The Politics of Pain - Why Governments Tighten Early and Loosen Late

29th November 2025

Every government faces the same dilemma: how to balance the books without losing the public's goodwill.

The classic solution is as old as parliamentary politics itself — take the pain early, then offer relief later.

Economists call it front‑loading; voters know it as the cycle of tax rises followed by pre‑election giveaways. The November 2025 Budget suggests Chancellor Rachel Reeves is following this well‑trodden path.

Front‑Loading the Pain
Reeves's first budgets have been heavy on restraint:

Frozen tax thresholds until 2031 — a stealth tax that quietly pulls more workers into higher bands.

Savings and dividend tax rises from 2027 — announced years in advance, ensuring the pain lands early.

Air Passenger Duty hikes from 2026 — making family holidays abroad more expensive.

Other levies in the pipeline — including a pay‑per‑mile duty on electric vehicles from 2028.

These measures are politically costly, but they establish fiscal credibility and signal seriousness to financial markets.

Holding Back the Rewards
At the same time, Reeves has offered some relief — lower energy bills, expanded free school meals, and the scrapping of the two‑child benefit cap. Yet the bigger "giveaways" are conspicuously absent. The suspicion is that she is saving them for later, when the electoral calendar demands generosity.

The Election Cycle Logic
2025-2027: Tough measures dominate, framed as necessary to close the "black hole" and restore stability.

2028-2029: If growth stabilises, Reeves could pivot to tax cuts, investment packages, or family‑friendly measures.

2030 election run‑up: The government would want to showcase generosity — pensions, childcare, infrastructure — to contrast with the austerity of the early years.

It’s a familiar rhythm: pain first, relief later, timed to maximise political advantage.

Historical Precedents
Reeves is hardly the first Chancellor to play this game:

Gordon Brown (1997–2001): Began with tight fiscal discipline, sticking to Conservative spending limits, before loosening the purse strings with investment in health and education as the 2001 election approached.

George Osborne (2010–2015): Front‑loaded austerity in the wake of the financial crisis, then shifted to tax cuts and giveaways (like raising the personal allowance) ahead of the 2015 election.

Nigel Lawson (1980s): Used early restraint to build credibility, then delivered sweeping tax cuts in 1988 that became a defining political moment.

The pattern is clear: fiscal pain early, electoral generosity later. Reeves’s strategy fits squarely into this tradition.

Risks and Realities
Of course, this strategy depends on the economy cooperating. If productivity remains weak and revenues disappoint, Reeves may find herself with little room to manoeuvre. In that case, the pain may linger longer than planned, leaving voters unconvinced by promises of future generosity. The danger is that the narrative of “black holes” and doom loops becomes entrenched, eroding trust before relief can arrive.

Rachel Reeves’s approach fits a long‑standing political pattern: governments tighten early, then loosen late. The November 2025 Budget was heavy on restraint, but the real test will come in the years ahead. If growth improves, she may yet pivot to generosity before the next election. If not, the cycle of pain and reward may falter — and voters will judge whether the strategy was worth the cost.