Budget: Labour says UK in store for ‘anaemic’ GDP growth under Tories
Labour has claimed the UK is in store for “anaemic” GDP growth in the coming years in response to Rishi Sunak’s Budget today.
Shadow chancellor Rachel Reeves, filling in for Sir Keir Starmer who has Covid-19, said “the Conservatives are the party of high tax”.
Forecasts from the Office for Budget Responsibility (OBR) accompanying the Budget upgraded GDP growth forecasts this year and next, after a stronger than expected recovery.
However, annual GDP growth is expected to then dip to just 1 per cent in 2024 and 1.3 per cent in 2025.
Reeves said the UK’s high tax burden, set by 2023 to be the highest in more than 50 years, was because the UK had become a “low growth” country.
“The government is caught in a bind of its own making, because low growth inexorably leads to less money for our public services unless taxes rise,” she said.
“Under the Conservatives, Britain has become a low growth economy – let’s look at the last decade. The Tories have grown the economy at just 1.8 per cent a year. If we had growth at the same rate of other advanced economies we could have had an extra £30bn to invest in public services, without raising the taxes the Tories are raising on working people today.
“The Conservatives are the party of high taxation, because the conservatives are the party of low growth. The OBR confirmed this today – that we will be back to anemic growth … that by the end of this parliament the UK economy will be growing by just 1.3 per cent which is hardly the plan for growth the chancellor boasted about today.”
Sunak Budget saw a £150bn day-to-day spending boost, which will see every government department’s budget increase this parliament.
He also announced business rates reform, which will see taxes slashed by £7bn and a bevy of other taxes cut.
This includes fuel duty for domestic flights, the bank surcharge and alcohol duty for draught beer.
The large spending increases will come as something of a surprise, after there was much speculation that today’s Budget would not see big increases in day-to-day spending in the wake of the government’s record spending during Covid-19.
“Whilst today’s Budget delivers historically high levels of public spending, its success will be measured not by the billions we spend but by the outcomes we achieve and the difference we make to people’s lives,” Sunak said.
“The budgets are set, the plans are in place, the task is clear. Now we must deliver – because this isn’t the government’s money, this is taxpayer’s money.”