“We need to intensify the political case for a new economic consensus that raises working class living standards and provides real hope against the threat of the far right.”
By Daniel Kebede, General Secretary, National Education Union
If you want to see why the NEU is calling for change in economic policy, look at the campaigns we’re fighting for: universal free school meals. End child poverty. Stop school cuts. Giving all children the right to study arts and creative subjects at school and access a broad and balanced curriculum. All of these things need to be paid for but every time we’re told there’s no money.
We have an economy that fundamentally does not work for the majority – one that limits life choices, builds-in inequality, denies real democratic power. Our members see the consequences of that in our schools every day.
All of us – not just the unions here at the TUC this week but every single person in the country – is told that you can’t do certain things: like fund our schools and colleges properly, solve the scandal of privatised water, pay for decent council services, or restore pay in the NHS, because to take action on those things would upset the need for stability and confidence in the public finances, or threaten the fiscal rules.
We have to get beyond this.
I want to see the trade union movement lead the fight for a different economy. To do that we need to build a consensus across the labour movement.
The NEU is not affiliated to the Labour Party but our members are affected by what the present Labour government does. Some say that after years of Tory-led governments, the new government is basically on the right track but it is being knocked off course by its mistakes. It is true that there are good ministers in the government trying to do their job. But huge errors, starting with winter fuel cuts, are not exceptions to the rule, they are symptoms of the problem: the government is on the wrong track on its economic choices and working class people are paying for it.
Of course, not all of the government’s errors flow from its policies on tax, spend, investment and cuts. The government’s handling of Gaza has been a political and moral disaster. But on the domestic policy agenda, the government’s economic course has driven a coach and horses through hope in our communities and created the political space for Nigel Farage to flourish.
So what has happened and why does it need to change?
Even before it was elected, the incoming government boxed itself in – refusing to raise the income it needed to address years of austerity and underinvestment.
It placed an argument about ‘stability’ over everything else and relied on the belief that growth in the future will solve the country’s problems. It said that its fiscal rules meant its green investment plans had to be gutted. Rachel Reeves ruled out using the main levers on tax, and committed not to touch corporation tax or taxes on profit, income and wealth. This is also why the Labour Party in opposition did not commit to universal free school meals, despite the overwhelming case for the policy. Labour proposed no plan to raise the living standards of the great majority who have seen their household disposable incomes plummet. All of that, and ‘stability’ rules on bringing current spending into balance that are extremely tight, opened the door to cuts alongside still-stagnating living standards. This is the road that ended up with cancelling pensioners’ winter fuel payments, eliminating the £2 bus fare cap, keeping the two-child benefit cap, and the loathed welfare cuts which caused the huge rebellion in July.
Unfortunately however there is one exception: defence. Our government is committed to increasing military spending as a share of GDP. But since GDP growth is limited, as the share of the economy devoted to military spending goes up, other more productive or useful types of spending will be hit. Rising defence spending but school budgets still being squeezed is the wrong choice. Our message should be clear: welfare not warfare; wages not weapons.
The labour movement is the main force available in British politics that can give a lead and stand for something different.
Much of the policy material and thinking is already there but we need to bind it together and put it to work. Think tanks, campaigners, unions and the TUC have all developed a range proposals for a shift in social and economic policy, such as: equalising capital gains with rates on income tax, windfall taxes on oil and gas giants, a wealth tax on the richest one percent and extending public ownership. Polling shows the majority of the British public believe the wealthiest should be taxed more to protect public services, and believe that big businesses do not pay their fair share of tax.
So, our task now is to take all of this and turn it into something powerful enough that it is irresistible.
It’s extremely welcome that there are at least three fringe meetings on this theme at Congress this year, along with the debates we are seeing in the hall itself. The RMT has called for the British economy to be restructured to raise investment and productivity, and UCU has brought a motion opposing increased defence spending. Earlier this year Dave Ward of the CWU issued a statement saying that his union will ‘campaign for this failed economic strategy and overall direction to be abandoned.’
We need to speed up the dialogue between those unions who are arriving at a common analysis of the problem, about how we can intensify the political case for a new economic consensus that raises working class living standards and provides real hope against the threat of the far right.
- Daniel Kebede is General Secretary of the National Education Union.
- You can follow Daniel on x here and you can follow the NEU on x here.
- Details of NEU Fringe Meeting at TUC Congress 2025 are: Building the labour movement’s economic alternative. Speakers: Daniel Kebede – General Secretary, NEU; Faiza Shaheen – Executive Director, Tax Justice UK; Dave Ward – General Secretary, CWU. Chair, Sarah Kilpatrick, NEU President. Tuesday 9 September, Brighton Centre, Meeting Room 1D, 12:45pm.
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