Politics Weekly UK The budget: Labour’s big tax and spend gamble
Nov 26, 2025
The panel dives into the chaos surrounding the recent budget leak, highlighting Rachel Reeves' high-stakes challenge to please MPs, markets, and the public. Discussions on tax freezes and perceived hikes reveal mixed reactions among Labour MPs. There's a focus on the financial strategies behind increased welfare spending and the political messaging failures regarding child poverty. The talk also addresses potential cuts in special educational needs funding and Labour's narrative of avoiding austerity while appeasing the market.
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Three Audiences Shaped The Budget
- Rachel Reeves aimed to satisfy MPs, markets and the public, prioritising markets and MPs in the short term.
- Lifting the two‑child cap and other measures appeased many Labour MPs but raised concerns about hidden tax burdens.
Reeves' Tax-and-Spend Legacy
- Reeves has delivered large tax rises across two budgets to fund increased spending and investment.
- The OBR shows the tax burden will soon hit an all‑time high, reflecting a clear tax-and-spend stance.
Two-Child Cap Replaced Disability Cuts
- The budget swapped earlier planned disability cuts for lifting the two‑child cap, creating an £8bn hole.
- Treasury plugged that mainly by freezing tax thresholds, which is regressive compared with rate rises.