Rachel Reeves, the Chancellor of the Exchequer, is set to announce a budget at the end of the month that could significantly impact the Labour government's future. Facing a potential 'black hole' in public finances, she may have to break campaign promises not to raise taxes on working people, avoid austerity measures, or exceed borrowing limits.
The Chancellor is preparing to set the direction of the Government's economic policy as she announces her approach to the public finances Rachel Reeves is preparing to set out a Budget at the end of this month that could end up defining the future of the Labour Government.
Inheritance tax and capital gains tax fall mostly on wealthier households. Some other possible tax rises, such as making businesses pay national insurance contributions on the money they put into workers’ pension pots, do not directly affect individuals but would have an indirect effect over time, example, by reducing wages slightly.
Experts have also suggested that the law allowing people to pass on their entire pension pot without inheritance tax could be abolished, which would reduce the value of the money received by the heirs of big savers.The last Government set out spending plans for the next few years, which implies that many services will have to find cuts.
To avoid those cuts, the Chancellor would either have to find £10bn-£20bn more through higher taxes or more borrowing – or hope that the economy starts growing so quickly that the tax revenue she receives increases even without higher rates.
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