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  5. UK's Labour Government Imposes Significant Tax Increases in First Budget

UK's Labour Government Imposes Significant Tax Increases in First Budget

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The Labour Party's Chancellor of the Exchequer, Rachel Reeves, has announced a tax hike as part of the party's first budget since returning to power. The tax hike, valued at £40 billion, will be used to fund public services and bolster the government's finances. The tax increase will come from a hike in employers' national insurance contributions, which will raise £25 billion, and changes to inheritance tax, which will raise over £2 billion. This move is part of the government's effort to "invest, invest, invest" and spur economic growth.

  1. GB
    Rachel Reeves
    Labour Party
    1. I won't cut capital budgets to make up for shortfalls in the day-to-day running costs of departments.
    2. To restore stability to our public finances. To protect working people. To fix our NHS. And to rebuild Britain.
    3. I am restoring stability to our public finances and rebuilding our public services.
    4. The choices that I have made today are the right choices for our country.
  2. GB
    Edward Allenby
    Oxford Economics
    1. While fiscal policy is expected to tighten over the course of this parliament, we remain relatively upbeat about the broader outlook for the UK economy, so I'm not sure the concept of 'pain' necessarily applies if one is thinking beyond just fiscal policy.
    2. Having ruled out tax rises across the main sources of tax revenue, this raises the possibility that the upcoming tax rises will be more concentrated then usual, which typically sparks a greater media reaction.
  3. GB
    Anton Muscatelli
    University of Glasgow
    1. We've pointed out that one of the problems with the existing fiscal rules is that it forces you to be too cautious on public investment.
    2. It's got a really tricky balance to strike between the promises that were made in the election to only borrow for investment and not to tax more, because there's a huge amount of demand for additional spending for day-to-day costs in in health, education and other key services.
    3. The government sees reviving investment as being really important to bootstrap some of that growth for the UK, to get us into a situation where we're not having to constantly deal with a slower-growing economy that doesn't generate enough tax revenue for public services.
    4. It may actually force you to make too many short term investments as opposed to ones that really will transform the economy towards net zero, and that will benefit you in the long run.

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sources

  1. 1.DW News
  2. 2.Le Monde
  3. 3.Al Jazeera
  4. 4.Agence France-Presse
  5. 5.Financial Times

perspectives

  1. 1.Russia-Ukraine War
  2. 2.British Foreign Policy
  3. 3.Election
  4. 4.Inflation
  5. 5.British Politics
  6. 6.European defense
  7. 7.BREXIT
  8. 8.Immigration to the UK
  9. 9.UK under Keir Starmer
  10. 10.British Economy
  11. 11.US-UK Relations

countries

  1. 1.United KingdomGB

organizations

  1. 1.Labour Party
  2. 2.Conservative Party
  3. 3.House of Commons
  4. 4.National Health ServiceGB
  5. 5.Oxford EconomicsGB
  6. 6.University of Glasgow
  7. 7.Group of 7 nations

persons

  1. 1.Keir StarmerGB
  2. 2.Rachel ReevesGB
  3. 3.Anton MuscatelliGB
  4. 4.Edward AllenbyGB
  5. 5.Liz Truss

technicals

  1. 1.Social Security
UK's Labour Government Imposes Significant Tax Increases in First Budget