- Created: Thursday, 07 May 2009 15:02
- Written by FRFI
Every Labour budget since 1997 has been driven by one real consideration – to ensure that the coalition of forces that elected Labour into office remains on board. Labour has to be able to govern in the interests of banking and multinational capital yet keep the support of the professional, middle and upper working classes (middle classes).
Labour's first two budgets assured banking and corporate capital that British capitalism was safe in its hands. Monetary policy was handed over to the Bank of England and a ruthless fiscal policy put in place to slash the public sector deficit and reduce the level of public debt to national income. 'Enterprise' was to be promoted through tax cuts and privatisation. Policies were put in place to discipline the poor working class, and inequality continued to grow as Labour steadfastly stood by its promise not to raise direct taxes on the middle classes. This neo-liberal dogma was called 'prudence'.