Starmer says budget did not break manifesto tax pledge – as it happened

PM says: ‘We kept to our manifesto in terms of what we’ve promised. But I accept the challenge that we’ve asked everybody to contribute’

The Conservative party is attacking the budget on the grounds that Rachel Reeves is putting up taxes supposedly to fund more spending on benefit claimants. Even though the rationale for this claim is questionable, the Tories were making it before the budget was announced, and Kemi Badenoch firmed it up last night, claiming it was a “Benefits Street budget”.

On LBC this morning, asked if the budget meant “alarm clock Britain paying for Benefits Street”, Reeves said she did not accept that. She said 60% of the families that would benefit from the removal of the two-child benefit cap (the most expensive welfare announcement in the budget) were in work.

I don’t think children should be punished by this pernicious policy any longer. And the cost to society of this is huge, the cost for councils of temporary accommodation, when people can no longer afford the rent, putting families in B&Bs, kids having to move to school all the time because parents have moved from B&B to another lot of temporary accommodation, and there’s costs for years to come, because all the evidence shows that kids that are growing up poor are less likely to get into work and more reliant on the welfare state in the future for them.

So this is a good investment in those kids, to give them the chances that I want for my kids, and everyone wants for their kids. It also saves money for taxpayers on that accommodation, on those additional health costs, and ensuring that those kids grow up to be productive adults.

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Lifetime of earnings not enough for UK workers to join wealthiest 10%, report says

Research finds it would take average worker saving all their earnings for 52 years to match wealth of richest 10th of society

It would take the average earner in the UK 52 years’ worth of earnings to become as wealthy as the richest 10%, according to new research by the Resolution Foundation.

In a new report, the influential thinktank analyses the Office for National Statistics’ latest wealth and assets survey, which covers the Covid pandemic period of 2020-22.

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Starmer says welfare concessions are ‘common sense’ but dodges funding question – UK politics live

No 10 has offered significant concessions to the rebels, estimated to cost around £3bn a year, amid fears over Tuesday’s vote

Stephen Kinnock, the care minister, was the government voice on the airwaves this morning. Here are the main points he made about the welfare bill U-turn.

Kinnock rejected claims that the U-turn was a sign of weakness. When it was put to him on the Today programme that this move, coming after the U-turns on winter fuel payments and a national inquiry into grooming gangs, showed that if Keir Starmer was pushed, he would give in, Kinnock replied:

I think if you talk to people out there in the country, they respond very positively to politicians listening, engaging, recognising that you don’t get everything right from day one every time, and making the adjustments and the changes that are needed.

And this prime minister will always put the country first. He puts country before party, and he does the right thing for the country.

He defended having a “staggered” approach to changing benefit rules. Asked about the Tory claim that the government was creating a “two-tier benefits system” (see 8.30am), he replied:

Whenever you bring forward change to a complex system, you always have to decide between do you make the change for everybody that’s in that system, in one big move, or do you do it in a more staggered way? What’s clear from the announcement today is that it’s going to be a more staggered process.

He declined to say how much the U-turn would cost. He told Times Radio:

The full details around what we are laying out, what I’ve summarised really today, is going to be laid out in parliament, and then the chancellor will set out the budget in the autumn the whole of the fiscal position and this will be an important part of that.

He said he was now confident that the UC and Pip bill will pass its second reading on Tuesday.

All of the MPs I’ve spoken to who signed the reasoned amendment – MPs from across the party, not just on the left – are sticking to their position because we understand that we are answerable to our constituents.

If the government doesn’t pull the bill, doesn’t consult properly with disabled people and come back to MPs with a serious proposal that protects the dignity of disabled people, I will vote against and I will be far from the only one.

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Gas boiler fittings outnumbered heat pumps by 15 to one in UK last year – report

Poorer households shut out of heat pump market and grants should be increased to speed up rollout, thinktank says

Gas boiler fittings outnumbered new heat pump installations by more than 15 to one last year, and only one in eight new homes were equipped with the low-carbon alternative despite the government’s clean energy targets.

Poorer households are also being shut out of the heat pump market as the grants available are inadequate and should be increased, according to a report by the Resolution Foundation thinktank.

