Judith Mora
LONDON, Oct. 30 (.) – Keir Starmer’s Labor government on Wednesday announced the biggest tax increases and state investment in the UK’s recent history in its first national budget since coming to power in July.
Economy Secretary Rachel Reeves said the £40bn (about €50bn) would be raised through an increase in tax burdens, particularly on businesses, and that part of the aim would be to raise the £22bn (€26.34bn) budget she claimed The aim is to eliminate the deficit, he said. Inherited from conservatives.
At the same time, the first female ‘finance minister’ unveiled plans for investment in education, health, defense and transport, which the Audit Office said would increase spending by around £70bn (€84bn) a year. It means. .Budget Report (OBR).
Increased burden on companies
The UK economy will grow by 1.1% this year, 0.1% in 2023 and 2% in 2025, according to the new budget, the financial watchdog said, higher than forecast in March under the previous Conservative government. We estimate that.
However, the OBR has lowered its forecast for 2026 from 2% to 1.8%. In 2027, from 1.8% to 1.5%. It will rise from 1.7% to 1.5% in 2028, but the conservative chief executive has admitted that the reference figure from March is now invalid because he hid the data.
In a statement to Congress, Reeves reported that starting in April, corporate social security contributions would increase from 13.8% to 15%, and the salary threshold at which payments would begin would be lowered, thereby raising $25 billion. He said he was looking forward to it. pounds per year (approximately 30 billion euros).
“It’s a difficult decision, but it’s the right one,” the minister said, announcing a 40% tax cut for commercial facilities in the retail, leisure and hospitality industries, as well as a tax cut on draft beer.
Capital gains tax will also be increased, from 10% to 18% in the lower tier and 20% to 24% in the upper tier, leaving it unchanged at 25% this term.
The tax rate on the profits of hydrocarbon companies will rise to 38%, while taxes on gasoline will be frozen and taxes on e-cigarettes will increase.
bet on investment
The minister explained that in order to increase borrowing for investment, successive governments have amended fiscal rules and changed the way debt is calculated to give confidence to the market.
In this sense, an additional GBP 2.9 billion (EUR 3.475 billion) will be allocated to the defense budget and GBP 3 billion (EUR 3.6 billion) for military assistance to Ukraine, in order to achieve 2.5% of gross domestic product (GDP). ) will be added. .
Mr Reeves said he would allocate £6.7bn (more than €8bn) to improve state schools and £5bn (almost €6bn) to help build new affordable homes.
The minister pledged to increase the budget for the NHS, which is stretched thin with 7.6 million people on waiting lists, by £22.6 billion (about 2.7 trillion yen) and complete the construction of high-speed rail.
While Labour’s Budget, which is expected to increase the minimum wage in April, has caused volatility in financial markets and weighed on the impact on debt, some analysts believe the success of the Budget could boost economic growth. He warned that it all depends on whether or not he can accelerate.
(Photo) (Video)
