The silver lining to Chancellor Rachel Reeves' promise-breaking, tax-raising Budget
The Chancellor’s commitment to reducing the UK’s national debt is a sign that she is avoiding the dangerous economic fantasies of the hard left and hard right
When a politician starts saying we must all “do our bit”, it’s usually time to worry. With these words, Rachel Reeves has effectively confirmed what’s been long suspected: that the looming Budget will break Labour’s manifesto promise not to raise taxes on ‘working people’.
“If we are to build the future of Britain together, we will all have to contribute to that effort,” the Chancellor said, while repeatedly refusing to rule out increasing income and other taxes.
The price for the government’s U-turn over means-testing of pensioners’ winter fuel allowance payments and Labour backbench rebellions over planned cuts to benefits must now be paid, it seems.
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Reeves blamed Donald Trump’s unnecessary tariff war and the expected downgrading of the UK’s economic productivity figures – the ‘changed circumstances’ that she will doubtless offer in mitigation for breaking Labour’s pre-election promises.
Few voters will welcome paying more money to the government and the real anger felt by many will only grow if the country’s fortunes fail to improve. However, Reeves made one hugely welcome remark – that reducing the UK’s national debt would be as high a priority as protecting the NHS and improving the cost of living.
UK’s debts pushing country further into debt
The country now owes a staggering £2.9 trillion, the equivalent of 95 per cent of our gross domestic product. As a result, Reeves said the UK had “the highest borrowing costs of any G7 country” and “today, one in every £10 of taxpayer’s money is spent on debt interest”.
In September alone, government borrowing hit £20.2bn, the highest level for that month in five years with higher debt interest payments a significant factor – the UK’s debts are pushing it further into debt.
So, while higher taxes will make life harder and hit economic growth, reducing our national debt to a manageable level should be worth it.
It is a sign that Labour is living in the real world – unlike Trump, who has just presided over a rapid $1 trillion increase in the US national debt to $38 trillion – and not embracing the dangerous economic fantasies of the hard left or hard right. For that, at least, we should be grateful.
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