UK Treasury Chief Rachel Reeves announced another sweeping round of tax increases Wednesday, marking the second consecutive year of major hikes under the Labour government.
Reeves unveiled a tangle of new levies — from taxes on high-value homes to a milkshake tax — aimed at raising £26 billion to stabilize Britain’s worsening public finances. The move is intended to convince investors that the UK is not sliding toward insolvency as welfare spending and interest payments skyrocket.
Critics warn the tax hikes will further damage Britain’s weak economic growth. Reeves faced jeers in Parliament as she insisted she kept tax increases “as low as possible,” even though Labour imposed the largest tax hike in a generation just last year. With Wednesday’s announcement, Britain’s tax burden is set to reach its highest level since World War II.
The UK deficit currently stands at 5.1 percent of GDP, one of the worst in Europe. The country is burdened by rising healthcare and pension costs for an aging population, higher military spending, expensive green energy mandates, and crushing interest payments on massive debt. Next year alone, the UK is expected to spend more than £110 billion on debt interest — double its defense budget.
Labour’s poll numbers have collapsed as voters experience low growth, crumbling public services, and rising taxes. The rollout was further marred when the budget watchdog accidentally released its report early, adding to perceptions of chaos.
Reeves also expanded welfare benefits, increased NHS funding, and raised the minimum wage. Economists remain skeptical, warning that ever-increasing taxes and expanding government programs may trap the UK in a cycle of stagnation and slow, long-term decline.
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