Chancellor Reeves Admits Budget Will Lower Wages

Chancellor Rachel Reeves' recent Budget has sparked significant debate as she admitted that her £25 billion increase in employer National Insurance will likely reduce workers' wages. Economists, including the Office for Budget Responsibility, forecast that by 2026/27, 76% of the tax burden will be passed on to employees, resulting in an estimated annual reduction of £300 in real household disposable income. Critics, including Tory MPs and the Institute for Fiscal Studies, have labeled the Budget a 'political heist' and warned that it undermines trust in politicians. The Budget, which also includes a controversial tax on vaping liquid set to increase by 267% in 2026, has raised concerns about its impact on working people, particularly in the North East. Despite the controversy, Reeves defended the measures as necessary to address a £22 billion gap in public finances while promising not to increase key taxes like income tax and VAT. However, the Resolution Foundation cautioned that the overall effect of these changes will result in stagnating real wages and heightened living cost pressures for families.