More tax rises on the way 'if anything at all goes wrong' with Rachel Reeves economic plans, IFS warns
'The risk is certainly that when we get to the next Budget this coming autumn if the economic forecasts move at all in the wrong direction, then we may have to have some more tax increases,' Mr Johnson told BBC radio.
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Scottish Sun
4 hours ago
- Scottish Sun
Beloved cafe serving loyal customers classic English breakfasts for nine years is forced to close due to cost of living
The owner thanked customers for the "wonderful journey" TEATIME'S OVER Beloved cafe serving loyal customers classic English breakfasts for nine years is forced to close due to cost of living A BELOVED cafe that served customers classic English breakfasts for nine years has been forced to close due to the cost of living. The owner said it is "impossible to carry on" in the current climate. Advertisement 2 The traditional cafe served big English breakfasts for nine yearss Traditional cafe Deb's Diner in Birmingham posted the sad update on Facebook. "It is with great sadness that Deb's Diner has closed it doors for the very last time. "Due to ill health and the current cost of living crisis, it has become impossible to carry on so we have decided not to renew our lease. "We would like to thank all of our customers for their continued support over the last nine years, it's been a wonderful journey." Advertisement Customers commented to express their sadness and to send best wishes. It comes after the Chancellor's hike to national insurance contributions and minimum wage for firms kicked in at the start of April. The NI rise has hit investment, recruitment and prices. Businesses were dealt the £25 billion 'Jobs tax' raid at the Budget with the increased contributions as confidence among entrepreneurs taking a hit. Advertisement From April 6, businesses have to pay a higher rate of employer National Insurance contributions (NICs) of 15% from 13.8%. The threshold at which they are paid is also being lowered from £9,100 to £5,000. The Government confirmed it was making the changes in its Autumn Budget last October in a bid to increase revenue. It also said the move meant it wasn't increasing taxes for working people. Advertisement However, it will have an impact on shoppers and everyday consumers as businesses look to pass on the additional costs. Figures show that almost a third of businesses affected by the hike are planning to cut jobs or freeze hiring. It comes on the back of 160,000 part-time retail jobs are on the cusp of going in the next two years due to a rise in Labour costs. 2 Rachel Reeves, Chancellor of the Exchequer, after presenting her Spending Review Credit: Alamy
Scottish Sun
6 hours ago
- Scottish Sun
Households face council tax hikes and £10billion stealth levies as Reeves gets boxed into corner by shrinking economy
Economists warned the circumstances meant tax hikes are almost certain this autumn GOGGLE-BOXED IN Households face council tax hikes and £10billion stealth levies as Reeves gets boxed into corner by shrinking economy HOUSEHOLDS face council tax hikes and £10billion in stealth levies as Rachel Reeves gets boxed into a corner by the shrinking economy, experts warn. The Chancellor, who wore protective goggles during a visit to the University of Derby yesterday, learned growth fell 0.3 per cent in April — less than 24 hours after her £113billion spending review splurge. Advertisement 2 Rachel Reeves wears protective goggles during a visit to the University of Derby Credit: Simon Walker / HM Treasury 2 Households face council tax hikes and £10billion in stealth levies Credit: Getty Businesses are reeling from the National Insurance rise, a jump in the minimum wage and ongoing uncertainty over Donald Trump's global trade war. Economists warned the circumstances meant tax hikes are almost certain this autumn — along with hard-pressed town halls having to up council tax rates by five per cent next year to pay for local services. Former Office for Budget Responsibility committee member Andy King said 'the writing was on the wall for another fiscal hole' — which would trigger tax rises or possible spending cuts in the Budget. Another expert accused Ms Reeves of 'making up numbers' in her spending review as there were few clues where savings would be found. Advertisement READ MORE ON SPENDING REVIEW TAX BLOW Council tax bills to rise at fastest rate in 20 years after Reeves' review Paul Johnson, from the Institute for Fiscal Studies, said her demands that all Whitehall departments cut administration budgets by ten per cent a year were not the result of a 'serious analysis'. He also said that if Ms Reeves was forced to raise taxes, the most politically straightforward approach would be to extend the freeze on income tax thresholds. Mr Johnson added that her plans will result in a 'sting in the tail' because local authorities would have to raise their levies. More than half of Brits — 52 per cent — reckon Ms Reeves' spending review will have a negative economic impact rather than positive. Advertisement But one piece of good news did emerge yesterday, as it was revealed the UK was finally ready to sign its trade deal with the US.
Sky News
8 hours ago
- Sky News
Rachel Reeves 'a gnat's whisker' from having to raise taxes, says IFS
Rachel Reeves is a "gnat's whisker" away from having to raise taxes in the autumn budget, a leading economist has warned - despite the chancellor insisting her plans are "fully funded". Paul Johnson, director of the Institute for Fiscal Studies (IFS), said "any move in the wrong direction" for the economy before the next fiscal event would "almost certainly spark more tax rises". Speaking the morning after she delivered her spending review, which sets government budgets until 2029, Ms Reeves told Wilfred Frost hiking taxes wasn't inevitable. "Everything I set out yesterday was fully costed and fully funded," she told Sky News Breakfast. Her plans - which include £29bn for day-to-day NHS spending, £39bn for affordable and social housing, and boosts for defence and transport - are based on what she set out in October's budget. That budget, her first as chancellor, included controversial tax hikes on employers and increased borrowing to help public services. 3:43 Chancellor won't rule out tax rises The Labour government has long vowed not to raise taxes on "working people" - specifically income tax, national insurance for employees, and VAT. Ms Reeves refused to completely rule out tax rises in her next budget, saying the world is "very uncertain". The Conservatives have claimed she will almost certainly have to put taxes up, with shadow chancellor Mel Stride accusing her of mismanaging the economy. Taxes on businesses had "destroyed growth" and increased spending had been "inflationary", he told Sky News. New official figures showed the economy contracted in April by 0.3% - more than expected. It coincided with Donald Trump imposing tariffs across the world. Ms Reeves admitted the figures were "disappointing" but pointed to more positive figures from previous months. 7:57 'Sting in the tail' She is hoping Labour's plans will provide more jobs and boost growth, with major infrastructure projects "spread" across the country - from the Sizewell C nuclear plant in Suffolk, to a rail line connecting Liverpool and Manchester. But the IFS said further contractions in the economy, and poor forecasts from the Office for Budget Responsibility, would likely require the chancellor to increase the national tax take once again. It said her spending review already accounted for a 5% rise in council tax to help local authorities, labelling it a "sting in the tail" after she told Sky's Beth Rigby that it wouldn't have to go up.
