Once again, hard-working Britons will be squeezed for the handouts Labour needs to buy support from the benefits class
Daily Telegraph 14/11/25
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If you were trying to cause a fiscal crisis, your plan of action might look something like this. First, stage two embarrassing climbdowns on welfare that make it clear you can’t push spending cuts past your MPs.
Second, brief out wildly contradictory stories on taxation for weeks prior to a Budget, appear to settle on a large tax rise to fill a looming black hole, then suddenly walk it back, making it clear that there’s no mandate for tax rises either.
Finally, engage in a public bout of infighting between the leader and the rivals jockeying for his job, adding an element of political risk to the whole process.
To give them their due, Rachel Reeves and Keir Starmer probably aren’t deliberately trying to sabotage Britain (although whether we could tell the difference if they were is an open question). The problem is simpler: they’re not very good at their jobs. With no mandate for tax rises – and indeed several explicit promises to avoid them – and no appetite for spending cuts, the two have found themselves caught between a rock and a hard place.
The result has been a series of revolts, U-turns and broken promises as they desperately scrabble for short-term revenue raisers to kick the hard problems of spending reform down the road to the next fiscal event. Last time this included a raid on employers National Insurance contributions, inheritance tax hikes and imposing VAT on private school fees: a combination laser-targeted at the wealthy middle-class households that matter less to Labour’s electoral coalition.
This time around the plan appears to be higher handouts for the benefits class, with the two-child benefit cap apparently for the chop, and relaxed requirements for workless claimants to look for jobs. With a considerable fiscal hole still to fill, someone else is going to have to pay for this largesse.
That “someone” is you, Telegraph readers. Once again, Middle England is going to be squeezed for the handouts Labour needs to buy support from the benefits class. The current speculation makes for grim reading: one proposal is cutting the higher rate threshold from £50,270 to £45,000 (the point below which one qualifies as a “working person”; doctors, bankers, lawyers and council staff earning above this figure are apparently unemployed).
On a back of the envelope calculation, this would see the 7.4 million higher rate income tax payers earning more than £50,000 forking out an extra £1,000 per year: £7.4bn in revenue into the coffers, covering the £3.6bn needed to lift the two child benefit cap, and maybe a little bonus for the PIP claimants on top.
Another option would be to achieve the same effect through stealth, extending the income tax threshold freezes for another two years, pushing the end from 2028 to 2030. Because wages and prices rise with inflation, this pushes a larger share of incomes into taxable brackets even when the actual spending power of earnings hasn’t changed.
By wiping out around £2,000 in threshold increases, this would push more earners into the higher rate bracket, and increase the burden on those already in it, extracting £8.3bn in the process.
Or rather, extracting £8.3bn from you. Because, again, it’s going to be you who pays for this. But don’t feel discouraged. Remember, when the alarm clock goes off, and you trudge to work with your baby in childcare: think of the PIP claimants and UC dole bludgers tucked up in their duvets. You’re doing this for them.
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