Britain's new Labour Government has handed down its first Budget with measures that include £40 billion (A$78.48 billion) in tax hikes to fund the National Health Service (NHS) and other services.
One of the changes announced by Chancellor of the Exchequer Rachel Reeves to plug what she has called a £22 billion “black hole” left by the previous Conservative government was a rise in national insurance (NI) payments by employers.
Companies will pay NI at 15% on salaries above £5,000 from April, up from 13.8% on salaries above £9,100, raising an additional £25 billion a year.
A freeze on income tax and NI thresholds for workers was interpreted by some as a “stealth tax”.
Reeves, Britain's first female chancellor (finance minister), also plans a big increase in borrowing to fund public sector investment, a higher budget for the NHS, and £5 billion to build 1.5 million homes over the next five years.
The Chancellor said she hoped Labour's first Budget since taking power would be a one-off.
"This is not the sort of Budget we would want to repeat," she told the BBC.
"But this is the Budget that is needed to wipe the slate clean and to put our public finances on a firm trajectory."
The Labour Party was elected July 4 after 14 years of Conservative-led government, which was plagued by turmoil and scandal.
Reeves and HM Treasury said the Government would not return to austerity and would instead boost investment to rebuild Britain by investing in the fabric of the country, as well as supporting the industries of the future.
“This will go towards rebuilding our schools, hospitals and roads, turbocharging the delivery of 1.5 million homes, and unlocking long-term economic growth,” they said in a statement.
The Budget was criticised by the former Conservative Prime Minister Boris Johnson as a “high tax, low opportunity budget”.
“Hitting employers for short term gain shows a lack of vision for the future,” Johnson posted on social media site X.