Labor government ‘will not be able to do everything we want’, says Reeves

On Thursday, Prime Minister Jeremy Hunt announced a series of tax increases that will raise the tax burden to 37.5% of GDP in 2024/25. This is the highest level since World War II.

The most notable tax increases announced are:

• Freeze on income tax deductions until April 2028. According to Treasury projections, this will cause around 92,000 people to pay income tax for the first time, with an estimated 130,000 taxpayers now moving into the 40p bracket.
• The threshold at which people will be subject to income tax at the rate of 45 pence will be further reduced from £150,000 to £125,140.
• In 2024, the annual dividend deduction and capital gains deduction will be halved. The capital gains tax credit is then halved again and the following year he drops to £3,000.
• For the first time, a vehicle excise tax has been imposed on electric vehicles.
• Between 2024 and 2028, the energy sector windfall tax (energy profit tax) will increase from 25% to 35% and a new temporary generator tax of 45% will be introduced.

On Friday morning, Ms Reeves said the government could have made “a fairer choice” on taxation in its fall statement.

“For example, if you are based in the UK, you have to pay tax in the UK, and the government could have done away with non-resident tax status because there are still too many people who are not doing that.” she said.

Reeves accused the Conservatives of attacking ordinary workers “again and again” with tax increases, rather than focusing on the “broadest-shouldered” workers.

Against the backdrop of government plans, the national debt is now projected to fall to 97.6% of GDP in 2025/2026 and 97.3% in 2027/28.

Hunt also had a media round on Friday morning. There is nothing conservative about avoiding the difficult decisions that get the economy off the ground. And because we’ve been doing all these things, to make sure that one of the most important things people expect of us as a party is to get the economy sorted out, this is a very conservative package. There is a reason.

Speaking publicly, the prime minister summed up: “There may be a recession in Russia, but we are seeing a recovery in the UK.”

Reeves responded on Thursday, suggesting the prime minister should have come to parliament and “begged for forgiveness”, suggesting the country is receiving “invoices” for “genocide created by conservatives”. .