Voters could abandon centrist parties if budget fails, warns former cabinet secretary | Budget 2025

Voters will look elsewhere unless Rachel Reeves uses next week’s landmark budget to show “centre” politicians can solve the UK’s deep-seated economic problems, former civil service chief Simon Case has said.

Case told the Guardian during last year’s general election, when he was still cabinet secretary, that he believed Labor would be forced to break its manifesto promise not to raise taxes due to the state of the public finances.

The evolution of Rachel Reeves’ fixed financial pitch has been dramatic; The Prime Minister gave an intense briefing that he would have to breach the Labor Party manifesto and raise income tax before the Treasury suddenly backtracked on the idea.

Instead, it is expected to raise more revenue through a series of changes, including possible taxes on gambling and potentially freezing income tax thresholds; but this is an actual increase that would allow Reeves to argue that this does not violate the manifesto.

Before the election, some fiscal think tanks said Labour’s pledge not to increase income tax, national insurance or VAT was unrealistic. Case said he was not allowed to give advice during pre-budget outreach discussions, but he agreed.

“We were very concerned about the promises they made in Whitehall before the election not to raise taxes, because we clearly knew the real state of the public finances they would face when they arrived,” said Case, who left the post last December and is now among different colleagues.

Case said voters could abandon centrist parties such as Reform UK if Wednesday’s budget fails to solve deep-rooted problems around tax, spending and debt.

“Yes, this budget will be critical to the fate of the intertwined Keir Starmer and Rachel Reeves,” he said. “But this budget is even riskier than that because it raises the question of whether governments at the center can answer the fundamental questions that are holding the UK back. If they can’t, voters will look elsewhere. This is a really important moment.”

Case suggested that debates about whether specific tax increases could break the manifesto pledge were to some extent missing the broader point.

“We’re talking about a few billion here or there that will be extremely politically significant, because that’s the difference between accepting the fact that the process is unsustainable and flouting the manifesto,” he said.

“Nobody’s really giving a big talk: if we’re going to change the UK economy dramatically, we need to talk about how we spend hundreds of billions.”

Reeves’ troubles are deep-rooted, Reeves said: “Some of this has to do with the current political situation, of course. But there are other long-standing problems that seem to be getting more and more difficult.”

“Our economic productivity is poor, despite the efforts of many governments to fix this. There is also huge pressure to spend on public services because they are not performing as we would like. Any budget for the next few years is going to be incredibly difficult.”

One of the measures approved in the budget is a renewed crackdown on illegal e-cigarettes; This includes giving border and tax authorities new powers to restrict products, as well as QR codes that will make it easier to detect fake products for those who are legitimate.

The move comes five months after the government banned disposable e-cigarettes in a bid to reduce environmental damage and stop their widespread use among children. But since the ban was adopted, the government has struggled to limit the spread of illegal products.

Reeves will use his budget to introduce a range of new tools to combat the illegal e-cigarette trade, officials said. These include giving Border Force and HM Revenue and Customs the power to instantly seize illegal e-cigarettes and issuing fines of up to £10,000 to rogue traders who break the law.

A government source said: “Britain’s high streets are flooded with illegal e-cigarettes by rogue traders. The Chancellor will crack down, giving Border Force and HMRC the power to instantly seize dangerous e-cigarettes and hit offenders with £10,000 fines. We protect shoppers and support honest businesses.”