Blue Labour's budget is just the latest manifestation of its reactionary, petty-bourgeois nationalist character, and the inevitable bureaucratic, lying and deluded politics that goes with it. But, the chaos and farce that surrounded the budget shows that they are, also, totally incompetent. At least Mussolini was reputed to have made the trains run on time. The tragedy is that its not just Blue Labour that displays this incompetence, or the totally deluded, petty-bourgeois nationalist ideology that has no grip on reality, or solutions to the problems of late, monopoly capitalism, and specifically those of British capitalism. The entire political elite is in a state of utter confusion and disarray. In previous decades, these are the conditions in which a mass, revolutionary workers' party, would be kicking down that rotten door, but, alas, no such party exists, today.
At the time of the last General Election, I pointed out, as did many others, that Blue Labour's agenda made no sense, and it was either delusional, or else, simply lying, in order to win the election. To win the election, Blue Labour believed that they had to distance themselves from Corbyn's mildly progressive, social-democratic agenda, presented in 2019. To do that, all of those popular policies that Starmer had committed to, in order to lie his way to the leadership, had to be quickly ditched. Any whiff that a Labour government might increase taxes, spending, or borrowing had to be crushed, as giving a hostage to fortune. Hence the amazingly inconsequential and uninspiring economic agenda they put forth. But, even that agenda was clearly impossible to fund, without significant tax rises or borrowing, given the state of the public finances, which everyone other than Rachel Reeves, apparently, was able to discern.
The existence of a £20 billion “black hole” in those finances was only news to Rachel Reeves, when they opened the books, so it was claimed, even though, numerous others had pointed it out months before the election! The economic analysis and programme of Rachel Reeves was never airtight, but as the months ticked by, even more holes were exposed. To fill all of Reeves' holes, it was obvious that either taxes would have to rise, borrowing increase, or both. But, Blue Labour had committed to doing neither, and had jammed itself into a tight spot of its own making. It had come up with the delusional alternative of growth, as the means of raising its revenues, and so shrinking the deficit. It was both delusional and lying, because growth requires changes in the economy itself, which often take years, if not decades to bring about. Blue Labour could offer no evidence that it could raise growth other than minor measures such as changes to planning regulations and so on.
There are two major causes of slowing growth in the UK economy. One is falling levels of productivity. It is not alone in that. Global productivity always falls at this stage of the long wave cycle. The peak of the last Innovation Cycle arose in 1985, as the microchip revolution swept the globe, replacing labour and, hugely depreciating the existing fixed capital stock, which brought about a huge rise in the global, annual rate of profit, which, in turn, also, led to falling interest rates and rising speculation on rapidly inflating asset prices. That rise in productivity, and profits continued for another 20 years, as a period of intensive capital accumulation shook out labour, and old technology, replacing it with the new technologies.
But, in fact, that rising productivity from the 1980's until the early 2000's, was actually one cause of slower global growth, as is always the case in such periods. As Marx describes, the rising productivity means that gross output rises more slowly than net output, the physical counterpart of the higher rate of surplus value and profit. In past long wave cycles, its when that period of rising productivity, and intensive accumulation, transitions into extensive accumulation, so that every increase in capital means a greater increase in employment, also, meaning a slowing in productivity growth.
What is different in this cycle, as I have set out before, is that the global ruling class, particularly in the developed western economies, has become addicted to rising asset prices, and any speeding up of growth, based on extensive accumulation, means rising wages, and rising interest rates, which, then, causes asset prices to fall, and, in conditions where those asset prices have been inflated to astronomical levels by repeated injections of liquidity, then, even the slightest rise in those rates means global financial crashes, like that of 2008. Only if capital could continue to accumulate on the basis of rising productivity could it have avoided that. But, the main way it achieved that, as the effects of the 1980's Innovation Cycle waned, was by removing global barriers to trade, and expanding the global division of labour/globalisation of production.
Brexit, and petit-bourgeois nationalism has cut the legs off that option, and even sent globalisation into reverse. For Britain, and its economy, highly dependent on trade and its trade with the EU, in particular, Brexit was just about the most stupid course of action it could take. Yet, the main parties have pursued it, as they have chased after the votes of that reactionary petty-bourgeoisie that has imposed its numbers electorally, as it expanded by round 50% in the period since the 1980's, itself a consequence of the process of technology replacing wage-labour, and sending former workers into the ranks of the impoverished and precarious petty-bourgeoisie, as a plethora of small traders/white van men.
Despite the fact that the electorate clearly recognised this reality, and now overwhelmingly support reversing Brexit, the main parties – Blue Labour, Tories and Reform – are paralysed, because none of them wants to be the first to break ranks, in fear of losing a large chunk of its perceived electoral coalition. But, that is a delusion too. The Conservative Party is dead, as its core petty-bourgeois base has already simply rebranded itself as Reform. Reform itself has reached the peak of its electoral support, based on that petty-bourgeoisie, and as is happening with Trump in the US, its inability to deal with the economic reality it faces, leads to it disillusioning even that base. Again, in previous times, it would be precisely those conditions that would enable the working-class, led by a mass communist party, to draw that petty-bourgeoisie behind it, not by appeasing it, or forming unprincipled popular fronts with it, but by marching out in front of it with a clear progressive alternative.
