The Labour Party is set to announce its first budget in 15 years, and major tax hikes are expected. Rishi Sunak, the current Tory leader, has criticized the potential increase in employers’ national insurance, calling it a “complete betrayal” by Labour. Sunak argues that any rise in national insurance for employers will ultimately impact employees as well, leading to less money available for pay raises.
Rachel Reeves, the Chancellor, is expected to allocate nearly £3bn more to the armed forces in the budget announcement. This additional funding will cover the cost of a six percent pay rise for soldiers and the purchase of weapons to replenish depleted stockpiles due to arms supplies to Ukraine. The government plans to conduct a wider review of future defense spending following this one-time injection of funds.
In a comparison of Labour’s pre- and post-election promises, experts anticipate that the budget will focus on tax increases while protecting what Labour considers working people. Reeves aims to reset public spending and taxation trajectory for the remainder of the parliament, potentially for a decade. The budget is anticipated to be the largest tax-raising budget in history in terms of cash terms.
Reeves has emphasized her belief in Britain’s economic growth, stating that the budget will prioritize economic stability, investment, and reform. The Treasury has also confirmed that the budget will reject austerity, ensuring funding for healthcare, affordable housing, and investment in schools. Despite previous manifesto promises not to increase taxes on income tax, VAT, or employee national insurance, there is debate over whether the proposed increase in employers’ national insurance constitutes a broken promise.
The budget announcement is expected to end austerity measures and reflect tough decisions made to restore economic stability. Reeves plans to crack down on fraud, tax avoidance, and waste to ensure taxpayer money is spent wisely. While some may view potential broken promises as dishonesty, voters often accept such decisions when they believe they are the right choice.
The day’s schedule includes a budget cabinet chaired by Keir Starmer, PMQs featuring Rishi Sunak, and the budget delivery by Rachel Reeves. Following the budget announcement, Richard Hughes of the Office for Budget Responsibility will hold a press conference to provide analysis. Stay tuned for more updates on the budget coverage throughout the day.
