The Budget added another £8.5billion of tax increases, yet some believe the country got off lightly. This analysis argues that Labour's tax-and-spend agenda is unsustainable and points to fiscal ruin.
Labour's tax and spending plans
Chancellor John Healey has lifted the UK tax burden to its highest level on record, but faces pressure from the left to go further. Critics say the party wants more tax, more spending, more borrowing, and more benefits with no apparent end.
Labour is set to spend £500billion more than the Tories planned this Parliament. The national debt is equivalent to £100,000 per household. Savers will soon pay tax of up to 49% on their deposits.
Bank windfall tax under fire
The left was upset over Healey's decision to impose a windfall tax on banks, not because he did it but because it was not hard enough. The TUC suggested £60billion over four years. A headline at The Guardian demanded: "Hit the banks - and hit them hard."
Banks are already among the most heavily taxed in the world, contributing a record £47.8billion to the Treasury last year. Piling on more taxes risks driving banking jobs, capital and investment to New York, Dublin and Singapore. Healey kept a time-limited £1.5billion raid, but it expires on March 31, 2028.
Pressure for more tax hikes
The left believes the Budget is a prelude to a snap election, dreaming of Burnham's 10-year plan and a new manifesto that could pave the way for hikes to income tax, national insurance and VAT. Income tax is already rising through the freeze on thresholds, which will continue until 2031.
Government spending is around 44% of GDP. The left looks enviously at France, where the figure is closer to 57%. France is plunging into the abyss because no matter how much the government spends, it will never be enough.
Healey has to placate backbenchers who rebel at the first hint of a spending cut. Keir Starmer tried cutting £5billion off the £160billion bill for working-age welfare, which was too much for Labour.
Think tank influence and fiscal outlook
The Resolution Foundation's former director Torsten Bell helped shape the Budget. Bell previously called for 20 different taxes to be hiked, hitting pensioners, inheritances, savings, ISAs and homes. Labour is working its way down his list.
As the population ages and the welfare bill rockets, Britain faces fiscal ruin unless it gets a grip. Bond markets have their hands full with French debt, but if they looked at the thinking on the British left, gilt yields would rocket. No matter how much the country taxes and spends, it will never be enough.
