cross-posted from: https://ibbit.at/post/99259
Earlier today, Rachel Reeves gave a teaser for her fast-approaching budget. While teasers can work well for upcoming movies, they prove less effective for something that no one is looking forward to. In fact, many are probably dreading the budget speech:
Reeves, making a speech on he economy at 8 in the morning, communicates just one message: she’s panicked, and she and Labout are scared witless by the decisions they have to make whilst clueless about what to do.
— Richard Murphy (@RichardJMurphy) November 4, 2025
Rabbit in the headlights
While Reeves’ speech was vague, people have interpreted it as meaning she will raise taxes:
Rachel Reeves delivers big pitch-rolling speech for tax-rising budget later this month… after promising last year taxes wouldn’t have to go up again.
But chancellor says: “My job is to deal with the world as I find it, not the world as I might wish it to be”. pic.twitter.com/AOtC9cIOdG
— Pippa Crerar (@PippaCrerar) November 4, 2025
David Osland was among those arguing Reeves should be instating some sort of wealth tax:
The super-rich pay a lower rate of tax on their unearned income than ‘greedy’ nurses do on the £30k they work shifts all year round to earn. If Rachel Reeves needs to raise taxes, that’s where she should be looking.
— David__Osland (@David__Osland) November 4, 2025
He noted this isn’t unreasonable when you compare it to how much graduates pay on student loans:
In a country that imposes a de facto 9% tax on graduates earning the average wage, the case against a 2% tax on multimillionaires looks remarkably weak
— David__Osland (@David__Osland) November 4, 2025
Economist Richard Murphy described Reeves’ performance as follows:
Rachel Reeves is panicking. There is no other description that I can offer of her behaviour this morning.
She stood up at exactly 08:10 to coincide with the news cycle and presented a speech at a podium in Downing Street that was unprecedented. Three weeks or so before her budget, she is offering an explanation of why it is going to be truly so terrible for everyone in the UK except the City of London. She looked frightened; she acted frightened; and she will have panicked everyone but the City of London.
Murphy has four potential explanations for Reeves’ performance:
She’s getting her excuses in early because she thinks a market crash is happening.She’s reacting to Nigel Farage’s claim there will be a sovereign debt crisis.She’s seen figures for the Office for Budget Responsibility that are so bad she feels the need to lay the groundwork for what’s coming.She’s folded to pressure from the finance sector in the City of London.
Murphy is leaning towards the latter.
Growth
Novara’s Aaron Bastani suggested this was all very predictable:
Reeves is going to increase income tax.
This is a complete failure of the media, who were broadly incapable of scrutinising what they were saying in opposition.
They had no plans for growth, or generating more public revenue. Zero. pic.twitter.com/LW7yqoyjVM
— Aaron Bastani (@AaronBastani) November 4, 2025
Is Bastani forgetting that Labour made ‘GROWTH, GROWTH, GROWTH’ their slogan?
Investment in Britain.
Jobs in Britain.
Growth in Britain. pic.twitter.com/z3cFtKapCS
— Keir Starmer (@Keir_Starmer) October 9, 2025
We know Bastani is saying Labour had no plan to make this growth happen, but what if simply repeating ‘growth’ was the plan?
If it was, it certainly hasn’t worked.
There was another big problem with Labour’s growth strategy, and it’s that growth wouldn’t necessarily improve our conditions. We had growth (albeit meagre) for most of the 2010 – 2024 period; at the same time, we experienced:
Growing in-work poverty.Increased child poverty.Worsening public services.
Starmer’s growth argument was the age-old aphorism that ‘a rising tide lifts all boats’. The problem is we’ve seen this doesn’t happen anymore, and Labour has no clue how to change that.
Panic in the City of London
We don’t know what Reeves hoped to get out of all this, but the primary result so far has been a market slump. To be fair, there are many good decisions she could have made which would have caused panic in the financial sector – a sector which has far too much power – we just don’t think Labour are going to make a good decision here.
Featured image via Times News
By Willem Moore
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