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Former Bank of England deputy warns Rachel Reeves against kneejerk cuts

Charlie Bean says OBR forecasts are ‘flaky’ and cautions against trying to hit targets five years away

The former Bank of England deputy governor Charlie Bean has warned the chancellor against making kneejerk cuts in next week’s spring statement to try to hit fiscal targets that are five years away.

Rachel Reeves is preparing to slash spending, including on disability benefits, in response to weaker forecasts from the independent Office for Budget Responsibility (OBR) – prompting a backlash from within her own party.

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Poorest UK households pay rising share of income on council tax, study finds

Resolution Foundation report says failure to reform has ‘slowly recreated the issues that undid the poll tax’

Britain’s poorest households are paying an increasing share of their income on council tax, according to new analysis that likened it to the poll tax that contributed to the downfall of Margaret Thatcher.

The poorest fifth of households paid 4.8% of their income on council tax in England, Wales and Scotland and on domestic rates in Northern Ireland in the 2020-21 financial year, up from 2.9% in 2002-3, according to research by the Resolution Foundation.

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Solar panels could cut fuel-poor UK families’ energy bills by 24%, says study

Call for means-tested grants or loans to cover upfront costs that prevent poorer households from benefiting

Poorer households could cut their energy bills by a quarter if solar panels were installed on their rooftops, a report has found.

However, the upfront costs mean that those who stand to benefit most from decreased energy bills are prevented from getting panels installed, according to the Resolution Foundation thinktank.

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Reeves’s long-term spending figures almost as unrealistic as Tories’ were, IFS says – UK politics live

Institute for Fiscal Studies says budget ‘looks like the same silly games’ as seen under the Conservatives

Rachel Reeves is now being interview on ITV’s Good Morning Britain.

She is being interviewed by Ed Balls, the former Labour shadow chancellor who is now a TV presenter. He asks her to confirm that workers will end up losing out because of the employers’ national insurance contributions (NICs) increase.

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Wealth taxes could raise £10bn to help plug Tory budget hole, say economists

Reforms to inheritance and capital gains taxes could reduce £20bn shortfall and combat UK’s widening wealth gap

Rachel Reeves could quickly find around £10bn a year to plug half of the fiscal hole left by the Conservatives if she were to raise taxes on soaring levels of unearned wealth, according to leading economists.

New research by the independent Resolution Foundation published today finds that Britain is a country of “booming wealth” but “busted wealth taxes”, leaving ample potential for the chancellor of the exchequer to raise desperately needed funds by raising taxes on the richest.

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Labour told it will need to defeat ‘net-zero nimbys’ to decarbonise Britain

Opposition in wealthier areas is likely and overcoming it is essential, says Resolution Foundation

The government will need to “take on net-zero nimbys” and ramp up public investment to decarbonise Britain’s homes, transport and electricity system, a leading thinktank has said.

With Keir Starmer promising a rapid transition to decarbonise the power system by 2030, a report by the Resolution Foundation said achieving the target would require more government spending and private investment.

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UK rent rises forecast to outpace wage growth for three years

Average 13% increase by 2027 will put millions of households under further pressure, says thinktank

Rent rises in Britain are forecast to outpace wage growth, despite having already surged at the fastest pace on record after the Covid pandemic and the cost of living crisis.

The Resolution Foundation expects added pressure on millions of households and said average rents could increase by 13% over the next three years as current high growth in the private rental market work their way through existing tenancies.

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UK politics: Sunak refuses to say how abolition of national insurance would be funded – as it happened

PM says ‘people trust me on these things’ and refuses to be drawn on whether government would forgo entire £46bn raised from measure

Keir Starmer has accused Jeremy Hunt of repeating the budget mistakes made by Liz Truss during her disastrous premiership.

In comments on the budget during a visit to a building site this morning, Starmer focused on Hunt’s proposal to abolish employees’ national insurance over time, saying that this was a bigger unfunded tax promise than those in Truss’s mini-budget. (See 9.28am.)

How humiliating was that for the government yesterday?

We’ve argued for years that they should get rid of the non-dom tax status, they’ve resisted that. And now, completely out of ideas, the only decent policy they’ve got is the one that they’ve lifted from us.

