Would Rachel Reeves’s Communist Party Heroine Be Proud of Her £40bn Tax-Hiking Budget?
Labour Chancellor Rachel Reeves, who, it emerged this week, replaced a picture of Nigel Lawson in her office with one of Communist Party founder Ellen Wilkinson, has delivered her £40bn tax-hiking budget. Is it one that her heroine would be proud of? We list some of the winners and losers.
Outgoing Conservative leader and former PM Rishi Sunak said the Budget contained “broken promise after broken promise”.
Today his actions speak for themselves with a Budget that contains broken promise after broken promise and reveals the simple truth that the Prime Minister and the Chancellor have not been straight with the British people.
Time and again we Conservatives warned Labour would tax, borrow and spend far beyond what they were telling the country and time and again they denied they had such plans.
But today the truth has come out, proof that they planned to do this all along because today’s Budget sees the fiscal rules fiddled, borrowing increased by billions of pounds, inflation-busting handouts for the trade unions, Britain’s poorest pensioners squeezed, welfare spending out of control and a spree of tax rises they promised the working people of this country they would not do. …
This is the truth: They have fiddled the figures, they have raised tax to record levels.
They have broken their promises and it is the working people of this country that are going to pay the price.
The Chancellor and Prime Minister have tried to say that they had no choice but be in no doubt, their misleading claims about the state of the economy are nothing but a cynical political device. …
When we left office the United Kingdom was the fastest growing advanced economy in the world.
These are her choices so stop blaming everyone else and take responsibility for them.
The Office for Budget Responsibility said the Budget “delivers a large, sustained increase in spending, taxation and borrowing”.
As a result of public spending increasing by almost £70bn a year over the next five years, “the size of the state is forecast to settle at 44% of GDP (gross domestic product) by the end of the decade, almost five percentage points higher than before the pandemic”.
Half of the increase comes from tax hikes of around £36 billion a year, pushing the tax take to a “historic high of 38% of GDP by 2029-30”.
The other half comes from £32 billion a year of increased borrowing, “one of the largest fiscal loosenings of any fiscal event in recent decades”.
Tory MP and leadership candidate Robert Jenrick wrote on X: “Labour complete the biggest heist in modern political history. They won power promising not to raise taxes. They lied.”
Winners
Minimum wage workers: 6.7% increase to the national minimum wage up to £12.21 an hour from April 2025, an extra £1,400 a year for a full-time worker. The wage for 18 to 20 year-olds to rise by £1.40 per hour.
State pensioners: State pension to rise by 4% in April due to triple lock.
Drivers: The freeze on fuel duty has been extended for two years.
Drinkers: Draught beer duty cut by 1.7 points.
Green Blob: Funding announced for 11 new unicorns green hydrogen projects across England.
David Goldstone: The new head of the Office for Value for Money sits on the board of HS2 as a Non-Executive Director, a project whose second leg was cancelled last year by Rishi Sunak as a result of the delays and overspend.
State schools: £6.7 billion of capital investment for the Department for Education next year.
NHS: £25 billion for the NHS, comprising £22.6 billion for the day-to-day health budget and £3.1 billion for capital investment.
Ministry of Defence: Budget increase of £2.9 billion next year.
Losers
Employers: Employers’ National Insurance raised by 1.2 points from 13.8% to 15% and the threshold lowered from £9,100 to £5,000, which may be reflected in reduced pay for employees. This is expected to raise £25 billion for the Treasury.
Families: Unspent pensions to be within the scope of inheritance tax from April 2027. Thresholds for estates will remain frozen until 2030 (meaning more will be drawn into paying the tax). Farmers with assets over £1 million to be subject to a 20% inheritance tax, threatening the sale of many farms on the death of the owner.
Investors: Capital gains tax raised: lower rate up from 10% to 18%, higher rate from 20% to 24%. The rate paid on second homes has not risen.
Landlords: Stamp duty surcharge for second properties up by two points, to 5%, to come into effect tonight.
Workers: Income tax thresholds to remain frozen until 2028. The Chancellor has committed to unfreezing them from 2028.
Private schools: Fee-paying schools to lose VAT exemption from January and business rate relief from April.
Oil and gas companies: Windfall tax on oil and gas companies (Energy Profits Levy) to increase to 38% (expiring in March 2030) and 29% investment allowance removed.
Smokers and vapers: Tax on hand-rolling tobacco to increase by 10 points while a flat rate levy will be imposed on all vaping liquids from October 2026. (Note disposable vapes will be banned from June next year.)
Non-doms: Non-dom tax status to be scrapped from April next year.
Social housing tenants: Right to Buy discounts to be reduced.
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Perhaps if you, Rishi Sunak, were actually a conservative leading an actual conservative party, none of this would have happened.
Hear, hear.
Rishi has a bloody cheek questioning the budget – half this crap, his lot were worse at anyway and had almost a decade and a half to do something, and they did FA. His responses were rather disingenuous at best to some points. No fan of labour, however this budget was not as bad as I expected it to be personally. Tax brackets staying frozen for some more years was annoying, but it sounded like some possible commitment to rebaseline them at some future point. Also surprised car drivers were not clobbered more… clearly they didn’t like the feedback they received from the focus groups on that front
There will be very few true winners. This kind of socialism is not sustainable long term – eventually you run out of money to buy off enough of the masses to vote for you.
The only good news was the increase in minimum wage, but that is not her money. That, along with massive increases to N I will drive prices up and profits down. Lower private investment will follow.
Minimum wage earners who get laid off might find it not such good news.
