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Your support makes all the difference.In a damning assessment of the chancellor’s spending plans, the Institute for Fiscal Studies (IFS) has warned that Rachel Reeves is playing “the same silly games as the last lot” on tax and spending.
IFS director Paul Johnson said that Ms Reeves’ current plans mean a 4.3 per cent jump in spending next year, 2.6 per cent the year after and then 1.3 per cent in each of the following years.
Mr Johnson said: “I’m afraid this looks like the same silly games playing as we got used to with the last lot. Pencil in implausibly low spending increases for the future in order to make the fiscal arithmetic balance.”
It comes as Ms Reeves has admitted that her £40bn tax-raising Budget could impact wage growth for workers.
Asked about the consequences of increasing national insurance contributions for employers she told BBC Breakfast: “It will mean that businesses will have to absorb some of this through profits and it is likely to mean that wage increases might be slightly less than they otherwise would have been.”
However, the IMF endorsed the investment and spending on public services in the chancellor’s Budget, as well as sustainable tax rises.
Key Points
- Rachel Reeves playing ‘same silly games’ as Tories on tax and spend, IFS warns
- Reeves admits tax rises will impact wage increases for workers
- IMF endorses Reeves tax rises and focus on investment
- How did the papers react to the Budget?
- Kirstie Allsopp accuses Rachel Reeves of breaking up farms and estates after Budget
PM and chancellor talking to staff at University Hospitals Coventry and Warwickshire
The prime minister and chancellor are talking to staff at University Hospitals Coventry and Warwickshire.
Sir Keir was thanked for the extra NHS funding by Dr Amy Burridge, a consultant in acute medicine, but she asked how that income could deal with staffing gaps and burnout
Sir Keir said the first thing his government would provide was a “mindset change” from the Tories, who he said “blamed” NHS staff for problems in the service.
He said the Government would “really go much much faster on the technology that you need to take some of the weight off”.
The PM added: “Look, I’m not going to pretend that by next week it will all be fixed, because too many politicians have done that.
“It is going to take time, but what we did in the Budget yesterday is the first step, the down payment if you like, down that road, to make sure that you can do your jobs better and we can have the NHS that we need.”
Pictured: Rachel Reeves visits NHS staff at UCL Hospital in London
Jeremy Hunt to step down as shadow chancellor with end of Tory leadership race in sight
Jeremy Hunt has confirmed he is stepping down from the Conservative frontbench, calling for his party to be “humble” following July’s election defeat.
The decision comes just hours before the Tory leadership race comes to an end, with polls closing at 5pm on Thursday.
On Saturday morning, either Robert Jenrick or Kemi Badenoch will be crowned the new party leader.
Mr Hunt, who served as chancellor under Rishi Sunak’s Conservative government and is currently the shadow chancellor, confirmed he will be stepping back from the role following Wednesday’s budget.
Millie Cooke reports
Hunt to step down as shadow chancellor with end of Tory leadership race in sight
The shadow chancellor, who narrowly retained his seat in the election, says he’s unlikely to return to the frontbenches for ‘the next few years, at least’
Joe Middleton31 October 2024 11:47 1730374560Kirstie Allsopp accuses Rachel Reeves of breaking up farms and estates after Budget
TV presenter Kirstie Allsopp has accused the chancellor of ushering in the break-up of farms and estates by imposing a new 20 per cent inheritance tax on such assets over £1m.
Farming and landowner organisations also warned the change, announced in Wednesday’s Budget, would lead to the “death of the family farm” because owners would sell up to pay the tax.
Rachel Reeves said from April 2026, the first £1m of combined business and agricultural assets would continue to attract no inheritance tax, but for assets over that sum inheritance tax would apply.
Kirstie Allsopp accuses Rachel Reeves of breaking up farms and estates after Budget
TV presenter says inheritance tax of 20% over £1m announced in Budget will stop farmers passing on businesses to children
Joe Middleton31 October 2024 11:36 1730374485UK firms face higher employment costs, say National Institute of Economic and Social Research
The National Institute of Economic and Social Research has warned that businesses face higher employment costs due to Rachel Reeves Budget.
