“This budget completes the biggest heist in modern history. Labour promised not to raise taxes, but this £40bn tax hike amounts to a £1,400 bill for every household. The British public are right to be furious that they were brazenly lied to. No budget in recent memory has hiked the taxes of the British people more. Labour’s recipe of taxing, spending and borrowing more has caused the OBR to downgrade growth to amongst its lowest levels for decades. Forget boom and bust. Rachel Reeves will go down in history as the Gloom-and-Bust Chancellor. Reeves and Starmer conned the public at the General Election and working people are now paying for it with higher taxes and lower growth.”
“Labour had 14 years in Opposition to think about what they should do with the economy and this is what we get: higher taxes, more borrowing, and lower growth. We Conservatives cannot afford to make the same mistake. We need to return to principles and spend our time out of Government building a plan that will rewire the state, bring down taxes and reward the risk-takers and the entrepreneurs who create jobs and fuel economic growth.”
“The Chancellor’s commitment to public investment in new infrastructure is to be welcomed. However, it will be impossible to get the scale of investment needed to get Britain building again without private financing. The UK is one of the only countries in the developed world that doesn’t use public private partnerships to build new schools, hospitals and transport. We need a modern partnership between the private and public sectors that addresses the issues of the past if we’re avoid another lost decade of British infrastructure.”
“Labour came into power promising to secure the highest sustained growth in the G7. And the Chancellor opened her Budget by saying that the route to growth was to ‘Invest. Invest. Invest’. But by hammering the private sector, she has delivered a Budget which – as the Office for Budget Responsibility’s own figures show – will reduce business investment, trade and private sector activity, propping up the economy via higher state spending. A party which promised no tax rises for working people has today committed to £40 billion in tax rises, the centrepiece of which is a massive tax hike for businesses through an increase in employer’s National Insurance – the vast bulk of which ultimately falls on workers themselves – plus a reduction in the threshold at which it is paid. This increases the cost of employing workers, especially those who earn least. Along with increases to capital gains tax, stamp duty, energy taxes, inheritance taxes, cuts to agricultural and business reliefs, and the abolition of non-dom status, the Chancellor will have made existing investors very nervous about continuing to do business in Britain and sent a powerful anti-growth message to overseas investors.
“Today’s budget marks a decisive, positive shift for the UK economy. By setting a course that involves higher investment than the previous government planned, and additional tax revenue to support public services, the chancellor is steering the country away from stagnation and austerity, towards a better economy. On investment, the chancellor has heeded our call that getting the fastest growth in the G7 will not be possible with the lowest investment in the G7. This budget marks the moment when the UK turns the tide on our low investment, low productivity, low wage economy. The focus must now be on increasing investment year on year, and spending it well, to deliver shared growth. But decades of economic damage cannot be undone in one budget.”
“This Budget tilts resources away from the wealth-creating parts of our economy towards the public sector. It will be the working people of the UK who will suffer in the form of lower wage growth and higher tax bills. The Prime Minister said on Monday that he would take the tough decisions needed to promote long term prosperity. The decisions made today are unlikely to unlock the growth needed to do this.”
“The scale of the challenge facing Britain is enormous. GDP per capita, wages, productivity and living standards have all stagnated and our public services aren’t working. The Chancellor is right to say that the only way to get our country out of this quagmire is to go for growth. Unfortunately, many of the measures outlined in this Budget will have the complete opposite impact to that which is intended by the Chancellor and will worsen – rather than fix – Britain’s problems. The abolition of the non-dom regime will drive away highly-mobile wealth creators, and so their tax contribution will decrease and they will invest less in our economy. The Minimum Wage rise will increase the cost of goods and services, and make it harder for businesses to employ more people, or to move people off minimum wage jobs. Anti-private sector measures, namely levying VAT on private school fees, will not improve state sector provision. Instead, the Government risks overwhelming state schools, increasing class sizes, and reducing opportunities for under-privileged children, all whilst potentially raising no money at all. And a tax on vaping liquid will increase the cost of products that smokers use to help them give up cigarettes. We welcome the Chancellor’s decision to unfreeze Income Tax thresholds from 2028, preventing more workers being dragged into higher Income Tax bands. But the tax rises in this Budget will actively hurt working people. An increase in Employers’ National Insurance Contributions, which is a tax on jobs, will suppress wages and job creation. The hike to Capital Gains Tax too will keep productivity and wages low. The Government needs to outline a radical plan to boost growth and wages. This Budget is not it.”
“We were consistently told that there was no need for big tax hikes because of a focus on growth, so taxpayers will be disgusted by the whoops and cheers of Labour MPs celebrating the fact that Rachel Reeves has just condemned the country to a record high tax burden.
Given wider global uncertainties the stakes are incredibly high, yet we’ve doubled down on disastrous managerialism and decline. That means growth will flatline over the next five years, which is unsurprising given the assault on aspiration and wealth creation we’ve just witnessed.
If the government ever wants to regain the trust of taxpayers it will need to rapidly find a way to halt the growing tax burden. This astonishing hike in national insurance contributions for employers will decimate businesses up and down the country. And despite what the chancellor may claim, the grim reality is that the cost of this will ultimately be borne by working people through lower salaries. Labour should be apologising for what is clearly a manifesto breach that will do huge harm to taxpayers.”
