Category Archives: Budget

Keir Starmer vows to ‘embrace harsh light of fiscal reality’ ahead of budget

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PM will defend Labour plans in speech and insist working people need better public services more than lower taxes

Keir Starmer will promise to “embrace the harsh light of fiscal reality” on Monday as his chancellor prepares to unveil a budget that includes billions of pounds’ worth of tax rises and spending cuts.

The prime minister will give a speech in the West Midlands defending Labour’s approach to the economy, as Rachel Reeves prepares to announce what she promises will be as momentous a budget as any in the party’s history.

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Chancellor pledges extra £500m for social homes in budget

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Treasury plans £5bn total investment in housing supply and a reduction in discounts under the right-to-buy scheme

The Treasury has announced an extra £500m for social homes in the budget, in what appears to be a compromise with the housing department, led by Angela Rayner, over the scale of ambition required in the sector.

The promise of an additional £500m for the government’s affordable homes programme (AHP) is intended to add up to 5,000 extra social homes. The Treasury said it will bring total investment in housing supply to £5bn.

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Labour to announce plans for five new UK freeports in budget

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Starmer says new low-tax zones, a policy inherited from the Tories, will ‘have this government’s stamp on them’

Downing Street will announce five new freeports in next week’s budget as part of its effort to drive economic growth.

Ministers will set out plans to establish five new low-tax zones, plus an investment zone in the East Midlands, where businesses will benefit from tax breaks such as lower tariffs and customs.

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No 10 clarifies ‘working people’ tax pledge amid confusion over definition – UK politics live

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PM hinted at tax rises for those who earn income from shares and property, saying they did not fit his definition of ‘working people’

Downing Street is blocking moves to include a ban on smoking outdoors in the upcoming Tobacco and Vapes bill amid fierce opposition by the hospitality trade.

No 10 officials privately believe that banning people from lighting up in pub gardens is “an unserious” policy and is not backed by good evidence showing that it harms non-smokers.

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NatWest urges Reeves to ‘get balance right’ when changing debt rules

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Bank’s boss says chancellor must signal intentions clearly amid risk to borrowing and mortgage rates

Rachel Reeves must “get the balance right” when announcing changes to Britain’s debt rules in next week’s budget given the potential knock-on effects to borrowing and mortgage rates, the boss of NatWest has said.

The bank’s chief executive, Paul Thwaite, said markets would be sensitive to the chancellor’s reasons for releasing up to £50bn of borrowing headroom after she confirmed in Washington on Thursday that she planned to rewrite her fiscal rules.

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Lloyds backs Reeves budget plans despite mooted tax increases

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Bank expects ‘constructive, pro-growth agenda’ by chancellor next week and seeks to be part of it

Lloyds Banking Group has backed the Labour government’s forthcoming budget and played down the impact of any tax increases, which it said would probably be part of a “constructive, pro-growth agenda”.

The chief financial officer of the UK’s biggest mortgage lender, William Chalmers, said he would welcome a budget package that was consistent with government pledges to kickstart growth and investment in key areas such as energy, infrastructure and housing.

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Rachel Reeves expected to extend ‘stealth’ freeze on income tax thresholds

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Policy known as ‘fiscal drag’ could bring in as much as £7bn a year after 2028, while dragging workers into paying more tax

Rachel Reeves is expected to extend a “stealth” freeze on income tax thresholds beyond the 2028 deadline set by the previous Conservative government to raise billions of pounds in the budget.

The chancellor is contemplating the move, first reported by the Financial Times, as she seeks tax-raising measures to plug a £40bn shortfall in the public finances that Labour claims was left by the Conservatives.

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Infrastructure taskforce to help chancellor avoid financial sector turmoil

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Rachel Reeves is to seek advice from City experts to ensure big projects’ value for money and reassure markets

Rachel Reeves, the chancellor, is taking action to ensure her budget plan for a multibillion-pound increase in government borrowing to fund infrastructure projects avoids a Liz Truss-style meltdown in financial markets.

