Rachel Reeves will announce Labour’s first Budget since coming into power on 30 October, leading one of the most anticipated fiscal events in over two decades.
Ahead of her announcement, veteran Labour politician Lord Blunkett has warned the chancellor against “very worrying” proposals to raise national insurance on employers’ pension contributions.
Writing in The Times, the former Labour work and pensions secretary said: “It is one thing to increase the rate of National Insurance, and quite another to levy this on employer pension contributions.
“I sincerely hope the rumours are well wide of the mark.”
Yesterday, the chancellor said “taxes will need to rise” in her starkest warning to the public yet. Writing in the Financial Times, the chancellor added that this will come alongside “tough decisions on spending and welfare.”
Ms Reeves also strongly hints that she will be revising Labour’s fiscal rule around debt, unlocking a potential £57bn for investment, writing that the rule “will make space for increased investment in the fabric of our economy”.
We’ll be bringing you all the latest updates ahead of the big event on 30 October here, on The Independent’s liveblog.
Key Points
- Streeting refuses to rule out income tax threshold freeze
- When is the 2024 Budget and what might be in it?
- Government will keep manifesto pledges, says Starmer
Lord Blunkett: Plans to increase NI on pension contributions “very worrying”
09:10
Albert Toth
Veteran Labour politician Lord Blunkett has expressed his concerns over rumoured plans to reform pension tax relief, extending employers’ national insurance contributions.
Writing in the times, he said: “The widespread reporting of a possible extension of employers’ national insurance in next week’s budget is very worrying. It is one thing to increase the rate of national insurance, and quite another to levy this on employer pension contributions.
“As the former work and pensions secretary who signed off, with Tony Blair and Gordon Brown, pensions auto-enrolment — which recognised the genuine crisis, for generations to come, in maintaining living standards in retirement — I would advise strongly against this.
“We need more employers contributing more than the basic 3 per cent and, with it, the corollary of savings and investment, not less. I sincerely hope the rumours are well wide of the mark.”
Rachel Reeves set to borrow billions for investment after announcing major change to fiscal rules
07:00
Alexander Butler
Air Passenger Duty may go up in Reeves’s Budget – could the ‘Inverness Immunity’ come to an end?
06:00
Simon Calder
A week from now, the chancellor will be rehearsing for her first Budget. With rises in the most significant taxes – such as income tax and VAT – ruled out, Air Passenger Duty (APD) looks ripe for an increase, writes Simon Calder.
Read his expert advice:
Staggering cost of Britain’s Brexit divorce revealed – and there’s billions more to pay EU
05:00
Alexander Butler
How make-or-break Budget has fractured Keir Starmer’s cabinet
03:00
Albert Toth
Rachel Reeves’ Budget is a make-or-break moment for Sir Keir Starmer’s government, potentially sparking a decade of national renewal – or sowing the seeds of Labour’s downfall.
The prime minister’s poll ratings are at rock bottom after just over 100 days in charge, and the much-hyped “tough choices” to be unveiled on October 30 will likely do little to help boost his appeal.
Rachel Reeves to turn on spending taps with Budget boost for infrastructure and clean energy
02:00
Alexander Butler
How Labour could push through ‘stealth’ income tax rise at the Budget
Friday 25 October 2024 00:01
Albert Toth
Labour is expected to extend an income tax measure that has been described as a “stealth tax” at the upcoming Budget as more people are set to pay higher rates.
Officials have said Rachel Reeves is looking to extend the freeze on income tax thresholds, which has dragged millions of earners into paying higher rates of income tax since 2021.
Rachel Reeves set to borrow billions for investment after announcing major change to fiscal rules
Thursday 24 October 2024 21:00
Albert Toth
Rachel Reeves has announced a change to the fiscal rules ahead of next week’s budget, allowing her to borrow billions more each year.
The chancellor today confirmed her rules will “make space for increased investment in the fabric of our economy”, amid widespread expectation she will change the way debt is measured.
