Rachel Reeves raised taxes by £26bn in her second Budget yesterday, taking the burden to an all-time high of 38% of GDP by the end of this parliamentary term. A freeze in personal tax thresholds is being extended by three years, salary sacrifice pension contributions will be capped at £2,000 before national insurance applies, and a council tax surcharge will see homes worth more than £2m pay higher rates. The Chancellor also scrapped the two-child benefit cap, adding around £3bn to the welfare bill, and raised the minimum wage for over 21s by 50p an hour. The OBR revised down average GDP growth over the next four years, but the bond markets reacted positively, meaning Britain’s borrowing costs should fall. Jakarta has overtaken Tokyo as the world’s most populous city, according to the UN, with some 42 million people living in the Indonesian capital. Bangladesh’s Dhaka comes in second with 37 million while Tokyo has dropped into third with a relatively measly 33 million.

“What a way to waste a landslide majority”

The best that can be said about yesterday’s Budget, says Robert Shrimsley in the FT, is that “it could have been worse”. Rachel Reeves hasn’t been fiscally reckless; the bond markets are happy. But most Britons will have woken up this morning feeling not only poorer but also none the wiser about what, exactly, this government is trying to do. Having twice tried and failed to get a grip on welfare spending, they are now increasing the tax burden to a record high to pay for yet more of it – specifically by scrapping the two-child benefit cap. The continued freezing of income tax thresholds will eventually bring a whopping 5.2 million people into paying tax and shift 4.8 million into the upper rate band. Gordon Brown talked of “prudence with a purpose”. Reeves is prudent alright. Where’s the purpose?

The goal is obvious, says Aditya Chakrabortty in The Guardian: “to buy time”. The government’s poll ratings are “down the U-bend”; backbenchers are readying themselves to defenestrate the prime minister. So rather than stimulating much-needed growth the Chancellor is tapping taxpayers for an extra £26bn – to keep our “unfortunate, empty, placeholder of a PM” in office for a few months more. It’s shameful. Labour has again broken its manifesto promise not to increase taxes on working people. The small measures to improve voters’ lives, such as cutting energy bills and freezing train fares, will “barely be noticed” amid rising bills and flat wages. And it won’t save Starmer and Reeves – once the public judges you worse than the “calamity couple” of Liz Truss and Kwasi Kwarteng, it’s over. “What a way to waste a landslide majority.”

🏠💰 Perhaps the most egregious part of this “farrago of bile, envy and nastiness”, says Allister Heath in The Daily Telegraph, is the chancellor’s “taboo-breaking” tax on properties worth over £2m. As with the 40p tax rate introduced in the late 1980s, relatively few homeowners will be hit at first. But the threshold will doubtless be lowered over time, “snaring many more”.