Rachel Reeves has broken every single one of her promises in this year’s Budget, and it’s hardworking families who will pay, writes Mel Stride
Rachel Reeves had a simple choice today: change course or double down on failure. She chose failure. Again.
After a year of the self-appointed “iron chancellor”, the economic record is unmistakable. Taxes up. Borrowing up. Inflation up. Growth downgraded. Business confidence drained away. That is Labour’s record – and they’ve just repeated all of the same mistakes again.
Reeves used her first Budget last year to unleash the biggest tax-and-spend splurge in recent memory, increasing taxes by £40bn, borrowing by £30bn and spending by £70bn. She promised she would not be back for more. She promised she had “wiped the slate clean” and it was now on her. She promised she wouldn’t freeze tax thresholds because it would “hurt working people” and break Labour’s manifesto.
This afternoon she broke every single one of those promises.
The Chancellor has delivered a further £26bn of tax rises while scrapping the two child benefit cap – a Benefits Budget paid for by hardworking families. Frozen tax thresholds alone will raise £8bn. Taxing salary-sacrificed pensions another £4.7bn. Higher taxes on savings, dividends and property: £2.1bn. A council tax surcharge on some family homes. A new electric vehicle mileage charge. Even gambling taxes pushed up.
Under Labour we have seen the biggest tax raids in a generation, all to feed their spiralling welfare spending. Scrapping the two child limit alone will cost £3bn per year, on top of the cost of their humiliating U-turn on welfare changes over the summer. Labour’s answer to every problem is higher welfare, higher borrowing and higher taxes – and they are sending the bill straight to working people.
What did the country get in return? Downgraded growth. Again. From next year onwards, the OBR now expects weaker growth every single year compared with March’s forecast – a devastating verdict on Labour’s economic management.
Yet rather than confront these failures, Reeves stood at the despatch box and blamed everyone but herself. She insists her fiscal rules will magically get borrowing down – even though she is borrowing more in the early years and taking Britain to twice the debt level of the average advanced economy.
Labour is out of ideas
This is not a government in control. This is a government out of ideas, out of discipline and increasingly out of credibility. The chaotic run-up to the Budget, the endless leaks, the constant hinting at new tax raids – it has damaged investment, rattled markets and left households fearful about what is coming next.
But there is an alternative.
Only the Conservatives have a plan to get Britain growing again: control spending, cut the deficit, and bring taxes down responsibly. We have identified £47bn in credible savings – including £23bn from welfare – because we will always tell the public how our plans are paid for. Under our Golden Economic Rule, at least half of those savings go straight to reducing borrowing, with the rest used to cut taxes and unlock growth.
We would scrap stamp duty on the family home. We would give young workers a first job bonus, letting them keep their first £5,000 of National Insurance. We would abolish business rates for thousands of high-street shops and pubs. In short: we would reward work, restore fairness and rebuild opportunity.
Labour had one job: restore stability and growth. Instead, they have delivered the most expensive, least ambitious Budget in years. Britain deserves better than this.
Mel Stride is shadow Chancellor of the Exchequer