Rachel Reeves’ tax-hiking Budget will hit workers however Labour frame it, the former governor of the Bank of England has said.
Lord Mervyn King, who was head of the Bank of England for a decade until 2013, said that the debate around who Labour are classifying as a “working person” is “a terrible illusion”.
Speaking on Sky’s Sunday Morning with Trevor Phillips, Lord King said: “Taxes are paid by people, they’re not paid by companies or institutions, ultimately, they fall on the amount that people can spend, and you only can raise significant amounts of money by raising taxes on most people, however you care to define that, but it’s most people will have to pay higher taxes.”
He added: “Ultimately, the impact of these higher taxes has to be on the consumption of most people, however you care to define that group.”
It comes after education secretary Bridget Phillipson pledged that working people would not see higher taxes on their payslips.
We’ll be bringing you all the latest updates ahead of the big event here, on The Independent’s liveblog.
Key Points
- What is expected in next week’s Budget?
- Rachel Reeves: Budget is ‘not going to be easy'
- Working people will not see higher taxes on their payslip, education secretary promises
- New era of investment in hospitals, schools and transport to be announced in Budget
- Expected rise on bus fares in Budget - reports
Recap: Education Secretary open to ban on smacking children
16:31
Holly Bancroft
The Education Secretary has said she is “open-minded” to a ban on smacking children, but she added there are no imminent plans to change the law.
Bridget Phillipson said she would like to hear more from experts on how such legislation could work - a change in tone from the previous Tory government which said it was up to parents to discipline their children.
It comes after Children’s Commissioner Rachel de Souza said a ban is a necessary safeguarding step and suggested similar measures already in place in Scotland and Wales should be adopted in England.
Asked whether she supports that proposal, Ms Phillipson told the BBC’s Sunday With Laura Kuenssberg show: “We are considering it, but this is not an area where we intend to bring forward legislation any time soon.
“I’d be keen to hear from the Children’s Commissioner and from others about how this would work. I’m open-minded on it. It’s not something we intend to legislate on, but I think we do need to look at how we keep children safe.”
She said measures set out in the Children’s Wellbeing Bill, which will be brought forward “by the end of the year”, will address many of issues relating to children’s social care and safeguarding.
Analysis: 8 things to watch out for in autumn budget 2024
16:05
Kate Devlin
Rachel Reeves is set to unveil Labour’s first Budget in a generation on Wednesday – and the first ever written by a female chancellor.
She has warned that it will involve “difficult decisions” – as she blamed the last Tory government for leaving a £22bn black hole in the public finances.
Paul Johnson, the director of the high-respected Institute for Fiscal Studies (IFS) think tank has already said it could be the “biggest tax-raising budget” ever and yet it still could leave “a lot of public services still feeling squeezed”.
Here we take a look at some of the key measures expected:
Rachel Reeves claims her Budget is for strivers amid uncertainty over ‘working people’
15:42
Kate Devlin
Rachel Reeves claimed her Budget was for strivers as she tried to draw a line under a furious row over Labour’s definition of working people.
The chancellor, who is expected to raise taxes on Wednesday, warned that she had had to make “tough decisions…Not everything is going to be easy”.
But she said her reforms, which Labour hope will kickstart economic growth, were for “hardworking families up and down the country who have been crying out for change.
“To these people I say, I’ve got your back.... I will deliver for you. It’s a Budget for the strivers,” she wrote in The Sun on Sunday.
Public services will still feel the squeeze despite tax hikes - expert
15:19
Holly Bancroft
Paul Johnson, the director of the Institute for Fiscal Studies, has warned some public services could continue to feel squeezed despite “one of the biggest tax-raising budgets ever”.
When asked about what the government’s pledge to protect the NHS budget could mean for non-protected departments, Mr Johnson told Sky News’s Sunday Morning With Trevor Phillips programme: “If we get tax rises of the scale that it looks like we might, then that will at least allow some increases for other departments, but they still won’t look like very generous ones.
