UK finance minister unveils major tax hikes
Britain is on course for big tax rises and more public spending. Finance minister Rachel Reeves delivered her first budget.
She said she would raise taxes by $52 billion - or £40 billion - and invest heavily.
"Change must be felt. More pounds in people's pockets. An NHS that is there when you need it. An economy that is growing, creating wealth and opportunity for all, because that is the only way to improve living standards. And the only way to drive economic growth is to invest, invest, invest."
Reeves was scathing about the previously ruling Conservative Party. She accused them of leaving public services broken after their 14 years in power.
She further said Labour inherited a $28.5 billion shortfall in public finances when it came to power in July.
"Any chancellor standing here today would have to face this reality and any responsible chancellor would take action." First reactions to the speech suggested investors had taken the plans well as government bond prices rose.
One leading economic think-tank believes the tax hikes would be equivalent to 1.25% of economic output. That was only surpassed in recent history in 1993 by a budget plan under the Conservatives.
Reeves also said she would raise the rate of social security contributions paid by employers to 1.2 percentage points.
That will raise it to 15% from April next year, and the move could raise an extra $32.5 billion a year in five years' time.
Company bosses had warned higher taxes on them could hurt Labour's promise to turn Britain into the fastest-growing Group of Seven economy.
Reeves announced a string of other revenue-raising moves.
They included changes to the tax rules on capital gains and inheritances and tax paid by non-domiciled residents. The government also said that she would increase the day-to-day health budget by $29.33 billion.
Reeves also aims to accelerate $90.6 billion of investment through the newly created National Wealth Fund to drive investment and build new infrastructure.
