Labor says goodbye to years of economy, but British don’t feel much of it

More money for healthcare, education and defense. New tram lines, a free school breakfast for 500,000 children and more budget to municipalities for libraries and swimming pools. With these types of measures, government party Labor wants to give the British the feeling that things are going better economically – with the United Kingdom and with themselves.

On Wednesday, Minister of Finance Rachel Reeves presented her multi -year financial plans. That planning runs up to and including 2029, the end of this reign. During her speech the extra billions flew through the British House of Commons. « Austerity Was destructive for the fabric of our society. My choices are different, « said Reeves. With that she referred to the cuts on public facilities that the conservative party has been implementing since 2010. Years known in the UK as the period of Austerityfragility.

Indeed, Labor will spend much more in the coming years than what the conservatives intended according to their election program. The joint editions of the British ministries grow by 2.3 percent per year until 2029, in addition to the expected inflation. The government largely pays those extra expenses with loans on the international financial markets.

But those investments also mean that other departments must cut back. The ministries of agriculture, the Interior and Foreign Affairs can spend considerably less money in the coming years, with percentages that change per ministry of 2 to 7 percent less per year. Reeves did not say on Wednesday exactly what they should cut. At Foreign Affairs, in any case, international assistance is being reduced, and the subsidies for public transport and for more sustainable agriculture are likely to fall.

Marginal growth

Labor has been in power in the United Kingdom for almost a year now and has a hard time in imaging. Since the party, a big win reached the lower house elections, in July last year, the popularity of the party and its most important ministers in opinion polls decreased rapidly. Labor campaign with the promise change. But, Minister Reeves admitted in the Lower House: « British do not yet feel that things are going better. »

Promoting economic growth is one of its priorities. This growth remains marginal and the expectations for this year were recently adjusted down, partly due to international uncertainty and the import tariffs of US President Donald Trump. Unemployment has just increased in recent months, which was probably partly due to the higher social contributions and taxes that Labor charges for employers from April.

Politically risky for Labor is that many of the investments that Reeves announced for long -term projects are. For example, she promised new train, tram and bus connections in the Midlands and in the north of England, and dozens of billions extra for new social housing. Only it takes years for these types of plans to have been delivered and residents can benefit from it. Until that time, many Britons attach little value to such commitments; In recent years, the conservatives also often come up with these kinds of ideas, for example for new railway connections, which then did not come.

Minister Reeves had also been under pressure for months to reverse one of its most controversial measures so far. That was her restraint, last year, of a financial contribution for the elderly for their energy bill in the winter. This week she announced that most of the pensioners who will receive a subsidy again from next winter. The income threshold for this is at 35,000 pounds per year, almost 42,000 euros. The subsidy varies from 200 to 300 pounds per year.

Reform as a competitor

On Wednesday it was noticeable that Minister Reeves not only addressed the largest opposition party, but also explicitly to Reform UK, the radical-right party led by Nigel Farage. That party now has five seats in the Lower House, but is doing well in opinion polls and also won many seats in regional elections in May. « Reform is simply not serious, » said Reeves in response to policy proposals that Farage and Reform had lately and that would cost a lot of tax money. For example about higher social benefits for minima with children or the reopening of a blast furnace for steel in Wales.

At the same time, one of the most important themes for Reform remains the relatively high immigration and Reeves’ commitments were also tailored to that. The government no longer wants to accommodate asylum seekers in hotels and is going to eliminate the big backlog in the applications for asylum, she said. The image of those hotels is that asylum seekers are offered a luxury stay there, even though they often live in sober conditions. The costs of those hotels are relatively high, around 3 billion pounds per year. The Tories also promised to put an end to the asylum hotels in recent years, but never managed to do so.

The multi -year planning on Wednesday was not an official budget, which comes in the fall. Opposition parties and analysts expect that Labor will then come up with an increase in taxes in order to be able to pay all these investments. Labor ministers maintained that that would not be necessary and that they already have coverage for their plans. « Instead of deterioration, I choose investments. For national renewal, » said Reeves on Wednesday. She still has a few years to fulfill those promises.

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