With taxpayers and businesses holding their breath, Labour’s first budget is anticipated with more dread than optimism. The question is not if this budget will hit hard but how hard it’s going to hurt.
Rachel Reeves, backed by her Labour allies, seems set to deliver a fiscal blow that will hit every corner of the economy, despite Labour’s campaign promises of fiscal responsibility and no new taxes on “working people.”
To start, this Labour government has delayed its first budget announcement to an unprecedented degree. Why? It seems they’ve used this time to prepare the nation for two things Labour explicitly vowed to avoid, increased borrowing and higher taxes.
These are the same Labour MPs, including the Chancellor Rachel Reeves, who during the general election paraded a commitment not to raise taxes on working people. Now they appear poised to do precisely that.
Back in October 2021, then-Shadow Chancellor Rachel Reeves lambasted the Conservative Party’s freeze on income tax thresholds, labelling it a “stealth tax” designed to quietly drag more people into higher tax brackets.
Yet, this same “stealth tax” that Labour once condemned is now the centrepiece of their own strategy. Labour’s “promise” not to raise taxes is crumbling before they even set their budget in motion, breaking the trust of the millions of voters they courted with empty assurances.
Labour’s missteps don’t end with taxes. Reeves promised fiscal responsibility and a reduction in government borrowing. Yet Britain’s national debt now teeters at 98.5% of GDP, with the highest tax burden in 70 years, and the public has precious little to show for it.
Real fiscal responsibility would mean cutting the deficit, slashing taxes, and promoting growth, not digging the economic grave even deeper. It’s basic economics, you cannot tax your way out of debt. Yet, Labour seems determined to try, with Reeves even considering bending the government’s borrowing rules to justify even more debt.
And who’s going to pay for this? Certainly not Labour’s ideological base of champagne socialists. It’s the small and medium-sized businesses and working taxpayers who will foot the bill for these spending and borrowing splurges. Labour’s attempt to redefine the “working class” to suit their agenda only shows how detached they are from reality.
It’s the hardworking middle and lower- income earners who will bear the brunt of Reeves’ tax freezes and likely VAT increases measures that stifle growth and put more strain on an already overtaxed population.
To put it plainly, Reeves and her Labour government are preparing to repeat the fiscal follies of previous administrations, entrenching Britain in an endless cycle of debt and tax hikes. As the UK grapples with soaring inflation, high energy prices, and a stagnating economy, what we need is a government that will encourage growth and ease the tax burden not one that digs the economic hole deeper with false promises and shallow fixes.
Labour promised to bring financial stability, but instead, they’re wielding a sledgehammer to the nation’s finances. If this budget is anything to go by, Labour is a far cry from being the fiscally responsible government they sold to the public. It’s time for Labour to wake up and deliver on their promises before their empty words push the UK further down a path of economic ruin
The country is already in a economic hole and Labour just keeps on digging!
Richard Thomson was the Reform UK candidate for Braintree at the 2024 General Election
