The Chancellor’s recent Budget displayed an array of different measures and tax hikes which attacked a multitude of different groups from pensioners, farmers and businesses; Rachel Reeves delivered a Budget which simply didn’t stack up. As Rishi Sunak said in response to the Budget:
“They are taxing your job, they are taxing your business, they are taxing your home, they are taxing your savings. I said during the election campaign:
“You name it, Labour will tax it”,
“And that is exactly what the Government have done, with broken promise after broken promise and working people paying the price.”
One of the main charges which the Conservatives made during the election campaign was that Labour were not being straight with the electorate – this has turned out to be the case.
Even after the Budget, the Education Secretary announced that tuition fees would be increased for the first time since 2017, despite Keir Starmer pledging to scrap them entirely in his Labour leadership campaign back in 2020. Perhaps the Chancellor believed that the outlook from her tax hikes already looked too murky that she refrained from announcing this hike on students in the actual Budget.
We know that Labour are now squeezing students, pensioners, farmers, businesses and anyone with savings, all of which simply does not stack up.
Let us first turn to something which may seem insignificant from the Budget which will actually have a damning impact – the raising of the bus fare cap from £2 to £3. The language which the Chancellor used when she announced this measure says it all about Labour – as she attempted to pass it off as if she was coming to the rescue of working people:
“We understand how important bus services are for our communities so we will extend the cap for a further year, setting it at £3 until December 2025.”
The actual damage of raising this threshold by an entire one pound will be devastating to many who depend on buses, with the increase in national living wage announced by the chancellor being cancelled out by this measure. The Conservatives actually understood how important this cap was – hence why it was always protected in the Budget along with winter fuel payments. You cannot claim to understand the importance of something and then reimagine it’s significance to working people entirely.
Rachel Reeves pledged in the general election campaign that a Labour government would be “pro- worker and pro- business”, saying this with the intention of this Budget coming all along – this is not the Budget that she needed to do, but the Budget she wanted to do, with the OBR not even recognising the Governments claim of a £22bn black hole in the public finances to actually be the case.
The rise of national insurance contributions from employers does also not appear to be very “pro- business” – a move which will definitely lead to a drop in revenue which can then be reinvested into enterprises.
One of the most economically significant measures that the Chancellor announced in the Budget was the absurd attack on British farming. The new measures introduced by the Chancellor mean farmers will have to pay inheritance tax on estates worth more than £1million. On paper this sounds like a good way to raise money through wealthy landowners, however it fails to consider the damning impact it will have on family farms.
There are very little farms which do not meet the £1mn threshold set out by the Chancellor, drawing many already struggling farmers who do an awful lot for the country, into this measure. This has provoked protests, and possibly farmers strikes, which could be absolutely terrible from an economic perspective when supermarkets have to relay the cost of imported goods onto consumers, further impacting working people.
Another aspect of the Budget which did not stack up is the spending spree which the Chancellor has set out. As Rishi Sunak put it in response to the Budget:
“Her decision to let borrowing rip makes a total nonsense of her claims on the state of the public finances. If they truly were in such a dire state, as she has said, what we should have seen today is a significant reduction in borrowing to repair them, not the splurge she has just unleashed.”
If the public finances were in such a dire state as they were claiming, and the charge is the Conservatives were fast and loose with the public finances, how can you justify spending such a high amount in the first Labour Budget in 14 years?
The simple truth is this: Keir Starmer and the Labour Party say one thing when it suits them, and then do something different when they get the chance. This hypocrisy and deception is evident from Starmer’s 2020 leadership pledges, as well as Labour’s 2024 manifesto. It will likely continue to be the case throughout the entirety of this Labour administration.
