Veteran journalist and broadcaster Andrew Neil has slammed Chancellor Rachel Reeve’s Budget as he highlights some glaring problem that could come back to bite the Labour Government.
Ms Reeves hiked overall taxes by £40billion through her employers’ National Insurance increase and Capital Gains Tax rise.
She was dealt a blow immediately after the Budget when the Office for Budget Responsibility warned growth would fade after about two years and the size of the UK economy “largely unchanged in five years.”
Writing for the Daily Mail, Mr Neil said: “The Chancellor’s first Budget was immediately greeted with a cacophony of criticism which shows no signs of abating. If anything, the attacks are mounting as people trawl through the small print and find fresh horrors on every page.”
He added that the Budget will see “tens of billions” borrowed – despite Ms Reeves assurances she would be fiscally responsible.
Mr Neil said: “The debt markets have already taken fright.
It takes a special stupidity to pump up public spending by £74 billion over the next five years, borrow an extra £142 billion to help pay for it – and end up with a slightly smaller economy at the end of the decade than the independent Office for Budget Responsibility was forecasting before you opened the fiscal taps.
“Yet that is what Reeves has managed to achieve. As a result, living standards – as measured by disposable income – are predicted to grow almost as slowly until the end of the decade as in the previous decade.”
The employers’ National Insurance will also be a “dagger” to care homes because many staff who work in the sector will be hit by the cut to the threshold where people start paying tax – down to £5,000 from £9,100.
His comments come as Care England warns that £2,4billion will be added to annual labour costs for adult social care providers, risking putting many out of business.
GPs will also be hit by the extra National Insurance costs and “patients will suffer” as a result, Mr Neil claimed.
Small businesses are also worried as The Institute for Fiscal Studies claims the National Insurance hike will add nearly £800 to the cost of employing someone full-time on the minimum wage.
Concluding his column, Mr Neil said: “I don’t want to scare you. But there will be plenty more Halloween Budgets to come.”
Labour defended its Budget this week.
Asked about GP practices and care homes, Sir Keir Starmer’s official deputy spokeswoman said: “On this and more broadly, the Government has taken tough decisions driven by the need to restore economic stability and protect public services and that’s the approach that we have taken and we’ve been very clear throughout that that involves tough decisions and trade-offs.”
