Rachel Reeves has finally laid out Labour’s spending plans in the party’s first budget in almost 15 years. The Guardian’s John Harris is joined by political editor Pippa Crerar and political correspondent Kiran Stacey to discuss the fallout
Continue reading...Category Archives: Autumn budget 2024
Reeves accused of betraying small family firms with inheritance tax rises
Chancellor also criticised for letting the very rich off the hook with a lower than expected rise in capital gains tax
Tax rises aimed at inherited wealth are at risk of backfiring, after the chancellor was accused of betraying small family businesses while letting private equity bosses off the hook.
Labour’s first budget in 14 years included measures to close inheritance tax (IHT) loopholes and press ahead with scrapping the controversial non-dom tax status, as well as levying higher taxes on private jet flights.
Continue reading...OBR says budget unlikely to lift economic growth over next five years
Forecaster says extra spending revealed by Rachel Reeves will give only a short-term lift to economy
Labour has embarked on a “large, sustained increase in spending, tax and borrowing”, according to the government’s economic forecaster, as it judged that Labour’s first budget for 15 years is unlikely to increase economic growth over the next five years.
Assessing Rachel Reeves’s policies, the Office for Budget Responsibility (OBR) said the economy would expand at the same rate as predicted in March by the end of the parliament, despite a £70bn-a-year rise in spending.
Continue reading...Labour wants to reverse decline – but with a big budget comes a big risk
The government knows cynical voters will need to see tangible change in public services and to feel better off
At the final political cabinet before Rachel Reeves delivered her first budget this week, ministers were presented with internal party research on what the public was expecting.
In the months since the general election, they had been fed a regular diet of gloomy warnings about the state of the economic inheritance and, more recently, high levels of pre-budget news coverage, so it was firmly on their horizon.
Continue reading...Chancellor announces £22.6bn cash injection for NHS in England
Rachel Reeves hails biggest increase ‘outside of Covid’ since 2010 but health experts say patients may not feel impact
The NHS in England is to receive a £22.6bn cash injection over two years, the chancellor has announced, in what she called the biggest spending increase outside Covid since 2010. But health experts said patients may not feel the impact as much of the increase would be absorbed by pay rises and higher care costs.
Announcing the “down payment” on the government’s 10-year plan for the NHS, due in spring 2025, Rachel Reeves said the NHS was the nation’s “most cherished public service” and that the extra funding would help the government cut waiting lists.
Continue reading...Wednesday briefing: Five key messages that will define the budget
In today’s newsletter: Labour has told two stories about Rachel Reeves’ budget. Will it be an end to austerity – or an acceptance of “the harsh light of fiscal reality”?
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Good morning. There will be no triumphalism, no big giveaways and certainly no rabbits out of hats: this, Keir Starmer and Rachel Reeves have been at pains to tell us, is going to be a very grownup budget. And even though Reeves will promise today that “the prize on offer is immense”, we might also therefore expect it to be a painful one. Since the entire thing appears to have been briefed out in advance over the last few weeks, nobody can say they haven’t been warned.
In a way, it feels like two budgets: the optimism and ambition of a minimum wage rise, a major boost for the NHS, and significant new investment in infrastructure; and a bleaker story about misleading pledges, limited ambitions, and the biggest set of tax increases in budget history.
UK news | The suspect charged with the murder of three girls in Southport is to be separately prosecuted on suspicion of possessing terrorist material and producing ricin, a powerful poison, police have said. Axel Rudakubana is due to appear in court on Wednesday.
US election | Kamala Harris urged American voters to elect a “new generation of leadership” in a speech at the same place Donald Trump spoke on January 6 almost four years ago. Likening her opponent to a “petty tyrant”, Harris told the crowd: “Donald Trump would walk into that office with an enemies list … I will walk in with a to-do list.”
Middle East | Israel is not addressing the “catastrophic humanitarian crisis” in Gaza, the US envoy to the UN has said, ahead of a deadline for the Israelis to improve the situation or face potential restrictions on US military aid. The warning came as Gaza’s civil defence agency said 93 people had been killed in an airstrike on a crowded block of flats.
Conservatives | Britain’s former colonies should be thankful for the legacy of empire, Conservative leadership candidate Robert Jenrick has said. Jenrick’s comments, which follow an agreement among Commonwealth leaders that “the time has come” to discuss reparations, were condemned as “an obnoxious distortion of history”.
Mexico | A team of researchers have stumbled on a lost Maya city of temple pyramids, enclosed plazas and a reservoir, all hidden for centuries by the Mexican jungle. The discovery was made possible by the use of laser mapping techniques in an area previously ignored by archaeologists.
Continue reading...Reeves to promise ‘wealth and opportunity for all’ in major tax-raising budget
Having announced minimum wage boost, chancellor to say she can spare working people from tax rises
The UK’s national minimum wage is to rise by a higher than expected 6.7% next year, Rachel Reeves has announced before a multi-billion pound tax-raising budget designed to act as the springboard for a decade of national renewal.
Insisting that the increase to £12.21 in the pay floor marks a significant step in Labour’s plan to support the low paid, the chancellor will also say she can spare working people from the tax increases intended to plug the hole in the public finances and avoid a fresh wave of found of public spending cuts.
Continue reading...NHS will not be turned around in one budget, says Wes Streeting – UK politics live
Health secretary says measures to be announced on Wednesday would ‘arrest the decline’ amid significant NHS reform
Kemi Badenoch, who is the bookies’ favourite to be the next Conservative leader, has told Times Radio that the contest is poised “neck and neck”.
Interviewed by Kate McCann, Badenoch told listeners:
People are tired of the party looking like it is not out working for the people out there. That is what I want to bring: integrity, and a focus on conviction and conservative values.
