Ed Davey has described Rachel Reeves’ budget as a failure. He said:
This was a botched Budget delivered by a Chancellor who has diagnosed the disease, but refuses to administer the cure.
This Government has chosen to reject the single biggest thing it could do to turbocharge economic growth and repair the £90 billion Brexit black hole.
Labour was elected on a promise of tackling the cost of living crisis and growing the economy – and this is the second budget where it’s failed to do either. For millions of people struggling with higher bills, all this budget really offers is higher taxes.
David Chadwick, our Welsh MP, had this to say:
This is yet another budget that fails to deliver the structural changes needed to deliver for the people of Wales.
My constituents will be bitterly disappointed in the lack of help for the cost-of-living crisis and the failure of the Government to listen to Liberal Democrat calls to make energy bills cheaper and cut VAT for hospitality businesses.
Rural communities have been left abandoned again, with Labour’s refusal to compromise on the family farms tax set to cause devastation to the entire wider supply chain.
The Government has deliberately turned its back on the single most effective step it could take to kick-start growth and fill the £90 billion Brexit-shaped hole in the public finances. No wonder our public finances are in such a rough state.
He made further comments on the lifting of the two child benefit cap, which we opposed from the start:
This is a commendable move that will go a long way to addressing Wales’ sky-high child poverty levels, which are amongst the highest in Europe and something the Liberal Democrats have been campaigning on since 2017.
But this could have been done much sooner; thousands of Welsh Children have been dragged into poverty due to the Conservatives and Labour’s refusal to do this sooner.
This must be the start, rather than the end, to reducing child poverty in Wales, with the level of children in poverty almost stagnant since Labour started running the Welsh Government in 1999, we will need further action.
That is why we are calling on the Welsh Government to introduce 30 hours of funded childcare per week for every child in Wales aged between 9 months and 4 years old.
And he welcomed the release of the investment reseerve of the British Coal Staff Superannuation Scheme back to its members. This will not cost the public purse anything but will make a massive difference to the lower paid staff in particular – the office staff and the nurses, for example, who are its members and are mostly women. In fact, it will bring a gain in taxes.
He has been really active on this issue since he was elected last year:
This is welcome news for the roughly 4,000 former miners who were denied full access to their pension pots in last year’s budget.
I am proud to have been the only Welsh MP to consistently press the UK Government to right this historic injustice. The Welsh Liberal Democrats will continue to stand up for our former mining communities, who have been abandoned by the major parties for far too long.
For decades, coal miners across Wales powered our nation, and many now suffer ill health as a result of that hard and often dangerous work. It is only right that they finally receive the full pension support they have been owed for far too long.
Scotland Spokesperson Susan Murray used a different B word to Ed to describe the budget:
This was a bungled budget from a Labour government who are making many of the same mistakes as the Conservatives did.
Labour was elected to ease the cost-of-living crisis and boost the economy, yet for the second budget in a row it has achieved neither. For the millions still battling rising bills, all this budget really delivers is more tax. And no change to the toxic hike in employer national insurance for small businesses.
There’s the occasional positive step like lifting the two-child cap, a long-time Liberal Democrat campaign goal but overall this is thin gruel.
The Government has deliberately turned its back on the single most effective step it could take to kick-start growth and fill the £90 billion Brexit-shaped hole in the public finances. No wonder our public finances are in such a rough state.
And our Scottish Economy spokesperson Jamie Greene said:
There was precious little in this budget on how to grow the economy. A growing economy would expand the tax base and make it much easier to pay for great public services.
There is also almost nothing in this budget to make life better for key Scottish industries.
There was nothing for the whisky industry, nothing for our food producers facing the hated family farm tax and nothing to make up for this government’s complete contempt for Scotland’s fishing industry.
Scots now have two economically incompetent governments.
Liberal Democrats have set out practical and fiscally responsible plans to grow the economy and get Scotland moving again.
As Rachel Reeves was giving her speech, Whitehall was full of tractors as farmers came to protest last year’s introduction of increase in inheritance tax on family farms.