“Now part of the problem of course is the NHS is so big that if, for example, they were to be as generous as 4 per cent or 5 per cent a year increases - and mind you that’s nowhere near as big as what the last Labour government was able to give the NHS - that still leaves other departments quite tight: increases in their budgets but probably not even increases in line with national income.
“And of course justice, local government, social care, police, prisons, they’re all really struggling at the moment.
“So again we’re in this really tough position where we could have the biggest tax-raising budget, or one of the biggest tax-raising budgets, ever and yet a lot of public services still feeling squeezed.”
Man dies after Channel crossing attempt
14:56
Holly Bancroft
A man has died after a boat carrying migrants deflated in the English Channel on Sunday morning, French authorities said.
The man, who was Indian and aged about 40, was in a boat which left from the town of Tardinghen in northern France at 5.30am, the prefecture of Pas-de-Calais said.
The boat quickly deflated and the people on board swam back to the beach, the authorities added.
Emergency services tried to help the man, but he died at the scene.
The authorities said several attempts were stopped by police and gendarmes on Sunday morning, including in Equihen-Plage, Calais and Sangatte.
Scheme to boost French school trips to Britain ‘in peril'
14:39
Holly Bancroft
A scheme that brings more French children to the UK for school trips is reportedly in peril as a result of new Brexit rules.
The Financial Times has reported that the scheme is at risk because of the UK’s new electronic travel authorisation (ETA) scheme, which is due to come into force on 2 April 2025.
This will require all EU visitors to the UK to register before their travel. Registering will require the children to have a passport. French president Emmanuel Macron and then-prime minister Rishi Sunak had agreed that French school children could travel to the UK just on ID cards, however this seems to have been scuppered by the new ETA requirements.
Rachel Reeves’ expected tax hike will hit working people, says ex-Bank of England governor
14:13
Holly Bancroft
Former Bank of England governor Mervyn King has said the debate around not putting up taxes on working people is a “terrible illusion”.
Lord King told Sky News’s Sunday Morning With Trevor Phillips: “All this debate about not putting up taxes on working people is a terrible illusion, really.
“Taxes are paid by people, they’re not paid by companies or institutions, ultimately, they fall on the amount that people can spend, and you only can raise significant amounts of money by raising taxes on most people, however you care to define that, but it’s most people will have to pay higher taxes.
“And if they, instead of unwinding the cuts in employees’ national insurance contributions, put up employers’ national insurance contributions, that will make it less likely that companies will exceed to wage demands, they will press down on that, they will probably be less enthusiastic about creating new jobs.
“Ultimately, the impact of these higher taxes has to be on the consumption of most people, however you care to define that group.”
Daughter of murdered MP says he was failed by government
14:09
Holly Bancroft
The daughter of murdered MP Sir David Amess said he was “catastrophically” failed by the government’s Prevent programme, as she called for a full inquest into his death.
The veteran MP, 69, was stabbed to death by Ali Harbi Ali, then aged 26, at Belfairs Methodist Church in Leigh-on-Sea in Essex in October 2021.
Katie Amess, 39, said she was told Ali had been reported to Prevent in 2014, but after one meeting his case was not followed up by the anti-radicalisation programme “due to an admin error”.
She told The Sunday Times: “He was reported. People were trying to help us, and so why was he allowed to just go on and do whatever he wanted for seven years?
“What happened to my dad should not have been an admin error.”
Sir David, a father of five, had been holding a surgery in his Southend West constituency when he was attacked by Ali, who was sentenced in 2022 to a whole-life prison term for the murder.
In an interview with The Sunday Times, Ms Amess, an actress who lives in West Hollywood in the United States, said the pain of his death was “unbearable” and “unspeakable”.
She added: “It’s pretty obvious that Prevent isn’t fit for purpose, it has consistently failed people.
“It failed me. It failed my family catastrophically, it failed the public and also it failed other Members of Parliament.”
Recap: Reform MP says party’s migrant plan could lead to ‘friendly stand-off’ between British and French in Channel
13:54
Holly Bancroft
Richard Tice, the deputy leader of Reform UK, has admitted his party’s policy of picking up and taking migrants back to France could result in a “friendly stand-off” between the countries in the English Channel.
