Big spender Gambling on old-school approach

The days of tax and spend are supposed to be over, but clearly no one told Rachel Reeves.

- Larry Elliott

The chancellor's debut budget - with its sharp increases in spending, taxes and borrowing - was a budget from yesteryear.

In her speech, Reeves harked back to the times Labour governments had arrived in power - in 1945, 1964 and 1997 - needing to sort out Britain's problems. This was most like a mid-1960s budget, with its vision of a bigger state used to modernise the economy.

Labour MPs loved it as Reeves announced extra cash for the NHS, schools, the armed forces, railways and roads, half of which will be paid for by extra taxes and half by additional borrowing. Apart from the pandemic, it was the biggest rise in health spending since 2010.

The numbers are certainly big. As the Office for Budget Responsibility pointed out, spending will rise by just short of £70bn a year, taxes by £40bn a year and borrowing by £32bn.