Finally, after weeks — even months — of talk, we are about to see what this year’s Budget actually contains.
Chancellor Rachel Reeves will present what she calls “the fair and necessary choices” she is making. Necessary, of course, means difficult.
Her speech will center on three cuts: lowering the cost of living, reducing NHS waiting lists and cutting government debt as a share of national income. Achieving those goals will, however, require taxes to rise elsewhere. The problem is that raising taxes increases bills for those affected, which can itself worsen cost-of-living pressures for some households.
Reeves will point to measures such as freezing some rail fares to show the Budget eases pressures for parts of the population. But avoiding higher headline income tax rates means relying on a raft of smaller, targeted tax increases — a strategy that risks sparking loud, coordinated protests like those seen from farmers after last year’s inheritance tax changes.
This is a landmark moment for Labour. The usual mix of official briefings, speculation and leaks has been amplified this year by an unusually long pre-Budget conversation. Reeves herself has engaged publicly more than chancellors typically do.
There is a reason: the prime minister, the chancellor and their team know this Budget matters. Opinion polls show the relatively new government is deeply unpopular, and both Keir Starmer and Reeves fare poorly in public ratings. The economy is fragile, many households still feel the squeeze, and ministers accept the change they promised during the election has not arrived quickly enough.
Labour MPs are increasingly restless. They feel the party’s unpopularity in constituency messages and in their inboxes. Some fear this may be Starmer’s and Reeves’s last Budget. A few privately talk of a “four-year walk to the guillotine,” expecting defeat at the next general election. Even loyal MPs admit concerns privately.
That restlessness makes the run-up to this Budget feel messy. The turmoil has prompted some commentators to suggest scrapping the annual Budget altogether. Relations between the government and its backbenchers range from prickly to volcanic.
The danger of the Budget failing badly — potentially triggering a leadership challenge before Christmas — has already stirred speculation. The possibility of a mutiny if Reeves broke Labour’s manifesto pledge not to raise income tax prompted public debate inside the party, attempts to justify higher rates, and then a retreat. That visible indecision is hard for MPs to defend.
The strain goes both ways. Some government figures describe the Parliamentary Labour Party as sprawling and naïve, unwilling to accept the trade-offs that come with being in government. Their message is blunt: you can’t avoid difficult choices when running the country.
What Reeves needs most is a Budget she can pass without making the political situation worse — one that buys her and Starmer time and some patience from both MPs and the public. But they know patience is in short supply.
