This Budget was the one that Labour always promised to deliver – if you listened closely enough. As I wrote before the election, Keir Starmer and Rachel Reeves’ pledge to “prevent austerity” was only achievable through larger tax rises. These, I suggested, would be imposed after Reeves discovered “the books are worse than thought”. That’s exactly what has happened.
The £41.5bn of tax rises announced by Reeves put the UK within touching distance of the western European norm (a tax take of 38.2 per cent of GDP will leave us level with the Netherlands and not far off Germany). Combine this with a new industrial strategy, stronger workers’ rights and the highest public investment since Harold Wilson and a distinctively social-democratic model emerges.
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