Spring Budget Leaves Labour Facing Squeeze On Manifesto Plans

Tight public finances after the next election could leave any potential Labour government forced to make significant decisions on taxation and borrowing to pursue its manifesto plans, after Wednesday's Budget saw chancellor Jeremy Hunt eat into the party's plans to raise revenue.

The Budget on Wednesday saw a raft of changes to taxation, including a two per cent cut to National Insurance contributions (NICs) in part funded by an abolition of the "non-dom" tax status and an extension of the windfall tax on oil and gas companies - both of which Labour had intended to abolish to raise money for schools and this NHS.

Shadow chancellor Rachel Reeves has not said Labour would reverse decisions Wednesday's budget despite it eating into some of Labour's revenue raising plans, also saying her party would "go through every pound spent, every tax raised" in order to make sure Labour are able to "continue to fund those commitments" in its planned manifesto. 

"We will identify the savings we can make to fund this," she told BBC Radio 4's Today programme. 

It comes against a backdrop of economists warning not only has Hunt left "buffer room" in the budget that the Office for Budget Responsibility (OBR) has described as "historically" low, but the spending plans forecast post-2024/25 could lead to deep spending cuts in unprotected departments. 

"We fully expect that we are going to inherit possibly the worst financial position that any government has received in modern political history and because of that, we've laid out our fiscal rules; we're going to abide by them," a Labour source told PoliticsHome.

"The shadow chancellor has been really public on it... we have have fiscal rules, and we are going to be having to make some tough