Read more here:
Smacking ban being considered by UK government, education secretary says
13:46
Holly Bancroft
The new Labour government is considering a ban on smacking, a cabinet minister has said.
Bridget Phillipson said she was “open-minded” about the move and wanted to hear from experts.
Smacking bans have already been brought in in Scotland and Wales, to outlaw the use of physical violence to punish children.
The move follows fresh calls for a change in the law from the Children’s Commissioner for England Dame Rachel de Souza
Education secretary Ms Phillipson told the BBC’s Sunday With Laura Kuenssberg programme “we do need to look at how we keep children safe”.
Revealed: Farage-inspired plot to persuade Trump to veto Starmer’s Chagos Islands deal
13:20
Holly Bancroft
A Nigel Farage-inspired bid to persuade Donald Trump to veto Keir Starmer’s controversial Chagos Islands deal can be revealed today.
The Independent has seen legal advice on Starmer’s controversial deal to hand over the Chagos Islands to Mauritius sent to Mr Trump that was requested after the Reform UK leader raised the issue directly with the former president’s team.
The advice was drawn up by legal experts who worked alongside Mr Farage in the Brexit campaign.
Mr Farage says he was not directly involved in the legal advice but his links with Trump are believed to have played a vital part in the initiative.
The aim of Farage and his allies is to persuade Trump to block the deal if he becomes president.
Read the full exclusive story from David Maddox and Andrew Feinberg here:
Recap: Labour donor says rich Brits opposing higher taxes should ‘f*** off’
13:07
Holly Bancroft
A prominent Labour donor has told wealthy Britons threatening to leave the country over potential tax hikes to “f*** off,” claiming they contribute little to the UK if they are only here for low taxes.
Dale Vince, the green energy tycoon who has previously donated £5 million to Labour, has dismissed arguments that higher taxes will harm UK entrepreneurship, describing this view as “profoundly stupid.” Instead, Mr Vince suggests Britain would be better off without those who are prepared to leave if, as expected, Shadow Chancellor Rachel Reeves raises taxes in the upcoming Budget.
Read more here:
Expected rise on bus fares in Budget - reports
12:41
Holly Bancroft
Rachel Reeves could put up the price of bus fares in Wednesday’s Budget, according to newspaper reports.
Department for Transport analysis has reportedly concluded that the £2 cap on bus fares is not financially sustainable for the taxpayer and bus operators. The measure has apparently cost £200 million in the first ten months between January and October 2023.
Ms Reeves is expected to announce the rise and say that such measures are necessary to fund the NHS.
Police probe reports of an assault involving Labour MP
12:26
Holly Bancroft
A former Labour shadow minister says he has spoken to police after a video emerged of him appearing to tell a member of the public “you won’t ever threaten me again, will you?”
Officers are investigating reports of an alleged assault involving the backbencher.
In footage shared on social media, Mike Amesbury, the MP for Runcorn and Helsby, is seen apparently repeatedly pointing at the man, who is on the ground.
At one point, when he is identified as a local MP, he appears to say: “Yes, I am, and you won’t threaten the MP ever again, will you?”
Cheshire Police said they were called to reports of an assault in Frodsham in the early hours of Saturday.
Asked whether the Labour Party was investigating, Ms Phillipson told Sky News’s Sunday Morning With Trevor Phillips programme: “Mike Amesbury, who’s the MP in question, has gone forward to the police.
“He is co-operating with any investigation they would want to take forward. It is a matter for the police and we want to allow them to do that work.”
Budget will aim to slash government waste - reports
12:11
Holly Bancroft
Wednesday’s Budget is expected to slash government waste, such as cutting £550 million from spending on private consultants, according to a report in The Sunday Times.
Ms Reeves will also announce a sale of £1bn of government property by 2030, the newspaper reported.
Some redundancies are also expected in Defra’s arms-length bodies.
