High-tax virtue signallers will regret this brutal Budget

Rachel Reeves will present her Budget on Wednesday
Rachel Reeves will present her Budget on Wednesday - Stefan Rousseau/PA

Put the battered old red box back in the cupboard, and cancel the fancy charts prepared for the TV studios. We are only a couple of days away from what is widely expected to be one of the biggest tax raising Budgets of the post-war era. And yet, after telling pollsters for years that they would be happy to pay extra taxes for better public services, now that it is about to happen the public have changed their minds.

There is just one catch. It is too late to reverse course now – instead the voters should stop virtue signalling and demand that a bloated public sector finally starts to deliver better value.

If she feels any nerves ahead of her first Budget, the Chancellor Rachel Reeves can at least assure herself that she has broad public consent for increasing taxes to improve public services, especially if the bill is mostly paid by businesses and the better off. After all, polling consistently shows that the majority of the voters would agree to pay a little more to fund a better health service, improve schools, and fix the UK’s crumbling infrastructure.

A Financial Times/Ipsos poll before the election, for example, found that 37 per cent of voters wanted to pay higher taxes to fund more state spending, against only 30 per cent wanting to pay less. Sure, a few selfish millionaires might moan, but the average person will be right behind the Chancellor.

But hold on. Now that the tax rises are about to be imposed, it turns out that we are having second thoughts. According to research released by the pollsters More In Common today, 53 per cent of us now believe that the government’s priority should be to keep taxes low, compared to only 32 per cent who want “investment in public services” prioritised. With two days left before the Budget, it turns out we don’t want tax rises after all.

It is not hard to understand why. To start with, now that the tax rises are both real and imminent, the impact they will have is starting to hit home. Over the last few weeks it has become painfully clear that there isn’t any serious money to be raised by shaking down the non-doms, raiding the energy companies, or charging VAT on the small minority of parents who send their children to private schools.

Despite what Reeves and Sir Keir Starmer said only a few months ago, the £40 billion or more the government will raise will have to be paid by the vast majority of taxpayers one way or another. Even worse, that is coming at a time when living standards are stagnant, and real wages are barely growing.

More In Common also found 70 per cent of us felt we were getting worse off, with only 7 per cent thinking things were getting better (and presumably they are mostly train drivers). The extra tax we have to pay will mean we have less to spend on everything else, even though budgets are already squeezed.

Next, we have seen over the last couple of months that a bloated public sector will simply spend any extra money on higher salaries and pensions. We have already seen lavish pay awards for train drivers, and for NHS staff, and many more generous rises are in the pipeline.

Billions are already being spent on expensive follies such as GB Energy and the National Wealth Fund, while the bill for housing “irregular migrants”, as illegal asylum seekers are now known, keeps rising all the time. The public’s faith that tax rises really do mean better services has already been shattered. Instead, they already sense they will be paying more for less.

The trouble is, there is no way that Reeves is going to change course now. In reality, the public needs to grow up. Taxation already consumes 40 per cent of the entire output of the economy, and that is more than enough. For years, the average voter has been happy to virtue signal by telling pollsters that they are more than willing to pay extra for better services.

Now that it is actually happening, and they have started to work out they will have several thousand a year less to spend, they have changed their minds. In reality, we are about to be trapped in a never-ending cycle of higher and higher taxes without any improvement in delivery. This week, it is starting to look as if the voters have worked that out – even if it is too late to scrap the Budget tax raid now.