Sadly, they were disappointed:
It’s outrageous that the Chancellor is doubling down on the government’s betrayal of family farms today.
Tinkering around the edges of the family farm tax will do nothing to reduce the devastating impact on many family businesses and will lead to many closing their farm gates for the last time.
Thousands of farmers have travelled down to Westminster today to plead for the Chancellor’s support – and this Government has shamefully turned their back on them.
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34 Comments
Excellent speech from Ed! Delighted to hear him lead on the damage that Brexit has done to the economy and call for a new trade deal with Europe. This is a simple message that we can tell on the doorstep.
I punched the air when he called out the Chancellor’s decision to continue the freeze on the personal allowance for ANOTHER three years – til 2031! – and just how much it has cost and will cost the poorest in society. I feel this goes to the heart of Labour’s failure to look after the working poor.
And Ed is always excellent when he’s talking about carers. He called out the Government for failing to get to grips with the scandal of Carer’s Allowance and the impact that it has on Carers’ ability to work.
Sorry, Tom, but “the poorest in society” don’t pay tax.
Sadly Tom, Ed sat around the cabinet table for near on 5 years when the coalition delivered budgets that had a devastating effect on public services & beyond. Many issues we face today stem from those budgets. Most voters have little time for the EU debate all over again – you can look across the continent and see economies struggling.
@ David Raw,
” …….’ the poorest in society’ don’t pay tax.”
You’re saying that there’ll always be someone who’ll be the poorest person in society who won’t pay any tax.
You’re quite right in a literal sense, of course, but does this really justify freezing the personal allowance for those who need it most for more than a decade?
A interesting comment from a friend yesterday in response to the budget: “Labour used to be the party of the working class, now it’s the party of the non-working class”.
Did Sir Davey condemn the policy of Austerity/Neoliberalism, which is one of the root causes of our nation’s problems?
If not, why not?
@ Jenny,
I wouldn’t put it quite like this myself but I know what you mean. The accusation is that the Labour is more interested in the social benefits of non-workers than the wages of workers. There has been lots of disquiet about the two child cap but there’s not the same amount of opposition to the freezing of the personal allowance which is most needed by lower paid workers. If the freeze lasts until 2031 that will be over a decade since we’ve had any significant increase.
It’s not just confined to Labour. Lib Dems are good at making the case for better social benefits but not quite so good when it comes to arguing that the lower paid working class should have higher wages or pay less tax.
It shouldn’t be a question of either/or though. Society needs the efforts of workers to make it function – otherwise everything stops. So we do need everyone working who is capable of working to provide the real resources for those who aren’t.
Steve,
I wish you’d stop asking the same question albeit in slightly different ways.
I’m sure we all know why Ed Davey, Vince Cable, Rachel Reeves, Keir Starmer and Kemi Badenoch etc won’t condemn neoliberalism and austerity in the way we’d like them to.
People like to blame austerity under the coalition government but it should be noted: a) the cuts to government spending 2010 to 2015 were less than Labour or Conservatives campaigned for; b) it was what the public wanted, as per opinion polling and 2015 ge; c) although a shock, the economy was in pretty sound condition going in to the EU referendum.
Excellent to see Ed and MPs linking the need for closer economic relations with Europe to alleviating
the cost of living crisis and increasing funding for our deteriorating public services. Labour would not have to raise taxes if we were part of the EU Customs Union and Single Market.
@ Nick,
” Labour would not have to raise taxes if we were part of the EU Customs Union and Single Market.”
Just like membership of the CU and SM saves the French govt from having to do the same?
https://www.lemonde.fr/en/opinion/article/2025/11/26/time-is-running-out-for-the-french-prime-minister-s-strategy_6747848_23.html
@ Jenny Smith. “The party of the non-working class”, Which paper does your friend read ? The Telegraph, The Mail, or The Sun ?
An excellent speech by Ed and others. He’ll never be able to please those on here who have nothing but negative comments to offer.
For those who do not like what I ask, may I suggest that they read no further than my name?