Rachel Reeves to turn on spending taps with Budget boost for infrastructure and clean energy
Thursday 24 October 2024 18:00
Archie Mitchell
Rachel Reeves will turn on the spending taps to upgrade Britain’s creaking infrastructure and invest in the clean energy transition, she will tell world leaders today.
The chancellor is planning to change the government’s fiscal rules to free up billions of pounds of borrowing, which she will promise to spend laying “the foundations of future growth”.
“Taxes will need to rise”: Reeves pens letter ahead of Budget
Thursday 24 October 2024 15:55
Albert Toth
The chancellor has published an article for the Financial Times where she discusses her fiscal rules. It’s the strongest hint yet that she will be revising Labour’s rule around debt on 30 October:
“My fiscal rules will do two things. The first and most important: my stability rule will mean that day-to-day spending will be matched by revenues.
“Given the state of the public finances and the need to invest in our public services, this rule will bite hardest. Alongside tough decisions on spending and welfare, that means taxes will need to rise to ensure this rule is met. I will always protect working people when I make these choices, while taking a balanced approach.
“Crucially, my stability rule will also cover the interest on our national debt and unlike the previous government I won’t cut capital budgets to make up for shortfalls in the day-to-day running costs of departments.
“My second fiscal rule, the investment rule, will get debt falling as a proportion of our economy. That will make space for increased investment in the fabric of our economy, and ensure we don’t see the falls in public sector investment that were planned under the last government.
“We will invest alongside business, through expert bodies like the National Wealth Fund, multiplying the impact of public money. And I will invest wisely — we won’t just increase investment, we will also invest differently. We won’t repeat the costly mistakes of the past.”
Starmer discusses Budget in Samoa
Thursday 24 October 2024 14:19
Albert Toth
Speaking while travelling to Samoa for a meeting of Commonwealth leaders, Sir Keir addressed Labour’s inheritance from the Conservatives head on, saying: “I am not prepared to walk past it.”
“Obviously there are other Budgets to come but this is a significant one which will set the approach, the framework if you like, and it will give a sense of how we intend to do business.
“We are going to tackle the inheritance in this Budget.
“I’m not prepared to walk past it. I’m not prepared to put it off and that is a signal of the way I want to do business which is not to pretend our problems aren’t there, it’s to actually roll up our sleeves and deal with it.”
Budget will ‘face up’ to black hole in public finances, Keir Starmer vows
Thursday 24 October 2024 11:30
Archie Mitchell
Sir Keir Starmer has said the Budget will “face up” to the reality of Labour’s inheritance from the Conservatives as Rachel Reeves prepares to borrow tens of billions of pounds to invest in Britain’s crumbling infrastructure.
Ahead of the party’s first Budget in 15 years, the prime minister promised to tackle the hole left in Britain’s public finances and give the public “a sense of how we intend to do business” going forward.
How could a change to debt rules ‘unlock’ £50bn for Labour?
Thursday 24 October 2024 10:13
Albert Toth
Rachel Reeves will reportedly unveil a major change to Labour’s fiscal rules at the budget on 30 October by borrowing billions for infrastructure investment.
Following weeks of speculation, the chancellor will reveal her plans to change Britain’s debt rules at the International Monetary Fund’s (IMF) annual meeting in Washington on 24 October.
There’s a few ways she could do this – here’s everything you need to know:
Reeves confirms disposable vape ban as new taxes still on the cards
Thursday 24 October 2024 09:52
Albert Toth
The sale of disposable vapes will be banned in England and Wales from next year.
Under legislation laid out by the Labour government in Parliament, it will be illegal for retailers to sell the devices from 1 June 2025.
It has been reported that Rachel Reeves is also considering raising the tax further as part of her Budget to be unveiled at the end of the month.
