Gareth Davies says people will be asking "what is this Budget for if it's not for growth?", after Rachel Reeves raised taxes by £40bn. The shadow exchequer to the Treasury adds the chancellor's tax increases have sparked a hostile market reaction. Report by Brooksl. Like us on Facebook at http://www.facebook.com/itn and follow us on Twitter at http://twitter.com/itn
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00:00On behalf of the millions of British people are going to be paying way more taxes when they
00:04thought that they weren't going to be because they were told that Labour wouldn't put up taxes
00:08before the election. I think if you just look at the OBR report 200 page independent audit of the
00:15budget it's pretty damning. I was quite surprised by it quite frankly we knew it was going to be
00:21bad but not this bad. Their central mission is to grow the economy and the OBR have downgraded
00:27growth expectations based on the measures in this budget. People will be asking this week
00:33and going forward what is this budget for if it's not for growth? What is it for? What are the 40
00:39billion pounds worth of tax rises on working people on small businesses across the country
00:44what is it for because it's not clear to me and it's not clear to the OBR. Well I think one of
00:50the reasons for the adverse market reaction was the fact that debt is going up quite significantly
00:56now and as I say the tax rises that were implemented were higher than a lot of people
01:04expected in the country and so when you have a budget that does that markets react but I think
01:10the principal reason is that level of debt that's going up without the growth to correspond and so
01:17there are jitters and there are concerns out there among international investors which has meant that
01:22a few things actually first of all that borrowing is going to be more expensive
01:26but as the OBR have outlined interest rates will stay higher for longer now as they project and
01:33that means higher mortgages unfortunately for the British public as well as higher inflation
01:38unbelievably having just got it down back to two percent they're projecting that that will now
01:43tick up as a result of this budget and so I think markets are considering all of those factors
01:48looking at the independent OBR and walking away from this feeling a little concerned which is why
01:53Rachel Reeves had to go out on the airwaves last night remarkably to calm markets and to
01:58to try and reassure the international community that
02:02she's on top of things which I'm not sure she is.