The recent Spending Review announced by Chancellor Rachel Reeves indicates substantial increases in public spending, particularly an £11 billion annual uplift in the defence budget. Leading advisory firm Blick Rothenberg highlights that to finance these commitments, tax hikes are unavoidable, with estimates suggesting a 1.5p rise in the basic income tax rate. The review aims to boost sectors like training and apprenticeships amidst concerns regarding accessibility for businesses. While the government's energy policies receive praise, experts warn about potential cost overruns and delivery delays for major projects, underscoring the need for careful management to avoid past mistakes.
The increase in the Defence budget alone is equivalent to a 1.5p rise on the basic rate of income tax.
Sadly in many cases this additional funding may not reach the organisations who need it, because many firms are unable to access training due to the restrictive conditions associated with the apprenticeship levy.
There is a real risk that the costs of these major nuclear and carbon capture and storage facilities will significantly overrun, and that delivery deadlines will be missed.
Given the size of the government's planned spending increases, significant tax rises are inevitable in the coming months.
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