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Rachel Reeves There has been an emphasis on keeping taxes “at an absolute minimum on ordinary working people”, with even one influential think tank saying that increasing tax rates for low to middle earners would have been better than keeping their tax rates frozen.
boisterous chancellor Defended his position by saying: “You’re not going to write my obituary today,” after giving a speech Budget She was “incredibly proud”.
put his decisions Britain The tax burden is set to rise to record highs as he hikes taxes by £26 billion after weak economic forecasts left holes in his previous spending plans.
The increase is also needed to pay for increased welfare spending, with Ms Reeves announcing the scrapping of the two-child benefit cap, which is expected to lift 450,000 children out of poverty.
“I’m not going to apologize for removing the two-child limit,” Ms Reeves said on Thursday. He rejected claims that he had raised taxes on working people to finance the rising welfare bill.
Having abandoned plans for a manifesto-destroying income tax increase, the Chancellor opted for a series of smaller tax increases to pay for government spending and create a larger buffer against his borrowing rules.
These include a new pay-per-mile tax for electric vehicles, an increased tax on online betting and a so-called “mansion tax” on homes worth more than £2 million.
But it continued to face accusations of breaking Labour’s election promise not to raise taxes on working people following its decision to keep the tax threshold frozen until 2030/31 and impose national insurance on some pension contributions.
The cap cap will result in 780,000 more basic-rate, 920,000 more higher-rate, and 4,000 more additional-rate income tax payers in 2029/30 as earnings increase over time. Scotland has a separate income tax system.
People If their earnings exceed £12,570, they have to pay 20% income tax, with a rate of 40% from £50,271 and 45% from £125,140.
Ms Reeves insisted the border closure did not breach Labour’s manifesto commitment not to increase income tax or national insurance.
And he said the burden on working people – the group Labor promised to protect – was being kept to a minimum.
She told Sky News: “I recognize that it will mean working people have to pay a little more. But I have kept that contribution to an absolute minimum by closing many tax loopholes and reducing government spending, waste and inefficiency.”
The Resolution Foundation argued that Ms. Reeves’s decision to stick to her “manifesto tax pledge” has harmed millions of low- to moderate-income people who would have been better off having their thresholds frozen rather than increasing their tax rates.
The think tank said in its initial response that raising all rates by 1p would be less expensive than freezing the cap for anyone earning less than £35,000.
“Indeed, all but the top 10% of the income distribution are worse off, having chosen cap cuts over rate increases (which would raise the same amount of revenue),” it said.
Chief executive Ruth Curtis said most of the impact of the budget would be felt over three years.
“Those limits will start in 2028. Some of the other measures will also not come in – for example the mansion tax and salary sacrifice – until 2028, so the most pain from this Budget will be felt then,” he told BBC Radio 4’s Today programme.
“This Parliament is second only to the last one in terms of (living) standards… This decade is looking very difficult indeed.”
On welfare, the think tank boss said that while spending on pensioners and health and disability benefits was rising more than expected, “we didn’t hear much yesterday about how they (the government) might take action in the future” to save money in that area.
Ms Reeves denied she was raising workers’ taxes to fund a rising welfare bill.
“I don’t accept it,” she told Times Radio.
“The OBR say that their revisions to productivity, reflecting the Conservatives’ legacy, will mean £16bn less tax revenue, and as a result, we will have to fill that gap. But if we can grow the economy, as I am determined to do, we can get that money back.”
He challenged the radio presenter over rising welfare costs, saying “A lot of people have tried to forgive me over the last 16 months, and you’re not going to write my obituary today”.
A Labor Cabinet minister has refused to “apologise” for scrapping the two-child limit for Universal Credit – a measure to reduce child poverty that was warmly welcomed by Labor MPs but could cost £3 billion a year by 2029/30.
He described it as a “good investment” that would reduce future costs by giving children from low-income families a better start in life, and said that 60% of families benefiting from abolition had parents in work.
“When I became Chancellor, in my first speech, I said that I would know that my time as Chancellor had been successful if ordinary children from working-class backgrounds were living more fulfilling lives,” she told Sky News.
“I’m confident I achieved that in my budget yesterday. It’s a budget I’m incredibly proud of, and I look forward to delivering many more budgets to help grow our economy and put more money in the pockets of working people.”
But Tory shadow chancellor Sir Mel Stride said Labour’s “very bad” measures would “benefit 25,000 more people as a direct result of making them more attractive”.
The budget was overshadowed on Wednesday by an unprecedented leak of details of Ms Reeves’s plans before they were due to stand in the Commons chamber.
Richard Hughes, chairman of the Office for Budget Responsibility, has hinted that an “outsider” may be behind the watchdog’s premature publication of the document.
Ms Reeves said she trusted Mr Hughes, but added that the early release of the material “disappointed me” and “should never happen again”.