possible, with or without them leading it.

Within the framework of conventional economic theory and practice, a Labour government will therefore face great difficulty when it seeks to deliver its mandate for real change. Frankly, if a Labour government plays by these rules, it will lose. There are clear warnings from our own history. When Labour Prime Ministers preside over cuts, we face electoral doom. Look at the end of the Macdonald government or the electoral consequences of Callaghan’s austerity. 

The only rational response is to avoid this Tory trap by rethinking the whole intellectual edifice of neoliberal economics and to rebuild our economy on a new basis. A government intent on national reconstruction would rid itself of the crippling financial orthodoxy which has led to the near collapse of public services. It would set about tackling  the now catastrophically large divisions in income and wealth.

This means shifting the balance of power in our society towards working people so that they have stronger trade union rights and higher wages. It also means modernising the tax system so that the huge sums of wealth accumulated by the super-rich can be taxed fairly and at the same level that income from work is taxed. This is the only credible path to ending austerity.

It would recognise that monopoly power in many sectors of the economy is what lies at the heart of inflation, and not turn the other cheek when markets are failing to deliver for working people. It would pursue an industrial strategy underpinned by public investment that creates well-paid trade union jobs throughout the UK regions in socially useful industries, like renewable energy. Such a government would set our country on a path towards a new economic settlement that could turn the tide on economic decline and sustain Labour in office.

Is the public ready for the large scale changes which this would entail? The answer is yes. There is a great desire for a real alternative to the political settlement that has blighted so many lives and communities since the Miners’ Strike began. The best way to mark the anniversary would be to start building it.