A Summary of the Article
Businesses and MPs Warn of Devastating Consequences as Chancellor Rachel Reeves Prepares to Unveil £40 Billion in Tax Rises and Spending Cuts
Chancellor Rachel Reeves is facing mounting criticism over her plans to hike taxes and impose spending cuts, with businesses and MPs warning of a "bonfire of jobs" and devastating consequences for the economy.
Tax Rises to Hit Millions of Workers and Businesses
The planned tax hikes, which are expected to raise £40 billion, will hit millions of workers and businesses, with increases in income tax, employer National Insurance Contributions (NICs), inheritance tax, and fuel duty. The government's own fiscal watchdog, the Office for Budget Responsibility, has warned that the rise in NICs will lead to "lower wages and higher prices".
Business Chiefs and Economists Slam Tax Hike Plans
Business chiefs and economists have slammed the tax hike plans, warning that they will lead to job losses, lower wages, and higher prices. Tina McKenzie, from the Federation of Small Businesses, said: "Hiking small firms' tax is a recipe for cuts to pay, hours, and jobs. Tax on work should be going down, not up."
Hospitality Industry Warns of 'Gut-Punch' to Businesses
Kate Nicholls, boss of UK Hospitality, warned that increasing employer NICs would be a "gut-punch" to thousands of hospitality venues that are already struggling to pay the bills. "These businesses want to create more jobs for local people, but this tax increase will have the opposite effect," she said.
Tory MPs and Former Chancellor Slam Labour's Tax Plans
Tory MPs and former Chancellor Kwasi Kwarteng have also slammed Labour's tax plans, warning that they will lead to a "doom loop" of higher taxes and lower growth. "They have given inflation-busting pay rises to the unions, and that is why Rachel is now looking at freezing income tax thresholds," Kwarteng said.
Labour's Poll Ratings Take a Hit as Budget Looms
Labour's poll ratings have taken a hit since their landslide election victory, with the party's handling of the economy and tax plans coming under increasing scrutiny. The Budget, which is due to be unveiled on October 30, is seen as a crucial test of Chancellor Reeves' authority and the party's economic credibility.
Cabinet Ministers in Revolt Over Spending Cuts
Several Cabinet ministers, including Deputy PM Angela Rayner, are reportedly in revolt over the spending cuts imposed by the Treasury. Ministers are said to be unhappy with their settlements, with some departments facing significant reductions in funding.
Shadow Treasury Minister Accuses Labour of 'Broken Promises'
Shadow Treasury Minister Laura Trott has accused Labour of "broken promises" over their tax plans, saying that the party had failed to be honest with the public about their intentions during the election campaign. "It's obvious to everyone that Labour have been planning tax rises all along," she said.
