It’s fair to say Rachel Reeves’ second budget has been about as controversial as her first one. The chaos in advance of the budget has continued after with blame games and briefings, the head of the OBR resigning, an emergency press conference from the prime minister and the PM’s chief secretary blowing apart their previous claims of a £22 billion black hole. While the optics and politics might be bad for ministers, the budget itself is unravelling before our eyes.While the chancellor and her team have stressed the £21.7 billion of headroom, as Adam Smith explained in the Telegraph, this figure is “built on sand”. In order to maintain this headroom, Reeves is now committed to cutting departmental spending, increasing energy bills, and reining in welfare spending (not really, just slowing its increase).While we’d certainly cheer on two of those - you can guess which ones - does anyone really think Labour backbenchers would tolerate any of it, beyond the reimposition of green levies on energy bills that is… And that’s before her back-loaded tax rises kick in.Elsewhere, Reeves delighted in cutting business rates for pubs by 5 pence, but as ever it was just more smoke and mirrors. The loss of rate relief combined with new rateable values mean pubs will see their tax bills sky rocket. Throw in minimum wage increases and bigger national insurance bills and you get 90 per cent of pubs now expecting to hike the price of a pint while the hospitality sector could lose 100,000 jobs. Not forgetting that taxes already account for 28 per cent of your pint!
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