Chancellor Rachel Reeves plans to cut tax increases and spending to £40 billion in this month’s budget, government sources told the BBC.
At a political cabinet meeting this morning, Reeves told ministers that filling the “£22bn black hole left behind by the previous government” would only be enough to “keep public services stagnant”.
Sources said Levi’s is currently formulating plans to raise 40 billion pounds to avoid real cuts in various departments. financial times and the times.
Reeves warned ministers that her October budget would feature “tough decisions on spending, benefits and tax”.
The Chancellor is finalizing the details of her first budget, which will be published on Wednesday 30 October.
She recently said her administration would “not return to austerity” and pledged to increase government investment to drive economic growth.
A spokesman for the Treasury said: “We do not comment on speculation about tax changes outside of fiscal events.”
Sir Keir Starmer did not rule out increasing employers’ national insurance in the budget during an interview with BBC Breakfast on Tuesday.
Treasury officials are reportedly exploring state insurance of employer pension contributions to boost budget revenue.
Employers pay NI to all employees earning more than £175 a week at an external rate of 13.8%, but employer contributions to pensions are currently exempt from this tax.
The Prime Minister sidestepped the question of whether Labour’s manifesto pledge not to raise taxes on “working people” would also cover employers’ national income.
Labour’s 2024 manifesto rules out raising “labor” taxes such as National Insurance, income tax and VAT.
on Monday, Reeves says Labour’s election promises Do not increase the NI of “working people” in relation to the employee, rather than the amount paid by the employer.
Britain’s leading business group Stirring concerns about potential tax increaseswarned it would “hinder” economic growth and “hit” the hotel industry.
The Prime Minister has insisted he will not be swayed by budget speculation ahead of a formal announcement in just over two weeks.
Given that these are market-moving measures, this is the standard position taken by the government – and in this particular case, the budget will be the most important political and economic moment of this government to date.
