Labour's Budget Focuses on Cost of Living, NHS, and Debt Amidst Internal Tensions
Labour, under Reeves's leadership, is set to present a Budget centered on three main priorities: addressing the cost of living, reducing NHS waiting lists, and cutting government debt as a share of national income, with financing coming from targeted tax increases elsewhere.
The Budget does not include an increase in income tax; instead, it plans for smaller, targeted tax rises alongside measures such as freezing some rail fares to help ease cost of living pressures.
This Budget is framed as a landmark moment for Labour amid deep unpopularity for both Reeves and Starmer and a struggling economy. The aim is to buy time and support from voters and Members of Parliament (MPs).
However, Labour faces significant internal challenges, with backbench unrest described as high. Some MPs privately speculate that this may be Reeves’s and Starmer’s last Budget, with murmurs of a leadership challenge possibly occurring before Christmas.
Tensions between the government and backbench MPs are acute, highlighting the need to defend governing trade-offs.
The pre-budget period has been marked by heavy briefing, speculation, and leaks, with Reeves engaging more publicly than in previous years.
There is concern within Labour that raising income tax could trigger an internal mutiny or threaten manifesto commitments, influencing the Budget decisions.
Additionally, there is awareness of potential protests from groups such as farmers if tax plans impact them, referencing prior demonstrations over inheritance tax.