Nothing that Jeremy Hunt did yesterday, nor anything the OBR said, changes anything very significantly. Which is a shame. Because that means we are still:

-heading for a parliament in which people will on average be worse off at the end than at the start,

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Jeremy Hunt’s budget giveaway ‘will act as sweet filling in tax sandwich’

Thinktank says juicy cuts this year follow far bigger increases in 2023 and precede planned ‘chunky rises’

Jeremy Hunt’s expected pre-election giveaway budget will be sandwiched between £20bn of tax increases already implemented and a further £17bn of hikes pencilled in for after polling day, a thinktank has said.

The Resolution Foundation said it expected Hunt to freeze fuel duty and cut income tax on 6 March but warned the chancellor’s “tax sandwich” was based on the “fiscal fiction” of £30bn of spending cuts in the next parliament.

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More than 11 million Britons have less than £1,000 in savings

Resolution Foundation calls for auto-enrolment into saving schemes, as millions have no ‘rainy day’ fund

More than 11 million working-age people in Britain don’t have basic “rainy day” savings of at least £1,000, according to a report that warns that the poorest households are struggling to build up financial resilience amid the cost of living crisis.

The Resolution Foundation said people across Britain faced a “triple savings challenge” of insufficient savings, an inability to cope financially with major life events such as family breakdown, and inadequate retirement incomes.

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The broken state of UK economy is clear; Hunt and Starmer’s solutions are less so

Resolution Foundation report underlines lack of progress by Tories but Labour proposals seem woolly

Britain’s economy is broken. That was the simple message given by the Resolution Foundation thinktank in the final report of its long-running look into the state of the nation.

Monday’s conference to launch the report was a high-powered affair, containing past and present members of the Bank of England’s monetary policy committee, the head of the Office for Budget Responsibility, Richard Hughes, and other members of the great and good.

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James Cleverly tells MPs crackdown will cut annual immigration numbers by about 300,000 – as it happened

Home secretary to announce big hike in salary requirement for migrants to the UK as Rishi Sunak tries to cut net migration figures

Hunt says the government wants to speed up the time it takes to get a connection to the national grid by 90%.

Zanny Minton Beddoes, the editor of the Economist, is interviewing Hunt. She says he has mentioned the 110 policies, but she wants to know what the growth strategy is.

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Jeremy Hunt faces red wall revolt if he delivers ‘a budget for the rich’

The chancellor’s potential inheritance tax cut in Wednesday’s budget would aid millionaires amid a cost of living crisis

Jeremy Hunt faces a backlash from “red wall” Tory MPs if he uses a fiscal windfall of up to £20bn to deliver tax cuts for the rich rather than to help ordinary families with the cost of living, the Observer has been told.

The chancellor and Rishi Sunak are this weekend finalising an autumn statement on Wednesday that could include a major reduction in inheritance tax – four-fifths of which would benefit those with more than £1m at their death, according to a new report from the Institute for Fiscal Studies (IFS). Each person with more than £1m would receive an average tax cut of £180,000, the IFS states.

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Great British slowdown has hamstrung our economy – thinktank

Country needs successful firms to grow and struggling ones to shrink, says Resolution Foundation

The UK needs more businesses to fail, or at least shrink, to solve the economy’s long-running productivity crisis, a study has argued.

The country’s lack of “economic dynamism”, whereby weaker firms or lower productivity sectors shrink, and more productive ones grow, has caused GDP to be 4% lower between 2008 and 2019 than it would otherwise have been, according to a paper published on Monday by the Resolution Foundation.

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Nearly 4m fewer UK working days in past year due to strike action, study says

Resolution Foundation report says much of industrial action ‘fuelled’ by public sector workers’ anger over falls in real-terms pay

About 3.9m working days have been lost to industrial action in the past year, more than at any point since the 1980s, according to a new analysis.

The Resolution Foundation, which focuses its research on low- to middle-income households, said many of the strikes were “fuelled” by anger among public sector workers over real-terms pay declines, which amounted to an average cut of more than 9% since 2021, adjusted for inflation.

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