Military families set to be exempt from Labour’s controversial VAT on private school fees
12:02
Holly Bancroft
Military families are set to be protected from Labour’s decision to impose VAT on private school fees.
Critics of the plan have warned it is unfair to those in the Armed Forces who have to move countries and homes frequently and put their children in boarding schools.
There have even been warnings some could leave the services altogether as a result of fee increases which could come as a result of the changes due to come in in January.
Working people will not see higher taxes on their payslip, education secretary promises
11:43
Holly Bancroft
Working people will not see higher taxes on their payslip, a minister said as she acknowledged “frustrations” over the government’s refusal to spell out who will be hit by greater levies ahead of the Budget.
Education Secretary Bridget Phillipson repeated warnings that Wednesday’s financial statement will include “tough choices”, but she insisted it is a choice between investment or decline for the UK.
Facing broadcasters on Sunday morning, the Cabinet minister was repeatedly pressed to define the Labour Government’s use of the term “working people” – who it has promised to protect from tax hikes in the Budget.
“You are inviting me to speculate about the nature of the question that you’re asking,” she told the BBC’s Sunday With Laura Kuenssberg show.
“What I’m saying is that when people look at their payslips, they will not see higher taxes.”
Explainer: What should I do with my savings ahead of the Budget?
11:39
Holly Bancroft
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.
Other speculation focused on tax breaks for workers planning to retire, spurring them to do the opposite, and pack more cash into their pensions in case their own tax incentives are slashed.
Read more about what you should do with your savings from Howard Mustoe here:
Chief of Staff and Deputy Prime Minister in ‘battle for influence’ - reports
11:15
Holly Bancroft
Sir Keir Starmer’s chief of staff Morgan McSweeny and deputy prime minister Angela Rayner are battling for influence in No10, according to a report in The Telegraph.
The friction is reportedly over the government’s plans for devolving power across the regions and nations. While Ms Rayner is meant to be overseeing the plans, The Telegraph has reported that the most important meetings are happening behind her back.
Mr McSweeney is reportedly holding monthly calls with the mayors, while Ms Rayner is not invited.
Chancellor’s three key Budget pledges
11:01
Holly Bancroft
Rachel Reeves is expected to make three key pledges in her Budget on Wednesday.
According to a report in The Sunday Times, the chancellor will promise to “do everything in my power to protect working people”, “fix the NHS” and “rebuild Britain”.
Ms Reeves will emphasis the terrible public spending situation she inherited from the Conservatives, and the Office of Budget Responsibility (OBR) will publish a document providing a detailed breakdown of the £22bn ‘black hole’ that Labour has said it has inherited, the Sunday paper reports.
Ms Reeves will also reportedly announce an end to big changes in the Spring statement, pledging that the Budget will be the only time big economic plans are set out.
Keir Starmer denies misleading public over tax rises in the Budget
10:53
Holly Bancroft
Keir Starmer has denied misleading the public over tax rises in the Budget after he suggested “working people” did not make money from property or shares.
The prime minister also rejected claims he had waged a “war on middle Britain”.
Labour made manifesto pledges to not hike taxes on what it described as “working people,” explicitly ruling out increases to VAT, national insurance, and income tax.
Read more from our Whitehall Editor Kate Devlin here:
Extra help for foster and kinship carers announced
10:39
Holly Bancroft
The Education Secretary said she would “love to go faster” on improving family support services and bolstering protections for vulnerable children but it will “take time”.
Bridget Phillipson said the government’s commitment to extra help for foster and kinship carers - with £44 million in support announced on Sunday - “cannot be the extent of” its measures to help with safeguarding.
“This cannot be the extent of it... the children’s social care system just isn’t working,” she told the BBC’s Sunday With Laura Kuenssberg programme.
Ms Phillipson said the government would legislate for a register of children not in school in order to know “where children are” and whether they are safe.
