Labour's Budget Crisis: £26bn in Tax Rises and Broken Promises
The Labour government under Keir Starmer finds itself embroiled in controversy following Chancellor Rachel Reeves' latest budget announcement, which has seen the administration accused of multiple manifesto breaches and policy U-turns.
At the heart of the storm is the abandonment of the flagship employment rights policy that would have given workers protection from unfair dismissal from their first day in a job. The government has now extended the qualifying period to six months, marking a significant departure from their original commitment.
The Angela Rayner Connection
The employment rights bill was originally championed by former deputy PM Angela Rayner, who resigned in September following investigations into her tax affairs. Rayner had reportedly considered joining I'm a Celebrity... Get Me Out of Here! but ultimately decided against what would likely have been a career-ending move.
Instead, Rayner is now conducting what insiders are calling the 'House of Commons tearoom trial', testing the waters for a potential return to frontline politics by engaging with discontented backbenchers who increasingly wield influence from the sidelines.
Budget Fallout and Manifesto Breaches
Chancellor Rachel Reeves' budget has come under intense scrutiny, with the Institute for Fiscal Studies (IFS) confirming that the £26bn tax increase represents a clear breach of Labour's manifesto commitments. This follows a £40bn tax rise last November, creating a cumulative tax burden that contradicts Labour's election promises.
Business Secretary Peter Kyle defended the government's position by claiming the manifesto committed to 'finding compromise', though examination of the original document reveals no such wording. The government also faces accusations of misleading statements after insisting on Monday they wouldn't water down employment rights while simultaneously meeting with business leaders to discuss doing exactly that.
Helen Miller, director of the IFS, delivered a damning assessment: 'Before this budget, the UK was faced with lacklustre economic growth, stagnating living standards, and a dizzying array of fiscal pressures. The same is still true after this budget.'
Political Consequences and Future Prospects
The budget's primary achievement appears to be keeping Starmer's leadership secure until after the May elections, having sufficiently placated rebellious backbenchers. However, the government now finds itself in familiar territory - debating whether manifesto commitments have been broken, just as it did following its tax-raising budget earlier in the week.
The controversy highlights the challenging reality facing the Labour government, which during opposition frequently cited the IFS as 'trusted' but now avoids referencing the organisation altogether. The budget has been characterised by critics as designed to protect just one job - the Prime Minister's - rather than creating employment opportunities for the wider population.
As the government continues to navigate these turbulent waters, questions remain about its ability to deliver on its original promises while facing economic realities that have proven more challenging than anticipated during the election campaign.
