Budget puts Labour to the test - Sue Webber
Only a fortnight to go before the depth of the crisis gripping the UK Labour government is revealed in Chancellor Rachel Reeves’ budget. And such have been the predictions of dire political consequences if she raises the basic rate of income tax, will she go through with it?
Maybe the game is to hope that the huge sighs of relief that she has not broken her election manifesto promises will be enough cover for a raft of other tax rises every bit as damaging to the economy.
The birds in the trees know the £30 billion black hole has been caused by Labour’s unfunded public sector pay deals and their inability to cut the swollen welfare bill. But even four years away from an election, the destruction of trust in a future Labour manifesto would surely guarantee defeat for a party now sitting fourth in the UK opinion polls.
Then again, she’s now hinting about more public spending on pensions and welfare, talking up ending the two-child benefit cap and settling the “Waspi” pension row, so maybe she thinks enough voters will be persuaded these are worth breaking a promise.
But that makes the spending gap wider, so she’ll still need to raid shareholder dividends and hit small independent businesses, hike Capital Gains tax, go after the assets of the wealthy, gut the horse racing industry, and attack electric vehicle drivers and all the other ideas being floated.
And as the economy grinds to a halt, ultimately we will all be poorer.