Labour inherited from the Conservatives utterly inadequate spending on public services, benefits and the regulatory activities of the state. Rather than the desperately needed increases in spending on these, the government has continued with the the Tories’ spending plans, carried out further immediate cuts to them, and is now proposing to cut them further.
While there is leeway for greater borrowing, in the medium and long term increase in public spending needs to be funded by increases in taxation of capital and of the rich. This should be the central demand of socialists and the labour movement because it challenges neoliberalism which is still dominant.

Increase taxation of capital
Reeves’s botched proposal to raise £25bn from hiking employers’ national insurance was always going to be a failure as bosses passed on this to their workers in lower wages.  Instead there has to be a significant increase on taxes on profits and asset values of companies. These are the primary means that any government can properly gain tax revenue from business.

The rate of corporation tax, the main tax on profits, is currently 25%. It should be raised to 50%. Also there are 340 types of tax breaks (reductions in corporation tax) that corporations get for “investments” costing at least £150bn a year – the corporate welfare state. None of them has been shown to have any economic or social benefits. These should be abolished.
Introduce a Development Gain Tax (DGT) on the profit made by a landowner when they obtain planning permission for a new development.

End the bank subsidies! The government pays interest on bank reserves held at the Bank of England. Reducing this by two thirds would save around £22bn a year.

Increase taxation of the rich

Increase the top rate of income tax from 45%. Tax the pension contributions of the rich at the highest rate of income tax. Increase the rate of national insurance on incomes over £150,000 from its present flat rate. Charge national insurance on investment income. Make council tax progressive rather than its present regressive form.

Many City financiers gain their income as capital gains – profit from buying and selling assets. Capital gains are presently taxed at around 20%. Capital Gains Tax should be raised to the highest rate of income tax.

Place punitive taxes on the luxury consumption of the rich such as private jets, mega yachts and flights in space. Increase tax on harmful forms of consumption such as SUVs and highly processed food.

Taking back essential services into public ownership

Though not strictly part of the budget, the ownership of public services impacts not only on their benefits to users but also on their costs to the government. In fifty years of neoliberalism, numerous public services and infrastructures have been shifted from the state to corporations. Privatised services are not only less efficient but much more costly to national and local government. This needs urgently to be reversed.

The water and sewage companies should be nationalised without compensation, enabling them to be run in an ecologically responsible way.

The great majority of social care, which employs 2.5 million workers, is now run by transnational corporations as a cash—cow. It should be nationalised without compensation and run by local government, as a free public service.

The Labour government is taking back the railways into public ownership gradually as contacts end. This needs widening to buses and trams, which should be owned and directly operated by local government.

Contracting out of NHS work and other work of national and local government to private corporations should be reversed and this work carried out by public employees.

Our central demands for the budget should therefore be to increase taxation of corporations and the rich and to bring back public services and infrastructures into public ownership. ★