Reeves is lucky she wasn’t on my train after her budget statement
If anyone had any doubt – and there were multiple budget leaks galore, including the entire budget by the Office of Budget Responsibility in a bad mistake an hour before Reeves delivered it in parliament – Labour is raising taxes by a further whopping £26 billion in order to hand a lot of it out to the work shy.
In the process they will keep the Labour MPs happy but frustrate and anger the rest of the nation who are already deeply upset about the ineptitude of Starmer’s government in its handling of the economy and allowing unfettered illegal migration.
Before the budget was handed down the nation had been fearful of just how hard they would be hit. My pensioner neighbours were in tears about the mansion tax (which taxes homes worth more than £2 million [AUD $4m] with a surcharge of at least £2,500) which means they may have to move from their home of three decades because they would not be able to afford the extra thousands of pounds from their fixed budget to go into central revenue.
Their three bedroom, one bathroom house would be considered an ordinary suburban home in a suburban Australian city: but it has no parking, is semi-detached and located half an hour outside of central London. It has a courtyard-size backyard you could just about swing a cat in.
“Mansion” it is not but Starmer and Reeves are determined to get their claws deep into any house price growth over the past years.
It was a pity Reeves was not on my train leaving central London after she delivered the budget claiming, with a straight face: “I don’t get to choose my inheritance and I have to live in the world as it is, not the one I might like it to be. And I believe I made the fair and necessary choices, given the fiscal circumstances.”
Normally head-down commuters were openly hostile to what they were reading on their phones. Several conversations sprung up among strangers focused on one thing: that the pain and extra tax they were all about to pay was “going to be wasted on people who don’t want to work”.
The sop to welfare recipients means the left-wing of the Labour Party will delay any move on Starmer’s leadership, but this may only be a short-term fix.
It is widely expected Labour will be annihilated at the local council elections in May, prompting a leadership challenge at that time.
In the meantime the Labour party may as well rename itself the Shirkers party, because the benefits to rising numbers of illegal immigrants and the unemployed are worth more now than the wages earned by lower earners such as delivery drivers who rise at 5am, construction workers who battle the chilly mornings and even pensioners who still struggle with meeting huge heating bills.
Instead of slashing spending to make the figures add up, Reeves imposed future tax rises on all workers by way of fiscal drag on income tax rates and a host of other taxes on pensions, dividends, investments, savings and landlords. She has even taxed sweet dairy products such as milkshakes. The taxes will help pay for the removal of the two child benefit cap, increased welfare payments and a U-turn on heating allowances.
It means tens of thousands of families who have no one in work but have six children will get an extra £14,000 a year, angering workers with two children who struggle with the high cost of living.
Tory leader Kemi Badenoch has come into her own in attacking Labour’s profligacy, saying the benefits for 560,000 families will rise by an average of £5,000.
Badenoch ripped Reeves apart for her broken promises, particularly her vow that she wouldn’t come back for more after last year’s £40bn budget which hammered businesses and stymied growth. But this latest budget is also bereft of any growth measures, raising concerns about how the country will be able to stay afloat.
“There are a million more people claiming Universal Credit than there were at the time of the last budget,’’ Badenoch said.
“Government spending up. Welfare spending up. Universal credit claimants up. Unemployment up. Debt interest up. Inflation up. And what about the things you want to go up? Growth down. Investment down. Business confidence down. The credibility of the Chancellor? Not just down, through the floor.”
Labour is now also the party of ideological envy and meanness: its mansion tax hits both homeowners and renters while for homes worth more than £5m, the annual charge will be £7,500 pounds and all homes will be uprated in line with the consumer price index every year.
As well as giving high net worth people further ammunition to escape the country before this “mansion tax” – which hits many flats and everyday semi detached homes in London and the south west – comes into effect in two years, it creates chaos in the housing market, immediately devaluing £2mill homes.
As real estate agents have noted, it will mean reduced stamp duty for the government, and reduced movement in a market already paralysed by high stamp duty costs.
While every political party, apart from Labour, attacked the budget for not delivering on any growth, even the left wing Resolution Foundation noted: “The outlook for living standards has worsened – with real disposable incomes rising by a paltry 0.5 per cent a year over the parliament – the second worst since records began in the 1950s. And while many will focus on rising taxes, an ever greater concern for living standards is the projected rise in unemployment.”
The official Office of Budget Responsibility has also highlighted that taxes will rise as a share of GDP to peacetime records for every year of this government.
With trust in the government at an lowest, Reeves has had the audacity to refuse to promise she won’t be back for even more taxes next year.
The British are strapping in – or leaving in droves – for a very wild ride indeed.
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Sir Keir Starmer and his chancellor Rachel Reeves have placated their restive Labour backbenchers in the short term by delivering a vicious and punitive budget that directly targets all workers and the aspirational.