Budget 2024: Rachel Reeves set to hike taxes in landmark statement on UK economy

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Rachel Reeves is expected to hike National Insurance contributions for employers and raise inheritance taxes for the wealthy in order to help fund a massive cash boost for the NHS.

The Chancellor will today deliver her long-awaited first Budget since Labour won a landslide general election victory in July.

She is expected to warn the UK still faces a massive blackhole in public finances caused by the previous Tory government making uncosted spending commitments.

Reeves will aim to plug the gap with a range of tax rises and by amending the rules on borrowing.

But the Chancellor will insist that Labour remains the party of ordinary working people by handing millions of people a wage rise.

The UK Government will raise the National Living Wage by 6.7 per cent - worth £1,400 a year for an eligible full-time worker – while the National Minimum Wage for 18 to 20-year-olds will also rise from £8.60 to £10.00 an hour – the largest increase in the rate on record.

The Chancellor will also boost spending on the NHS - which will in turn mean more cash for the Scottish Government via Barnett consequentials.

Reeves said: "This Government promised a genuine living wage for working people. This pay boost for millions of workers is a significant step towards delivering on that promise."

The Chancellor is also widely expected to raise national insurance contributions for employers, a move blasted by firms.

She will also use her Budget speech to make “difficult decisions on spending, on welfare and taxation” and change the way national debt is measured to give her more flexibility to borrow.

It come as John Swinney urged Reeves to "immediately and significantly" increase funding for Scotland in the Budget.

Scotland’s largest trade union body, the STUC, has also demanded an "end to austerity" as they implored the Chancellor to invest in public services and the economy ahead of the budget.

Ahead of the Budget – the first for a Labour Government since 2010 – Swinney pushed the Chancellor to boost cash for Scotland.

Speaking to business leaders at a reception on Tuesday, the SNP leader said: “The Office for Budget Responsibility highlighted recently the potential for public investment to deliver permanent improvements in the economy.

“It is welcome that my calls for the Chancellor to amend her fiscal rules have been heard, with indications last week that there will be scope for greater investment.

“The Chancellor has the chance to choose to deliver a UK Budget that invests in our public services and supports the entrepreneurial spirit displayed in Scotland’s business sector.

“With these new rules in place, the Chancellor must use the fiscal headroom they create to deliver a Budget that immediately and significantly enhances Scotland’s resource and capital funding, enabling us to invest more in our public services and take forward the vital infrastructure projects that support economic growth, net zero, and action to tackle child poverty.”

The Scottish Government has been candid about its dire financial straits in recent months, with Finance Secretary Shona Robison forced to make more than £500 million of in-year cuts.

Meanwhile, Scottish Chambers of Commerce chief executive Liz Cameron warned the Budget will have a direct impact on business confidence.

“Our Budget focus is on growth, investment and competitiveness. That means investing in skills, technology and infrastructure, and equipping the workforce for tomorrow’s challenges,” she said.

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“The Chancellor’s actions and the message they send will directly impact business confidence and investment at a time when we need to create positive momentum. We hope that our calls to support business have been listened to and not ignored.”

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