UK Budget: Chancellor Reeves Announces $52B in Tax Rises
Facts
- UK Chancellor Rachel Reeves has announced the Labour Party's first budget since 2010, including £40B ($52B) in tax rises and £22.6B ($29.5B) in extra day-to-day spending for the National Health Service (NHS).[1][2]
- Speaking in the House of Commons, Reeves — the UK's first female Chancellor of the Exchequer — stated the 'only way' to achieve economic growth was 'invest, invest, invest,' and claimed she was 'restoring stability' to public finances and 'rebuilding' public services.[2]
- Employers' national insurance contributions have been raised from 13.8% to 15%, effective from April 2025, while the contribution threshold has been reduced from £9.1K ($11.8K) to £5K ($6.5K).[3][4]
- The lower rate for capital gains tax has been raised from 10% to 18%, with the higher rate up from 20% to 24%. The minimum wage for those over the age of 21 will also rise by 6.7% from £11.44/hr ($14.87) to £12.21/hr ($15.87), with the minimum wage for 18 to 20-year-olds rising from £8.60/hr ($11.16) to £10/hr ($13).[5][6]
- Stamp duty on second homes has been raised from 3% to 5%, while unspent pensions will be added to inheritance tax from 2027, with the current inheritance threshold freezes extended to 2030. Income tax band thresholds will also remain frozen until 2028, when they will then rise alongside inflation.[1]
- Non-dom tax status has been abolished, VAT exemption for private schools will be removed in 2025, £11.8B and £1.8B have been earmarked for the infected blood and Post Office scandals, respectively, and draught duty will be reduced by 1.7%.[7][2]
Sources: [1]BBC News, [2]Parliament, [3]GB News, [4]Guardian, [5]The Mirror, [6]The Telegraph and [7]thetimes.com.
Narratives
- Right narrative, as provided by Express.co.uk. Labour's socialist budget exposes Reeves and Keir Starmer for their continued misleading of the British public. Having promised a changed party during the general election, Labour has returned to its high-spending, high-borrowing, high-taxation dogma that history has shown to fail time and time again. This anti-business and anti-growth approach will not succeed.
- Left narrative, as provided by Daily Record. Albeit unpopular for the wealthy who will have to fork the bills, Reeves's budget is a strong and fair approach to finally putting the working people of Britain first. Having left the state of the UK's finances in disrepair after 14 years of self-centered short-termism, the Conservative Party has little right to complain about the painful yet necessary decisions made by the new government.