“The Government came into office promising to prioritise growth. But the reality of their first Budget – heavier burdens on business and more borrowing for public sector capital spending – does not inspire much confidence in their approach. Coming alongside an inflation-busting increase in the minimum wage and heavy-handed changes to employment law, higher employer National Insurance Contributions will be a bitter pill for firms to swallow. Businesses will see their costs rise and it will be workers who pay the price – in the form of lower wages, reduced benefits, and fewer job opportunities. The idea that this Budget does not increase taxes on workers is an economic fantasy. While rejecting an extension to the freeze on income tax and national insurance thresholds is welcome, it does not undo the damage elsewhere. They will still remain frozen for now, meaning the effects of fiscal drag will continue to eat into our pay cheques for the next 4 years. Without a radical, reformist agenda – a focus on the fundamental causes of our economic malaise – this government faces the same fate as its immediate predecessors: getting stuck managing Britain’s relative decline, with no clear plan to break free of it.”
“The bleak growth forecast outlined by the Chancellor in her Budget shows why it is critical for the government to urgently introduce radical changes to the planning system. The only way we are going to get the growth we all want to see is by getting Britain building the clean infrastructure the country needs. More investment in infrastructure is overdue, but without bold reforms to our planning system Britain faces another lost decade. The Government should urgently set out the proposals for their planning bill to cut the red tape that holds back Britain’s builders.”
“This high-tax Budget will scare the entrepreneurs and crowd out the private investment we need to decarbonise. The private sector is willing and able to finance the UK’s clean energy transition. Hiking business taxes to fund GB Energy’s enormous £8.3 billion price tag encapsulates the government’s wasteful, big state approach to net zero. This Budget shows the government has the wrong priorities on the environment. There were positive announcements to protect electric car tax breaks, incentivise home insulation, and support rail electrification schemes. But ideological vanity projects were backed over low business taxes, long-term protection of the nature-friendly farming budget, acceleration of new nuclear, and support for rural bus services. The next Conservative leader now has an opportunity to offer a positive, market-led approach to the environment. They should seize this opening with both hands by pledging to sweep away state-imposed barriers to green private enterprise.”
“The Budget is meant to boost growth but we have done the sums very carefully and frankly it doesn’t. We think in fact that there will be a hit on growth of 3.4% as a result of the changes announced, notably the rise in employers’ National Insurance contributions, the rise in the minimum wage and the changes to Capital Gains Tax, pensions, Inheritance Tax and the taxation of non-doms. Our calculations demonstrate how each of these policies will damage the economy. Labour’s planning reforms could boost growth, but it will all come down to the detail. The tax rises, along with increased borrowing, will pay for £50 billion of higher current spending and another £20 billion of increased capital spending. This is essentially a tax and spend budget, with both taxation and spending reaching record peacetime levels as a proportion of GDP. The bottom line overall is that less growth will mean an even bigger black hole to be filled in due course.”
“Regardless of whether you thought that was a “budget for change” or a “budget of broken promises”, the fact is today’s statement provided a glimmer of hope that this Government has a plan to fix Britain’s economic inactivity crisis. This could not be more urgent. The welfare bill is spiralling out of control, with working-age incapacity benefits alone set to exceed £30 billion by the end of this parliament, and millions of people left behind. The Government must now implement the Into Work Guarantee and fully devolve employment support, building on the welcome £240 million expansion announced today. Elsewhere, the rollover funding for family hubs is good news and we hope to see that expanded in next year’s spending review, while the reduction in welfare deductions from 25% to 15% is the realisation of five years of CSJ campaigning, another step towards making work pay”
“This was a bad Budget for both trust in politics and small businesses. Labour was given a mandate for ‘change’ and the wide-ranging increases in tax announced today will do little to deliver what people wanted, or help employers. Breaking Blue, our post-mortem on the 2024 election, showed that Labour had a steady but small lead on the economy. Our research shows that voters were willing to give Labour a go, but were far from certain they would improve matters. The fact that Sir Keir Starmer said scores of times during the election that he wouldn’t raise taxes, and has now done so by a whopping £40bn, is scarcely going to convince defectors they were right to put their trust in Labour. In short, Rachel Reeves has delivered Labour’s most traditional budget since the 1970s. It ramps up borrowing for a short sugar rush of growth before slumping. Unless there are serious plans for supply side reform – with planning and nuclear power at the top of the pile – this risks being a Budget for stagnation, with living standards heading into decline.”
Ryan Shorthouse, Executive Chair of Bright Blue, said:
“Britain has been struggling with stagnation for some time: higher taxes, borrowing and spending but no significant improvements in private incomes or public services.
“The first Budget of this new Labour Government simply does not do enough to move the dial. By the end of the 2020s, our modest growth in output and living standards is forecast to hardly change, yet we will be paying higher taxes and borrowing more. If anything, to avoid austerity on public services, taxes will likely have to rise again.
“There are some positive steps: more capital spending, increased investment to boost the supply of affordable and social housing and prioritising investments in state education. And it is not credible to oppose every tax rise. But the figures speak for themselves: individual and national prosperity is projected to increase only marginally. By the end of the parliament, Britain will not really be better off.
“This Budget was a missed opportunity to take bold action to transform this country’s trajectory when the Labour Party were at the height of their political power. The public is despondent and disillusioned with mainstream politics. The wolf is at the door. It is vital that moderate politics delivers via this new Labour Government. Those in power need to be bolder.”