Chancellor Rachel Reeves has announced plans for what she describes as the “biggest drive for growth in a generation” as she prepares to deliver her second Budget on March 15, 2024. Speaking ahead of her statement in the House of Commons, Reeves emphasized her commitment to maintaining control over public spending while tackling the significant financial challenges facing the country.
Reeves outlined her intention to implement a series of economic measures aimed at addressing the ongoing cost-of-living crisis, which she described as a top priority. She stated, “I will not return Britain back to austerity, nor will I lose control of public spending with reckless borrowing.”
Priorities and Taxation Strategy
The Chancellor has identified three main areas of focus for the upcoming Budget: reducing the cost of living, cutting NHS waiting lists, and beginning to decrease public debt. She reiterated her commitment to investing in essential sectors, highlighting infrastructure projects such as roads and rail, alongside housing, education, and skills training.
To support low-income workers, Reeves confirmed an increase in the National Living Wage, which will rise by 4.1% to £12.71 an hour for eligible workers aged 21 and over, effective from next April. This adjustment is expected to boost the annual earnings of a full-time worker at this rate by approximately £900, benefiting around 2.4 million low-paid workers across the UK.
As part of her broader taxation strategy, Reeves is considering a “smorgasbord” approach to raising taxes. This may include adjustments such as increased council tax on higher-value properties, often referred to as a “mansion tax,” and freezing income tax thresholds. Such measures would effectively bring more individuals into higher tax brackets without altering the basic rate of tax. Additionally, regional mayors may gain the authority to impose taxes on overnight tourism stays, and the soft drinks levy is set to be expanded to encompass pre-packaged milkshakes and lattes.
Opposition Response
Critics, including shadow chancellor Sir Mel Stride, have voiced strong opposition to Reeves’s plans. Stride accused her of attempting to mislead the public, noting that she had previously raised taxes by £40 billion and promised not to impose further increases. He stated, “Tax rises won’t be the product of tough choices, but the Chancellor’s refusal to face them.”
As the Chancellor prepares to unveil her Budget, the economic landscape remains challenging, with public sentiment sensitive to tax increases amid rising living costs. Reeves’s commitment to growth will be closely scrutinized as she outlines her fiscal policies and their implications for the average citizen.
