Raoul Bobet
LONDON, Oct. 27 (.) – Britain is preparing to learn of other measures, including expected tax increases and loosening of fiscal rules, that will be included in the Budget due to be tabled by the Economy Secretary on Wednesday. It is planned to be included. , Rachel Reeves, and the first government of Keir Starmer’s new Labor government.
On October 30, Reeves will make history as the first female prime minister to wear a red briefcase in more than 800 years, but she will also make history as the last person to introduce a budget. I will leave it behind. The document is expected to arrive 117 days after the president enters the country. He will work with the government to “re-establish the foundations” of the country, promising change and future growth.
As Reeves himself explained to the Financial Times (FT), the budget was a “black hole” of £22 billion (more than €26 billion) in the British exchequer inherited after 14 years in government. It solves problems such as “. Conservative. The same goes for improving public services.
However, government sources told the FT a few weeks ago that Reeves had identified a funding gap of £40bn (€48bn) in his budget, which would need to be covered through tax increases and additional borrowing. He said there is. Debt already exceeds 98% of GDP.
Taxes and fiscal rules
The “cornerstone” of the first budget of the “Starmer era” was new fiscal rules based on the premise that “day-to-day spending is offset by income”, which, in Reeves’ words, would become the norm. “Harder” because its guarantee and stability depend on tax increases.
The question here is what kind of portfolio the minister will hold. The Labor government has pledged not to raise income, social security or value-added tax (VAT) rates, nor to increase taxes on “working people”, a definition that Mr Starmer said does not apply to groups with assets. It has caused controversy for stating that people who have the same are not included. stocks or property.
Some critics say that if these expected tax increases are announced alongside the Budget, Labor will be breaking the promises of its election program, but Britain’s ‘Chancellor’ has always been ‘very clear’ about his plans. he claimed.
In this sense, Chancellor Reeves announced the taxation of employer contributions to UK social security and the freezing of personal income thresholds until 2028 as a “hidden” tax measure providing an additional £7bn (€8.4bn). An announcement is expected to be made regarding the extension.
Increasing corporate contributions to UK social security by up to 2 percentage points and lowering the tax threshold could raise up to £20bn (€24bn), with the aim of raising public funds such as public services. It would increase funding for services. Like the UK Health Service (NHS), which is in tatters.
Reeves asserts that businesses “understand the need” to raise taxes to break even, but business leaders and opponents have called the measure a “tax” on jobs that would discourage hiring. has warned that it will cut salaries and force hiring. Reduce expenses.
Some sources suggest that the UK Chancellor is also targeting increases in capital gains rates, inheritance tax, fuel tax, gambling tax and bookmaker taxes.
“Reversal or decline?”
Last week, at the International Monetary Fund (IMF) annual meeting in Washington, D.C., his first as a minister, Reeves announced that in addition to the new budget, he would also change the way debt is measured for the purpose of borrowing to finance investment. confirmed. In the long run.
According to the Guardian, Reeves is deferring further details to Wednesday, but Labor will point to the “Public Sector Net Financial Liability” (PSNFL), a measure that takes into account all of the government’s financial assets and liabilities. Probably. Gives a debt margin of up to £53bn (€63.6bn).
In the minister’s opinion, the Labor budget selects the first option for Britain to turn the page on 14 years of “chaos” under Conservative governments “between investment and decline” and establish Britain’s “stable foundations”. It will show you what you need to do. Future growth of the country.
The Economy Ministry recently outlined the government’s priority areas that will receive increased funding in the new budget, including housing and education.
One of Executive Starmer’s objectives for this Budget is to make the UK an attractive destination for foreign investment again.
At the International Investment Summit in London this month, Labor announced £63bn of new funding for the country, while Starmer’s party offered businesses “stability” and a “clear financial framework”. He promised that regulations would be reviewed to “remove regulations that unnecessarily delay investment.”
