£40bn tax rise: bailout for NHS and public services!

£40bn tax rise: bailout for NHS and public services!

The British government under Finance Minister Rachel Reeves has suddenly increased taxes by an incredible 40 billion pounds (52 billion dollars)! In her first budget speech since Labor returned to power after 14 years in opposition, Reeves announced that the drastic measure was necessary to stabilize public finances and support struggling public services.

Reeves, who spoke to Parliament on Monday, stressed that the tax increase comes primarily through an increase in corporate taxes on employers. This decision was made in response to the economic “black hole” left by the previous Conservative government. “The decisions I have made today are the right ones for our country,” she declared, pledging to boost the NHS with an extra 25 billion pounds ($32.5 billion) to tackle record waiting lists in the wake of the coronavirus pandemic.

Drastic measures for the economy

To stimulate the economy, Reeves also plans to increase employers' social security contributions by 1.2 percentage points to 15 percent from April next year. These measures are expected to raise an additional £25 billion over five years. Despite warnings from business leaders that these tax hikes, combined with new worker protections and a higher minimum wage, could threaten Labor's growth promises, Reeves remains resolute. She has also announced plans to change capital gains and inheritance tax rules to generate additional revenue.

Prime Minister Keir Starmer had previously stressed that “those with the broadest shoulders” would have to pay more taxes. Still, Reeves ruled out that more individuals will be affected by the tax hike after the personal income tax exemption expires in the 2028-29 tax year. Fuel tax will also be frozen and the tax on draft beer in pubs will be reduced. A bold move that could determine the direction of the UK economy for years to come!