Labour has already outlined its ambition to reduce the amount of young people smoking or vaping, bringing in new rules as part of the Tobacco and Vapes Bill.
ICYMI: Reeves considers ‘Amazon tax’ in business rates reform drive
Thursday 24 October 2024 07:00
Albert Toth
The chancellor is reportedly considering a new ‘Amazon tax’ that would see business rates paid my online tech giants increased.
Industry sources understand that a consultation will be launched after Ms Reeves announces the Budget on 30 October. This means the plans may get a mention.
It comes after Labour wrote in its manifesto that it would reform the business rates system to “level the playing field between the high street and online giants.”
The manifesto added that the current system “disincentivises investment, creates uncertainty and places an undue burden on our high streets.”
Budget rumours: Inheritance Tax reform
Thursday 24 October 2024 04:00
Albert Toth
Inheritance tax is a levy on the estate of someone who has died. This is their property, money and possessions. Crucially, it is not paid if the value of these things is below £325,000.
The tax rate is 40 per cent, but it’s only charged on the part of the estate that’s above the threshold. In 2023/24, only 5 per cent of deaths generated an inheritance tax bill, raising around £7 billion.
However, the IFS writes that the tax measure “is littered with special exemptions”. These include a business relief, the ability to pass on agricultural land tax-free, and the tax-free passing on of pension pots.
The economic think tank says that ending these measures alone would raise £4.8bn a year by 2029.
ICYMI: Rachel Reeves boosted by big drop in inflation as she seeks £40bn in Budget tax rises
Thursday 24 October 2024 01:00
Albert Toth
Rachel Reeves has been boosted by a sharp drop in inflation as she seeks to find £40bn of tax hikes and spending cuts in this month’s Budget.
The chancellor will welcome the dip, which saw inflation fall under the Bank of England’s 2 per cent target for the first time in more than three years, as she prepares for what promises to be a brutal Budget.
Budget rumours: Taxing pension savings
Wednesday 23 October 2024 22:00
Albert Toth
Pension tax relief is a reduction of the amount of tax paid on private pensions. It helps workers save for retirement by boosting their pension pots.
The amount of tax relief a person is granted is based on their income tax. It will effectively cancel out tax on pension contributions up to a maximum of £60,000.
After this, contributions will be taxed at either 20, 40, or 45 per cent, depending on which income tax rate the worker falls into.
However, the chancellor is thought to be considering a flat 30 per cent pension tax relief rate. This would mean that higher earners would effectively pay 10 per cent in tax, while those on the additional rate would pay 15.
The measure would raise around £3 billion a year, with 7 million earners paying more tax. But it would be better news for basic rate earners, who would actually begin to receive a 10 per cent boost to their pension contributions.
Evaluating the idea last year, the IFS said it would “redistribute the burden of taxation from the bottom 80 per cent to the top 20 per cent of earners.”
ICYMI: Millionaires urge Reeves to raise £14bn from capital gains tax changes at Budget
Wednesday 23 October 2024 19:00
Albert Toth
Rachel Reeves should increase capital gains tax (CGT) at Labour’s upcoming Budget, a group of millionaire business owners have urged, estimating the measure would raise £14bn a year.
In a report by the IPPR think-tank, analysts have consulted with wealthy entrepreneurs who say higher CGT would not have stopped them from making investments in the UK.
Budget rumours: Capital Gains reform
Wednesday 23 October 2024 16:00
Albert Toth
Capital Gains Tax (CGT) is paid on the profit made when an asset which has increased in value is sold. It is applied to things like the sale of personal possessions worth more than £6,000 (apart from a car), property that’s not the seller’s main home, shares and business assets.
It is charged at 10 or 18 percent for basic rate taxpayers, and 20 or 24 for higher or additional rate earners. There is a tax-free allowance of £3,000.
There are several ways CGT could be changed. In the run-up to the election, the Lib Dems and Greens both said they would rethink the tax bands to be more similar to income tax, raising an estimated £5.2bn a year.