Asked whether she believed social services should be more proactive in stepping in when there are concerns about a child, following a series of high-profile cases of children being abused and killed by their parents such as Arthur Labinjo-Hughes, she said: “What I do think needs to happen though, alongside that - and there will always be cases where the state has to step in - we need to do a lot more when our children are younger, and we need to put in much put in much more support around families.
“Because sometimes problems do escalate and the situation does get worse, and we have seen the steady erosion of family support services.”
Watch: Education secretary gives latest definition of 'working people'
10:30
Holly Bancroft
Reform MP admits migrant plan would lead to ‘friendly stand-off’ between UK and France
10:20
Holly Bancroft
Richard Tice, the deputy leader of Reform UK, has admitted his party’s policy of picking up and taking migrants back to France could result in a “friendly stand-off” between the countries.
Speaking to Sky News’s Sunday Morning With Trevor Phillips programme, he said: “It’s very simple. The government’s policy of smashing the gangs is clearly not working, and sadly people are literally dying... The only way to stop the boats is a variant of what Australia did.
“We’ve talked about it before. I will repeat it again: You’ve got to safely pick up and take back to France, which we are legally entitled to do under the 1982 UN Convention of the Law of Sea.
“And by the way France has a legal obligation to do the same, which they are in breach of. So we are legally entitled to do this.
“If the French coastguards say ‘you’re not coming in’ they’re in breach of international law.”
When pressed on what would happen if French authorities refused, Mr Tice said: “Well then we’ve got a stand-off... I’m not saying go to war but you can have a friendly stand-off with friends. It’s the only way you’re going to stop the deaths. Ours is the kind and compassionate policy.”
Reform MP: Labour’s Budget will be ‘most socialist in living memory'
10:14
Holly Bancroft
Deputy leader of Reform UK Richard Tice has said he expects Labour’s Budget to be “the most socialist budget in living memory”.
Speaking to Sky News’s Sunday Morning With Trevor Phillips programme, he said: “What we’re going to get on Wednesday, I fear, is the most socialist budget in living memory.
“I think it’ll be an assault on jobs, I think it’ll be an assault on small businesses, on entrepreneurship, on hard work and that will end up being an assault on growth.
“We’re in a crisis. You can’t tax your way out of a crisis. You’ve got to grow your way out of a crisis, and that means reducing the size of the state and motivating people with hard work, taking risks, setting up businesses, being an entrepreneur. And that’s how you get growth in the economy.
“Instead we’re going to get a bigger state, more bloated, more inefficient and with outcomes frankly that are not commensurate with the money that’s being poured into the public services.”
Scientist and TV presenter Brian Cox criticises reported cuts to research: ‘Nothing short of idiotic'
10:05
Holly Bancroft
Scientist and TV presenter Brian Cox has criticised reported cuts to research and development spending in the upcoming budget.
Former minister for science George Freeman MP has written a letter to Rachel Reeves expressing his concern at a reported below inflation spending settlement for UK science, research and innovation.
In his letter, Mr Freeman warned this would mean “deep cuts across other parts of R&D investment, with significant negative consequences for the UK’s world-leading R&D sector, putting the brakes on growth and undermining fragile investor confidence”.
Brian Cox shared the letter on the social media platform X, saying: “I wholeheartedly agree. Cutting UK R&D funding in today’s highly competitive and indeed dangerous world would be nothing short of idiotic.”
Working person is someone whose main income comes from them ‘going out to work everyday’ - education secretary says
09:56
Holly Bancroft
Education Secretary Bridget Phillipson is on the media rounds this morning.
She has declined to say whether Labour’s pledge not to raise income tax, VAT or national insurance will remain in place for the next five years. However a government source has now been forced to clarify that the pledge covers the whole of this Parliament.
She also said that a working person in someone “whose main income arises from the fact that they go out to work every day”. There has been a lot of speculation about what Labour meant in their manifesto when they promised to not tax working people.
“What we’re talking about here is people whose main income arises from the fact that they go out to work every day,” the Education Secretary told Sky News’s Sunday Morning With Trevor Phillips programme.
