Rachel Reeves lied about last year’s tax hikes and about this year too | Personal Finance | Finance

For once, she was right. But what happened in practice? We got the taxes, but not the growth.

That sums up our hapless Chancellor. What should happen, doesn’t. What shouldn’t happen, does. And there’s no sign of that changing.

Labour won July’s general election on a false prospectus.

Reeves repeatedly insisted she wouldn’t raise taxes on “working people”. Then, once in office, she claimed to have stumbled across a £22billion black hole, which made tax hikes necessary after all.

As Paul Johnson at the Institute for Fiscal Studies pointed out: “The £22billion ‘black hole’ was obvious to anyone who dared to look.”

But Reeves pretended not to look. She’s a rotten liar. So is Keir Starmer, who no longer cares whether people believe what he says or not.

In last October’s Budget, Reeves slapped inheritance tax on two of the hardest-working groups of people in the country: farmers and family business owners.

And she hit businesses with £25billion in extra national insurance (NI) charges.

Reeves claimed her NI raid wouldn’t hit working people, but the Office for Budget Responsibility (OBR) disagreed. It said 80% of the cost will fall on workers through lower wages and on consumers via higher prices.

As journalist Andrew Neil noted over the weekend, Labour campaigned on £8.5billion in tax hikes. In her Budget, Reeves hit us with £40billion, the biggest rax raid in three decades.

She promised £9.5billion in extra spending. We got £30billion.

We mustn’t let Reeves fool us again. Because she’s already given it another shot.

In November, as the country raged about her Budget, a desperate Reeves promised not to hike taxes again.

It’s worth repeating her words in full: “We’re not going to be coming back with more tax increases, or indeed more borrowing. We now need to live within the means we’ve set ourselves in the Budget and those allocations of spending totals.”

To be fair, there were no fresh tax rises in the Spring Statement in March.

But by October, when she delivers her Budget, it’ll be a different matter.

The growth we need isn’t coming. The Bank of England, OBR and IMF have all halved their GDP forecasts for this year.

Reeves’s tax hikes have strangled confidence and activity. Donald Trump’s tariff threats haven’t helped.

She has just £10billion of fiscal headroom left, and that’s shrinking fast. She’ll have to either slash spending or raise taxes again in the autumn to make ends meet.

Last week’s fallout suggests spending cuts are off the table. The £3.5billion of disability benefit cuts announced in March have triggered civil war in the Labour party.

Labour MPs and activists won’t accept more cuts.

Which leaves taxes. Deputy PM Angela Rayner is demanding more and Starmer has refused to rule them out.

So once again, Reeves has promised one thing, and will deliver the exact opposite.

Let’s hope she keeps quiet what she’s going to do in 2026. Taxpayers can’t afford any more of her promises.