New Budget - Collab Article
There’s been a lot of discourse in the news regarding the “New Budget”, but what does that actually mean? Well, according to House of Commons Library, “The Budget is a statement made by the Chancellor to MPs in the House of Commons, presenting the government’s plans for the economy, including changes to taxation and spending.” What this essentially means, is when the budget is announced, it tells people how much money the government is going to spend on areas of life.
Reeve’s budget delivered tax rises, social-policy shifts and cost of living reliefs aimed at repairing public finances while helping families against inflation. The budget increases minimum wage to £8 for 16–17-year-olds, £10.85 for 18–20-year-olds and £12.71 for workers aged over 21. This was intended to address the cost of living and ensure workers are improving economic stability. Other key measures are introduced to indicate a shift towards targeted taxes on consumption, including increases tax on electric vehicles, online gaming, fuel and parcel duty. The Budget also intends to scrap the two-child benefit cap, benefitting families in the efforts to eradicate child poverty. One of the consequential changes is the freeze on income tax thresholds, meaning that people will be dragged into higher tax brackets overtime. Together, these measures mark a change in who ends up paying more and who gets support.
So, what does this mean for the public? For many people on low income and benefits, the new budget brings a positive change. The two-child benefit cap is being lifted meaning parents can claim more benefits for their third child which the government hopes will lift 450,000 children out of poverty. Energy bills are being reduced aiming to make daily living more affordable. Working- and middle-class individuals may be pushed into a higher tax bracket due to inflation and savings will also face increased tax. A mansion tax has been introduced on properties worth more than 2 million so the upper class will pay more in taxes compared to other classes. Minimum wage is going up which is positive for employees but means businesses will be paying higher wage bills. However, businesses do get bigger tax breaks when buying machinery or equipment.
Whilst Reeves budget promoted cost of living cuts with various reductions to energy bills and prescription charges, the media has heavily criticised the budget’s tax rises and their impact on the working class. The BBC and The Times coverage of the budget began with the accidental early release of the OBR report, criticising the department’s organisation. Whilst The Times commended Labour’s increase in welfare spending; to fund the abolition of the two-child benefit cap, it finds fault with Reeves’ ‘stealth’ taxes. Similarly, the Guardian called the budget a ‘smorgasbord approach’ regarding the numerous targeted rises and ‘smoke and mirrors’ calculated proposal that have been attacked on social media, worrying audiences of the lack of transparency in the current government.
MATILDA, ELLIS, AMBER, ALISIA
