A lot done… a lot more to do? MPs, unions and think tanks react to Budget – LabourList

Labour MPs, unions and think tanks have broadly welcomed the Chancellor’s Budget – but hit out at the OBR’s “unacceptable” leak.

Rachel Reeves received significant praise for scrapping the controversial two-child benefit cap and for hiking levies on the gambling sector, but received some criticism for not going far enough on taxing the wealthy and for freezing income tax thresholds.

‘Removing limit very welcome’

Among those who praised the decision to scrap the cap was former Labour Prime Minister Gordon Brown, who said: “Rachel Reeves has today done more to transform the lives of 450,000 of Britain’s poorest children than any of the seven previous Conservative chancellors, who, in 14 long years, did nothing but harm to the lives of vulnerable children.”

Helen Hayes and Debbie Abrahams, chairs of the committees for education and work and pensions, both welcomed the decision to scrap the two-child benefit cap.

They said: “Removing the two-child limit is very welcome. It will almost immediately lift hundreds of thousands of children out of poverty and stop even more from being drawn into it.

“The policy was directly linked to damaging the opportunities of a generation of children, who were dragged into poverty through no fault of their own.

“Removal of the two-child limit is a positive start. We will keep watch on what the government proposes in its forthcoming Tackling Child Poverty Strategy.”

Professor Ashwin Kumar, director of research and policy at IPPR, and former advisor to Gordon Brown, said the Budget was a “landmark moment” and added: “All eyes now turn to the upcoming child poverty strategy – the chance to ensure no child is left too hungry to learn, too cold to sleep, or too poor to thrive.”

‘A proud day’

Labour MPs from all factions praised the move, from former Shadow Chancellor John McDonnell to North Durham MP Luke Akehurst, who described the cap as “pernicious”.

Calder Valley MP Josh Fenton-Glynn said that it was a “proud day” following the decision to scrap the two-child benefit cap.

He said: “The Budget confirms we are going to leave office with fewer children in poverty than the Tories left. A proud day. That’s what Labour governments do.”

Kim Johnson, MP for Liverpool Riverside, said: “I’m ecstatic that all those organisations who campaigned against the two-child limit have had a great win today.”

York Central MP Rachael Maskell said: “While I look forward to scrutinising the detail, this is a strong budget for children and young people, lifting children out of poverty and giving them a strong and secure start.”

James Asser, MP for West Ham and Beckton, said the decision to tackle child poverty was “very good news for his constituency” and said: “I have estates where the majority of children live in poverty.”

‘The sorts of Labour policies the country needs’

Luke Hurst, national coordinator for the soft left campaign group Mainstream, said: “This Budget shows what’s possible when Labour hears and heeds the voices of its mainstream.

“Scrapping the two-child benefit limit, allowing local government to levy their own funds further, reforming taxation to unlock revenue and promote fairness: these are the sorts of Labour policies that the country needs.

“Of course, we must go even further to tackle the cost of living and lay the foundations for a new economic settlement. This will only be possible if Labour embraces democracy and debate, and draws upon the energy of its whole movement. We’ll continue to fight for a more open party with a more transformative offer.”

Katrina Murray, MP for Cumbernauld and Kirkintilloch, said: “It’s absolutely clear that this is a Labour budget. There has been a deliberate push on infrastructure, growth and wages. I welcome the move on the two-child cap and the funding of the youth jobs guarantee… The political decisions have been the right ones.”

MP for Loughborough Jeevun Sandher said: “Getting energy bills down by £150 makes life more affordable. It will help get inflation down by 0.4%, making it easier to get more interest rate cuts. Ending the two-child limit means far fewer hungry kids. We have shown we can make life more affordable for families.”

Terry Jermy, MP for South West Norfolk, said he was “very happy” to see the two-child benefit cap removed and also welcomed the government’s continued commitment to the triple lock, the continued freeze on fuel duty and a concession for farmers that will allow for the easier transfer of reliefs available between married couples.

He said: “The government must understand the strength of feeling on this issue and the precarious nature of farming in the UK. We must ensure there is a future for farming in this country and I will continue to do everything possible to press the government on this issue.”

‘Only overhaul of economy will stop Reform’

Left-wing pressure group Momentum also praised the decision to scrap the cap, describing it as a “major win for anti-poverty campaigners and a clear vindication for the Labour MPs suspended last year for voting to scrap it”.

However, co-chair Alex Charilaou criticised the Chancellor for not going further in hiking taxes on the wealthy.

“By sticking to an unnecessarily restrictive fiscal framework and refusing to take more radical steps to tax wealth, it’s clear our public services will continue to be underfunded and millions will still suffer declining living standards.

“Only a complete overhaul of the British economy will beat Reform and deliver real change for the people Labour was founded to represent.”

‘Strong Budget informed by Labour values’

Joe Dromey, general secretary of the Fabian Society, said: “This is a strong Budget, informed by Labour values.

“The Chancellor made the right call in freezing thresholds, rather than increasing income tax. As we’ve argued, this will raise a significant amount, without breaking a key manifesto commitment.

“Through asking those with the broadest shoulders to pay a bit more, the Chancellor has been able to increase headroom against the fiscal rules, breaking out of the doom-loop we’ve been stuck in, and providing greater economic security.

“But more importantly, it means no return to austerity. The Chancellor has protected public spending and investment. And she has scrapped the two-child limit, fulfilling Labour’s moral mission by lifting hundreds of thousands of children out of poverty.”