‘We can do great things as a country again'
09:36
Holly Bancroft
Rachel Reeves has compared her mission in this week’s Budget to Labour’s historic reform programmes under Clement Attlee, Harold Wilson and Tony Blair.
In an interview with The Observer, she said: “This is only the fourth time that Labour has gone from opposition into government. In 1945, we rebuilt after the war; in 1964, we rebuilt with the white heat of technology; and in 1997, we rebuilt our public services. We need to do all of that now.
“This is a new settlement on Wednesday to rebuild our country and seize the massive opportunites in technology and energy that are out there.
“There is a global race on for those jobs and we need to seize them for Britain. If we can unlock that investment, public and private, then we can do great things as a country again.”
New era of investment in hospitals, schools and transport to be announced in Budget
09:25
Holly Bancroft
Rachel Reeves has said that she will launch a new era of public and private investment in hospitals, schools, transport and energy in her Budget.
In an interview with The Observer, Ms Reeves has said that Labour will change the fiscal rules to allow for £50bn of extra borrowing for capital projects.
£1.4bn has already been pledged to rebuild crumbling schools, but further measures for hospitals are expected to be announced.
She told the paper: “We inherited a plan from the previous government in which public sector net investment, capital investment, would be falling sharply over the course of this parliament, and that would mean scores of hospitals not built. It would mean massive opportunities to grow our economy in the digital and energy sector would be missed and those jobs would go elsewhere.”
UK's 'best days are ahead of us' minister says
09:10
Kate Devlin
Bridget Phillipson said the UK’s “best days are ahead of us” as she promised the Budget would seek to “invest in the long-term prosperity of our country”.
The Education secretary told Sky News’s Sunday Morning With Trevor Phillips programme: “We face some tough choices but we need to restore stability back to the economy.”
She added: “But the choice of this Budget is, ‘do we invest in the long-term prosperity of our country, or do we accept we’re on a path to decline?’
“I think our best days as a country are ahead of us, and this Budget will fix those foundations so that we can get our country back on track.”
Education secretary ‘can't speculate’ how long ‘working people’ pledge will last
09:01
Kate Devlin
Education secretary Bridget Phillipson says she “can’t speculate” on whether Labour’s pledge to not raise income tax, NI or VAT on “working people” will apply for the whole five years of this government.The pledge on working people is included in Labour’s manifesto – but without a timeframe.
Follow along this morning as we bring you everything from the Sunday morning political shows ahead of this week’s Labour Budget.
What is reportedly in this week’s Budget?
08:49
Holly Bancroft
On top of what has been confirmed, here are a number of measures that are reportedly going to be in Labour’s first Budget this week:
National insurance hike for employers
The amount employers will pay in national insurance is reportedly set to rise in the Budget.
Reports have suggested it could be increased to up to two percentage points. It has been reported that the raise would be used in part to fund the NHS.
Ms Reeves will also make a cut to the earnings threshold at which employers start making national insurance contributions, The Times has reported. Both measures are expected to raise £20bn.
Continued freeze on income tax thresholds
A continued freeze on income tax thresholds beyond 2028 has been floated ahead of the Budget. Government sources have insisted it would not be a breach of Labour’s election promise to not tax working people.
A threshold freeze would allow Ms Reeves to raise an estimated £7bn by bringing more people into the tax system.
Capital gains tax on shares
Rachel Reeves will reportedly use her Budget to increase capital gains tax on the sale of shares.
However the rates will not change for selling second homes, The Times reported.
Capital gains on profits from the sale of shares, which is currently levied at a higher rate of 20 per cent, is reportedly going to rise by several percentage points.
What is expected in this week’s Budget?
08:41
Holly Bancroft
What has been trailed so far from Wednesday’s Budget:
Slash Right to Buy discount
Rachel Reeves is to slash Right to Buy discount given to those purchasing their council house. The move is designed to protect existing stock so thousands more homes remain for rent.
£500m boost for social homes
An extra £500m for the current Affordable Homes Programme will see thousands more houses built. There will also me hundreds of millions of pounds invested in housing projects in Liverpool.
