TWOP’S FIRST BUDGET.
An awful lot of commentary and very little substance. Rache decided to raise taxes on working families to pay for increases in welfare while hoping future growth can reduce the sting in the future tax tail. [NB: the “hope for growth” has not borne fruit for the last 30 years, why it should produce the goods now is a mystery.]

The expansion of child benefit payments to more than two children is a particular oddity. It will not reduce “child poverty” but it will incentivise the least-qualified parents to have larger families. Absolute nonsense, but wrapped in the self-satisfied smugness of misguided class prejudice. These parents need to work not just to provide material goods for their children but to provide an example for their households. Child benefit should be phased out entirely.

Income tax thresholds will be frozen for another three years, raising £8bn in 2029/30 and £13 bn in 2030/1 by bringing more lower-paid employees into income tax and increasing the amount of tax all the lowest paid employees pay. A 1% increase income tax rates across the board would have raised slightly more, but raised more from those on higher incomes. So that sucks.

However, by freezing National Insurance thresholds Rache has in any case broken Labour’s manifesto tax promise not to increase National Insurance. The Chancellor acknowledged that this represents a tax rise on the very working people her party promised to protect from tax rises, so what was the point of avoiding the 1% income tax rate rise that would have raised similar sums for the Exchequer.

This seems to have been a delusional Budget. The Chancellor has deluded herself in to thinking that if she staves off a Labour backbench rebellion by expanding Child Benefit to allow those MPs to clap themselves on their backs, she stands a chance of fooling the electorate into believing that this was a Budget about “fairness.” It was not. It was a Budget designed to prevent Starmer’s removal and save Rachel’s job. The electorate will render their own verdict soon enough. It will not be positive.

In response, Kemi Badenoch found her mojo at last by going after the Chancellor personally and viscerally. The dramatic child-voiced interruption of the Cheerios with an income tax public service announcement was actually funny and going “woman to woman” landed well. With Reform unable to deliver speedy Chamber pyrotechnics (as usual, it IS a failing) this was Badenoch at her best. “She is spineless, shameless and completely aimless” was a great line.

If Miss Reeves is searching for “Respect” this Budget will not deliver it.