MP ‘delighted’ by gambling taxes hike

Theo Bertram, director of the Social Market Foundation, welcomed the decision to hike gambling taxes – a move called for by Gordon Brown as a means of scrapping the two-child benefit cap.

He said: “We are pleased the government has listened to our case that the more harmful and addictive products should be taxed more highly. This puts the UK in line with countries like Austria and US and will help tackle gambling harm. We also welcome the increase of GBD to 25%, which is precisely what we called for. 

“We need to see the details, but we welcome the indication that horse racing will be treated differently, without such big increase, because it is a lower harm form of gambling.”

Worthing West MP Beccy Cooper, one of those who had campaigned for changes to gambling taxes in the run-up to the Budget, said she was “delighted” by the announcement made by the Chancellor.

“In raising the level of tax paid by remote gambling companies, the Chancellor has recognised that these are some of the harmful products on the market.”

‘Long-standing injustice finally put right’

One of the other measures included in the Budget was a pension boost for ex-mineworkers from the release of £2.3 billion in reserves from the British Coal Staff Superannuation Scheme (BCSSS).

Easington MP Grahame Morris, who chairs the Labour Group of Coalfield MPs, described the measure as a “hard-won victory for all in the coal industry”.

“These achievements are never easy wins, they are hard-fought gains made possible only through the tireless dedication of thousands of people working toward a shared goal.

“Everyone who worked in the coal industry deserves to see this long-standing injustice finally put right. I’m proud that Labour has made this a priority, and that 738 BCSSS pensioners in Easington will now receive a significant uplift to their pensions.”

‘Where has this Labour government been?’

Campaign group Compass welcomed the progressive measures included in the Budget but lamented the fact that it had taken around 16 months to take such steps.

Compass’ director Neal Lawson said: “Scrapping the two-child benefit limit, bolstering local funds with a tourist tax, putting the biggest burden on those with the broadest shoulders – where has this Labour government been?

“These are huge wins for everyone who has been working to pressure the Government into progressive action.

“Why it’s taken them this long – and why they’ve had to play their hyperfactional games in the meantime – will never make sense.”

‘Final nail in the coffin’ for Tory austerity

The GMB said that the Budget marked the “final nail in the coffin” for austerity.

General secretary Gary Smith said: “Today’s budget looks like the final nail in the coffin for the Conservatives’ failed austerity project.

“Key public services, essential national infrastructure, and communities across the UK suffered deep wounds because the Tories made the wrong economic choices – we must never go back to those dark days.

“The challenge for Labour is to grip the task of rebuilding our economy and country, lock in essential investment to create growth, and start bringing a bit of hope to people.”

‘Significant gaps must be addressed’

However, while the Fire Brigades Union welcomed “steps in the right direction”, general secretary Steve Wright said the Budget still left “significant gaps… that must be addressed if our public services are to be rebuilt”.

“The increase in the statutory minimum wage is welcome and will help many low-paid workers. However, we had hoped to see more action to boost pay across the board, reflecting Labour Party conference policy and the reality of the cost of living. Lifting the two-child benefit cap is a long-overdue commitment to addressing child poverty.

“However, without meaningful action on taxing extreme wealth, this Budget does not yet provide secure, long-term investment or break with austerity.

“The fire service will continue to face huge pressure and the risk of further cuts, including fire station closures, cuts to numbers and continued real-terms pay cuts for firefighters.

“As an affiliated union, we will continue to work with the Labour government. But, under my leadership, we will stand firm in pressing for the investment our service urgently requires to keep our communities safe.”

Unite: ‘Billionaires left largely unscathed by Budget’

Prior to the budget, Unite had signalled that the Chancellor’s announcement would prove decisive in the union’s continued affiliation with the Labour Party.

General secretary Sharon Graham criticised the Chancellor and said that workers would end up paying the price from the Budget from “stealth taxes”.

The union put out a statement saying: “On the fundamental issues of who pays for the crisis and the investment required to back British industry, the wrong decisions are being made.

“Millions of workers are being forced to live hand to mouth, surviving rather than living.

“Communities are being ground down by surging energy bills and baked-in high food prices, while at the same time, profits soar.

“Energy companies have made over £30 billion in profits, costing households £500, while supermarkets led by Tesco – which made £3.1 billion – are coining it in.

“The chancellor has picked a side. Health workers, engineers, and tanker drivers will pay through stealth taxes, while city bankers and billionaires go largely unscathed”

Scathing criticism of OBR

Measures included in the Budget were accidentally leaked by the Office for Budget Responsibility after its economic and fiscal outlook document was published online almost an hour before the Chancellor addressed MPs.

In a statement, a spokesperson said: “We apologise for this technical error and have initiated an investigation into how this happened. We will be reporting to our oversight board, the Treasury and the Commons Treasury Committee on how this happened, and we will make sure this does not happen again.”

Jeevun Sandher hit out at the OBR’s accidental early publication of its forecasts as “completely unacceptable”.

He said: “The OBR has got their key judgements wrong for 14 years. Consistently underestimating the impact of public spending (cuts) on growth. Today they’ve released the forecast document early. Completely unacceptable.”

Akehurst also hit out at the OBR leak and said: “It is shocking that they should be responsible for leaking such market sensitive information and I hope appropriate action will be taken.”

Bolton East MP Phil Brickell told LabourList: “Heads should roll at the OBR.”

Meanwhile TUC general secretary Paul Nowak said “The TUC has consistently called for a root and branch review into the OBR.

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