The Telegraph, 1st November 2024
https://www.telegraph.co.uk/news/2024/11/01/budget-broken-promises-damages-working-people/
Rachel Reeves has taken her first opportunity to show this is a Government intent on clawing back funds from productive parts of the economy
The Budget, laced with lofty rhetoric but weighed down by chaotic delivery and broken promises, is a tragedy of political governance rather than a triumph.
Despite the attempts to paint it as a victory for economic prudence, it lays bare a series of disappointments that many are finding hard to forgive. From embarrassing gaffes like social media banners from The Chancellor reading “Difficult Descisions” (value for money means cutting the costs of spell-checkers now), to ministerial confusion about the definition of working people, the public has been treated to a spectacle that would almost be amusing if it weren’t so destructive.
And while it may resemble an episode of The Thick of It, what it signifies – a lack of coherence and direction – cannot be so easily dismissed.
This Government’s swift, and arguably reckless, reversal on its promises has left working people, small business owners, and family farmers facing profound uncertainty.
The biggest tax burden on working families since 1993 comes as a direct blow, despite repeated pledges that Labour would spare working people from further financial strain. The abandonment of fiscal promises and an inflated tax bill signifies a turning point that has bred disillusionment.
For everyone, this Budget’s broken promises are more than a misstep; they are a breach of trust that may mark a decisive shift in public opinion.
A cornerstone of this breach lies in the new National Insurance hikes, which have raised the rate for employers by 1.2 per cent, resulting in an overall rate of 15 per cent and shifting the earnings threshold. Branded as a £25 billion “tax on jobs,” this change is expected to hit small businesses – arguably the lifeblood of the British economy – hardest.
These are the enterprises that have historically weathered economic storms, finding ways to innovate and grow despite obstacles. Now, however, they are cornered by a government intent on clawing back funds in ways that stymie economic expansion.
Small and medium-sized enterprises (SMEs) will likely see reduced capacity to hire, lower investment, and diminished potential for growth, with much of this tax rise being absorbed through cuts to wages, lay-offs, or elevated prices.
The Labour government’s Budget also unveils an unexpected threat to the agricultural sector. A revision to the Agricultural Property Relief is set to levy a 20 per cent tax on farms valued above £1 million – a move that targets small to medium-sized family farms and stands to be devastating.
Our farmers have faced an onslaught of challenges recently: poor harvests, volatile energy costs, and rising competition from abroad. Labour’s move, rather than offering relief, adds to this burden, forcing many farms that have been family-run for generations to make untenable choices.
Several farmers in my part of southern Hampshire have expressed fears to me that this may well be the final straw. For them, selling out looks like the only viable option. This tax is more than a financial hit; it’s a potential death knell to a way of life, a blow to the rural economy, and a threat to food security in a time of global instability.
One of the more unsettling aspects of this Budget is its borrowing strategy, a £30 billion splurge that reflects the government’s risky reliance on debt.
Already brushing the limits of its own fiscal framework, the government’s fiscal policies are causing concerns in the market. In the wake of the Budget’s release, the pound fell to its lowest in 18 months, while gilt yields – a bellwether of investor confidence – rose sharply.
These indicators reveal the anxiety that has taken hold among investors, and many are left questioning whether this government is capable of delivering the economic stability it claims to uphold. Far from a sustainable approach, the borrowing binge appears to signal a dependency on debt that the government may find difficult to overcome, especially if market reactions continue to reflect growing unease.
The Chancellor opened her address with a focus on her historic appointment as the first female Chancellor – a noteworthy milestone in itself.
Yet as the details of this Budget unfold, it becomes apparent that this government’s approach to fiscal responsibility and economic growth is anything but revolutionary.
Reeves may champion her own success in breaking barriers, but this high-tax, high-spend Budget offers little to inspire future generations. Instead of exemplifying a new, progressive vision for Britain’s economy, the policies here are a return to a bygone era where high taxes and high borrowing stifle innovation, punish small businesses, and discourage hard work and ambition. Hardly a model for young women to emulate.
In the wake of this Budget, we are left to consider the broader implications. This government has often prided itself on supporting working families, promoting business growth, and fostering innovation.
But through broken promises, increased burdens on small businesses and farms, and a fiscal policy that leans heavily on debt, it has weakened the economic bedrock it once vowed to protect.
A Government that no longer supports the aspirations of its people cannot inspire them. For those watching, this Budget was not merely an economic exercise; it was a betrayal of the hard-working Britons who are now left to pay the price.
