UK budget 2024 live: Rachel Reeves’ expected tax hike will hit workers, says ex-Bank of England governor
Education secretary Bridget Phillipson has vowed no tax rises in payslips for ‘working people’
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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.
£1.4 billion to fix ‘crumbling’ schools as Reeves pledges to prioritise education and free childcare in Budget
Rachel Reeves has announced she will earmark £1.4 billion to rebuild crumbling schools as she pledges to prioritise education and childcare in the Budget.
Investment in free breakfast clubs for pupils will also be tripled, while there will be another £1.8 billion to expand government-funded nursery care.
The Chancellor said children “should not suffer for” because of a £22 billion ‘black hole’ Labour says it was left by the last Tory government.
However, experts cautioned that most of the funding would simply be enough to maintain existing programmes.
More than 400 schools which are part of a flagship government rebuilding scheme, set up under the Tories, still don’t have any builders.
Analysis: Rachel Reeves might just get away with breaking her promise – here’s how
Chief political commentator John Rentoul has spelled out how Rachel Reeves could get away with raising taxes on working people in his latest column:
“When George HW Bush said, “Read my lips: no new taxes” as he accepted the Republican nomination for president in 1988, he thought he was on safe ground. And he would have gotten away with it if it hadn’t been for those meddling kids in Congress, where a Democratic majority forced him to put up taxes in a 1990 budget.
Bush insisted that he hadn’t imposed any “new taxes” – he had only increased existing ones. And, surprisingly, American voters seemed to accept this sophistry. He seemed so popular that the Democrats struggled to find a candidate to put up against him in the 1992 election.
But then the economy went into recession and a little-known governor of a small southern state ran against Bush as a New Democrat. Bill Clinton made Bush pay a heavy price for his tax pledge in the end; Bush’s broken promise was played like a broken record in the election campaign.
The other case study for Rachel Reeves as she prepared Wednesday’s Budget was Nick Clegg’s promise in the 2010 election to oppose a rise in university tuition fees. It was followed not just by a breach of the promise, but by the appointment of fellow Liberal Democrat Vince Cable as the cabinet minister who would sponsor the legislation to triple fees.”
Read the rest here:
Rachel Reeves might just get away with breaking her promise
George Bush Sr and Nick Clegg paid the price for making U-turns, but other politicians have escaped the voters’ wrath – could the chancellor, too?
Recap: Education Secretary open to ban on smacking children
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
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:
8 things to watch out for in autumn budget 2024
Speculation is rife on what will come in Rachel Reeves’ Budget - here we take a look at some of the measures expected
Rachel Reeves claims her Budget is for strivers amid uncertainty over ‘working people’
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.
Rachel Reeves claims her Budget is for strivers amid questions over ‘working people’
Echo of Tory chancellor George Osborne’s claims as Labour prepares to raise taxes
Public services will still feel the squeeze despite tax hikes - expert
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
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'
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
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
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.”
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