Grim milestone for Reeves as she formally has two of the highest 10 greatest tax-raising Budgets on report… after warning she would possibly come again for extra
Rachel Reeves is responsible for two of the 10 biggest tax-raising Budgets on record, according to official figures.
The Chancellor’s latest package ranks seventh in an historical database compiled by the Treasury’s OBR watchdog.
Meanwhile, her debut Budget last year is rated as the second largest in figures going back nearly six decades.
The alarming comparisons emerged after Ms Reeves refused to rule out coming back for more tax in the future, despite pushing the burden to new high as a proportion of GDP.
The OBR maintains figures for all the tax policies ‘scored’ at fiscal events since 1970, adjusted for GDP growth to the present day.
Rachel Reeves is responsible for two of the 10 biggest tax-raising Budgets on record, according to official figures
The numbers do not account for measures raising more or less than anticipated – and miss out some smaller changes up to the watchdog’s creation in 2010.
However, they give the best indication available of the size of packages announced by Chancellors.
Ms Reeves’ November 26 raid was ‘scored’ by the OBR as bringing in an eye-watering £29.8billion a year by 2030-31.
That was only marginally less than Tory Geoffrey Howe’s Spring 1981 plans – estimated at £30.3bn in today’s terms.
Labour predecessor Denis Healey’s Budget in Spring 1974 brought in £30.8billion, according to the database.
Previously Ms Reeves’ first Budget had been assessed as the biggest tax-raiser ever.
But in a crumb of comfort for the Chancellor, it has now been classed as marginally smaller than Norman Lamont’s Spring 1993 bumper raid following the Black Wednesday sterling crisis.
That appears to be down to GDP revisions of the last few years affecting the historical measures more than the recent ones.
Lord Lamont’s Budget is now scored at £43.6billion, while the 2024 Reeves event is put at just over £43billion.
The measures announced on November 26 included extending the ‘stealth’ freeze on thresholds by another three years.
That is expected to mean a quarter of the working population paying higher or top rate tax by 2031, up from just 15 per cent when the freeze began in 2021.
Brits appear to be running out of patience with Labour according to a poll that showed the proportion saying the government taxes and spends too much at a six-year high.
YouGov research released this week found 45 per cent believe the burden of the state is too great, while a fifth thought taxes and spending was too low.
Giving evidence to the Treasury Select Committee yesterday, Ms Reeves insisted she ‘reserves the right’ to hammer Britain with more taxes.
The Chancellor pointedly refused to repeat the explicit guarantee she gave – and then broke – not to come back for more.
She also made another bid to shore up her position by stressing the package had been jointly agreed with Keir Starmer.
The Chancellor talked up her decision to boost the ‘headroom’ in the government’s books from £9billion at the last Budget to £22billion this time – although in fact a large chunk of the extra cash raised went on benefits costs.
Pressed if she could promise she will not have to raise more revenue in the Spring or at the Budget next Autumn, Ms Reeves said: ‘I reserve the right to be able to take action at any point.
‘But I believe the headroom that we have and the changes we have made means I won’t need to do that in the spring.
‘Of course I reserve the right at any time to take action.’
