Chancellor of the Exchequer Rachel Reeves delivered the Labour Government’s second Budget, saying that she was putting Labour values at the heart of her decisions, that there would be no return to austerity, that she would take measures to cut the cost of living, cut NHS waiting lists and cut the national debt. The budget also put an end to the 2-child benefit cap which, when introduced in full from April would be lifting 450,000 children out of poverty.
Budget in brief
The Chancellor said “To cut the cost of living, the Budget will: Bring down the average energy bill by around £150 from April 2026. Scrap the two-child limit in Universal Credit, lifting 450,000 children out of poverty. Boost the National Living Wage and National Minimum Wage to increase the pay packets of around 2.7 million workers. Increase the State Pension by up to £575 a year, delivering on our commitment to the Triple Lock. Freeze rail fares for the first time in 30 years, saving passengers hundreds of pounds a year, and freezing prescription charges to save patients around £12 million. Labour is determined to build an NHS fit for the future. To help cut NHS waiting lists, we’re rolling out 250 new Neighbourhood Health Centres across the country, to help build on the 5.2 million extra appointments delivered since Labour came into office. And to cut national debt, we are ensuring that borrowing is reduced every year so that interest rates, which have been cut five times since the election, can keep falling and keep mortgage costs down for families. We are making fair choices, asking everyone to contribute but ensuring that income is taxed more fairly: Increasing how much property income is taxed, because landlords pay less tax on rental income than their tenants do on earnings from work. Reforming taxes on very expensive homes, so a £10m Westminster mansion doesn’t pay less than a terraced house in Blackpool. Raising duties on online gambling. “
Protecting Opportunity not Wealth
Reaction in Somerset was positive. Bridgwater Labour’s economy spokesman Cllr Mick Lerry (Victoria, Labour) commented;- “The Labour Government budget will increase the Minimum and Living wage for young people and low paid workers. At the same time Small and Medium Industries will receive 100% financial support for employing apprentices. The tax and National Insurance thresholds will be frozen, Energy prices will be reduced for users which will also help growth and the cost of living. Child poverty will be reduced by scrapping the 2 child benefit cap, introduced by the Tory government, which will be fair to all children. The Council Tax will be reviewed to make sure that does not lay the burden of local services on the people in lower tax band properties. This was a Labour budget that is planning for the Government to achieve their aims, of increasing investment in public services and the NHS, increasing economic growth and paying off the public debt left by the Tory Government and the Liz Truss budget. The only contribution by the opposition was to try and interrupt the delivery of the speech by the Labour Chancellor. They moaned and groaned but offered no real alternative, except for more austerity, cuts in the NHS and public services. There was no argument for increased investment in infrastructure for business. The Labour Government is not prepared to go down the line of reducing the life chances of ordinary people, in order to protect wealth and not opportunity.”
Freeze on Rail Fares
Cllr Irena Hubble (Bridgwater Fairfax West, Labour) said “Absolutely delighted to hear the 2 child cap has been lifted and right that it should raise the roof of the House of Commons. A freeze on rail fares and a rise in the minimum wage are the kind of moves you expect from a Labour government, so it is a start in the right direction. “
Investment in NHS
Cllr Tim Mander (Bridgwater Westover, Labour) “I welcome the investment in the NHS; the scrapping of the two-child benefit cap bringing half a million kids out of poverty; changes to business rates which should help struggling town centre retail and hospitality businesses together of course with the increase in the living wage.”
Impossible Choices
There was a note of concern from Somerset County Chair of Children’s Scrutiny Cllr Leigh Redman (Bridgwater North, Labour) ;- “ Today’s budget once again asks councils to do more with less while families in Somerset are already at breaking point. It offers warm words on prevention and children’s services, but no realistic, long-term funding settlement to keep the lights on in vital local support.”
Leigh continued “Somerset will always do everything possible to protect our most vulnerable children, but without a fair deal for local government we are being forced to make more impossible choices between basic statutory duties and the preventative services that stop families reaching crisis in the first place. The new national prevention grant and SEND commitments sound positive, but they are nowhere near enough to close the gap created by years of rising demand, higher costs and short-term pots of money. Our children deserve stable, sustained investment in family help, foster care and inclusion, not another headline that doesn’t match the reality on the ground. Somerset needs a long-term, sustainable funding settlement – not another sticking plaster – so that local councillors can plan with confidence and give every child the best possible start in life.”
Huge win for anti poverty campaigners
Bridgwater Town Council Leader Cllr Brian Smedley (Bridgwater Westover, Labour) had mixed feelings but welcomed the direction change “This move towards policies we should expect from Labour has only been brought about by pressure from mainstream and left labour MPs and grassroots members. Only last year good socialist Labour MPs lost the whip for supporting this policy. This just goes to show that to achieve this you need a strong left alliance in parliament and in local government. Bringing 450,000 children out of poverty is a good thing. Conservatives brought this in back in 2017, it was the worst of austerity. For a Labour party in Government, it was the right thing to do. It’s a huge win for anti-poverty campaigners and it vindicates those Labour members who took a stand last year.”