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lMembers of Parliament have had little to cheer about since that confident morning last July when they were elected, many for the first time, For the first Labor government in 14 years,
Yet this was somewhat contrary to expectations given recent events. chancellor, Rachel ReevesWho caused him to smile, wave his order papers and send a slight seismic shock with his approval at Westminster, Thank you for improving child benefits,
When Ms. Reeves talked passionately about why she got into politics because of the social evil of child poverty, she was speaking the language of change.
During the election, Sir Keir Starmer did Virtually refused to remove the two child limitAnd as recently as the summer the possibility of a policy change was considered unlikely. Then came the welfare reform failure, the Labor back bench tasted power, and the Prime Minister’s position became increasingly precarious (and with it Ms Reeves’s), and change became inevitable.
Ms Reeves presented the policy proudly and made the most of the moment – but make no mistake that the driving force behind the change in approach was the collective ranks of delighted soft leftists on the benches behind her.
Ms. Reeves only made The most closely watched references welfare reform and some changes to the mobility scheme.There is little chance that he will feel the need for this, unlike the comprehensive expenditure review at the beginning of the year,
The result is that this Budget As he announced, it was a traditional “labor budget” of a kind not seen before in centuries. new laborIn essence, it was a tax and expenditure budget, with some modest attempts to reduce the national debt at the end of Parliament,
And Ms. Reeves will definitely tax “working people,” no matter what she claims. The long-term pain that taxpayers will face in the years to come cannot be hidden. What Labor once called the “squeezed middle” is about to have its pips squeezed even further.
The tax cut is going to rise to 38 percent of national income, a record since World War II, and, thanks to the expansion of the tax bracket, every taxpayer will pay more in real terms, and 800,000 low-paying people will be dragged into income tax for the first time.
It’s true that he has targeted the richest people with the “mansion tax,” but many average-income families will be hit hardest — after years of struggling with a cost-of-living crisis. By making it more difficult to save for their old age through changes in salary sacrifice, young and middle-aged people working in the private sector today will feel the pain well into old age. This seems neither appropriate nor prudent in an aging society.
While she was applauded by her colleagues when she sat down, there is no doubt that Ms Reeves’s reputation has suffered in recent weeks. Chaotic briefings and U-turns, crowned by The humiliation of the Office for Budget Responsibility (OBR) mistakenly releasing its budget prematurely, His control over events hardly inspires confidence. In the manifesto, Labor famously promised not to raise taxes – a fundamental message received, understood and trusted by voters.
Since then, he has increased personal taxation in ways that seemed impossible when Labor were in opposition – 43 new taxes or tax rises in the latest budget alone, according to Tory shadow chancellor Sir Mel Stride.
Broadly speaking, they raised £40 billion in their budget last year and £26 billion in this exercise, and a large part of that will be spent on social security. And anyway, Labor didn’t say it would do this, nor was it elected to do so last year. This time last year, Ms Reeves scoffed at the idea of raising the tax cap and told the CBI, “I’m not coming back with more borrowing or more taxes.”
It would be a bit harsh, not to say rude, to say that the British middle class is paying to save Ms. Reeves’s job; But the current political dynamics are abundantly clear, and quite evident from the choices made in this Budget.
More so than his earlier ones, it was aimed at garnering support for himself and the Prime Minister’s leadership, and focused more on redistribution of income and wealth than on growth and wealth creation. To this extent he has strengthened his position. It has created more “headroom” in its plans and calmed bond markets.
Yet, as the OBR points out, the margin of fiscal safety is “small compared to the wider risks surrounding our fiscal forecast, including risks of uncertain yield from a range of complex tax changes and pressures on welfare, health, education, asylum, defense and local authority budgets”. Translated: Things can still go horribly wrong.