A political betrayal of such magnitude in so short a space of time

Politicians often tell half-truths but, believe it or not, they only occasionally tell downright lies.

This Labour Government is breaking new ground. It has adopted mendacity as a way of doing business.

Yesterday’s Budget, with its £40 billion of tax increases, was the most shocking example so far. And yet Rachel Reeves had the brass neck in her speech to make much of her supposed honesty.

The first Labour lie is that it inherited a basket-case economy after 14 years of Tory incompetence. Of course, not everything was rosy. But as Tory leader Rishi Sunak argued in a barnstorming response to Ms Reeves, Labour inherited inflation at 2 per cent, extremely low unemployment and economic growth among the highest in the advanced G7 economies.

The second lie, even more egregious, is that the Budget honours Labour’s manifesto commitment not to increase taxes for ‘working people’, and specifically not to raise National Insurance.

It is incredible that the Chancellor should have insisted that her measures were entirely consistent with her party’s manifesto.

On May 28, in her first speech of the campaign, she promised that if Labour won the election, there would be ‘no additional tax rises’ beyond the comparatively limited ones already announced for private school fees, non-doms and energy companies.

Has there ever been a political betrayal of this magnitude in so short a space of time? The truth is that millions of working people are likely to find themselves worse off as result of Labour’s assault.

The lion’s share of the tax hike, about £25 billion, will come from National Insurance, the very tax that the party’s manifesto pledged not to touch. True, it will fall directly on employers, not employees, but because it is a tax on jobs it’s bound to affect working people.

Thousands of small businesses, which constitute the lifeblood of our economy, will struggle with this extra cost. In addition, they will have to fork out a much higher national living wage to staff. It is being raised by 6.7 per cent (more than three times the rate of inflation) to £12.21 an hour.

It’s preposterous to pretend that all small businesses with these extra burdens will be able to protect ordinary working people. At the very least they will be less likely to hire extra staff or to offer decent pay rises.

Countless other working people will also suffer as a result of this Budget. Why is someone who will have to pay capital gains tax at a minimum of 18 per cent (rather than the previous 10 per cent) on a modest share gain not a ‘working person’?

What about those who will have to pay a much higher tax surcharge for second homes? Aren’t they workers too? And what about people who have slaved all their lives, and will now find themselves constrained by inheritance tax thresholds frozen for a further two years to 2030?

Inheritance tax, though paid by relatively few, is widely hated. The thresholds – which allow the first £325,000 of any estate to be tax free, rising to £500,000 if the estate includes a residence passed to direct descendants – have remained substantially unchanged since 2015 despite rampant inflation. Now Ms Reeves is helping herself to more of people’s hard-earned money.

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If Labour had been straightforward in its manifesto, and stated that taxes would have to go up, it couldn’t be accused of rank dishonesty. It is of course no defence for it to pretend it didn’t know about the public finances during the campaign since bodies such as the Institute for Fiscal Studies openly discussed them.

Falsehoods are always hard to bear. They become intolerable when they drop easily from the mouths of Sir Keir Starmer and Rachel Reeves, who wrapped themselves in the raiment of virtue and integrity when they so freely accused former PM Boris Johnson’s administration of lying.

What is so depressing is that this deviousness is combined with a stunning level of incompetence. Take, for example, Darren Jones, who is Ms Reeves’s deputy. On Tuesday he justified the large increase in the national living wage by suggesting that ‘investing in your workforce is a great way to improve your productivity’.

Really? Certainly not when it coincides with a whopping rise in National Insurance. Many smaller businesses borne down by dramatically higher costs will have less money to invest, and will become less – not more – productive. They’ll also have Deputy PM Angela Rayner’s expensive smorgasbord of workers’ rights to cope with.

Where does Labour think money comes from? It really seems to believe that it grows abundantly, and without much care or attention, on trees.

The Budget was billed by the Chancellor as driving investment and growth. And yet the growth figures produced by the Office for Budgetary Responsibility (OBR) – which she has tried to enlist in her contention that the Tories left a £22 billion ‘black hole’ – were decidedly anaemic.

I’ve little faith in the accuracy of the OBR’s forecasts. But the Chancellor reveres the organisation. So she should have choked as she rattled through its very disappointing growth projections. Two per cent next year, and then, in successive years, 1.8 per cent. 1.5 per cent, 1.5 per cent and 1.6 per cent.

And this from a Government that claims to have prioritised economic growth! These rates compare unfavourably with most of the Tory years in which – according to Labour – the economy ground to a halt.

Look, for example, at the five years before the pandemic, i.e. 2015 until 2019. The average annual growth rate, according to the Office for National Statistics, was fractionally under 2 per cent, appreciably higher than the yearly average forecast by the OBR for between 2025 and 2030.

Another Labour lie, or just plain ignorance? Either way, it’s extraordinary that Labour – which has bet the farm on economic growth – is in the view of the Office for Budget Responsibility likely to achieve less growth than the supposedly half-witted Tories.

Rachel Reeves and Labour are as far up a gum tree as was Liz Truss. They look like amateurs. Another example is their intention to throw an extra £22.6 billion at the NHS in a short period of time, where we can be sure huge sums of money will be squandered.

Meanwhile, in the midst of a European conflict, the Government is prepared to lay its hands only on an extra

£2.9 billion for defence even though recently its own Defence Secretary admitted that Britain ‘is not ready to fight’ a war.

Earlier this week both Rachel Reeves and Health Secretary Wes Streeting implied that the insatiable and inefficient NHS will require further funding, and therefore more tax rises.

What happened yesterday, awful though it was, is a mere hors d’oeuvre. An overtaxed and over-regulated economy won’t produce the growth necessary to pay for all the goodies Labour wants. The Government has fiddled the borrowing rules and the markets won’t lend it endless amounts. Depend on it: Rachel Reeves will be back for more of our money.

Even before yesterday’s Budget Britain was more highly taxed than at any time outside war. Over the next few years this dismal and dishonest crew are going to break many more terrifying records.