That petty-bourgeoisie is currently fragmenting, hence a section is being driven into the camp of the fascists, as seen with Musk and Yaxley-Lennon. Electorally, that split means those parties have peaked, but as Trotsky noted in relation to that phenomena in Germany, its consequence is that the actual fascists then seek to move increasingly from the ground of electoral politics to that of street fighting and paramilitary organisation. Any attempt to continue to appease that reactionary petty-bourgeoisie is, therefore, irrational. The Conservatives, now only face losing the rest of their electoral support based in the aspiring, professional middle-class, if they chase after Reform. They have already moved in droves to the Liberals.
But, Labour has seen the same thing. Now, it faces a similar collapse, as its core working-class vote flocks to the Greens, Liberals and others, hastened, increasingly, by the workings of the first past the post system. Its only rational choice is to cut loose from the reactionary, petty-bourgeois nationalist agenda it has pursued, since Starmer became Leader, backed by the shadowy forces of Blue Labour, and its ties to Trump, Zionism and other global reactionaries, and to embrace the EU. But, it will have to ditch Starmer and Blue Labour to do that. The current cakeist nonsense of a UK-EU Customs Union and so on, are just the latest variation of the delusion of a Labour Brexit. There is no chance of Britain creating a new Customs Union with the EU, and even if there were, it is meaningless, outside the context of being inside the Single Market. It is the single market that removes all of the frictions to trade, not the Customs Union. It is the former that is fundamental to raising productivity for Britain, as the basis of growth.
But, currently, it is only the Greens that are offering this alternative – if you ignore the Rejoin EU Party. Even the Liberals are too cautious to promote their long-standing support for the EU, and, instead give credence to the nonsense about closer ties to the EU, a new Customs Union and so on. So, Blue Labour's agenda is based on a delusion of the potential for economic growth, whilst refusing to commit to the one thing that could bring that growth to fruition. Hence, as the last GDP data show, the UK economy continues to not just stagnate, but even contract. It fell in September and October, and looks like being a negative final quarter of 2025.
The chaos and incompetence ahead of the budget, has continued after it. Reeves was accused of again misleading voters in relation to the health of the economy, in order to justify raising taxes. What that really amounted to was an attempt to press Blue Labour into further measures of austerity by cutting welfare. But, Reeves has been knee-capped by even the timid backbench MP's, who have to face the wrath of voters day after day in their seats. In fact, again, a similar thing has been seen in the US. Trump's support is cratering because, no matter how much he lies and lies again about how great the economy is, the reality is that US voters see growth slowing as a result of his tariffs, and they see their cost of living continuing to rise.
Starmer and Reeves have attempted the same deception in the UK, and all the same diversions over immigrants, but it is failing, and will continue to fail. In Reeves' budget, she talked about having increased NHS appointments, cut waiting lists and so on, as well as dealing with potholes in roads, but everyone can see that these claims have no real foundation. If some potholes have eventually been filled, they are dwarfed by the others that have appeared, but every motorist, and even more every cyclist, knows that even the claims about dealing with the existing potholes, are a lie. Anyone trying to get NHS appointments also knows that whatever figures the government claims are highly suspect, and open to manipulation and interpretation.
Waiting lists don't grow if you don't get put on to them. Back in 2003 when I was the Senior Vice-Chair of Staffordshire County Council's Health Scrutiny Committee, I got to attend meetings of the Board of the North Staffordshire Health Authority, and, at my first meeting, the question of waiting lists was addressed. At the time, I was actually on a waiting list to get an operation on a torn cruciate ligament. But, my experience gave me cause to question the data that was being provided, and I pointed out that I had been waiting for far longer than the claims being made suggested should have been the case. In a break, one of the officials spoke to me about it, and having checked the computer system, informed me that I seemed to have just disappeared off it! Precisely the point I had been making in the meeting. Government computer systems are notoriously unreliable, and workers under increasing pressure to meet targets, are also prone to massage the data, as was seen classically in the centralised planning systems of Eastern Europe under Stalinism.
The contradictions that petty-bourgeois nationalists are facing are, therefore, increasingly exploding, and no amount of lying and boosterism is going to fool voters who see the reality of decaying infrastructure, collapsing public services, due to lack of workers, and the workers there are being grossly underpaid, after 30 years of austerity, as well as seeing growth slowed by the implementation of Brexit, and it also resulting in higher prices, all the while, the liquidity pumped into the system has kept asset prices astronomically inflated, itself meaning that millions cannot afford a home to live in, or to put adequate amounts into a pension scheme to cover their future retirement. Now, we have these governments pumping out further ludicrous claims about a potential Russian invasion of Western Europe, requiring billions more to be poured down the drain to fund military spending. This is the same Russia that has been bogged down in a war against Ukraine for the last 4 years, and which, the same NATO countries have told us all along, Russia was losing, and whose economy was on its knees, as a result!
The best defence of Western Europe would be increased spending on its own infrastructure, and public services, raising the living standards of its people, as something the workers of Russia could aspire to, not reducing the living standards of workers in Europe further by draining resources into useless military spending and further belligerence, such as led to the Ukraine War, which can only be seen by the workers in Russia, as a further threat to them, and leading them to back the militarism of their own reactionary rulers. But, the governments in Europe will not do that, because they know that their own main enemy is not Putin, but their own workers. Thatcher said it openly in 1984, when she described the miners as “The Enemy Within”. All bourgeois politicians see the organised working-class in that way, and, they know that any period of sustained economic growth, means, now, a growth in the economic and social position of that working-class, much as happened in the 1950's, 60, and 70's, and that means a greater confidence, organisation and assertiveness of that class.
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