Rachel Reeves Sets Record as Chancellor with Historic Tax Hike of £41.5 Billion Annually in the UK by 2029-30

Rachel Reeves has set an unwelcome record with her recent Budget, becoming the Chancellor responsible for the biggest tax-raising package in history.

New data from the Office for Budget Responsibility (OBR) reveals that her plan will add a staggering £41.5 billion to the national tax burden annually by the end of the decade.

This surpasses even Norman Lamont’s infamous 1993 fiscal measures, which were estimated to raise £40.8 billion following the Black Wednesday crisis.

A Glance at Historic Comparisons

The OBR’s updated statistics now officially confirm Reeves’ Budget as the largest tax increase in comparable records, which date back to 1970.

It pushes the tax burden to a level unseen since the post-World War II period, possibly marking the highest tax load ever for Britons.

Notably, Reeves’ plan is expected to raise £41.5 billion per year by 2029-30.

The most significant component of this increase is the hefty rise in employer National Insurance contributions, which economists predict will hit ordinary citizens, leading to lower wages and higher costs for goods and services.

Surpassing Previous Major Tax Rises

When comparing Reeves’ Budget to past fiscal policies, it clearly outstrips other historic tax hikes.

For instance, Lamont’s 1993 fiscal raid, which followed the turmoil of Black Wednesday, raised £40.8 billion.

Even more surprising is the fact that Lamont imposed another substantial tax increase later that same year.

Reeves’ Budget also exceeds Denis Healey’s 1975 fiscal event, which aimed to curb inflation during a time of economic turmoil, raising £33.3 billion.

Additionally, it surpasses Rishi Sunak’s tax hike of £32.1 billion in 2021, which followed the economic impact of the Covid-19 pandemic.

Tax Burden Soars to Historic Highs

The OBR predicts that the UK’s tax burden will rise to 38.3% of GDP in the coming years, the highest since 1948.

There are no records of tax-to-GDP data prior to that, but estimates compiled by the Bank of England suggest that taxes were likely lower all the way back to 1700.

Concerns Over Economic Growth

Despite the unprecedented tax increases, there are growing concerns about the potential impact on economic growth.

Official figures suggest that the economy was already showing signs of contraction before the Budget was introduced.

Reeves’ tax-and-spend plan has raised fears that it could suppress growth even further.

The Chancellor defended her approach, stating, “At my Budget, I took the difficult choices to fix the foundations and stabilise our public finances.

Now, we are going to deliver growth through investment and reform to create more jobs, more money in people’s pockets, get the NHS back on its feet, rebuild Britain, and secure our borders in a decade of national renewal.”

The coming years will reveal whether this historic tax package will lead to the expected growth, or whether it will have unintended consequences for the nation’s economy.