Officials within the government are proudly describing this as an authentically Labour budget, focusing on substantial tax increases and spending to achieve social goals. According to the Institute for Fiscal Studies, the tax rises announced during this parliament are unparalleled since at least 1970. Rachel Reeves elaborates that these changes allow the government to address policies considered fundamentally Labour, such as the removal of the two-child limit on the child element in Universal Credit. These measures are anticipated to lift hundreds of thousands of children out of poverty.
While Labour MPs in the Commons largely celebrated the plan, its reception is not unanimously positive within the party. Public opinion polls indicate that maintaining the cap was also a popular stance. The chancellor must ensure this budget appeals to varied audiences, including financial markets and the broader electorate, amid the government's challenging popularity.
The government claims that all but the wealthiest 10% will benefit from these initiatives by the end of the decade, reinforcing their progressive agenda. Downing Street hopes the enthusiasm seen from Labour backbenchers will persist metaphorically, securing time for both the prime minister and the chancellor.
The chancellor is also providing more flexibility in budgetary figures, aiming to stay within self-imposed rules, which boosts confidence among financial markets. Additionally, the evaluation of budget adherence by the Office for Budget Responsibility is now reduced to once a year, minimizing the risk of disruptions akin to the premature publication of budget details that occurred recently.