“Change”? What is “Change”? Change was the one word on the front of Labour’s manifesto. In July 2024, people took Keir Starmer’s Labour Party at its word and voted for his promise of “Change.” However, Labour didn’t take long to show that it was just more of the same old Westminster.
Labour’s Broken Economic Promises weren’t offering change for the better, but change for the worse. Labour revealed that they were not truthful to the British public. They presented a Budget with broken promises marked by significant tax increases, heavy borrowing, economic gaps, agricultural difficulties, and National insurance.
Broken Trust: Broken Economy
The British public needs a government that keeps its promises and puts people at the heart of every decision. Yet Labour’s latest Budget reveals a stark departure from its election commitments, striking at the core of public trust. The government faces growing questions over its economic policy after a Labour minister failed to commit to the party’s number one mission. They promised to increase the economy ahead of Sir Keir Starmer’s reset of government priorities on Thursday.
Alex Norris was repeatedly pressed on whether the government makes the UK the fastest-growing economy in the G7. But he refused to provide a clear answer. Action, transparency, and fulfilling promises are essential for trust. Each broken promise widens the gap between the government and the people, shaking the foundations of our democracy. Building trust is impossible when you say you won’t hit the working people and then hit them anyway.
A Black Hole: Labour’s Benefits From its Power
The Office for Budget Responsibility (OBR) recently dispelled the myth of Labour’s alleged £22 billion “black hole”. It is a financial gap primarily created by their spending decisions. Labour’s Broken Economic Promises has a long tale.
Nearly half of this gap is due to pay raises given to unions, showing that Labour’s priorities lie more with union interests than the public’s well-being. For instance, Sir Keir Starmer has spent nearly £8 million daily on pay raises for striking train drivers. The settlement with the train drivers came when it was disclosed that Sue Gray was paid more. Sue Gray, Sir Keir’s Chief of Staff, is paid more than him after a change to the rules on special adviser pay.
Ambiguity: An Approach to Increase Taxes
Labour promised at the general election not to increase taxes on working people. However, the party did not define who it had in mind. The government is considering increasing tax on asset sales, such as shares and property, freezing income tax thresholds, and changing inheritance tax.
The prime minister insists these changes will not hit working people. But, he has struggled to define who he seeks to protect from tax rises. As the Budget approaches, the Conservatives have accused Labour of “reinventing” what counts as a Budgeting person. However, ministers have not ruled out continuing to freeze income tax thresholds beyond 2028. It is a policy they inherited from the Conservatives, dragging more people into higher bands over time as wages rise with inflation.
Labour’s Broken Economic Promises: Raised Taxes
Labour had pledged not to raise taxes on working people. Yet, they’ve imposed a £25 billion tax hike by increasing National Insurance. They push the tax burden to an unprecedented level in the nation’s history. The Office of Budget Responsibility says that 76% of the NI hike will come from workers’ wages. So, it’s bad for business, bad for workers, and bad for growth.
For the first time, a 20% Inheritance Tax will be imposed on family businesses and farms, devastating local communities in Thirsk and Malton. Enterprises will be close to paying taxes rather than passing them on from generation to generation.
Labour’s Broken Economic Promises: Increased Borrowing
Labour has raised borrowing by billions each year of this Parliament. However, they had promised not to increase borrowing. According to the OBR, this will increase inflation and mortgage rates, impacting working families.
Furthermore, the Chancellor admitted they have “fiddled the figures” by abandoning fiscal rules, allowing debt to grow unchecked. Keir Starmer and Rachel Reeves always intended to enable borrowing to surge and break their promises. They lacked the courage to admit this to the British public before the election.
Labour’s Broken Economic Promises: Lowered Wages and Reduced Job Opportunities
There has been a £25 billion increase in employer National Insurance Contributions (NICs). This is one of the most alarming shifts and a clear violation of Labour’s campaign promises. According to the OBR, this added burden on businesses will hit employees the hardest, pushing down wages and reducing job opportunities.
For communities like Milton Keynes, with 99.5% of small and medium-sized businesses supporting 136,000 private-sector jobs, this “tax on jobs” will be devastating. Businesses already grappling with rising costs will find it harder to grow, invest, and hire. Some results will be Fewer jobs, pay raises, and opportunities.
Labour’s Broken Economic Promises: No Agriculture for Future
The Labour Government has committed a shameful betrayal by breaking another promise: not introducing a Family Farm Tax. This severely undermines farmers’ ability to pass their farms on to the next generation. In 2023, Labour said they would not change agricultural property relief (APR), which allows agricultural property to be passed on inheritance tax-free.
However, Labour announced that from April 2026, those who own farms worth over £1 million will now have to pay 20% inheritance tax. This broken promise threatens food security by forcing the sale of family farms. It complicates British food production when farmers struggle with soaring costs and rising energy prices. This sudden tax increase isn’t just a hit on farmers. It’s a direct assault on working families and the future of the agricultural communities in rural areas and across the country.
Labour’s Broken Economic Promises: A Lie on National Insurance
Then there’s Labour’s pledge on national insurance. Labour promised they would not put up national insurance. After the election, they shimmied and said that would only be “on employees”. However, placing the burden on the employer’s contributions to their employees has a knock-on effect on employees.
As the Fiscal Studies Institute mentioned, it will proportionally hit those employing lower-paid workers harder and flow through to lower pay. They also say higher national insurance contributions “will burden people—mostly workers”. Moreover, the most significant increase in labour costs will fall on low earners.