P. S. Does anyone have reasonable answer to my questions relating to what some would see as an incompatiblity between Neoliberalism/Austerity and Liberal Democracy?
@ Steve,
Ok if you insist, I’ll explain why Ed Davey, or any Lib Dem leader in the foreseeable future, won’t ever come out with the line you’d like them to. The constraint on the establishment parties known as the Overton window. He’s not going to venture outside it.
I disagree with the Wiki entry that the Overton Window is defined by what the public consider to be acceptable. They want the re-Nationalisation of the Utilities, for example, but that’s not on offer by any of the establishment parties.
The Lib Dems are an establishment party. There’s no contradiction between neoliberalism and Lib Democracy so long as the establishment is in favour of it. The Labour Party isn’t much different although it wasn’t an establishment party when Jeremy Corbyn was leader. It is now that Starmer is in charge though.
https://en.wikipedia.org/wiki/Overton_window
If Ed is right about the cost of being out of the EU and the Brexiteers argued that a fall in our living standards was a price worth paying then surely it is the Brexiteers that should stand the cost of this until we can get back into Europe.
The gains to the poorest workers by the uplift to the national minimum wage far outweighs any loss incurred by the freezing of the personal allowance.
The refusal to raise tax thresholds, particularly the lowest one, in line with inflation is disappointing. When Rachel Reeves was in opposition she took the line that this was a ‘stealth tax’. She’s since changed her tune, of course!
The basic pension is currently £11,973 per year. The lowest tax threshold, or personal allowance, is £12,570
So we are only one or two years away from pensioners who receive no more than a basic pension having to pay income tax!
“I disagree with the Wiki entry that the Overton Window is defined by what the public consider to be acceptable. They want the re-Nationalisation of the Utilities, for example, but that’s not on offer by any of the establishment parties.”
For what it’s worth my criteria for supporting a political party is not whether it is “establishment” or not but whether it offers a coherent political philosophy that aligns with my values along with deliverable policies. The current “anti-establishment” parties (Reform Ltd and The Green Party) fail that criteria, but the pre-amble the Lib Dem constitution woks quite well. .
“So we do need everyone working who is capable of working to provide the real resources for those who aren’t.”
Put that way it does make those who are working look a bit like jackasses carrying the idle. There are other good reasons to work like providing for family and self, self-respect, saving of capital etc.
@ Tristan,
Yes, you are quite right. I meant to say:
“So we do need everyone working who is capable of working to provide the real resources for those who can’t.”
I’m blaming the auto corrector on my phone! 🙂
Apparently Ed Davey has now unilaterally decided that the party is now opposed to the mansion tax. Unbelievable!
https://www.huffingtonpost.co.uk/entry/bbc-presenter-skewers-lib-dem-leader-ed-davey-over-his-mansion-tax-u-turn_uk_6927f8aee4b08a35c1aeee77
@David. I agree that Davey was cornered by Robinson on Today. I think the mansion tax could be this year’s farm tax. Expensive to bring in. Mostly in London (where Libdems will hope to get more MPs and standard terrace houses cost £2M) and might bring in £400m in 2029. Reform council tax by all means but this version of a mansion tax is for political rather than fiscal reasons and will hopefully (like the farm tax) not happen
@ David le Grice. I’m afraid it’s believable, given its ‘Middle England’
Tom Reeve,
It was also good that Ed pointed out that we had saved people £825 a year by raising the personal allowance when in government.
Jenny Smith and Peter Martin,
I expect the Labour Government would say they are doing things for working people such as increasing the minimum wage levels, freezing some prices and reducing energy prices. Since 1995 the Labour Party has not been the party of those on benefits, it has been the party of people in work.
Russell,
There is general agreement that austerity was the wrong policy at the start of the Coalition Government. The government itself did soften austerity after it was reported that the country had a double dip recession (upgraded later from a recession).
Peter Martin,
From April 2026 the new State Pension will be £12,547.60 a year.
