Rachel Reeves has admitted that her Budget will negatively impact workers, with pay rises likely slashed thanks to an increase in National Insurance contributions from employers.
In a bid to close the £22billion "black hole" in public finances, the Chancellor announced a variety of tax and borrowing measures yesterday.
One change introduced was the increase of National insurance Contributions, which will be paid for by employers.
Employers will have to pay an additional 1.2 per cent to 15 per cent from April 2025.
Asked about the impact of the increase, the Chancellor told the BBC: “I said that it will have consequences.
“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.
“But, overall, the Office of Budget Responsibility forecast that household incomes will increase during this Parliament.
“That is a world away from the last Parliament, which was the worst Parliament ever for living standards.”
Reeves labelled 'compulsive liar' after 'Halloween horror show'
Chancellor Rachel Reeves is a "compulsive liar" and delivered a "Halloween horror show" Budget, Tory leadership hopeful Robert Jenrick has claimed.
Speaking to Sky News, Jenrick said: "What we saw yesterday was a Halloween horror show. This was the biggest political heist in modern British history.
“£40 billion of tax rises hurting people across this country and just three months ago the Labour Party won an election on a pledge not to raise taxes.
“I am afraid Rachel Reeves, who you have just interviewed, is acting like a compulsive liar.
“She said during the general election she wasn’t going to raise taxes. She just has. She said she wasn’t going to increase debt. She just massively increased debt.
“And then after the election she invented that there was a black hole. The public will not trust this Labour Government. They are making it up to justify immense tax rises that are going to hurt the economy, hurts people’s working lives.”
Martin Lewis issues 'bad news' for families after key change left out of Rachel Reeves' Budget
Martin Lewis has announced disappointing news for families following Labour's Autumn Budget announcement.
Labour has confirmed it will not change the current system of Child Benefit, despite Lewis's campaign for reform.
The decision, revealed in Government documents, maintains the current rule that particularly affects single-parent and single-earner families.
Rachel Reeves slammed for 'ignoring fuel tax' amid push to ditch petrol and diesel - 'Huge mistake!'
Experts criticised Rachel Reeves for not addressing fuel tax in the Budget PAA leading motoring expert has criticised the Government for its decision to "ignore fuel tax" in Labour's first Budget since the July election.
Speaking in Parliament yesterday, Chancellor Rachel Reeves unveiled the Government's fiscal plans for the coming years as it attempted to account for a £22billion spending black hole.
Several new measures were unveiled for motorists including a surprise continued freeze of fuel duty, new electric vehicle incentives and additional funding to repair potholes.
Record £40bn budget will STALL growth, warns OBR
Rachel Reeves' freshly announced £40billion budget will stall growth, the Office for Budget Responsibility has warned.
The fiscal watchdog has downgraded growth forecasts for the next five years, in a blow to the Chancellor's fiscal vision where the party said they would embark on “large, sustained increase in spending, tax and borrowing”.
The economy will continue to grow at the rate it was previously forecast, despite Reeves pledging £70billion in spending increases.
The extra spending will give a short-term lift to economic output, however, the average growth rate over the next five years will remain unchanged.
The OBR said that increased public spending would "crowd out" private investment while tax increases on businesses could jeopardize profits and wages.
They added that interest rates and inflation would jump up by 0.25 and 0.4 percentage points, respectively.
Richard Hughes, the head of the OBR, said the new changes lined out in the Budge the tax burden will reach "a historic high of 38 per cent of GDP by 2029/30".
Hughes said: “Against a largely unchanged economic and fiscal backdrop since our last forecast in March, this budget delivers one of the largest increases in spending, tax and borrowing of any single fiscal event in history.”
Jeremy Hunt launches brutal attack on Rachel Reeves after ‘biggest tax-raising Budget in history’
Former Chancellor of the Exchequer Jeremy Hunt has hit out at his successor today on GB News after she unveiled the Autumn Budget in the Commons yesterday.
Rachel Reeves, to the dismay of many MPs, set out a series of tax hiking measures with the aim of plugging a £22bn ‘black hole’ she says was left by the previous Conservative Government.
Speaking to Stephen Dixon and Ellie Costello, Hunt accused Labour of fibbing about the economic outlook and lamented a Budget that he says will be “tough for families”.
He told GB News: “We all face pressures in public finances and we all face an economy recovering from the pandemic.
“The big question is, how do we get more money into our public services like the NHS without raising taxes in a way that damage economic growth?
Chancellor: 'We won’t have to do a Budget like this ever again'
Rachel Reeves delivered the Budget this afternoonPARachel Reeves said that yesterday's £40billion budget was a one-off event which has "wiped the slate clean".
She said that “as a result of what we have done we are not going to have to come back and ever do a Budget like this again”.
The Chancellor told Sky News this morning: “This was a Budget that fixed the foundations and wiped the slate clean. It was a big Budget, it was a significant Budget but we have now brought out into the open things that were covered up by the previous government and swept under the carpet."
She said that the debt and deficit are now on a more stable path and everything is now out in the open.
"As a result of what we have done we are not going to have to come back and ever do a Budget like this again because we have brought everything out into the open.”
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