Budget 2024: Taxes, borrowing and spending up in Rachel Reeves’ first Budget
Rachel Reeves announced £40 billion a year in extra taxes as she increased Government borrowing and spending to “rebuild Britain”.
The Chancellor’s plans will see the tax burden reach an historic high, while borrowing increases by an average £32.3 billion a year as spending increases by around £70 billion annually over the next five years.
Ms Reeves said the measures were necessary to address the “black hole” in the public finances left by the Tories while pumping billions into schools and hospitals.
She confirmed plans to hike employers’ national insurance contributions and increase capital gains tax, while also making changes to inheritance tax and stamp duty.
And changing the way government debt is measured allowed her greater flexibility to borrow, resulting in what the Office for Budget Responsibility called “one of the largest fiscal loosenings of any fiscal event in recent decades”.
The tax burden will reach 38.3% of gross domestic product in 2027-28, the highest since 1948 as the UK recovered from the impact of the Second World War.
In the first Budget ever delivered by a female chancellor, and the first Labour financial statement since 2010, Ms Reeves 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.”
But Tory leader Rishi Sunak accused Ms Reeves of “fiddling the figures” by changing the way debt is measured adding: “The reason the Chancellor has increased borrowing and increased taxes is because she has totally failed to grip public spending.”
More to follow