Rachel Reeves finally admits her tax bomb Budget WILL hit your pocket with Brits left £300 worse off
TAX hikes in the Budget are set to hit workers in the pocket with lower pay increases, the Chancellor has said.
Rachel Reeves conceded her decision to hike national insurance for employers could have a knock-on effect for staff.
The warning came as the independent watchdog said the average person would be £300 a year worse off with another five years of sluggish growth.
The "trick and treat" Halloween package included:
- A freeze to fuel duty for a 15th consecutive year in a win for The Sun's Keep It Down campaign A penny off a pint by cutting draught beer duty, but raising booze taxes on other drinks A gloomy forecast of sluggish growth is a blow to Labour's flagship mission A stamp duty rise for second-home buyers of two percentage points A pay rise for millions as the minimum wage was increased by £1,400 a year A hike to a packet of cigarettes as smoking duties were raised A new tax on vapes ahead of the looming ban on disposable e-cigsHigher taxes on air passenger duty for private jets that hit the wealthy A benefits crackdown with Ms Reeves telling jobless Brits to "get back to work" An increase to the state pension of £473 next year through the triple lock An inheritance tax raid through freezing the rates people pay An increase to the Carer's Allowance to give cash to 60,000 more carers
The tax raid - that could raise as much as £25 billion - could affect wages for private sector wages unless firms soak up the extra costs.
The move comes after it's been revealed that 141 days before the election she said: "We don't need higher taxes."
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She told voters that Labour had "no plans" to go beyond the £8.5 billion of tax hikes set out in the manifesto.
Ms Reeves told BBC Breakfast: “I said that it will have consequences.
She added: “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.”
She also revealed that the measure meant that she had little other choice following her inheritance from the previous administration.
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The Chancellor said: “Look, what alternative was there? We had a £22 billion black hole in the public finances.”
Plans have been announced that will protect the smallest businesses from the tax rise.
Despite claims of breaking the Labour party manifesto, Ministers say they have not raised taxes on working people - by hiking national insurance, income tax and VAT.
The day after the Budget allows time for experts, politicians and journalists to wade through the small print.
Tough road ahead for public hit in the pocket
Rachel Reeves has a big job to sell her Budget to business and public alike
The day after the Budget allows time for experts, politicians and journalists to wade through the small print.
The public may see the Chancellor give the speech in the House of Commons but accompanying documents are also published.
What has been uncovered so far is the employer national insurance hike WILL hit workers not just company bosses.
This goes to the heart of the Labour manifesto which said taxes wouldn't go up on working people.
Rachel Reeves has conceded there will be consequences for workers - which could see lower wage growth as a result.
Hidden away in a document by the independent Office for Budget Responsibility it said the average person would be a staggering £300 worse off thanks to the Budget.
Other experts have raised issues about living standards which will struggle to pick up.
The Labour government has put growth at the heart of its mission for government.
Forecasts revealed at the Budget revealed it was likely to be sluggish.
This will have a knock-on effect for Brits and show it's going to be a tough road ahead.
The Resolution Foundation say the next few years will be the worst term for living standards under any Labour government.
The think tank says it will be lower even than the 0.8 per cent annual growth recorded in the 2005 Parliament.
Laura Trott, Shadow Chief Secretary to the Treasury, said: “Rachel Reeves confirmed this morning that her budget will hit pay for workers.
“This follows from OBR saying household income will fall by 1.25%, and inflation will be pushed up because of the decisions in Labour’s budget.
“This is the Budget Labour planned all along but were not honest about at the election. And its’s no wonder, the effects of it are far worse than even we predicted during the campaign.”