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UK Hammonds Budget highlights crisis facing the ruling class

Marxist Analysis · 2026-05-13

Core Argument

The central thesis is that Philip Hammond's November 2017 Budget was not merely a weak or uninspired fiscal statement, but a symptom of a deeper structural crisis facing British capitalism and its political representatives. The argument claims that the Tory government is trapped between irreconcilable pressures: anaemic growth, stagnant productivity, falling real wages, the looming economic disruption of Brexit, and a shattered parliamentary majority. The Budget's emptiness reflects not incompetence but the impossibility of managing capitalism's contradictions through conventional means. The article contends that no amount of tinkering — railcards for millennials, modest NHS top-ups, or vague promises on productivity — can resolve the underlying crisis, and that the only way forward is a break with capitalism itself.

Theoretical Grounding

The analysis draws on the Marxist understanding of capitalist crisis as systemic rather than conjunctural. It does not treat the Budget's failings as a matter of poor policy choices or political miscalculation, but as the expression of a deeper deadlock: the refusal of the capitalist class to invest in productive capacity, preferring instead the "orgy of speculation and gambling in the City of London." This is a clear reference to the Marxist distinction between productive and fictitious capital — the former generating value through exploitation of labour, the latter circulating as financial claims detached from production. The article also implicitly invokes the tendency of the rate of profit to fall, insofar as it identifies the productivity crisis and the long-term decline of British capitalism as structural features, not temporary setbacks. The argument sits firmly within the Trotskyist tradition's insistence that capitalism has exhausted its progressive potential and that reformist measures — Keynesian or otherwise — cannot address the system's fundamental contradictions. The closing call for a "rational and democratic plan of production" grounded in modern technology and reduced working hours reflects the classical Marxist vision of socialism as the conscious organisation of production for human need, not profit.

Conjunctural Relevance

The article is anchored in the specific conjuncture of late 2017, roughly 18 months after the Brexit referendum and six months after Theresa May's disastrous snap election. The key data points are:

  • The Office for Budget Responsibility's downward revision of growth forecasts.
  • Stagnant productivity and business investment, with real-wage decline described as the worst since the Napoleonic wars.
  • A £3bn Brexit contingency fund, which the article dismisses as trivial compared to the likely loss of exports and investment.
  • The IFS finding that some government departments faced cumulative cuts of around 40% between 2010 and 2020, and that the NHS was experiencing its tightest funding squeeze since the 1950s.
  • The political context: a hung parliament, a fragile confidence-and-supply arrangement with the DUP, open factional war between "soft" and "hard" Brexiteers, and a resurgent Labour Party under Jeremy Corbyn breathing down the government's neck.

The article's relevance extends beyond this snapshot. The tensions it identifies — between the needs of British capital and the demands of Brexit, between austerity and electoral survival, between the City's financialised model and the need for productive investment — have only intensified in the years since. The Budget's emptiness prefigured the paralysis that would eventually consume May's premiership and contribute to the Tories' subsequent electoral collapse in 2024.

Where the Argument Continues

The article leaves several threads underdeveloped, which are taken up elsewhere in the IDOM corpus:

  • The relationship between Brexit and the crisis of British capitalism is stated but not elaborated. For a fuller treatment, see IDOM articles on the economic consequences of Brexit and the political realignments it has triggered, as well as Against the Stream episodes analysing the Brexit negotiations as a proxy for deeper class conflicts.
  • The critique of Keynesianism as insufficient is asserted but not argued at length. The broader Marxist case against reformist economic management — and the specific limits of Corbyn-era Labour's programme — is developed in other IDOM pieces on the "alternative" economic strategies proposed by the left.
  • The article gestures toward automation and reduced working hours as a socialist alternative but does not develop the argument. This theme is explored in depth in IDOM's literature on the four-day week, technological unemployment, and the Marxist case for the abolition of waged labour as such.
  • The political strategy for Corbyn's Labour — "seize this opportunity to go on the offensive" — is stated as a slogan rather than a programme. The strategic debate within the Marxist tradition about how revolutionary socialists should relate to reformist mass parties is taken up in other IDOM texts and in the broader Trotskyist literature on the united front and the transitional programme.

Connections

  • Trotsky, The Transitional Programme: The article's insistence that reformist measures cannot cure capitalism's crises echoes Trotsky's argument that the task of revolutionaries is to bridge the gap between the masses' immediate demands and the necessity of socialist revolution.
  • Marx, Capital Volume 3: The distinction between productive and fictitious capital, and the tendency of the rate of profit to fall, underpin the analysis of the City's speculative model and the productivity crisis.
  • Engels, Socialism: Utopian and Scientific: The article's contrast between production for profit and production for need is a direct inheritance of Engels's exposition of the contradiction between socialised production and private appropriation.
  • IDOM, "The Productivity Puzzle and the Crisis of British Capitalism" (2018): A companion piece that develops the productivity argument in greater empirical detail.
  • IDOM, "Brexit: A Crisis of British Capitalism" (2019): Expands on the relationship between Brexit and the structural decline of the UK economy.
  • Against the Stream, Episode 47: "The Tory Crisis and the Labour Left" (2017): A contemporaneous discussion of the political dynamics the article describes.

Key Quotes

  1. "The lack of any major announcements in this year's budget... reflects the insoluble web of contradictions that now entangles the Tory government."

  2. "The real-wage decline seen over the last decade, meanwhile, has not been matched since the time of the Napoleonic wars."

  3. "This budget impasse facing Hammond highlights the instability and weakness of the government. In turn, the Tories' precarious position reflects the crisis of the whole Establishment and the crisis of their system. Whatever they do is wrong."

  4. "For decades, the capitalist class have refused to invest in industry and infrastructure, choosing instead to participate in an orgy of speculation and gambling in the City of London. In their search for quick profits, they can see no further than the end of their own noses."

  5. "The result is the productivity crisis that we see today, with millions trapped in super-exploitative, precarious, low-pay jobs - a crisis that reflects the dead end of the capitalist system, which invests and produces only for profit, and not for society's needs."

  6. "You cannot cure cancer with an aspirin."