The NIESR said the rise in national minimum wage and higher employer contributions through National Insurance contributions will have a negative impact on employment in growth.
It added this would especially impact low-paid sectors such as hospitality.
Joe Middleton31 October 2024 11:34 1730373628John Curtice: Voters are backing Reeves now – but she needs her gamble to pay off before the next election
The nation is more concerned about the state of the public services than they are about taxes and debt – for now. But polling expert John Curtice warns that Reeves’s – and Labour’s – future hangs on delivering what they’ve promised
Voters are backing Reeves now – but she needs her gamble to pay off
The nation is more concerned about the state of the public services than they are about taxes and debt – for now. But polling expert John Curtice warns that Reeves’s – and Labour’s – future hangs on delivering what they’ve promised
Joe Middleton31 October 2024 11:20 1730371887Treasury chief secretary and Newsnight’s Victoria Derbyshire in heated Budget tax hike clash
Treasury chief secretary Darren Jones had a heated clash with BBC Newsnight‘s Victoria Derbyshire over Labour‘s tax hikes in the Budget on Wednesday, 31 October.
The MP for Bristol North West defended Rachel Reeves’ decision to hike employer national insurance by 1.2 percentage points from April next year.
Critics warned changing the UK’s second-biggest tax will have a knock-on impact on hiring, wages and staff benefits.
When asked to be “honest” about how the trade-off of the rise will be “fewer people in work,” Mr Jones told Ms Derbyshire: “I will not take any suggestion that I’m being dishonest in my answers.”
Treasury chief secretary and Victoria Derbyshire in heated Budget tax hike clash
Treasury chief secretary Darren Jones had a heated clash with BBC Newsnight's Victoria Derbyshire over Labour's tax hikes in the Budget on Wednesday, 31 October. The MP for Bristol North West defended Rachel Reeves' decision to hike employer national insurance by 1.2 percentage points from April next year. Critics warned changing the UK’s second-biggest tax will have a knock-on impact on hiring, wages and staff benefits. When asked to be "honest" about how the trade-off of the rise will be "fewer people in work," Mr Jones told Ms Derbyshire: "I will not take any suggestion that I'm being dishonest in my answers."
Joe Middleton31 October 2024 10:51 1730371399‘Last government must take responsibility for Budget challenges,’ IFS director Paul Johnson says
Paul Johnson has said Rishi Sunak’s government must take a lot of responsibility for Wednesday’s tax-grabbing Budget.
The IFS director said the chancellor was faced with “a genuinely difficult inheritance” and responded by hiking taxes, spending and borrowing, taking the former to record levels.
But, in a warning to Rachel Reeves ahead of future Budgets and spending reviews, he added: “Worryingly for the government, and indeed all of us, the OBR has reduced its forecast of household income growth, and expects income growth over this parliament to be lower than over any other parliament in modern times – except the last parliament. Not a recipe for a happy public come the next election.”
Joe Middleton31 October 2024 10:43 1730370692Rachel Reeves playing ‘same silly games’ as Tories on tax and spend, IFS warns
In a damning assessment of the chancellor’s spending plans, IFS director Paul Johnson has warned Rachel Reeves is playing “the same silly games as the last lot”.
The top economist warned that Ms Reeves’ current spending plans mean a 4.3 per cent jump in spending next year, 2.6 per cent the year after and then 1.3 per cent in each of the following years.
Mr Johnson said: “It would be odd to increase spending rapidly only to start cutting back again in subsequent years.” And he added: “I’m afraid this looks like the same silly games playing as we got used to with the last lot. Pencil in implausibly low spending increases for the future in order to make the fiscal arithmetic balance.”
Mr Johnson warned that it would be “extremely challenging” to get the cabinet onboard with real terms cuts, and said he would “bet a substantial sum” that spending will increase by more than planned after next year.
It lays the ground for further tax rises in the years ahead after Ms Reeves set out the biggest tax rising Budget in history on Wednesday.
Archie Mitchell31 October 2024 10:31 1730370215Watch: Paul Johnson warns taxes will rise in coming years despite £40bn hiking Budget
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