Rachel Reeves Under Fire For Misleading the Public Over NI Increases

[Social Media]

 

Rachel Reeves has come under sharp criticism following her claims about Labour’s economic management, with accusations of misleading the public over her handling of national insurance and the broader economy. Former Bank of England official Andrew Sentance branded her statements as an "outright falsehood" amidst rising inflation and signs of economic strain.

 

The controversy centers on Ms. Reeves's assertion that her recent Budget safeguarded "working people" by avoiding increases to their national insurance. However, her policy included a £25 billion increase in employer national insurance contributions, drawing the ire of business leaders and economists alike. Mr. Sentance, who previously served on the Bank of England’s Monetary Policy Committee, challenged her claims, stating, “How can the Chancellor say this with a straight face? It is an outright falsehood. Businesses and economic forecasters have made clear that higher employer NI means higher inflation and a bigger wage squeeze for working people.”

 

The criticism came as inflation figures for November revealed a rise to 2.6 percent, the highest in eight months, further straining household budgets. This development is seen as jeopardizing hopes for a swift recovery, with some experts suggesting Labour’s economic measures are contributing to stagnation.

 

Adding to the economic unease, UK manufacturing has taken a hit, and retailer Shoe Zone announced store closures, citing the increased costs imposed by the Budget. Shoe Zone pointed to the hike in employer national insurance rates and a lowered income threshold, which made some operations "unviable." Retail and hospitality sectors, which often employ lower-paid or part-time workers, have been particularly hard-hit. Kate Nicholls, chief executive of UK Hospitality, echoed these concerns, stating, “We urgently need the Chancellor to rethink these changes to protect businesses and team members.”

 

The economic challenges extend beyond specific industries. Domestic business confidence has plunged, with reports of project cancellations and declining orders. Ben Jones, lead economist at the Confederation of British Industry (CBI), noted, “Domestic business confidence has collapsed in the wake of the Budget, which has increased costs and led to widespread reports of project cancellations and falling orders.”

 

In response to these pressures, the Bank of England is expected to hold interest rates at 4.75 percent, disappointing millions of borrowers hoping for relief. Hopes for substantial rate cuts in 2025 have been scaled back, with current projections indicating only two potential reductions instead of the previously anticipated four. Sanjay Raja, chief UK economist at Deutsche Bank, observed, “The MPC is some way away from declaring victory on inflation,” and warned that businesses may raise prices further to offset the impact of the national insurance hike.

 

Britain’s economy, once the fastest-growing among G7 nations earlier this year, has slowed dramatically, with GDP contracting in November. Inflation, which had fallen to 1.7 percent in September, has reversed course, climbing for two consecutive months.

 

As economic headwinds grow, critics argue that the Chancellor’s policies risk plunging the UK into stagflation, where economic growth stagnates while inflation persists. The coming months are likely to test the resilience of both businesses and households as they grapple with the consequences of these fiscal decisions.

 

Based on a report by Daily Mail 2024-12-20

 

 

 

[James105]

Pretty sure Liz Truss was hounded out of office for less than these morons.  No doubt there will be another budget in April to raise taxes again when they realise that a shrinking economy doesn't generate enough revenue to fund all their foreign aid, foreign climate aid, foreign terrorist aid and illegal migrant commitments.   

[Peter60]

10 minutes ago, James105 said:

Pretty sure Liz Truss was hounded out of office for less than these morons.   

Liz Truss crashed the economy, caused a panic in the money markets and wanted to give tax breaks to wealthy people with uncosted budget plans.  Her government left office with  22 billion black hole, the British public voted very clearly to kick out a corrupt, incompetent shambles. 

[Chomper Higgot]

18 minutes ago, James105 said:

Pretty sure Liz Truss was hounded out of office for less than these morons.  No doubt there will be another budget in April to raise taxes again when they realise that a shrinking economy doesn't generate enough revenue to fund all their foreign aid, foreign climate aid, foreign terrorist aid and illegal migrant commitments.   

Liz Truss brought the UK bond market and the UK’s Pension Industry to the brink of collapse.

 

Rachel Reeve has up set the hyper wealthy and a few absent but to let landlords.

[James105]

5 minutes ago, Peter60 said:

Her government left office with  22 billion black hole

 

Any evidence for that £22bn black hole?  Perhaps you know something that the OBR doesn't as they were unable to locate it.  They were only able to identify the £9.5bn that Labour gave away on inflation busting pay rises whilst moronically not asking for productivity improvements in return.  

 

Labour have increased spending by £70bn over the next 5 years so seem to be creating new black holes as this relies on 2% growth which is highly unlikely with anti-growth policies.  Any idea where that money is going to come from?  I think the pensioners and farmers are all tapped out now so a new target will need to be identified.  

[JonnyF]

Labour lying and ruining the economy. Nothing new.

 

They think they are being clever with all these "tricky" NI raises and omitting things from the manifesto that they previously promised to do. They are not being clever, everyone sees through it and they have lost the trust and the respect of the British public. 

 

A recession is imminent. 

[RichardColeman]

7 hours ago, Social Media said:

Rachel Reeves has come under sharp criticism following her claims about Labour’s economic management, with accusations of misleading the public over her handling of national insurance and the broader economy

Misleading = LYING.

 

About time the public could sue for misleading voters in an election mandate