Historic, Keir Starmer’s government’s budget, presented on October 30, is historic in more ways than one. It is the first defended by a woman, Rachel Reeves, 45, Minister of the Exchequer. This key role of the British parliamentary monarchy, which has existed since medieval times, has until now always been performed by a man. It is also the first budget of a Labor cabinet after fourteen years of Conservative rule, which the British left ended after their victory in the general election in July.
Finally, this budget, which Mr Starmer announced as “painful” last summer, foresees unprecedented tax increases of £40 billion a year (€48 billion), but also a huge £100 billion in investments over five years, for, according to Rachel Reeves , “rebuild” the United Kingdom and its public services, which are “on your knees” for having been neglected by conservatives.
If the Chancellor imposes such tax increases it is because, repeated this former Bank of England economist, “The lamentable state in which the conservatives have left the country”in particular, of a hole of more than £20 billion in public finances in 2024 (differential between actual expenditure and projected revenue in the Treasury) that would ” hidden “ Conservative Rishi Sunak’s office. To fulfill the Labor Party’s campaign promise not to raise taxes “workers”Rachel Reeves, however, announced that the bulk of the tax increases would be borne by businesses or come from capital income.
There is no “return to austerity”
Business contribution to National Insurance (used to fund certain social benefits) will increase by 1.2%, capital gains tax will increase from 10% to 18%, remaining one of the lowest in G7 countries . The Chancellor also announced an increase in inheritance taxes, air tickets for private planes, a 20% VAT on private school tuition fees and the end of the advantageous “non-dom” status, which allowed non-British to reside permanently in the United Kingdom. country that is not subject to tax in the United Kingdom. Finally, Rachel Reeves promised that there would be no “return to austerity”but departments that are already in difficulty (such as transportation or, especially, justice) will have to tighten their belts again.
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