“Excellent speech from Ed! Delighted to hear him lead on the damage that Brexit has done to the economy” [Tom Reeve]
What people seem to be missing is Brexit dealt two blows to the UK economy, there is the one everyone focuses on, namely the actual severing of relations with the EU, and there is the other, the negotiation and effort put into Brexit, which effectively meant the UK government were overtaken and fully occupied by the process of Brexit, causing them to neglect the UK economy for 4+ years; something I remember those with experience of negotiations cautioning about back in 2016…
Thanks to Peter Martin for his comment about the Overton Window.
History presents us with a series of changinging Overton Windows.
Might current socio-economic contexts indicate that it could be time for L. D. H. Q to change its Overton Window too?
Might doing so, perhaps foregrounding its Social Liberalism heritage, increase poll ratings?
Why be an “Establishment Party” when the society the “Establishment” is supposed to care for and not exploit, is in such, overall, bad shape?
More and more lower paid workers paying tax due to fiscal drag, many of them also receiving welfare benefits. That has to be a nonsense . You keep your money, we’ll keep ours. But then Labour have always liked the idea of more and more people being clients of the state.
@ Steve,
One reason for trying to persuade Lib Dems to move away from neoliberalism towards a more traditional Keynesian approach was that Keynes himself was a noted Liberal.
Before Thatcherism and Monetarism came into vogue Keynesianism was inside the Overton window. It would be quite usual for mainstream economic commentators to describe fiscal policy in terms of pressing the accelerator or putting on the brakes. Now it is all about controlling the deficit which doesn’t make any sense at all. So the Overton window can change, but it’s a slow process.
I don’t usually reference Richard Murphy. He expresses some add ideas at times but this piece about Keynes is pretty good.
https://www.taxresearch.org.uk/Blog/2025/11/11/did-the-1970s-really-kill-keynes/
“There is general agreement that austerity was the wrong policy at the start of the Coalition Government”
I don’t think this is correct. Yes lots of people didn’t like austerity, and yes it hurt a lot of people too, but to say it is generally agreed to be the “wrong policy” goes much further.
A country can’t have what it can’t pay for. Borrowing just puts off payment (and repayment) until a future date. If your borrowing can increase output that may be fine but………
“One reason for trying to persuade Lib Dems to move away from neoliberalism towards a more traditional Keynesian approach was that Keynes himself was a noted Liberal.”
Two questions if I may:
My understanding of Keynes is that borrowing should be repaid in times of plenty. this might be politically very difficult in a world where “austerity” is a political sin.
Keynes published his general theory in 1936. I’d assume much less globalisation then compered to now. Is it a problem when capital can freely flow outside a country operating Keynesian policies? To put it another way, the UK may undertake fiscal expansion, but does the benefit move elsewhere?
What about productive capacity? We may want to spend money on infrastructure like solar farms – but what if there is not enough businesses and people able to build them?
@ Tristan,
Keynes’ idea is still valid. If everyone is spending freely it makes sense to run a tighter fiscal policy to restrain inflationary tendencies. The complication is that some countries ’tilt the table’ to run continued trade surpluses which means others, like the UK and the USA ( at least in the pre Trump era), which have a more liberal approach end up running trade deficits. The resultant loss of ££ and dollars from economies have to be taken into account.
Yes the benefit can move elsewhere when the economy is expanded by either fiscal or monetary means. So this is a not a problem particular to Keynesian theory.
All economics is, or should be, mainly about the management of available resources rather than money per se. Your last point is a recognition of this. Having said this there is no problem in importing what we need providing trade is balanced.
I agree with Keynes, and disagree with some MMTers, on the need for trade to be balanced. The problem is on how to do it. If we let the currency freely float and we don’t have trade barriers it won’t be balanced as long as others are determined to run continued surpluses.
@Peter Martin
Thank you!
Thanks again to Peter Martin!
Might the considerable unfairness of our tax set up which favours the wealthy and takes too much from the not wealthy be a relevant context of this discussion?
axresearch.org.uk/Blog/2025/10/24/the-moral-case-for-tax/