The atmosphere turned blue, literally, as the iPhone backlights of the Tory benches lit up in the minutes before Prime Minister’s Questions. There they were on the green benches pinching eagerly at their touchscreens, zooming in on all sorts of charts, footnotes and bullet points. We quickly realised in the press gallery that the whispered rumour of a full Office for Budget Responsibility (OBR) Budget forecast leak was real. PMQs, always just a preamble on Budget day anyway, went on as a formality yet we were already learning what, broadly, Rachel Reeves would announce.
The Chancellor looked annoyed by the Deputy Speaker’s decision to make a teacherly statement about “extensive briefing to the media” and leaks being a “a supreme discourtesy” to the Commons, which set back the start. Then Reeves began and the Budget took shape along the lines that have been briefed to journalists in recent weeks. In a long statement, she faced considerable jeering. Her junior minister Torsten Bell, an important architect of this Budget and former Resolution Foundation wonk, provided covering fire with barbed comments directed at the Tories.
Tensions reached fever pitch when Reeves announced the abolition of the two-child benefit cap, to cheering and the waving of parliamentary order papers by her own MPs. The Tories weren’t happy. “See what they get angry about,” the Chancellor jeered. It was a measure she had been forced into by her own restive MPs, but she decided to embrace the political dividing line it has now opened up with the Conservatives.
In response to the Budget statement, Kemi Badenoch, observed by her husband Hamish sitting in the visitor’s gallery, attacked it as a tax-raising fiasco (thanks to the OBR leak she had advance sight of the measures and more time to prepare). The Tories have already coined a line, destined for the headlines of unfriendly newspapers, that the smorgasbord Budget turned out to be a dog’s breakfast. Badenoch also went on a personal attack against Reeves, mocking her remarks about “mansplaining” in a recent newspaper interview. “No class whatsoever,” Wes Streeting said in response from a sedentary position.
Badenoch missed the mood of the chamber when Jennie, guide-dog to Lib Dem MP Steve Darling, began rolling around adorably on the Commons carpet, distracting the attention of the Treasury bench. “They’re all pretending they’re not listening,” she fumed to a chorus of we’re not.
The MPs have begun days of debate on the Budget resolutions. First to speak was the leader of this year’s well-organised welfare rebellion, Meg Hillier. The Hackney MP praised Reeves and described the rape clause of the two-child benefit cap as “Victorian”. Lifting the cap, she said, meant Labour was “investing in the future of Britain”. Then the Lib Dems’ leader Ed Davey gave a response so middle-of-the-road he was cruising down the central reservation. The lifting of the cap was “excellent” and a Lib Dem manifesto commitment (for this he was heckled as a minister in the coalition that first proposed the cap).
And yet, he said, Reeves was “like a doctor who has diagnosed the disease but is refusing to administer the cure” because she will not talk about Europe. The Liberals want Britain to rejoin the customs union on the basis that it would bring immediate economic benefits. It would certainly improve these pesky OBR forecasts. He condemned the pay-per-mile scheme for electric vehicles, called for a windfall tax on bank profits and said the most objectionable measure of all was the income tax thresholds freeze extension (something he can blame both Labour and the Conservatives for).
A succession of back-bench Labour MPs rose to praise the Chancellor, while the Tribune Group with its large soft-left membership welcomed it as a “Labour Budget”. Catherine West branded it “a family-friendly budget”. Keir Starmer’s own parliamentary private secretary (PPS) Abena Oppong-Asare rowed in with support early on in the debate. Tom Hayes, MP for Bournemouth East, said he grew up in poverty and welcomed the lifting of the two-child cap. Cat Smith, the Lancaster left-winger, said the government was lifting children out of poverty though expressed tongue-in-cheek unease about one of the new taxes “as someone who is partial to a milkshake”.
Reform’s Richard Tice slammed a “hokey-cokey Budget” in which “all of the incentives are bad”. He said that in two Budgets Reeves had managed to raise £70bn in taxes, the second highest of any chancellor. It was Tory Tom Tugendhat who made the fair criticism that about £30bn of the £70bn in taxes raised by Reeves have been intended to pay for the pensions triple lock, which the Reform party supports. Tugendhat is a rare Tory who wants it scrapped. Perhaps in that exchange we see the opening of a future battle on the right.
Jeremy Hunt, despite recent reporting that he provides advice to the Chancellor on how to do the job, was quietly merciless. She had a simple decision, he said, to cut welfare spending or to raise taxes. Because of the welfare rebellion and pressure to lift the cap, he argued, she chose the latter. He said lifting the cap was “totally unfair”. Labour backbenchers jeered. Self-identifying as one of “those terrible Tories”, he told them “progressive instincts don’t pay the bill for good public services, a strong economy does”. The Labour rising star and former Financial Times journalist Yuan Yang pointed out that Hunt’s two Budgets had left Reeves with the smallest slither of fiscal headroom since the creation of the OBR. The back and forth will now go on until Tuesday, with a break for the weekend. But on this first day it looks like the Chancellor and Prime Minister have managed to land this package safely with the group who matter most at this moment of political peril: their own fellow Labour MPs.
[Further reading: The Budget of last resort]
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