Budget 2024 latest: Reeves admits ‘taxes will need to rise’ in stark warning to public
Chancellor has reiterated that “tough decisions” have been made ahead of next week
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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, the chancellor has 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”.
Meanwhile, Sir Keir Starmer is attending the Commonwealth Heads of Government Meeting (Chogm) in Samoa, where he has issued a strong rallying call regarding the upcoming fiscal event.
“We are going to tackle the inheritance in this Budget,” he said, adding: “I’m not prepared to walk past it.
We’ll be bringing you all the latest updates ahead of the big event on 30 October here, on The Independent’s liveblog.
Rachel Reeves to turn on spending taps with Budget boost for infrastructure and clean energy
What will Labour’s Budget mean for my money – and for Keir Starmer? Ask John Rentoul anything
Inheritance tax to rise in Budget as Reeves plans to hit well-off
NHS problems will not be fixed ‘in a single Budget’, says Streeting
UK economy to grow faster than thought in pre-Budget boost for Reeves
ICYMI: Millionaires urge Reeves to raise £14bn from capital gains tax changes at Budget
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.
Millionaires urge Reeves to raise £14bn from capital gains tax changes at Budget
Government analysis has previously all but ruled out the measures
Budget rumours: Capital Gains reform
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
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.
Wes Streeting warned inflation busting NHS Budget deal will not be enough
Health experts urge the government to find more money to tackle waiting lists and improve NHS care
Could the chancellor introduce an ‘Amazon tax’?
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
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:
The 36 rail projects at risk of being scrapped to plug Labour’s £22bn black hole
Exclusive: Transport secretary Louise Haigh – who previously criticised Rishi Sunak for the ‘great rail betrayal’ of HS2 – now finds herself wielding an axe over £85m worth of projects
What should I do with my savings ahead of the Budget?
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.
What should I do with my savings ahead of the Budget?
Reports that pensioners could have tax breaks cut or axed have led to savers withdrawing chunks of their retirement pots ahead of the chancellor’s announcement
UK economy to grow faster than thought in pre-Budget boost for Reeves
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”.
UK economy to grow faster than thought in pre-Budget boost for Reeves
Only Spain was given a bigger economic upgrade by the IMF, making the UK the biggest beneficiary for extra growth in the G7 – although the US’s new growth rate of 2.8 per cent is higher
Jeremy Hunt “had a tough job” says Rachel Reeves
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
How make-or-break Budget has fractured Keir Starmer’s cabinet
With the prime minister’s poll ratings at rock bottom, Sir Keir Starmer is grappling with cabinet unity ahead of Rachel Reeves’ Budget, writes Political Correspondent Archie Mitchell
Budget 2024: Inheritance tax set to rise – here’s what it means for you
Inheritance tax set to rise – here’s what it means for you
Only around 4 per cent of families have to pay ‘death tax’ under current legislation
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