Keir Starmer’s government budget, unveiled on October 30, is historic in more ways than one. It is the first defended by a woman, Rachel Reeves, 45, the Chancellor of the Exchequer. This key function of the British parliamentary monarchy, which has existed since the medieval era, has until now always been occupied by a man. It is also the first budget from a Labor cabinet after fourteen years of Conservative domination, which the British left ended after its victory in the general election in July.
Finally, this budget, which Mr Starmer announced as ” painful “ last summer, plans unprecedented tax increases of 40 billion pounds sterling per year (48 billion euros), but also a huge envelope of 100 billion pounds sterling of investments over five years, for, according to Rachel Reeves, “rebuild” the United Kingdom and its public services, which are “on their knees” for having been neglected by the conservatives.
If the Chancellor imposes such tax increases, it is because, repeated this former economist at the Bank of England, “the lamentable state in which the conservatives have left the country”in particular, of a hole of more than 20 billion pounds sterling in public finances in 2024 (differential between expenditure incurred and revenue forecast at the Treasury) which would have ” hidden “ the office of conservative Rishi Sunak. To keep Labour’s campaign promise not to increase taxes on “workers”Rachel Reeves, however, announced that most of the tax increases would be borne by businesses or would come from capital income.
No “return to austerity”
The employer’s contribution to National Insurance (which is used to finance certain social benefits) will increase by 1.2%, the tax on capital profits will increase from 10% to 18%, remaining one of the lowest in the G7 countries. . The Chancellor also announced an increase in inheritance taxes, on plane tickets for private jets, a 20% VAT on private school tuition fees and the end of the advantageous “non-dom” status. », which allowed non-Britons permanently residing in the country not to be taxed in the United Kingdom. Finally, Rachel Reeves promised that there would be no “return to austerity”but departments already in difficulty (such as transport or especially justice) will have to tighten their belts again.
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