IT NORMALLY takes a few days for the bad news in a budget to come to light. But the impact of this week’s Autumn Statement was immediately clear: the Tories are planning yet another assault on the living standards of the vast majority.

The outlook for the general economy is eye-wateringly bad — but for the living standards of the vast majority of people it is horrific.

The British economy is now in a recession that’s expected to last over a year. Ours is the only one of the major economies not to have recovered its pre-pandemic levels. It isn’t set to do so until the end of 2024.

Worse still, living standards are set to have their biggest decline in six decades. Over the next two years alone, they are going to fall by 7 per cent. That’s the largest fall on record, and much greater than the overall fall in the economy, showing who is paying the price for this crisis. Homelessness, unemployment, poverty and personal debt will all soar.

Sadly, that’s just the bad news planned by the next general election which is likely to be in late 2024. Under the Tory vision, it doesn’t get any better after that. The Tories then plan a huge package of tax hikes on ordinary people and cuts to public services that are already on their knees.

If they are allowed to succeed, our public services will have been starved of resources for nearly 20 years. Many key services, especially at a local level, just won’t cope. Staff will be forced out of public services. Our NHS may not survive it.

Of course, when we talk of this worsening economic situation, we can’t forget the class politics of it all. This isn’t a cost-of-living crisis for the elites. British billionaires’ wealth is up £55 billion over the past year. Company profits are up 34 per cent. Bankers’ bonuses are up 28 per cent. Bosses’ pay at the largest 100 companies is up 23 per cent.

There is huge pressure for working people to accept pay cuts to help bring inflation under control. Aside from the obvious fact that inflation is not being driven by workers’ wages, but by external factors — including Russia’s war on Ukraine, post-Covid disruptions to global supply chains and by corporate profiteering, it is notable how this call for restraint is not applied to the wealthy.

It should be. The Guardian ran a revealing piece this week on how luxury champagne companies are “running out of stock on our best champagnes” as the wealthy spend huge amounts on luxury goods. Earlier this year the Sunday Times said we’re in “a golden era for the super-rich.”

In contrast, average workers’ real wages will not regain 2008 levels until 2027 in what has been the longest squeeze on pay in 200 years.

So, we are set to face a deepening crisis for the majority of people and boom time for the few. These widening wealth inequalities, and in particular tackling them through taxes on the very wealthiest, are going to have to be a central part of the policies the labour movement offers as a way out of this crisis.

While the Autumn Statement is full of bad news, the Tories have sought to backload the worst of the cuts and tax hikes until after the next general election. Partly this is because hammering people is not the best way of winning that next election.

But it is also about setting a trap for the Labour Party. By baking in austerity for the period after 2025 the Tories will demand that Labour backs austerity (and undermines our own popularity) or has to offer alternatives.

After everything people have suffered over the last decade, we can easily win the argument that austerity will further slow down growth, reduce incomes, worsen public finances and destroy key services.

We can also be confident that the public will back us in proposing to raise billions from the wealthiest as part of our alternative. One new poll shows broad support for the wealthiest to pay more in taxes — including from six in 10 people who voted Conservative in 2019.

There is huge scope for increasing tax revenues on wealth. I have recently been campaigning for a package of wealth taxes that could easily raise more than the Tories falsely claim is needed through tax hikes on ordinary people and public service cuts.

For example, an annual tax of just 1 per cent on all net wealth above £10 million would raise nearly £10bn per year, according to the Wealth Tax Commission. That would affect just the wealthiest 0.04 per cent of the population.

Another option is to end the scandal where wealth is taxed at lower rates than work. Currently, someone who lives off the income they get from share dividends or from profits when selling assets like second homes, pays less in tax than someone earning the same amount by going out to work for a living. That is simply indefensible. Scrapping these tax advantages would raise over £22bn per year.

Likewise, National Insurance Contributions only apply to earnings from work and not to all income. So, they are not paid, for example, on rental income from property. Extending NICs to investment income could raise another £10bn per year.

Scrapping the type of non-dom tax exemptions that Rishi Sunak’s own family was caught up in earlier this year could raise up to another £3bn per year.

Those four measures alone would raise £45bn per year. Further vast sums could be raised by extending windfall taxes to areas of the economy where companies are clearly making excess profits out of this crisis. Spain’s progressive government is doing just that with its plans for a windfall tax on banks.

We should also go after the big polluters driving the climate crisis too. The starting point should be raising billions by closing the deliberate loopholes in the Tory’s energy windfall tax that meant that Shell avoided paying any taxes in Britain this year despite record global profits.

There has been a lot of focus on how the last 12 weeks of Conservative chaos has worsened the economic situation and led to the need for cuts and tax hikes.

But the truth is the terrible attack on living standards is the result of 12 years of Conservative economic policies based on austerity, privatisation, wage freezes for the vast majority, profiteering, and milking the state to further enrich the wealth of the elite.

We need to sweep that broken model into the dustbin of history. That means fighting “austerity 2.0” head-on. It also means laying out a bold alternative that can deal with the scale of the crises we face. Wealth taxes on those that are doing very well from our current rigged economy need to be a key part of that alternative.

Richard Burgon is MP for Leeds East.