Ahead of her tax and spending event on 30 October, the chancellor is convening on Friday the first meeting of a taskforce of leading City figures to advise on infrastructure projects. The government will also launch a watchdog to oversee public works and ensure value for money for the taxpayer.

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Cabinet ministers contest chancellor’s planned cuts to their departments

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Rachel Reeves aims to find £40bn in budget but several ministers have written to Keir Starmer about spending cuts

Cabinet ministers have pushed back against planned cuts to their departments in the upcoming budget, with several writing to Keir Starmer to contest them.

Several are understood to have shared their concerns at the likelihood of deep cuts to unprotected departments such as housing and transport.

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PMQs live: Keir Starmer faces Rishi Sunak in the Commons

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Latest PMQs comes as sources say chancellor is briefing ministers that £40bn will need to be found in the budget

Robert Jenrick has finished his speech, and he is now taking questions.

Q: Kemi Badenoch says she is Labour’s worst nightmare. Is she right?

I think that our party faces an existential challenge right now. Our party has no divine right to exist. That’s why we need to get the choice right in this leadership election, and that’s why I stand for ending the drama, ending the excuses, and actually delivering for the British people.

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UK inflation falls below 2% for first time since 2021 in boost to Rachel Reeves

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Surprise annual drop to 1.7% in September raises chance of interest rate cuts, increasing budget leeway

Inflation in the UK has fallen to its lowest level in three and a half years, giving a pre-budget boost to Rachel Reeves as expectations grow for the Bank of England to cut interest rates.

Figures from the Office for National Statistics show the consumer prices index dropped sharply to 1.7%, down from 2.2% in August, in a bigger fall than anticipated in financial markets, driven by lower air fares and petrol prices.

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Rachel Reeves tells cabinet UK still faces £100bn black hole over next five years

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Chancellor’s words will be interpreted as signal she will not give in to ministers over cuts she imposes in budget

Rachel Reeves has told the cabinet that the UK still faces a £100bn black hole in the public finances over the next five years amid concerns that ministers are yet to grasp the full scale of the fiscal deficit ahead.

At a meeting of the political cabinet, the chancellor said the £22bn gap this year – which the government has blamed on their poor economic inheritance from the Tories – would be a recurring cost each year of this parliament.

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Shares in UK gambling firms fall £3bn amid talk of higher taxes in budget

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Thinktank reports saying sector should be hit with extra £900m to £3bn in levies prompts market selloff

Shares in British gambling companies have dropped sharply, reducing the stock market value of large operators by more than £3bn, after the Guardian reported that Treasury officials could tap the sector for between £900m and £3bn in extra taxes.

The chancellor, Rachel Reeves, has come under pressure from two influential thinktanks to raise taxes on the industry, as she pulls every available lever to plug a £22bn “black hole” in the nation’s finances.

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Labour needs £25bn a year in tax rises to rebuild public services, warns IFS

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Thinktank says tax increases in budget will be necessary even if Rachel Reeves changes fiscal rules

Keir Starmer’s promise to end austerity and rebuild public services will require tax increases of £25bn a year in the coming budget even if debt rules are changed to provide scope for extra investment spending, a leading thinktank has said.

In its preview of the first Labour budget in 14 years, the Institute for Fiscal Studies said Rachel Reeves would need to raise taxes to fresh record levels to meet the government’s policy goals. The chancellor was also warned of the risk of a Liz Truss-style meltdown if the City responded badly to substantially higher borrowing.

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Wednesday briefing: Inside Labour’s plan to move the fiscal goalposts – and tackle debt

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In today’s newsletter: Rachel Reeves calculates that changing debt rules could help boost the UK economy, but what does it really mean?

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Good morning.

There are just three weeks to go until the biggest fiscal and political event for any government: the budget.

Middle East | Israel has said it is expanding its ground operation in Lebanon with the deployment of a fourth division after another night of intense airstrikes. The reservist 146th division was sent to southern Lebanon overnight, meaning the number of troops on the ground is now likely to number 15,000. The Lebanese health ministry said late on Tuesday 36 people have been killed and 150 have been injured in Israeli attacks over the past 24 hours.

