UK Treasury chief admits business tax rise could lead to lower than anticipated wages

LONDON (AP) — U.K. Treasury chief Rachel Reeves conceded Thursday that wages may rise by less than previously thought as a direct result of her budget decision to increase a tax that businesses pay for their employees.

On Wednesday, Reeves raised taxes by around 40 billion pounds ($52 billion) to plug a hole she claims to have identified in the public finances and fund cash-starved public services, in a budget that could set the political tone for years to come.

The biggest single measure — worth some 25 billion pounds in five years — was an increase in the national insurance contributions employers pay in addition to the salaries of their workers. The levy, which was originally designed to pay for benefits and help fund the state-owned National Health Service but which is really absorbed into the overall tax take, will also be paid from a lower salary level.

Reeves admitted that the changes may prompt employers to pass on the additional financial burden by weighing down on wages.

“I recognize there will be consequences,” Reeves told the BBC. “It will mean that businesses will have to absorb some of this through profit and it is likely to mean that wage increases might be slightly less than they otherwise would have been.”

Her admission came as a widely respected British economic think tank warned that lower than anticipated wages may mean the tax raises more than thought, adding that Reeves may have to raise taxes again in coming years in order to support public services.

In its traditional day-after assessment of the budget, the Institute for Fiscal Studies said some of the projections looked “unrealistic,” particularly on public spending.

The IFS said the government will potentially need to raise up to another 9 billion pounds the year after next to avoid cutting spending in some departments.

Although day-to-day spending is set to rise rapidly after Wednesday’s Budget, increasing by 4.3% this year and 2.6% next year, it then slows down to just 1.3% per year from 2026.

IFS director Paul Johnson said keeping to a 1.3% increase will be “extremely challenging, to put it mildly.”

The center-left Labour party won a landslide election victory July 4 after promising to end years of turmoil and scandal under successive Conservative governments, get Britain’s economy growing and restore frayed public services. But the scale of the measures announced on Wednesday by Reeves exceeded Labour’s cautious general election campaign.

During the election, Labour said it would not raise taxes on “working people” — a loose term whose definition has been hotly debated in the media for weeks. Though Reeves did not increase taxes on income or sales, the Conservatives said hiking taxes on employers was a breach of Labour’s election promise and would lead to lower wages.

Britain's Prime Minister Keir Starmer and Chancellor Rachel Reeves speak with members of staff, during a visit to University Hospital Coventry and Warwickshire, in Coventry, England, Thursday, Oct. 31, 2024. (AP Photo/Darren Staples, pool)

Britain's Prime Minister Keir Starmer and Chancellor Rachel Reeves speak with members of staff, during a visit to University Hospital Coventry and Warwickshire, in Coventry, England, Thursday, Oct. 31, 2024. (AP Photo/Darren Staples, pool)

Britain's Prime Minister Keir Starmer and Chancellor Rachel Reeves speak with members of staff, during a visit to University Hospital Coventry and Warwickshire, in Coventry, England, Thursday, Oct. 31, 2024. (AP Photo/Darren Staples, pool)

Britain's Prime Minister Keir Starmer and Chancellor Rachel Reeves with members of staff, during a visit to University Hospital Coventry and Warwickshire, in Coventry, England, Thursday, Oct. 31, 2024. (AP Photo/Darren Staples, pool)

Britain's Prime Minister Keir Starmer and Chancellor Rachel Reeves speak with members of staff, during a visit to University Hospital Coventry and Warwickshire, in Coventry, England, Thursday, Oct. 31, 2024. (AP Photo/Darren Staples, pool)

Britain's Prime Minister Keir Starmer and Chancellor Rachel Reeves with members of staff, during a visit to University Hospital Coventry and Warwickshire, in Coventry, England, Thursday, Oct. 31, 2024. (AP Photo/Darren Staples, pool)

Britain's Prime Minister Keir Starmer and Chancellor Rachel Reeves speak with members of staff, during a visit to University Hospital Coventry and Warwickshire, in Coventry, England, Thursday, Oct. 31, 2024. (AP Photo/Darren Staples, pool)

LONDON (AP) — Actor-comedian Russell Brand was granted conditional bail by a London court on Friday after appearing to face charges of rape and sexual assault involving four women.

Brand, 49, did not enter a plea. He was swarmed by photographers as he arrived at Westminster Magistrates’ Court for his first hearing since being charged last month.

Chief Magistrate Paul Goldspring told Brand to present himself at the Central Criminal Court in central London on May 30 and granted him bail on condition he keeps the court informed of where he is staying, either in the U.K. or in the U.S. He currently lives in Florida but is obliged to attend all future court appearances. If he doesn't, he will face prison.

Brand, who was wearing an open shirt and jeans, listened intently to the details of the charges as he sat in the dock. He spoke only to confirm his name, date of birth, address and that he understood his bail conditions.

On his arrival at court as police tried to control the scrum, a man shouted, “No one is above the law, Russell Brand!”

The comedian, author and “Get Him To The Greek” actor faces one count of rape, one of indecent assault, one of oral rape and two of sexual assault. The alleged offenses took place between 1999 and 2005 — one in the English seaside town of Bournemouth and the other three in the Westminster area of central London.

In September 2023, British media outlets Channel 4 and the Sunday Times published claims by four women of being sexually assaulted or raped by Brand. The accusers have not been identified.

Brand has been interviewed by police about the allegations, which he denies.

Brand has denied engaging in “non-consensual activity.” In a video posted on X after he was charged, Brand said he welcomed the opportunity to prove his innocence.

Known for his unbridled and risqué standup routines, Brand hosted shows on radio and television and wrote memoirs charting his battles with drugs and alcohol. He has appeared in several Hollywood movies and was briefly married to pop star Katy Perry between 2010 and 2012.

In recent years, Brand has largely disappeared from mainstream media but has built up a large following online with videos mixing wellness and conspiracy theories. He recently said he had moved to the United States.

Russell Brand arrives at Westminster Magistrates' court in London, Friday, May 2, 2025, where he faces, rape and sexual assault charges involving four women. (AP Photo/Alberto Pezzali)

Russell Brand arrives at Westminster Magistrates' court in London, Friday, May 2, 2025, where he faces, rape and sexual assault charges involving four women. (AP Photo/Alberto Pezzali)

A person takes a smart phone picture as Russell Brand arrives at Westminster Magistrates' court in London, Friday, May 2, 2025, where he faces, rape and sexual assault charges involving four women. (AP Photo/Alberto Pezzali)

Russell Brand arrives at Westminster Magistrates' court in London, Friday, May 2, 2025, where he faces, rape and sexual assault charges involving four women. (AP Photo/Alberto Pezzali)

Russell Brand surrounded by media as he arrives at Westminster Magistrates' court in London, Friday, May 2, 2025, where he faces, rape and sexual assault charges involving four women. (AP Photo/Alberto Pezzali)

Russell Brand escorted by police and surrounded by the media arrives at Westminster Magistrates' court in London, Friday, May 2, 2025, where he faces, rape and sexual assault charges involving four women. (AP Photo/Alberto Pezzali)

Russell Brand arrives at Westminster Magistrates' court in London, Friday, May 2, 2025, where he faces, rape and sexual assault charges involving four women. (AP Photo/Alberto Pezzali)

Actor--comedian Russell Brand arrives at Westminster Magistrates' court in London, Friday, May 2, 2025, to face charges of rape and sexual assault involving four women. (AP Photo/Alberto Pezzali)