𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Chancellors often like to encourage speculation about large  tax rises in the run up to a Budget. It means that when they announce a slightly smaller increase, they can spin it as good news. But what we have seen from Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer in recent days is on a different scale. It looks like they really are planning to break the pledge in Labour’s general election manifesto not to increase the rates of income tax, VAT or National Insurance – as well as the promise Ms Reeves made in November that she won’t be “coming back with more borrowing or more taxes”.

The Chancellor may believe she has a trick up her sleeve to avoid criticism. The manifesto also refers to taxes on “working people”, and she may hope that if she targets pensioners – most of whom no longer work – then she can claim that she has technically kept her word. But nobody will be fooled by this. And it highlights one of the biggest problems with the behaviour of this Labour government.

We know that the decision to increase National Insurance payments by employers in the Chancellor’s Budget last year has damaged the economy. Every business organisation has warned that making it more expensive to employ staff has forced them to limit recruitment and control costs in other ways, such as keeping down wages.

Hiking up costs on businesses has meant higher prices in our shops. And it means worse value-for-money for taxpayers, because public services also faced higher costs.

But Labour’s brazen willingness to break a solemn manifesto commitment also destroys trust in politics and our established political parties.

That helps “insurgent” parties that have never held power before, and are seen as being outside the political establishment, such as Reform and the Green Party.

It also encourages voters simply to give up on democracy entirely – or in some cases to look for more extreme organisations to support. It helps to make our society even more divided.

Many people are cynical about politicians, and a little cynicism might be healthy. But it’s hard to think of any other government willing to blatantly ignore its promises. And this comes after Labour won a massive majority in the 2024 general election, which means it should be in a position to put its manifesto into practice.

The breach of trust with voters follows a torrid period in British politics. The last Conservative government had lost the plot by the end. Huge battles over Brexit, leadership plots and “letters”, partygate, Christopher Pincher and Liz Truss … it was a period we all want to forget.

Many voters had lost confidence in the Tories, and lost faith in the British state as a whole. Nothing seemed to work.

But rather than restore this faith, Labour is confirming our worst fears. If you are someone who thinks politicians are all the same, they all lie, they never keep their promises, then the message from Sir Keir and Rachel Reeves is that you are spot on.

This helps explain why Reform, rather than the Conservatives, have benefitted so much from Labour’s failings (although some recent polls show support for the Tories growing slowly). The message isn’t just that Labour is bad – it’s that politics as we know it is failing.