Rachel Reeves Slams Tories As She Hikes Taxes By Record-Breaking £40 Billion In The Budget
Rachel Reeves slammed the Tories as she unveiled plans to increase taxes by a record-breaking £40 billion in the Budget.
The chancellor said the last Conservative government had “failed this country” and left £22 billion of unpaid bills that Labour now had to pay.
She said the employers’ rate of National Insurance will go up, as will capital gains tax and inheritance tax.
However, she ended the freeze in income tax thresholds introduced by the Tories, saving millions from being dragged into higher tax bands after 2028.
And in a boost for motorists, Reeves also ditched plans to end the freeze in fuel duty.
Reeves, the country’s first ever female chancellor, said her Budget would “fix the foundations and deliver change”.
“Through responsible leadership in the national interest that is our task - and I know we can achieve it,” she said.
Turning her fire on the Tories, Reeves said they “had no plan to improve our public services and they had no plan to put our public finances on a sustainable footing”.
“Since 2021, there have been no detailed plans for departmental spending set out beyond this year,” she said.
“And their plans relied on a baseline for spending this year which we now know was wrong because it did not take into account the £22bn black hole.”
The chancellor said the new government would provide £11.8bn for those affected by the infected blood scandal, and a further £1.8bn in compensation for the postmasters whose lives were ruined by the Horizon scandal - funding which the Tories did not provide.
“The scale and seriousness of the situation that we have inherited cannot be underestimated,” she said.
“Together, the black hole in our public finances this year, which recurs every year, the compensation payments which they did not fund and their failure to assess the scale of the challenges facing our public services means this budget raises taxes by £40bn.
“Any chancellor standing here today would face this reality. And any responsible chancellor would take action. That is why today, I am restoring stability to our public finances and rebuilding our public services.”
Reeves also announced an extra £8.8bn for school repairs and maintenance, as well as nearly £30bn more for the NHS.
She said: “This is a moment of fundamental choice for Britain. I have made my choices. The responsible choices. To restore stability to our country. To protect working people. More teachers in our schools. More appointments in our NHS. More homes being built.
“Fixing the foundations of our economy. Investing in our future. Delivering change. Rebuilding Britain.”
Reeves’ room for manoeuvre in the future could be hampered by sluggish economic growth, however.
According to the Office for Budget Responsibility, the UK’s gross domestic product will go up by 2% in 2025, but will then only grow by 1.8% in 2026, 1.5% in 2027, 1.5% in 2028 and 1.6% in 2029.
That is a major blow for Labour, who have made growing the economy their number one mission in government.