Labour's Budget Betrayal: Working Families Face £26bn Tax Burden
Chancellor Rachel Reeves has been accused of breaking every major tax promise she made in her first Budget, with hardworking families set to bear the brunt of a £26 billion tax increase. The announcement came during what critics are labelling a "Benefits Budget" that prioritises welfare spending over economic growth.
Shadow Chancellor Mel Stride delivered a scathing assessment of Labour's economic management, highlighting the government's decision to double down on policies that have already led to rising taxes, increased borrowing, and downgraded growth forecasts.
Broken Promises and Rising Taxes
Reeves had previously committed to not returning for additional tax revenue after her initial Budget, which featured the largest tax-and-spend programme in recent memory. That package included £40 billion in tax increases, £30 billion in additional borrowing, and £70 billion in new spending.
Despite promising she had "wiped the slate clean" and wouldn't freeze tax thresholds because it would "hurt working people," the Chancellor has now implemented exactly those measures. The frozen thresholds alone are expected to raise £8 billion for the Treasury.
Additional revenue streams include £4.7 billion from taxing salary-sacrificed pensions, £2.1 billion from higher taxes on savings, dividends and property, a council tax surcharge on some family homes, a new electric vehicle mileage charge, and increased gambling taxes.
Welfare Spending Drives Tax Increases
The decision to scrap the two-child benefit cap represents a significant driver of new government expenditure, costing approximately £3 billion per year. This comes on top of what critics describe as a "humiliating U-turn" on welfare changes earlier in the summer.
Mel Stride argues that Labour's approach to economic management relies excessively on higher welfare spending, increased borrowing, and additional taxes - with working people ultimately footing the bill.
The Office for Budget Responsibility has delivered a devastating verdict on Labour's economic strategy, projecting weaker growth every single year from next year onwards compared to their March forecast.
Conservative Alternative
The Conservatives have positioned themselves as the party of fiscal responsibility, proposing a plan that includes £47 billion in credible savings, with £23 billion specifically from welfare reform.
Their "Golden Economic Rule" would direct at least half of these savings toward reducing borrowing, with the remainder used to cut taxes and stimulate growth. Key proposals include scrapping stamp duty on family homes, implementing a first job bonus allowing young workers to keep their first £5,000 of National Insurance, and abolishing business rates for thousands of high-street shops and pubs.
Stride concluded that while Labour had one job - to restore stability and growth - they have instead delivered what he describes as "the most expensive, least ambitious Budget in years."
