Britain’s new Chancellor of the Exchequer <a href="https://www.world-today-news.com/europe-british-labor-party-conference-make-brexit-work/" title="Europe: British Labor Party conference: "Make Brexit work"”>Rachel Reeves has announced the biggest tax rises in three decades in her first budget. Businesses and the wealthy will bear the brunt of the tax increases, Reeves said on Wednesday. The former Bank of England economist also paved the way for billions of dollars in austerity measures and increased borrowing for investment to boost Britain’s economy, which was slowed by the 2007-09 global financial crisis, Brexit, the coronavirus pandemic and rising energy prices . Reeves wants to increase taxes by £40 billion a year.
Reeves accused the previous Conservative government of leaving his Labor Party with a “black hole” in its budget. “Any responsible chancellor would take action,” she said. “That’s why today I’m restoring the stability of our public finances and rebuilding our public services.”
A large part of the targeted additional revenue should come from higher taxes for companies. This is to be achieved by increasing the employer’s share of social security by 1.2 percent. In addition, the capital gains tax is to be increased to 24 percent from the previous 20 percent.
As the new Labor Party leader, Keir Starmer wants to boost economic growth – but because of the tight state budget, he doesn’t have as much financial leeway as he would like. British national debt had recently reached the level of economic output for the first time in decades. Public sector liabilities totaled 100 percent of gross domestic product in August. This is the highest value since monthly records began in 1993.
This made it even more difficult for Reeves to draw up her first budget – especially as new debt is also increasing. Starmer’s Labor party won a landslide victory in the July 4 general election. After 14 years in power, the conservatives had to give way.