ICYMI: Wes Streeting warned inflation-busting NHS Budget deal will not be enough
Wednesday 23 October 2024 14:44
David Maddox
Fears have been raised that Wes Streeting’s inflation-busting funding deal for the NHS will not be enough for him to pay for the reforms he wants to drive through.
Sources have told The Independent that the Department for Health and Social Care is set to get about 4 per cent – between £7bn and £8bn – as Mr Streeting confirmed that he has mostly agreed his settlement with chancellor Rachel Reeves. Inflation is currently running at 1.7 per cent.
Could the chancellor introduce an ‘Amazon tax’?
Wednesday 23 October 2024 13:45
Albert Toth
The chancellor is reportedly considering a new ‘Amazon tax’ that would see business rates paid my online tech giants increased.
Industry sources understand that a consultation will be launched after Ms Reeves announces the Budget on 30 October. This means the plans may get a mention.
It comes after Labour wrote in its manifesto that it would reform the business rates system to “level the playing field between the high street and online giants.”
The manifesto added that the current system “disincentivises investment, creates uncertainty and places an undue burden on our high streets.”
Mayors in talks to soften local transport cuts – reports
Wednesday 23 October 2024 11:49
Albert Toth
Local mayors have reportedly engaged in a last-minute lobbying campaign to persuade the chancellor to soften potentially hundreds of millions in transport cuts.
There are fears bus, tube and tram projects in all 12 combined authorities represented by metro mayors could be at risk of underfunding. Following the local elections in May, 11 of these posts are held by Labour mayors.
“The mayors have been pushing back on the idea that their sustainable budgets should be cut, not least because many of them thought the money was guaranteed until 2027,” one official told The Guardian.
With the Budget only a week away, Ms Reeves will have already submitted her proposals to the Office for Budget Responsibility, making any last-minute changes unlikely.
The chancellor already made a substantial cut to rail infrastructure projects in July, when she announced the cancellation of the Tory-era Restoring Your Railways project alongside unveiling the £22bn shortfall in public spending:
What should I do with my savings ahead of the Budget?
Wednesday 23 October 2024 10:18
Howard Mustoe
Ahead of the Budget on 30 October, there has been fevered speculation about changes to pension savers’ tax allowances and other perks.
Reports that pensioners could have tax breaks cut or axed led to savers withdrawing chunks of their retirement pots ahead of Chancellor Rachel Reeves’s big announcement.
UK economy to grow faster than thought in pre-Budget boost for Reeves
Wednesday 23 October 2024 09:09
Albert Toth
The UK economy will grow faster than previously thought as lower inflation and borrowing costs lead to a boost in business activity, a boost for chancellor Rachel Reeves as she aims to fix the nation’s finances.
The update from the International Monetary Fund also suggested that the fight against inflation and the cost of living crisis had “largely been won”.
Jeremy Hunt “had a tough job” says Rachel Reeves
Wednesday 23 October 2024 07:36
Albert Toth
Chancellor Rachel Reeves has said she has a “good relationship” with her predecessor Jeremy Hunt.
“I may not be particularly impressed with the state of the public finances that he left me, but I do recognise that after Kwasi Kwarteng, he had a tough job to do as well,” she told BBC Radio 5 listeners.
She adds that if there were one person she could “pick up the phone to now” it would be Alistair Darling, who delivered Labour’s last budget in 2010.
The veteran politician died last year at the age of 70. He served in cabinet for 13 years under both Tony Blair and Gordon Brown, working as chancellor during the 2008 financial crisis.
“I hope that he would be proud of what I’m doing as the next Labour chancellor after him,” Ms Reeves said.
