Under the last Conservative government, the UK’s national debt went from £1.2 trillion in 2010 to £2.7 trillion in 2024. The Tories ran a deficit every single year they were in office, presided over record levels of welfare spending and a 70-year-high taxation burden. They took the national debt, as a percentage of GDP, from 65% to 96%. Just the interest payments alone on the UK’s national debt now make up close to 10% of all public spending, at over £100 billion per annum – almost double the entire defence budget of £62 billion. During their 14-year period in office, the Tories spent £177 billion of taxpayers’ money on foreign aid alone.
Labour’s budget last week was quite simply a continuation of the Conservatives’ high-tax, high-welfare and high-spend policies that will further hammer those who are working to pay for those who are not. It will penalise those prudently trying to save, and cumulatively, it will materially exacerbate the country’s already highly precarious debt position. Since taking office, Labour has now levied £70 billion of tax rises on businesses and workers – and by the end of this parliament, the tax burden, as a percentage of GDP, will reach a record high of 38%.
Over the next five years, welfare spending will rise by £73.2 billion to £406 billion per annum.
Reform UK Dorset
Pernicious policy
Labour’s most pernicious policy in the budget, that of freezing tax thresholds, is actually just a continuation of the Conservatives’ policy introduced in 2021 by Rishi Sunak. The Conservatives planned to freeze tax thresholds until 2028, and Rachael Reeves has extended the Tory policy until 2030-31.
The result will be that millions of working people will be “fiscally dragged” into either paying tax for the first time, or into higher tax bands. Labour will use a considerable portion of the £26 billion raised from tax increases to fund a welfare spending splurge: most notably, the ending of the two-child benefit cap.
Analysis by the Centre for Social Justice has found that a family with three children, with at least one parent claiming the average rates of Universal Credit and other benefits, will receive £46,000 per year by 2026-27. For a family with five children, this rises to £55,000.
One element of this under-discussed policy is the very significant payments that will go to foreign nationals. As of June 2025, the DWP revealed that there were already 1.26 million foreign nationals claiming Universal Credit. Professor Matt Goodwin has estimated that there are 341,700 foreign-born families that will benefit from the decision to lift the two-child cap, with households from Pakistan, Bangladesh, Nigeria, and Somalia being the largest beneficiaries.
It is simply unconscionable to levy tax rises on British workers to pay for the benefits of foreign nationals. Additionally, the OBR estimates that net migration will rise to 340,000 per year during the forecast period – the highest outside of the Conservatives’ mass immigration wave – and spending on asylum accommodation will be £15 billion over the next decade, up from the previous estimate of £4.5 billion.
Immediate measures
The truth is, none of these tax increases need to happen. They are choices that Labour has made. It has now emerged that the OBR told the Treasury several times in the lead-up to the budget that due to higher than expected inflation and wage growth, the government would in fact be within their fiscal rules and actually have a surplus of over £4 billion. This reality is clearly in sharp contrast to the picture that Rachel Reeves articulated to the country regarding ‘black holes’ to justify her tax raid on working people. Given the seeming disparity between the economic facts and what she has stated to parliament and to the nation, I cannot see her position as tenable.
As immediate measures, we need to completely end all welfare payments to foreign nationals, scrap our foreign aid budget, scrap net zero to slash families’ energy bills and start incrementally, as fiscal conditions permit, raising the point at which people pay tax so they can keep more of their own money. As Reform’s leader, Nigel Farage, said in his post-budget address to the nation, Labour and the Conservatives broke Britain; Reform UK stands ready to fix Britain, and with our national debt increasing by £428 million per day, that cannot come soon enough.
Thomas Gargrave
Reform UK Dorset