£1.4bn for schools and more childcare
£1.4bn will be set aside in the Budget to rebuild crumbling schools.
£1.8bn will also be allocated for the expansion of government-funded childcare, with a further £15m of capital funding for school-based nurseries.
Ms Reeves has also said she would triple investment in free breakfast clubs to £30m in 2025-26.
Rachel Reeves: Budget is ‘not going to be easy'
08:27
Holly Bancroft
Chancellor Rachel Reeves has said next week’s Budget is “not going to be easy” but promised it will be a “Budget for the strivers”.
She admitted in an opinion article for The Sun on Sunday: “I will take the tough - but fair - decisions on tax”.
She added: “I have had to make tough decisions in this Budget. Not everything is going to be easy. But let me be clear - I am doing this for hardworking families up and down the country who have been crying out for change.”
Keir Starmer has denied misleading the public over tax rises
Saturday 26 October 2024 11:45
Alex Ross
Keir Starmer has denied misleading the public over tax rises in the Budget after he suggested “working people” did not make money from property or shares.
The prime minister also rejected claims he had waged a “war on middle Britain”.
At a press conference at the end of the Commonwealth heads of government meeting (Chogm) in Samoa on Saturday, the prime minister was asked whether he was “plotting a war on middle Britain”.
“No. Let me clear about that,” he said. “What we’re doing is two things in the Budget.
“The first is fixing the foundations, which is dealing with the inheritance that we’ve got, including the £22 billion black hole. We have to deal with that. In the past leaders have walked past those problems, created fictions, and I’m not prepared to do that.”
Asked whether he had misled the public in the Labour manifesto, he added: “No, we were very clear about the tax rises that we would necessarily have to make, whatever the circumstances, and you’ve listed them there, and I listed them, I don’t know how many times in the campaign.
“We were equally clear in the manifesto and in the campaign that we wouldn’t be increasing taxes on working people, and spelt out what we meant by that in terms of income tax, in terms of NICs [National Insurance contributions] and in terms of VAT and we intend to keep the promises that we made in our manifesto.”
Labour Budget must tackle “black hole” in family finances, charity says
Friday 25 October 2024 13:57
Albert Toth
New research by the Joseph Rowntree Foundation ahead of next week’s Budget shows the ongoing “black hole” in family finances, particularly affecting the poorest families, with many already £700 worse off than they were five years ago.
They are calling on the government to act on the findings and take action on hardship at the upcoming event.
Katie Schmuecker, Principal Policy Adviser at JRF, says: “The Budget on October 30th is not just a book-balancing exercise, it is a statement of political intent.
“The Labour manifesto described the need for emergency food parcels as a moral scar on our society, so it is inconceivable that there will not be a serious plan to protect families from hardship this winter and beyond.
“Last year Labour condemned the fact that 1 million children experienced destitution in a single year as a damning indictment of the Conservative government. A Labour government now has the power to take urgent action and people are looking to them to act.”
Budget rumours: Private equity profits
Friday 25 October 2024 13:30
Albert Toth
In a manifesto pledge, Labour said it will announce more details on plans to close the private equity tax loophole in the October Budget.
Due to the ‘carried interest’ law, private equity fund managers pay only 28 per cent tax on their income, which is treated as capital gains. This was the result of a successful lobbying campaign in 1987.
Labour has vowed to change this, making managers pay the 45 per cent higher rate of income tax. It is estimated the change will raise around £600 million a year with just a few thousand people affected.
Rachel Reeves set to borrow billions for investment after announcing major change to fiscal rules
Friday 25 October 2024 11:00
Archie Mitchell
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.
Lord Blunkett: Plans to increase NI on pension contributions “very worrying”
Friday 25 October 2024 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
Friday 25 October 2024 07:00
Alexander Butler
Air Passenger Duty may go up in Reeves’s Budget – could the ‘Inverness Immunity’ come to an end?
Friday 25 October 2024 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:
How make-or-break Budget has fractured Keir Starmer’s cabinet
Friday 25 October 2024 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.