How make-or-break Budget has fractured Keir Starmer’s cabinet
Wednesday 23 October 2024 07:00
Alexander Butler
Budget 2024: Inheritance tax set to rise – here’s what it means for you
Wednesday 23 October 2024 06:00
Alexander Butler
Public sector pay rises hand Reeves a £6.7bn headache ahead of Budget
Wednesday 23 October 2024 04:00
Alexander Butler
Inheritance tax already up 10 per cent as Reeves looks to squeeze levy in Budget, official figures show
Wednesday 23 October 2024 02:00
Alexander Butler
Wes Streeting warned inflation-busting NHS Budget deal will not be enough
Wednesday 23 October 2024 00:01
Alexander Butler
Air Passenger Duty may go up in Reeves’s Budget – could the ‘Inverness Immunity’ come to an end?
Tuesday 22 October 2024 22:00
Simon Calder
Tax on high earners ruled out as Rachel Reeves looks to plug £40bn Budget black hole
Tuesday 22 October 2024 20:00
Alexander Butler
UK economy to grow faster than thought in pre-Budget boost for Reeves
Tuesday 22 October 2024 18:00
Alexander Butler
Inheritance tax already up 10 per cent as Reeves looks to squeeze levy in Budget
Tuesday 22 October 2024 16:00
Kate Devlin
Britons are already paying more inheritance tax as Rachel Reeves looks to squeeze millions more from the levy, official figures show.
Payments swelled the Treasury’s coffers by £4.3bn in the six months since April, £400m more than in the same period in the previous financial year and a rise of 10 per cent, new data from HM Revenue and Customs shows.
Borrowing figures show “scale of public finances challenges” says expert
Tuesday 22 October 2024 15:00
Albert Toth
Government spending so far this financial year was £11.5 billion more than forecast by the OBR, points out The Resolution Foundation, which tallies with Rachel Reeves’ claim of a £22 billion “black hole” in the public finances.
The foundation’s senior economist Cara Pacitti said: “Six months into the financial year, Britain is borrowing £6.7 billion more than expected at the time of the Budget in March.
“This reflects central government spending which is £11.5 billion higher than anticipated, largely due to public sector pay rises and higher running costs.
“Today’s data highlights the scale of the public finances challenges facing the Chancellor as she grapples with overspending today, the need to avoid austerity in the future, and having to fund extra public service spending through tax rises.”
GDP due to grow in 2024 in major uplift, says IMF
Tuesday 22 October 2024 14:05
Archie Mitchell
The IMF has said UK gross domestic product (GDP) is due to grow by 1.1 per cent in 2024 - a major uplift from the 0.7 per cent growth forecast from July.
The UK economy is then expected to grow by 1.5 per cent in 2025, with the IMF maintaining its prediction from earlier in the year.
The IMF report also found that UK inflation for 2024 is set to be slightly higher than expected at 2.6 per cent, having previously pointed towards a 2.5 per cent reading.
It likewise slightly increased its inflation projection for 2025 to 2.1per cent from 2per cent in its previous outlook.
Unemployment is also set to be slightly worse than previously expected by the IMF, according to the latest report.
It said the UK unemployment rate is set to have been 4.3per cent for 2024 as a whole, compared with a previous 4.2per cent estimate.
Rachel Reeves boost as battle against inflation has “been won”
Tuesday 22 October 2024 13:55
Archie Mitchell
Rachel Reeves has welcomed an upgrade to the UK’s economic growth forecasts from the International Monetary Fund (IMF) as it said Britain’s battle against inflation has “largely been won”.
The chancellor stressed that there is “more work to do”, but added “it is welcome that the IMF have upgraded our growth forecast for this year”.
Ahead of her first financial statement as chancellor on Wednesday, Ms Reeves said: “The Budget next week will be about fixing the foundations to deliver change, so we can protect working people, fix the NHS and rebuild Britain.”
Could capital gains tax be reformed at the Budget?
Tuesday 22 October 2024 13:00
Albert Toth
Capital Gains Tax (CGT) is paid on the profit made when an asset which has increased in value is sold. It is applied to things like the sale of personal possessions worth more than £6,000 (apart from a car), property that’s not the seller’s main home, shares and business assets.
