Published by The i Paper (28th November, 2025)
Like every chancellor, Rachel Reeves loves to say she is taking tough decisions and governing in the national interest. Yet her second budget was a dismal display: a weak Chancellor in a weak Government attempting to appease her own side to buy more time in power, regardless of the cost to the country. So, there was a headline-grabbing bung on benefits, an array of stealth taxes and some sniping at the rich. The legacy of this short-term tribalism will be that some big, poorer families get a significant boost to their income while the tax burden soars to a historic high, the economy stagnates and many more citizens face years of continuing struggle.
It was a traditional Labour Budget with emphasis on tax and spending – even down to the hoary claim that it was motivated by the desire to “properly protect” the NHS. Here is the most hackneyed defence in the political playbook – and it sounds even more absurd when the system is so dysfunctional, waiting lists so long and doctors endlessly grasping cash.There will be another £26bn extracted from voters and £11bn blown on extra spending by 2030 – although the taxes are backloaded to soften political impact, while the spending starts immediately, driving up debt.
Reeves bottled her original intention for a more progressive raising of income tax. The state will swell to soak up almost 45 per cent of the country’s gross domestic product by the time of the next election, driving up the overall tax burden to 38 per cent of GDP. This is not far off Scandinavian levels. Yet, many public services remain in disarray since Labour – like its Tory predecessors – shies away from systemic reforms desperately needed to boost Britain.
Take the so-called “mansion tax”, a council tax surcharge imposed on properties valued above £2m. Almost every expert agrees our property taxes are a mess. Stamp duty is a pernicious barrier to buying and selling homes, stopping older people from downsizing and stymying labour market mobility. Council tax is based on hypothetical values from 34 years ago; since then, prices have risen fivefold at differing rates across the country. This is one reason for the chronic underfunding of local government.
Yet, far from fixing the problem, Reeves has imposed a new levy which raises a comparative pittance, is based on iniquitous revaluation of just a tiny slice of the market and is grabbing the cash for central Government.
This typifies the tinkering seen repeatedly at Budgets by both Labour and the Tories, along with their timid collective failure to tackle major problems. Local authorities, having suffered the worst impact of former chancellor George Osborne’s austerity, are footing the bill for a huge jump in children with special educational needs. The numbers with an Education, Health and Care plan have more than doubled over the past decade – and even Sir Keir Starmer says this is the issue he gets tackled on most by the public. So, Reeves said the Government will assume the £6bn costs from 2028, which no doubt explains her decision to seize the “mansion tax” money.
Like too many parts of the state, the SEND system is a bureaucratic nightmare for families and fails many citizens most in need. Last year, £130m was wasted on tribunals for rejected applicants, although almost all cases are lost by councils. A fifth of children with plans have communication and speech development issues; it is estimated by the Disabled Children’s Partnership that early support for them could save the economy £8bn. The Government plans reform and preaches a gospel of inclusion in mainstream schools. Yet, this does not inspire confidence after Labour’s botched Treasury-led effort at welfare reform – especially when one adviser has suggested they strip out health and care components, then apply them only for pupils in special schools. And this is a party pushing assisted suicide over the justified fears of many people with disabilities.
Note how Reeves sneered in her speech that “the Motability scheme was set up to protect the most vulnerable, not to subsidise the least on a Mercedes Benz”. People with disabilities eligible for the mobility aspect of personal independence payments – a benefit for additional living costs, whether working or not – are entitled to top-up payments for an adapted car. There are restrictions on costly models which depreciate fast. Perhaps Reeves, like divisive populists who use this scheme to fuel resentments, thinks disabled people are not entitled to nice cars. Very few, of course, can afford such vehicles since they are far more likely to be trapped in poverty than other people. If there were fully accessible public transport across the country, demand for Motability might fall.
Such issues – schools failing special needs pupils, inadequate transport – feed into the biggest domestic behemoth confronting Westminster: the spiralling welfare bill. One in five Britons are out of work and not seeking jobs. A recent review by former John Lewis boss Sir Charlie Mayfield found 800,000 more people out of work now than before the pandemic due to health conditions, and there might be 600,000 more by the end of the decade. There are 235,000 under-25s claiming long-term sickness benefit, a rise of 80,000 in five years – and each costs the economy an estimated £100,000 a year.
Such data is alarming. Yet, it is easy to make jibes about anxiety and autism, to joke about the frailties of younger generations, to blame Covid or the curse of social media. This ignores the care system, which has been allowed to decay while politicians spout platitudes about a sacred NHS – and a mental health system reliant on restraint, incarceration and unaccountable private providers after hollowing out of community services and slashing of services for children and adolescents.
This Budget was meant to help poorer children. But disabled kids are far more likely to live in poverty, and their families are driven into welfare by having to give up work to fight for support. These are complex issues. Yet ultimately, they are symbolic of the failures of a state soaking up more and more cash while delivering too little – and of pathetic tribal politicians who play short-term games.