There will be no more tax rises or borrowing for the duration of this government’s term, Chancellor Rachel Reeves has said.
She told business leaders there will not be another budget like her maiden announcement, which included a rise in employers’ national insurance contributions and the national minimum wage.
“I’m not coming back with more borrowing or more taxes. And that is why at this budget, we did wipe the slate clean to put public finances and public services on a firm footing,” she told attendees at the Confederation of British Industry (CBI) conference.
“As a result, we won’t have to do a budget like this ever again.”
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Ms Reeves’ budget has faced sharp criticism from major UK businesses who have said the policy measures will cost them millions, forcing them to raise prices and cut jobs.
Analysis from independent forecasters the Office for Budget Responsibility said the budget would cause inflation to be higher than originally predicted, adding to the disquiet.
But Ms Reeves has insisted there is no alternative to her policies.
“I’ve heard a lot of feedback but what I haven’t heard is a lot of alternatives,” she said on Monday afternoon.
The £22bn “black hole” in public finances needed to be plugged, which necessitated “difficult decisions”, Ms Reeves reiterated.
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CBI chief’s approach to budget tax shock
Full consultation on the employer taxes could not take place with firms, she added, because budgets are supposed to be made to MPs in the Commons and not leaked to industry or the media.
“It is the nature of budgets that you can’t announce or consult in the way over tax rates that you can with other policies,” she said.
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Earlier on Monday, the head of the CBI, one of the UK’s most prominent business groups, said the budget business tax rises will hit firms rather than encourage growth.
A key goal of the Labour government is to grow the economy.
Kingfisher, the owner of Screwfix and B&Q, also said on Monday that the national insurance changes alone would force up its costs by £31m in the next financial year.
Meanwhile, the boss of McVitie’s, Jacob’s and Carr’s said the UK was losing its appeal for his business.
“We would like to continue to be a major investor going forward,” said Salman Amin, chief executive of snack food company Pladis.
But, he warned: “It’s becoming harder to understand what the case for investment is.”