If Labour can improve living standards, revive key services and get the economy motoring again, then bullish Rachel Reeves’ first tax-raising Budget will be a distant, irrelevant memory for voters.
The Chancellor of the Exchequer, a former Bank of England economist, would not start here if she had a choice but Labour does not, having inherited a trashed country from the Conservatives.
So her hands are tied, with households worse off at the end of the last Tory parliament than they were at the start of it and the NHS, education and law and order being run into the ground while roads are full of potholes. People wanting the fabric of society revitalised accept it must be funded and chancers fulminating against higher spending must be challenged by Reeves to detail what they’d cut.
Nurses? Teachers? Firefighters? Police officers? Soldiers? Electricians? Jobcentre staff? Coastguards? Housing officers? Border security? Nursery places? Prisons? There’s also genuine merit in raising Capital Gains Tax and closing its loopholes, while casino capitalists gambling on the stock market paying smaller tax rates than nurses, teachers, plumbers or 1,001 other workers is an expensive scandal.
Ditto on inheritance tax – shrouds don’t have pockets so the dead can’t take it with them. DNA lottery winners should not be able to dodge fair dues on their something-for-nothing windfalls. Keir Starmer ruled out Income Tax, National Insurance and VAT rate rises on working people in his party’s manifesto to defuse a 1992-style “Labour tax bombshell” blast from the Tories, which helped them to win power back then.
Labour’s ploy also red lines three-quarters of government tax income. But if hiking employers’ National Insurance, not that of employees, is a “tax on jobs” then scores of Conservative MPs must be challenged over backing Boris Johnson’s manifesto-smashing rise in 2022. If she holds her nerve this week, the real test of Reeves’ Budget will be in 2028 or 2029. By delivering economic success, the protesting, self-interested pips’ squeaking will have been long forgotten by then.