The Promise Versus The Reality
Last month, when asked about promises around income tax in the run-up to the budget, a government spokesperson said: “We take our promises very, very seriously.” After yesterday’s budget announcement, it’s clear that’s not the case.
During the election campaign, the Prime Minister and Chancellor didn’t just mention it once or twice—they said it dozens of times: “I make no apologies for being careful with working people’s money and no apologies for ruling out tax rises on working people.” “We will not raise tax on working people. That means no tax rises for income tax, for national insurance, for VAT. We will not raise tax for working people.”
Voters don’t read manifestos. They heard these promises repeated over and over again. Most people believed Labour would not increase their income tax. Now they have, and the government’s defense sounds like dodgy salespeople who promise something, break the promise, and say, “Well, by the way, you didn’t read the terms and conditions.”
The Technical Defense Versus Public Understanding
The government’s defense is technical: they point to the manifesto, which was “very specific about the rates of income tax, national insurance, and VAT that we wouldn’t raise.” They claim they made a commitment to “always try and keep taxes on working people as low as possible,” and that’s what the Chancellor set out yesterday.
But this misses the fundamental point. When politicians stand on stages, appear in interviews, and make campaign promises, they’re not speaking to legal experts parsing fine print. They’re speaking to ordinary voters who hear clear, simple messages: “We will not raise tax on working people.”
The government spokesperson acknowledged the difficulty: “I’m not going to shy away from the fact that we’ve asked people to make a bit more of a contribution. And that is very difficult.” But the technical defense doesn’t address why people are angry, why they distrust politicians, or why this represents what many see as the worst form of politics—promising one thing and delivering another while hiding behind manifesto fine print.
The Perfect Storm Defense
The government’s explanation for the tax increases centers on what they call a “perfect storm” inherited from the previous administration. They argue they came into office facing multiple crises simultaneously: public services on their knees, an economy in chaos, mortgages through the roof, and people paying a very high tax burden, particularly working people on lower and middle incomes.
They claim they’ve had to deal with all these issues at once—something they say hasn’t happened before. Even in 1997, when Labour last came into government, the economy was growing even though public services were struggling. When they left office in 2010, there was a global economic crash, but public services were in strong condition. This time, they argue, everything needed fixing simultaneously.
But this defense raises questions. The Institute for Fiscal Studies (IFS) said in the run-up to the election that Labour wasn’t being honest with the British public about the state of the economy or what they might have to do with taxes. That warning appears to have been accurate.
The OBR Forecast Revision
The government points to a specific trigger for the tax increases: the Office for Budget Responsibility (OBR) revised its forecast. Not as a result of anything this government has done, they claim, but based on a reassessment of what happened over the previous 14 years.
The OBR’s assessment is that features that impacted the British economy—whether the pandemic, Brexit, or austerity in the early years from 2010 to 2015—left a much bigger scarring effect on the economy than previously assessed. The Chancellor, they say, has to deal with the world as it is, not as they would like it to be.
However, critics argue this explanation doesn’t fully account for the tax increases. The main reason taxes are increasing, they contend, is because the welfare bill is going up. The majority of spending will be on welfare because the government couldn’t get rid of the winter fuel allowance for millions of people and couldn’t change welfare policies. These tax increases, critics say, are because of Labour’s inability to make difficult changes within government.
Rising Taxes and the Politics Behind Them
However, critics argue this explanation doesn’t fully account for the tax increases. The main reason taxes are increasing, they contend, is because the welfare bill is going up. The majority of spending will be on welfare because the government couldn’t get rid of the winter fuel allowance for millions of people and couldn’t change welfare policies. These tax increases, critics say, are because of Labour’s inability to make difficult changes within government.
Explore the Forces Driving Today’s Tax Increases →The Child Poverty Defense
The government strongly defends one major budget measure: the decision to end the two-child limit on Universal Credit and lift 450,000 children out of poverty. They call this “the single biggest step that any government has ever taken to tackle child poverty.” They note that 60% of those families are in work—people struggling to make ends meet, struggling to keep going in work.
They’re also introducing new funding to help 18 to 21 year olds who’ll be given a guaranteed job if they can’t find work. These are the long-term reforms needed, they argue, to deal with long-term unemployment and the scarring effect of child poverty that lasts throughout children’s lives.
But the question remains: if these are the right policies, why weren’t voters told during the campaign that achieving these goals would require tax increases? Why were the promises so absolute if the reality required nuance?
The Employment Rights U-Turn
The budget wasn’t the only area where promises appeared to shift. There was also what many called a U-turn on employment rights—a key tenant of what Labour meant to do for working people.
