The real impact of this Budget is yet to be seen
Allies of Reeves argue there are several reasons for the scale of the changes The stamp-duty land tax surcharge for second homes will rise by two per cent, with immediate effect. Private equity executives will have to pay 32 per cent tax on their carried interest from April, up from 28 per cent now. Private jets will attract an extra 50 per cent air passenger duty, up to £450 per passenger for a flight. And VAT will be brought in on private school fees from January.
But even so, her ambition was enormous. The decision to invest in public services, particularly in the NHS, while balancing the books means that in cash terms this is the biggest tax-raising budget in history. The Government knows voters want a functioning state; that’s why they flocked to Labour in July.
What the OBR says is one of the most significant fiscal loosening of modern times will almost certainly mean interest rates will be higher for longer – which is a pain for private-sector borrowers and for the highly indebted government itself. But she also appeared to pull this most Labour of statements without freaking out the bond markets –, only two years ago, that should be applauded.
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