REEVES ADMIT BUDGET WILL HIT WORKERS

As Labour faces a growing backlash against Chancellor's £40billion tax grab...

- Sam Lister

REMORSELESS Rachel Reeves has admitted working people will get lower pay rises after her brutal Budget tax raid on business.

The Chancellor yesterday said her £40billion grab will "have consequences" as firms shrink wage bills to cope with higher demands from the taxman. Business leaders warned hundreds of thousands of jobs will be lost. Economists described the national insurance rise for companies as a "tax on working people".

Market jitters over the Chancellor's plan for a massive borrowing binge sent the cost of Government debt up. Ms Reeves' choices will see the overall tax burden reach a record 38.3% of gross domestic product in 2027-28, the highest since 1948.

The Office for Budget Responsibility forecasts that by 2026-27, some 76% of the total cost of the employers' national insurance increase will be passed on through lower real wages combination of a squeeze on pay rises and increased prices.

The measure could also lead to the equivalent of around 50,000 average-hour jobs being lost, the watchdog said.

Defending her reforms, Ms Reeves, who visited University Hospital Coventry & Warwickshire with Prime Minister Sir Keir Starmer yesterday, said: "This Budget was to wipe the slate clean after the mismanagement and the cover-up of the previous Government.

"I had to make big choices. I don't want to repeat a Budget like this ever again, but it was necessary to get our public finances and our public services on a stable trajectory."