Biggest tax hike in 30 years: Key takeaways from new UK budget

CGTN Europe

The UK's new finance minister Rachel Reeves has announced the largest tax rises in 30 years in her first budget as Chancellor.   But what did she announce and what’s the experts’ verdict?  Read More: https://tinyurl.com/4s686hpb   #UK #Finance #Economics

Transcript

00:00Well, Labour's first budget in 14 years saw Chancellor Rachel Reeves announce the biggest tax increases in three decades today,

00:07a rise of $52 billion a year, with much of it falling on businesses.

00:13According to the Institute for Fiscal Studies think tank, the tax hikes will be equivalent to 1.25% of economic output,

00:21levels not seen since 1993.

00:25However, Reeves, the UK's first female Chancellor, said she needs to cover a $29 billion shortfall inherited from the previous government.

00:34Perhaps the biggest hit to businesses was a rise in their national insurance contributions by 1.2% to 15% next April,

00:44lowering the threshold for when employers start making the contributions to $6,500 per year.

00:51Here's that moment in Parliament.

00:54I know that this is a difficult choice. I do not take this decision lightly.

01:00We are asking businesses to contribute more.

01:03And I know that there will be impacts of this measure felt beyond businesses, too, as the OBR has set out today.

01:11Well, Reeves said the decision would raise an extra $32.5 billion a year in five years' time

01:17and have further impacts, as set out by the Office for Budget Responsibility.

01:21However, company bosses have warned that tax rises, combined with an increased minimum wage,

01:27could undermine Labour's pledge to turn Britain into the fastest-growing group of seven economy.

01:33Reeves also announced a string of other revenue-raising decisions, including changes to the tax rules on capital gains and inheritance

01:42and tax paid by private equity executives and non-domiciled residents, too.

01:47Meanwhile, the Chancellor said the newly created National Wealth Fund would spur investment worth $90.6 billion

01:55by creating the conditions that businesses need to invest in the industries of the future, such as gigafactories and green hydrogen, too.

02:02The initial reaction to Reeves's speech suggests investors have taken her plans well,

02:07with government bond prices rising further as she addressed Parliament for well over an hour.

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