Environment | Florida’s western coast was making emergency preparations on Tuesday for the impact of Hurricane Milton, with thousands of evacuees clogging highways, contending with fuel shortages, and the mayor of Tampa warning residents bluntly “you are going to die” if they stayed behind.

Conservatives | James Cleverly has topped the latest MPs’ vote in the Conservative leadership contest, making him the new favourite, as Tom Tugendhat became the latest candidate to be eliminated.

Poverty | More than 9 million people in the UK experience levels of poverty and hunger so extreme they are vulnerable to reliance on charity food handouts, according to research by the charity Trussell.

Society | Deaths have outstripped births in the UK for the first time in almost half a century, excluding the start of the pandemic, official figures showed.

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Cleverly, Badenoch and Jenrick stay in Tory leadership race as Tugendhat knocked out – UK politics live

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Trio face one more round of voting by MPs before party members have their say on final two

The prison system in England and Wales was “teetering on disaster” when Labour came to power, James Timpson, the prisons minister said today.

Speaking at his first Prison Governors’ Association conference in Nottingham since he took on the role, Timpson said:

It has not been easy to rehabilitate offenders in a system teetering on disaster.

We have to take the tough decisions bringing changes to release to ease the pressure on our prisons. It was quite frankly a rescue effort. If we had not acted our justice system would have grinded to a halt – we would have faced a total breakdown of law and order.

Unison said it has given notice to Perth and Kinross Council for strike action by members in schools and early years centres.

The union, which is the largest local government trade union in Scotland, hopes targeting the action in Swinney’s constituency will “bring home to him the importance of finding a fair settlement” to the council pay dispute.

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Rachel Reeves to decide by Wednesday whether to change fiscal rules

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Move could unlock up to £57bn in additional spending on infrastructure in October’s budget

Rachel Reeves must decide by Wednesday whether to change the government’s fiscal rules to potentially unlock up to £57bn in additional spending on infrastructure at this month’s budget.

Sources close to the Treasury said the chancellor would need to make a decision before submitting the “major measures” for her tax and spending event on 30 October to the Office for Budget Responsibility (OBR).

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Delaying budget was ‘miscalculation’, Blairites say as Starmer begins reset following Sue Gray’s departure – UK politics live

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Government needs to get better at communicating what it stands for, veterans from New Labour era argue

Sophie Linden, London’s deputy mayor for policing and crime, is stepping down after eight years working with Sadiq Khan to take a job as an adviser to Shabana Mahmood, the justice secretary, Khan has announced. In a statement Linden claimed that policing in the capital was “far more diverse, transparent and accountable” than when she started.

Matt Chorley from Radio 5 Live posted this on social media yesterday to provide some context about the departure of Sue Gray.

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‘Davos on the Mersey’: key conference takeaways as Labour tries to woo business

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As the budget looms, where the party stands on investment in the UK economy, workers’ rights and more

For a second year running, corporate Britain descended on Liverpool for Labour’s annual conference, in an event so packed with executives that some insiders joke the socialist gathering has developed into a full-blown “Davos on the Mersey”.

Like last year, the exhibition and conference fringe had sponsored events, lounge areas and advertising from exhibitors including Gatwick, National Grid, Ikea and Specsavers. This year, however, business leaders were looking for clues about how Labour will govern after July’s election landslide.

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Up to 50 Labour MPs could rebel over cut to winter fuel allowance

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Dozens said to be considering abstaining from Tuesday’s vote over pensioners’ payments, as PM says dealing with dissent is ‘matter for chief whip’

As many as 50 Labour MPs could refuse to back the government’s controversial plan to cut the winter fuel allowance, despite Keir Starmer urging back benchers to get behind a measure he has conceded is “unpopular”.

While few on the government benches are expected to vote against the policy in Tuesday’s vote, dozens are believed to be considering abstaining or being absent – though rebels say the numbers in their ranks are very hard to predict.

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