Agreed
Minimum wage excludes people from the work force when it exceeds the value of their labour. Thus is why unions insist in minimum wage rates, to prevent non-members competing for the jobs by agreeing to work for less. It is why the Progressive Movement recommended minimum wages to keep low intelligence people out of the work force and thus reduce their number… they starve. So it is clearly understood what the effect if minimum wages are. It may benefit those already in employment but not those who have their hours cut, or are fired, or can’t get a job because of it. The true minimum wage is zero. Why is it so difficult for people to realise the money to pay for things has to come from somewhere? If an employer has an increased payroll expense, he must reduce costs somewhere to pay for it. The biggest controllable expense is the payroll. Employers will cut the payroll expense to fund increased minimum wage, that means reduce number of people on the payroll, reduce benefits and/or overtime; don’t replace people who leave; don’t hire new people. Over 99% of businesses are SMEs. Big companies already pay above minimum wage. It’s small… Read more »
It will drive wages down.
Minimum wage increase does not help anyone. Just virtue signalling
Employers do not pay NIC – yes they hand over the money but it comes at the expense of a reduced gross wage to the employee on whom the incidence falls.
Employers look at the whole cost of an employee.
It doesn’t matter whether the employer pays the 15% to the thieves in Whitehall or to the employee.
Had there been no NIC, or if it were to be scrapped, gross wages would increase to cover the cost of self-provision of services that allegedly NIC is supposed to cover but doesn’t.
Move public “services” back into the competitive private sector, get rid of NIC, reduce other taxes – see Government shrink and the economy grow.
And there’s why it won’t happen – shrink Government.
Indeed
The firm I work for is 100% employee owned so it comes very directly out of our pockets. Almost 100% of staff have shares. We also have a share scheme which would attract CGT on the gain when we sell shares back to the firm on leaving/retirement. We are all very much “working people”.
Probably not according to Sir Keir.
Agreed – I think he’d have you all down as ‘investors’ or ‘owners’….
“Farmers with assets over £1 million to be subject to a 20% inheritance tax, threatening the sale of many farms on the death of the owner.”
This will devastate farming communities.
Billy and Finky will be looking to move in.
Yes, this will favour corporate mega-farms and penalize smaller family farms.
I think this government favours large organisations in general. They are potentially easier to unionise, and easier to negotiate with. The demise of SMEs does not worry this government.
It’s all part of controlling the food supply as we’ve been saying for ages. I wonder if anyone in opposition will say they would reverse it.
Control of the food supply is integral to the Reset. So too is control of water supplies about which I posted an article a few days ago.
We haven’t built a reservoir in over thirty years in this country despite millions added to the population. I wonder why.
Let’s see how the bond markets react as yields were already higher than before the election.
Tax on hand-rolling tobacco is – according to the BBC – supposed to increased by 10% above inflation, not by 10%. This will be a yearly automatic tax hike (already in place but presumably, at a lower rate). It’s also illustrative to look at the current prices, ie, before this tax hike takes effect.
In Germany, 40g of halfzware rolling tobacco costs between £6 and £7.
In the UK, 50g of the same kind of tobacco presently costs about £40.
The difference is exlusively due to taxes. That’s the price people, presumably mostly working class people, have to pay Labour really hates.
As you mentioned the HS2 project, she did confirm that the intention is to fund the Old Oak Common to Euston section, which is kind of mothballed at present. She also mentioned both the trans-pennine improvements (Manchester to Leeds etc), and further work on the East-West Oxford towards Bedford route (albeit creating the impression that it is a new idea, whereas a lot of the western end is almost there with some test operation being worked through).
Investment in useful infrastructure is worth funding – at least you get some value out over a long time… creating 2-3 new departments, if I heard correctly, makes me struggle to see how you do that and contain the government ‘size’, and therefore cost. As for the NHS efficiency goal of ‘2%’… bloody hell, talk about lack of ambition – why not set 20% and settle for 5-10% in reality? 2% in cost savings pa won’t even cover the inflation at 2.5% target
Lest we – and the sheep (as if) forget.
(Aside from the fact that UK PLC has been buggered courtesy of Blair).
Why NO mention of the 350 -500 BILLION black hole caused by the insane/deliberate Covid response?
Why the F+++ is there complete silence on this.
Anybody might think that the real rulers of the West ie the Banking Families and the MSM are complicit in it.
I always thought 22.5 billion was somewhat less than 500 billion, but maths was never my best subject.
Clown World lives.
They’ve all agreed not to mention that again…
The tobacco thing is funny because in many countries in the world tobacco is far more profitable than heroin these days. Australia is the best example. Nobody buys hand rolling tobacco at normal cost anymore and you can get the contraband everywhere. The cost is so high that the black market ipushes at an open door They don’t want to stop the harm caused by cigarettes hence the attitude towards vaping. Nicotine is the most important spiritual substance in the world in all cultures in terms of fighting off evil. Among native Americans it forms a base plant upon which other medicines are built. They are trying to get rid of nicotine replacement patches and nicotine gum as well not least because this molecule will interfere with their plans to poison us in the future.
Communism has failed where ever it has been implemented, and usually it has been implemented forcibly. What makes someone that has reached adulthood persist with an ideology when the evidence against has only increased.
“Despite a voluminous and often fervent literature on “income distribution,” the cold fact is that most income is not distributed: It is earned.”
Thomas Sowell
The green projects announced yesterday would cost, if I heard correctly, £100 billion. So if we abandoned the insane Net Zero project there’s money to spare for many things. Leading the world in decarbonising will be fulfilled, simply because other nations aren’t trying. Because they are not insane.
as for the NHS, The £22 billion going to IT will be consumed by the wage increases recently agreed, so is illusory.
Why didn’t she tax EV drivers? That would have been a nice cash cow.
Nothing short of wicked