Category Archives: POLITICS

Budget Analysis: Voters Could End Up Paying The Price For Rachel Reeves’ Big Gamble

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Rachel Reeves is not, by nature, much of a gambler.

She has managed to become the UK’s first ever female chancellor through a combination of political ability, sound economic judgement and caution.

But in the Budget, she decided to bet everything on the government being able to grow the economy – and the “working people” Labour have sought to protect could end up paying the price.

Reeves stunned the Commons by announcing that she was hiking taxes by £40 billion – an astronomical sum even bigger than what had been predicted and which will take the tax burden to the highest level on record.

Capital gains tax, inheritance tax and – most significantly – employers’ National Insurance are all going up as the chancellor seeks to clear up the financial mess she says the last Tory government left behind.

Tens of billions of pounds will also be borrowed as the government turns on the spending taps.

Much of the cash will be spent on improving the NHS and schools, moves which are likely to be popular with most voters.

But look at the small print and it’s clear to see why economic experts – and plenty of Labour MPs – are nervous.

Economic growth – the government’s number one mission, don’t forget – over the next five years is set to be lower than previously forecast by the Office for Budget Responsibility.

Inflation and interest rates are also set to rise, according to the OBR, further damaging household incomes.

Treasury sources acknowledge this is a sub-optimal situation, but are pleading for patience from voters.

One said: “Do we want those growth forecasts to be higher? Yes. But we’re not going to be able to turn around 14 years in one Budget. This is our first Budget in our first term.

“What the chancellor has set out is an honest Budget in response to the scale of the challenge we face.

“We’ve had to take difficult decisions on tax in order to bring back stability to the economy.

“We’re not immune to the consequences of our decisions, but the consequences of not acting would have been to lose control of economic stability.”

But there was an ominous warning from the highly-respected Institute for Fiscal Studies, whose director Paul Johnson said: “Somebody will pay for the higher taxes – largely working people.”

With the Labour government’s popularity already cratering barely three months after the election, a major financial hit to those who helped put them in office is the last thing Reeves and Keir Starmer need.

The chancellor desperately needs her big Budget gamble to pay off.

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Labour’s Tax Rises Will ‘Largely’ Fall On Working People, Leading Economists Say

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Working people will end up paying for Rachel Reeves’ huge tax hike, according to a leading think tank.

The chancellor unveiled a plan to raise a record-breaking £40bn in her Budget today, but maintained that she had stuck to her promise not to bring back austerity.

Labour also claims to have honoured their manifesto pledge not to increase taxes for “working people”.

Although that exact definition is still not clear, the government said they would not put up the income tax, VAT or National Insurance that they pay.

However, Reeves did raise the NI rate paid by for employers to 15% from April next year.

According to the Office for Budget Responsibility, three-quarters of the impact of that will be felt by employees through lower wage rises.

Institute for Fiscal Studies (IFS) director Paul Johnson said: “Somebody will pay for the higher taxes – largely working people.”

Johnson also issued a warning about the way the chancellor had “front-loaded” the government’s spending plans over the next five years.

“A government splashing the cash in the short term and promising to be more austere in future? Stop me if you think you’ve heard this one before,” he said.

He added: “The challenge will be to make sure the money is spent well enough to make those costs worth bearing.”

Accountancy outsourcing specialists Advancetrack said the increase to employers’ NICs is a “big blow to UK businesses of all sizes who are already grappling with a range of escalating costs”.

Meanwhile, accountancy firm Menzies LLP warned that this Budget was focused on “quick fixes rather than meaningful reform”.

European Movement UK CEO and former Lib Dem minister, Sir Nick Harvey, suggested there was something missing from the Budget: Brexit.

“The chancellor can tinker around the edges, but addressing the economic damage done by Brexit must become a priority,” he said.

Social mobility charity Sutton Trust thought it was educational support that was lacking from the Budget, saying: “The government has clearly identified the need to increase the national minimum wage due to cost of living pressures, so why does student maintenance remain inadequate?”

Meanwhile, Generation Rent’s chief executive Ben Twomey said: “The lack of clear support for the half of renters who don’t have savings and are really struggling is a big concern.”

Resolution Foundation’s interim chief executive Mike Brewer said the Budget engages with the country’s economic challenges – but it’s only the “first step of what will be needed”.

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JD Vance Declines To Label Russia’s Vladimir Putin An ‘Enemy’ Of The US

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Senator JD Vance (Republican, Ohio) would not concede that Vladimir Putin is an “enemy” of the United States during an interview broadcast on Sunday, claiming that the country needs to be strategic about the way it speaks about the Russian president.

The Republican vice presidential nominee told NBC’s Meet The Press Putin is “clearly an adversary” and a “competitor,” but suggested it would be wrong to antagonise him by using stronger language against him that could hinder diplomacy efforts when it comes to the ongoing war in Ukraine.

“Well, we’re not in a war with him, and I don’t want to be in a war with Vladimir Putin’s Russia. I think that we should try to pursue avenues of peace,” he said.

Vance noted the US “obviously” has “adversarial interests” with Russia.

“We can condemn Russia’s invasion of Ukraine, and I have, and of course the president has. But we also need to engage in some smart diplomacy if we’re ever going to get out of the mess that [Vice President] Kamala Harris has left us in and get back to a posture of peace,” he continued.

Former President Donald Trump has blamed both Ukrainian President Volodymyr Zelenskyy and President Joe Biden for the war breaking out. He has also said negotiating a peace deal between Russia and Ukraine would be one of his first orders of business as president-elect if he secures reelection.

Trump has also criticised the Biden administration’s efforts to continue sending assistance to Kyiv, while reportedly maintaining a cozy relationship with Putin, fuelling concern among Democratic lawmakers and US allies about the future of US aid to Ukraine in the event that he wins in November. The two men allegedly spoke on the phone several times since he left office, and Trump reportedly sent Putin Covid tests for his “personal use” in 2020, according to journalist Bob Woodward’s new book War.

While Trump’s campaign has denied the allegations contained in the book, the former president refused to answer whether he has spoken to Putin since January 2021.

“I don’t comment on that,” Trump told Bloomberg’s editor-in-chief John Micklethwait earlier this month. “But I will tell you that if I did, it’s a smart thing. If I’m friendly with people, if I can have a relationship with people, that’s a good thing and not a bad thing in terms of a country.”

Meanwhile, in the NBC interview, Vance insisted that the US would remain in the NATO military alliance under a Trump presidency.

But he also went on to say Americans “can’t be the policemen of the world,” claiming some NATO members, including Germany, need to spend more on defense, echoing Trump’s words.

“I think a very significant difference between Kamala Harris and Donald Trump is Kamala Harris would like to use our tax dollars and our troops to subsidise Europeans not taking care of their own security,” Vance said. “Donald Trump wants Europe to step up big time to become a real ally of the United States and not just a dependent.”

This year, Germany met NATO’s target for members to spend at least 2% of their GDP on defence spending for the first time since the end of the Cold War in response to the Ukraine-Russia conflict, according to Reuters.

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