The government defends this by pointing to the Employment Rights Bill, which they call “the biggest upgrade to workers’ rights in a generation.” But they reached an impasse in the House of Lords, and there was a genuine debate between business leaders and trade unions about the right balance to be struck.
Originally, the proposal was that protection from unfair dismissal should start on day one of employment. Currently, you’re not protected until you’ve been in a job for two years. The government proposed day-one protection. Now, as a result of a compromise reached between union representatives and business leaders, it will be set at 6 months.
Critics call this “a shell of its former self,” but the government rejects that characterization. They say this wasn’t an agreement imposed from above—it was reached by consensus, bringing people together in a room. “Gone are the days where you just have arbitrary decisions being dictated from Whitehall,” they claim. “We’re bringing the whole country together in order to improve people’s rights, improve people’s living conditions.”
The Trust Problem
The fundamental issue here isn’t just about tax rates or employment rights specifics. It’s about trust. When politicians make promises during campaigns, voters need to believe those promises will be kept. When they’re broken, even with technical justifications, trust erodes.
The government spokesperson was asked directly: “Do you understand then why people are angry, why people distrust and dislike politicians?” The response was defensive: “I’m trying to answer your question, but I don’t accept the premise of your question. And you can shout at me all you like, but I’m not going to accept it because it’s not true.”
But the reality is that when voters hear “we will not raise tax on working people” dozens of times during a campaign, and then taxes on working people are raised, trust is damaged. The technical defense about manifesto language doesn’t repair that damage. It may even make it worse by suggesting voters should have read the fine print.
The Cost of Living Measures
The government does point to measures they’ve taken to help people: cutting energy bills, freezing rail fares, freezing prescription charges. They say they’ve “wasted no time in pulling every lever at our disposal to make life easier for people” after “a decade and a half of falling living standards.”
They argue that if you look at the direction of travel of this budget, they’ve “strained every sinew to meet those commitments to make sure that we’re bringing down the cost of living.” But for many voters, these measures don’t offset the broken promise on taxes.
The Political Consequences
This situation illustrates a broader problem in modern politics: the gap between campaign promises and governing reality. Politicians face immense pressure to make clear, simple promises during campaigns. But governing is complex, and circumstances change.
The question is whether politicians should make absolute promises they may not be able to keep, or whether they should be more honest about the challenges and uncertainties ahead. The IFS warned before the election that Labour wasn’t being fully honest about what might be required. That warning appears to have been prescient.
The government says they’re “very proud of this budget” and believes “the whole country will feel the benefit.” But for many voters who heard those repeated promises about not raising taxes, the benefit may be hard to see through the broken promise.
FAQ
Did Labour break their promise not to raise taxes on working people?
Yes, despite repeatedly promising during the election campaign that they would not raise taxes on working people—specifically stating “no tax rises for income tax, for national insurance, for VAT”—the new budget includes tax increases. The government defends this by pointing to technical language in their manifesto about “rates” of tax, but voters who heard the clear campaign promises feel the commitment was broken.
What is the government’s defense for raising taxes?
The government argues they inherited a “perfect storm” of crises: public services on their knees, an economy in chaos, high mortgages, and an already high tax burden. They also point to the Office for Budget Responsibility (OBR) revising its forecast based on reassessment of economic scarring from the pandemic, Brexit, and austerity over the previous 14 years. They claim the Chancellor must “deal with the world as it is, not as we would like it to be.”
Why are critics saying the tax increases are due to Labour’s failures?
Critics argue the main reason taxes are increasing is because the welfare bill is going up. They contend the majority of spending will be on welfare because the government couldn’t eliminate the winter fuel allowance for millions of people and couldn’t make other welfare changes. They say these tax increases reflect Labour’s inability to make difficult policy changes within government, rather than unavoidable economic circumstances.
What happened with the employment rights promise?
Labour originally promised day-one protection from unfair dismissal (currently protection starts after two years). After reaching an impasse in the House of Lords and negotiations between business leaders and trade unions, this was changed to 6 months protection. The government calls this a consensus-based compromise, but critics call it “a shell of its former self” and a U-turn on a key promise to working people.
Why does this matter for political trust?
This situation illustrates a fundamental trust problem in politics. When politicians make absolute promises dozens of times during campaigns (“we will not raise tax on working people”), voters expect those promises to be kept. When they’re broken with technical justifications about manifesto language, trust erodes. The Institute for Fiscal Studies warned before the election that Labour wasn’t being fully honest about what might be required—a warning that appears to have been accurate.
Labour a joke