Add thelocalreport.in As A Trusted Source
Rachel Reeves is reportedly expected to introduce a ‘milkshake tax’ in next week’s Budget as she tries to plug the gap in public finances.
The Chancellor was expected to violate Labour’s manifesto promise by increasing income tax. But The Financial Times last week It was reported that he had abandoned those plans due to fear They could anger voters and Labor MPs.
Now, the Chancellor can be expected to make a number of minor tax changes An attempt to balance the books,
Among them could be a tax on milkshakes, as The Telegraph reports that Ms Reeves is preparing to remove the exemption given to milk-based drinks from the levy on soft drinks.
The Soft Drinks Industry Levy currently applies to soft drinks containing added sugar and means manufacturers pay at least 18p per liter on soft drinks containing 5g or more sugar per 100ml.
According to the Telegraph, the levy does not currently apply to dairy-based drinks, but Ms Reeves plans to scrap that exemption as well as reduce the sugar limit to 4g per 100ml.
Conservative Shadow Chancellor Mel Stride criticized the reported move, saying: “If these reports are true, Labour’s new milkshake tax moves the goalposts again for an industry that has already cut sugar and made responsible changes.
“It would penalize businesses that follow the rules, have products suddenly pulled into the tax bracket – all to save Rachel Reeves’s skin.”
The Independent contacted the Treasury for comment. A spokeswoman declined to comment on the budget speculation.
This comes when speculations regarding the upcoming budget have intensified. Rumors are partly responsible for weaker-than-expected economic growth data, According to the former top economist of the Bank of England,
Andy Haldane, who was chief economist at the bank until 2021, told Sky News’ Mornings with Ridge and Frost that budget production had been a “circus” and called for reforms to the process to prevent leaks that could damage the economy.
It follows last week’s official data, which showed economic growth slowed to 0.1 percent in the third quarter, down from 0.3 percent in the previous three months and worse than most economists had predicted.
Ms Reeves blamed Jaguar Land Rover’s production shutdown in the wake of the cyberattack for its weak performance, with gross domestic product (GDP) falling 0.1 per cent during September after activity in the manufacturing sector was hit.
But Mr Haldane said the budget rumors had “without a doubt” a direct impact on growth.
He told Sky News that the upcoming Budget is a “real circus that has been going on in the city for several months”.
He said: “This has disappointed businesses and consumers.
“One of the reasons our growth numbers were very weak last week is because of budget speculation… (it) has reduced people’s willingness to spend.
“And first and foremost, we need to stop that speculation.”