The Prime Minister’s looming surrender on welfare guarantees a kamikaze Budget this autumn
25 June 2025
Daily Telegraph
Don’t believe the denials, the hubristic promises to fight on, the chest-thumping from deep down in the Number Ten bunker.
It’s all over for Sir Keir Starmer, a hollow husk of a Prime Minister stripped of his last vestiges of authority and credibility. His final, doomed showdown with his MPs over his plan to trim incapacity benefits will only expose his impotence and lack of strategic nous.
His premiership, not even a year old, is already on borrowed time. He will have to surrender again, or suffer total humiliation.
He is now beholden to Labour MPs, and survives only on their say-so. There are, for the first time, whispers that he could be ousted as early as after the May local elections. I’m not so sure: I suspect that Rachel Reeves, his beleaguered Chancellor, is likely to be sacrificed first.
She has certainly failed disastrously. She convinced herself that her supposed technocratic brilliance and moral superiority meant she could manage Britain’s broken economy and welfare state more competently than the Tories. She sought to combine a few cuts with a massive increase in overall expenditure in a crude attempt at “triangulation”. She lied about Tory “black holes” and repeatedly broke the spirit of her party’s election promises, jacking up National Insurance.
Her staggering arrogance has caught up with her. The deficit is too high, and gilt yields have surged. She hasn’t fixed housebuilding or anything else. Her tax rises have vandalised the economy.
Britain will lose 16,500 millionaires this year, on top of 10,800 last year, according to Henley and Partners. We are now home to just 156 billionaires, down from 165 in 2024. The rich are taking jobs, spending and tax receipts with them. The number of children in private schools is down 11,000; Labour expected its hateful VAT raid to force just 3,000 children to move to state schools.
The irony is that Labour MPs still see Reeves as too Right-wing, even though she is the most Left-wing Chancellor since Denis Healey. Her Personal Independence Payments reforms would save £4.5 billion a year by 2029-2030; working-age health and disability spending would still increase by £15.4 billion between 2024-25 and 2029-30. These are not cuts, merely slightly slower spending growth, and yet even this has proved too much. Labour isn’t in the mood for nuance, for being sensible. They want to revolutionise Britain, and damn the consequences.
Starmer can’t pass the buck. The activists who backed him for Labour leader liked his 2020 personal manifesto. He wasn’t Jeremy Corbyn, for sure, but neither was he another Tony Blair. He promised to maintain Labour’s “radical values” and hailed “the moral case for socialism”.
His foreign policy proposals explains his choice of Lord Hermer as our worst ever Attorney General. Starmer demanded “no more illegal wars. Introduce a Prevention of Military Intervention Act and put human rights at the heart of foreign policy. Review all UK arms sales.”
His other ideas have yet to be implemented. He called for an “increase [in] income tax for the top 5 per cent of earners”, the dismantling of Universal Credit and an “end [to] the Tories’ cruel sanctions regime”; the abolition of tuition fees; massive labour market regulations and powers to the trade unions; a defence of “free movement”; the lionisation of the “green deal”; the nationalisation of utilities; and the end of NHS outsourcing.
This is what Labour thought they would get when he became Leader, and they are determined Starmer should deliver at least some of this agenda as PM. They accepted he had to pretend to be somebody he wasn’t at the election, to fool centrist voters, but will no longer tolerate any deviation from what they believe was the plan all along.
Britain is becoming ever more polarised. Some 25 per cent of the public believe taxes on top incomes are too high, close to the highest support for that enlightened position of the past 35 years; 24 per cent think the level is about right, the British Social Attitudes Survey notes. But 44 per cent think they are too low, up from 27 per cent in 2006.
The Right is becoming sounder, but the Left is becoming ever more extreme, which is bad for Labour. Whatever it does is never good enough. Today’s average activist is a graduate with quasi-communist economic ideas who wants to rejoin the EU, implement woke radicalism, believes in open borders, hates Israel and is soft on crime. They are not happy that Starmer is buying F-35A jets able to carry nuclear warheads. They do not support spending 5 per cent of GDP on defence (including “resilience” expenditure), as agreed with Nato. They are shocked that Palestine Action is being categorised as a terrorist group. They are ideologically and sociologically similar to the young, prosperous, uber-credentialed New Yorkers who picked the woeful “democratic socialist” and “anti-Zionist” Zohran Mamdani in the Democratic Mayoral Primary.
The coup de grâce for Starmer will come if a new Left-wing party is launched. If it were led by Jeremy Corbyn, such a venture would attract 10 per cent of the electorate, a poll for the New Statesman suggests, cutting Labour’s share to 20 per cent. In alliance with the Greens, a Corbynite party – absorbing the pro-Gaza independents – could poll 15 per cent, overtaking the Lib Dems, and doing to Labour what Reform did to the Tories.
To buy time, Starmer will need to concede to the Left on everything. He will start defaming Israel again. He will push through his Employment Rights Bill. He will task Reeves with one final mission: raise even more taxes at a kamikaze Autumn Budget to pay for defence commitments, the U-turns and to splash out even more on Labour’s client groups.
She will surely freeze tax thresholds, dragging millions more into higher bands. She may impose the first increase in petrol duty since 2010-11. She will slap more taxes on gambling.
Such “soft” measures won’t be sufficient. She may also target pension tax relief, or increase inheritance tax, or raid Isas, or revalue council tax, or mull nationwide road pricing, or even consider the nuclear option, a wealth tax. It will be tantamount to declaring total war on the aspirational, on anybody who wants to work, save and improve their lives. The Left will lap it all up, but Britain will never recover.
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