Tax & Spend
Reeves Resurrects Big State in Bid to ‘Rebuild’ Britain
- Chancellor pledges spending boost for investment and services
- Benefits may not be felt in Labour’s current five-year term
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Chancellor of the Exchequer Rachel Reeves promised that Labour’s first budget in more than a decade would end austerity and break the grip of economic stagnation. The plan she delivered will take so long to bear fruit the party will need to win another election to claim its reward.
To support her plan to “rebuild Britain,” Reeves raised taxes by £40 billion ($52 billion) a year, the most since ex-Conservative chancellor Norman Lamont’s 1993 budget after Britain was ejected from the European Exchange Rate Mechanism. The hike was to pay the bulk of a £70 billion annual increase in public spending, with the rest covered by £142 billion of borrowing across the five-year parliament.