Overview
- Rachel Reeves says she wants more fiscal headroom and has floated generating an extra £9.9bn, signaling higher taxes on the well-off while ruling out a new wealth tax and keeping pledges not to raise income tax, employee NI, VAT or corporation tax.
- The Office for Budget Responsibility will, for the first time, score the Employment Rights Bill’s economy-wide impact, after government analysis estimated employer costs of up to £5bn a year.
- OBR commentary has indicated the workers’ rights package is likely to have a net negative short‑term effect on employment and productivity, intensifying pressure on ministers over the bill’s design.
- ICAEW warns that further business tax rises would hit hiring and investment, citing a survey in which 56% of firms said they would cut jobs or freeze recruitment if taxes on businesses increase again.
- Trade unions caution they could withdraw financial support if welfare cuts proceed, as Reeves confirms welfare reforms are under consideration, while advisers speculate about unconfirmed measures such as reducing tax-free pension cash or changes to capital taxes.