Rachel Reeves, the new Shadow Chancellor of the Exchequer, pledges that will never happen. She argues that the Labour Party’s latest budget does not violate the party’s flagship pledge on tax hikes. During a recent press conference, she acknowledged that the decision to extend the freeze on tax thresholds would require “ordinary people to contribute a bit more.” This admission highlights the balancing act faced by the Labour Party in addressing pressing economic issues while maintaining their commitments to voters.
Reeves underscored the impact of this harmful policy on people who work. As Rep. He said, “You’re right that extending the freeze does hurt working people. It’s worth picking through these comments because they remind us of Labour’s impressive manifesto promises from last year. For one, they promised to not increase National Insurance or the basic and higher rates of Income Tax. The manifesto went further, promising to raise none of UK’s higher rates of Income Tax or any Value Added Tax (VAT).
When pressed on whether she would commit to apologizing for breaking her no tax on working people promise, Reeves doubled down. She answered without missing a beat. She reiterated their having made the “tough and fiscally responsible decisions” needed to steer them through today’s challenging economy. Underlying her choices is an admirable determination to confront urgent challenges. Her top pledges are to reduce NHS waiting times, end child poverty and ease the national cost of living crisis.
The environment for these decisions is set by the relentless economic squeeze on households nationwide. Helen Miller, another economist at the Institute for Fiscal Studies (IFS), said the increase in spending power was disappointing. She acknowledged that it’s a big improvement over recent decades. She noted, “especially when compared to the more than 2% per year we achieved across every parliament from the mid-1980s to mid-2000s.”
Reeves’ comments show an understanding that these are the hard choices that governments should be making in times of economic uncertainty. By pushing against tax freezes, the Labour Party aims to strike a balance between fiscal responsibility while supporting vulnerable communities.