Today in Focus Rachel Reeves’s big tax-and-spend budget dissected
Oct 31, 2024
Heather Stewart, a special correspondent at The Guardian with extensive experience in political analysis, discusses Labour's first budget in over 14 years. She highlights ambitious public spending plans aimed at revitalizing the NHS and education. The conversation dives into Rachel Reeves' proposals for tax increases and their potential economic risks. They also assess the impact of tax reforms on different social classes and explore the balance of optimism and concern in the overarching budget narrative.
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A Historic Budget
- Labour's budget is historic, showing significant increases in taxes, spending, and borrowing.
- It addresses the neglected public services, a key concern during the election campaign.
Tax and Spend
- Rachel Reeves plans to increase taxes by £40 billion annually and raise borrowing by £30 billion.
- This allows for a £70 billion spending increase, focusing on day-to-day expenses and long-term investments.
Addressing the Black Hole
- Reeves addresses the "black hole" by raising taxes and using a different debt definition (PSNFL).
- This approach has not negatively impacted financial markets so far.