It is charged at 10 or 18 percent for basic rate taxpayers, and 20 or 24 for higher or additional rate earners. There is a tax-free allowance of £3,000.
There are several ways CGT could be changed. In the run-up to the election, the Lib Dems and Greens both said they would rethink the tax bands to be more similar to income tax, raising an estimated £5.2bn a year.
Tax on high earners ruled out as Rachel Reeves looks to plug £40bn Budget black hole
Tuesday 22 October 2024 12:00
David Maddox
Sir Keir Starmer’s government was hit by another day of Budget confusion after Labour was bounced into conceding that individuals earning above £100,000 are still “working people”.
On a day when the prime minister had hoped to get a grip on the political agenda with the launch of a major consultation over the future of the NHS, Sir Keir faced another series of rows and speculation over whether Rachel Reeves was planning further taxes on the rich.
Borrowing figures prove need for “tough decisions” says Treasury official
Tuesday 22 October 2024 10:40
Albert Toth
Treasury Chief Secretary Darren Jones said the state of the public finances meant there would be “difficult decisions” in the October 30 Budget.
He said: “We have inherited a £22 billion black hole in the country’s public finances, including no plan to fund pay deals for millions of public sector workers.
“Strikes cost at least £3 billion last year, so it was the right thing to do to end those damaging disputes.
“Resolving this black hole at the Budget next week will require difficult decisions to fix the foundations of our economy and begin delivering on the promise of change.”
Could the government tax pension savings?
Tuesday 22 October 2024 08:00
Jabed Ahmed
Pension tax relief is a reduction of the amount of tax paid on private pensions. It helps workers save for retirement by boosting their pension pots.
The amount of tax relief a person is granted is based on their income tax. It will effectively cancel out tax on pension contributions up to a maximum of £60,000.
After this, contributions will be taxed at either 20, 40, or 45 per cent, depending on which income tax rate the worker falls into.
However, the chancellor is thought to be considering a flat 30 per cent pension tax relief rate. This would mean that higher earners would effectively pay 10 per cent in tax, while those on the additional rate would pay 15.
The measure would raise around £3 billion a year, with 7 million earners paying more tax. But it would be better news for basic rate earners, who would actually begin to receive a 10 per cent boost to their pension contributions.
Evaluating the idea last year, the IFS said it would “redistribute the burden of taxation from the bottom 80 per cent to the top 20 per cent of earners.”
Calls for budget to fund Iron Dome-style missile defence system in UK
Tuesday 22 October 2024 06:00
Jabed Ahmed
The UK needs its own version of Israel’s Iron Dome missile defence system to protect it from Russian aggression, former ministers have said.
Former defence secretary Penny Mordaunt told The I: “This is a significant UK capability gap we must plug at the earliest opportunity. The forthcoming Budget must enable early work to be done on the alliance’s key needs and let the US and other partners know we mean business.”
Fact check: Would raising employer national insurance be a ‘tax on working people’?
Tuesday 22 October 2024 04:00
Jabed Ahmed
Speculation has mounted in the subsequent months, with an increase in employer NICs now looking likely. The measure has caused strong political debate, focused on whether it would break Labour’s manifesto pledge to not raise taxes on “working people.”
Ministers and Treasury officials have indicated the government’s position is that the measure would not break their manifesto pledge. Labour has not confirmed that an employer NIC hike will be included in the Budget, but has refused to rule the measure out.
Meanwhile, Institute for Fiscal Studies director Paul Johnson has argued it would be a “straightforward breach.”
The tax expert adds that in the extreme case that an increase of one pence per pound in employer NICs was passed on to employees in the form of lower wages, the measure would only net £4.5 billion a year. He adds that the end figure would probably be a little higher than this, but much less than a previous HMRC estimate of £8.5 billion.