There is something very significant that is going on, we are picking a leader of the opposition. People have a choice.
This is a sacrifice, because I worry about the direction of the country.
I worry about a lot of decisions we make, and us not being honest with the public about the serious trade-offs that are going to be required, and not saying enough about how the world is becoming a more dangerous place.
Continue reading...Hard-hit Defra to have budget slashed further despite warnings
Department’s finances were slashed during austerity and campaigners say more cuts will stall progress to meet nature and climate targets
Rachel Reeves has been urged not to cut the government’s environment funding in the budget as analysis shows the department’s finances were slashed at twice the rate of other departments in the austerity years.
Between 2009/10 and 2018/19, the environment department budget declined by 35% in monetary terms and 45% in real terms, according to Guardian analysis of annual reports from the Department for the Environment, Food and Rural Affairs (Defra), the Environment Agency and Natural England. By comparison, the average cut across government departments during the Conservative austerity programme was about 20%. During the first five years of austerity, it was the most cut department.
Continue reading...Lindsay Hoyle criticises chancellor Rachel Reeves for early disclosure of budget details – UK politics live
Speaker of the House of Commons says it is ‘evident’ Reeves made significant policy announcements in the media, rather than parliament
Jeremy Corbyn and the independent alliance of MPs have issued a letter ahead of the budget with five things they are asking Chancellor Rachel Reeves to implement.
Saying “We have the means to end poverty, we just need the political will”, Corbyn listed five priorities:
Scrap the two-child benefits cap
Reverse cuts to winter fuel
Tax wealth
Protect welfare
Invest in a greener future
It is a national scandal that 4.2 million children and 2.1 million pensioners are living in poverty in the sixth richest country in the world.
You have previously told the British public to prepare for “difficult decisions” to repair this nation’s finances.
Continue reading...‘Cock-up with the comms’: how Labour announced five non-existent freeports
Erroneous announcement traced back to briefing note prepared by Treasury officals, ahead of PM’s Samoa trip
When Keir Starmer announced a shake-up in his No 10 operation last month he hoped to put an end to the missteps of his first few months in office. But an embarrassing error by Downing Street this weekend demonstrates how many pitfalls there are for a new government still learning the ropes.
In a press release on Friday, Downing Street said five new freeports would be announced in the budget. The Guardian and other outlets covered the news, which was given first to reporters who had travelled with Starmer to Samoa for the Commonwealth summit. Both the prime minister and his aides answered questions on the policy they had unveiled.
Continue reading...London’s Aim shrinks to smallest since 2001 amid fears of tax relief changes
UHY Hacker Young says 92 companies have delisted and only 10 floated on junior stock market in past year
The UK’s Alternative Investment Market (Aim) has shrunk to its smallest size in 23 years as business owners and investors anticipate an abolition of inheritance tax relief in the budget this week.
The accountancy group UHY Hacker Young calculated that 92 companies have delisted from Aim, London’s junior stock market, in the past year, reducing the total number of companies on Aim to 695.
Continue reading...Keir Starmer vows to ‘embrace harsh light of fiscal reality’ ahead of budget
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.
Continue reading...OBR to publish breakdown of claimed £22bn ‘black hole’ on budget day
Former chancellor Jeremy Hunt says decision to publish findings of review on Wednesday is ‘significant concern’
Britain’s fiscal watchdog is to publish a detailed breakdown of the £22bn “black hole” that Labour says it inherited after Rachel Reeves presents the budget on Wednesday.
The Office for Budget Responsibility will release the conclusion of its review of how the forecast for departmental spending for its last economic and fiscal outlook, published for the March budget, was prepared.
Continue reading...Reeves: ‘My budget will match greatest economic moments in Labour history’
The chancellor says she will invest to reverse Tory decline, but stands accused of breaking party manifesto promises
Labour will launch a new era of public and private investment in hospitals, schools, transport and energy as momentous as any in the party’s history in this week’s budget, the chancellor, Rachel Reeves, has said.
In an interview with the Observer before the first budget by a female chancellor, Reeves draws comparisons with Labour’s historic reform programmes begun in 1945 by Clement Attlee, in 1964 under Harold Wilson and in 1997 under Tony Blair.
Continue reading...Rachel Reeves has promised not to raise taxes, so how can she fill budget coffers?
Chancellor said to be planning measures including raising employer NI contributions and capital gains tax rates. We consider the likelihood of each and the potential for a row
During the general election campaign, Paul Johnson of the Institute for Fiscal studies repeatedly accused both main parties of indulging in a “conspiracy of silence” over their economic policies. Neither Labour nor the Tories would admit, he complained, that if they won they would have to announce huge tax rises or spending cuts to restore the public finances to anything resembling good health.
On Wednesday, 118 days after Labour won the election, Rachel Reeves will prove Johnson right. In her first budget she will spell out plans to raise an eye-watering sum of about £40bn from tax rises and spending reductions to wipe the slate clean and to pump funds into public services. She will also confirm changes to debt rules that will release up to £50bn more to borrow for long-term investment in new national infrastructure.
Continue reading...Chancellor pledges extra £500m for social homes in budget
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.
Continue reading...More than 1m households to get £420 budget boost in universal credit change
Exclusive: move will cap amount that can be deducted from benefit payments to repay short-term loans and debts
More than 1m of the UK’s poorest households will be £420 a year better off on average as a result of a change to universal credit set to be announced in next week’s budget.
The measure is intended to primarily help the worst-off families, and will be seen as a way for ministers to head off criticism over decisions to cut winter fuel allowance for most pensioners and maintain the two-child benefit cap.
Continue reading...Labour to announce plans for five new UK freeports in budget
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.
Continue reading...NatWest urges Reeves to ‘get balance right’ when changing debt rules
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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