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There was much to welcome in Rachel Reeves annual Budget on Wednesday.
Her decision to scrap the two child benefit will lift an estimated 350,000 children out of poverty and finally bring an end to the cruel George Osborne era policy that punished children for the crime of simply having been born.
The policy will be partly paid for by raising taxes on Britain’s harmful gambling sector – something long called for by campaigners, including the former Prime Minister Gordon Brown.
The tax on gambling will come despite heavy lobbying by the industry as well as from some of those British news organisations which have themselves heavily benefited from the misery the sector causes.
Meanwhile a new mansion tax on homes worth worth over £2 million will raise an estimated £400 million for new housing and local services, while a new pay-per-mile tax on electric vehicles will ease the transition away from polluting petrol and diesel cars.
Continued increases in NHS spending will help repair some of the damage caused by 14 years of neglect under the Conservatives, while an increase to the minimum wage should raise living standards for millions of young people.
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None of this is likely to be well received by the UK’s largely Conservative and increasingly Reform-supporting press.
A series of botched briefings and Treasury U-turns, followed by the accidental early release of her plans by the independent Office for Budget Responsibility, will no doubt give Fleet Street cover to label the entire package as a new “Omnishambles” Budget.
Even prior to her statement the Daily Mail, which celebrated Liz Truss’ disastrous budget that nearly crashed the entire UK economy as a “True Tory Budget” was lambasting what it described as Reeves’ “bonkers” plans to make young people slightly better off.
Plans to tax multi-million pound houses and target landlords are likely to be similarly coldly received by the hugely wealthy owners of most of Britain’s newspapers.
Putting Off Long Term Repairs
Of course this is not to say that there are not reasonable criticisms to make of Reeves’ Budget.
The Chancellors’ deeply unwise election pledges not to raise income tax, VAT or National Insurance has instead forced her to institute a bewildering range of new tax raising measures to make up the difference. Included in these are plans to continue Conservative freezes on income tax bands, which will raise taxes for millions of Brits. The fact the Chancellor is continuing to insist that she is keeping her pledge not to raise taxes on “working people” when she has now implemented stealth raises to both income taxes and National Insurance is difficult for anyone to credibly defend.
Other measures appear to be entirely conflicting with each other. Despite spending many years urging the public to invest money in their own pensions, the new tax on pension salary sacrifice schemes will push millions to do the complete opposite. The pledge to raise wages for young people will also run headlong into the accompanying stealth measure to freeze thresholds for tuition fee repayments.
The broader problem with this budget is that despite the Chancellor claiming to take the long term decisions required to turn the economy and country around, most of the difficult tax raising measures announced today are being put off until after the next general election.
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