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.
Reform MP: Labour’s Budget will be ‘most socialist in living memory'
Deputy leader of Reform UK Richard Tice has said he expects Labour’s Budget to be “the most socialist budget in living memory”.
Speaking to Sky News’s Sunday Morning With Trevor Phillips programme, he said: “What we’re going to get on Wednesday, I fear, is the most socialist budget in living memory.
“I think it’ll be an assault on jobs, I think it’ll be an assault on small businesses, on entrepreneurship, on hard work and that will end up being an assault on growth.
“We’re in a crisis. You can’t tax your way out of a crisis. You’ve got to grow your way out of a crisis, and that means reducing the size of the state and motivating people with hard work, taking risks, setting up businesses, being an entrepreneur. And that’s how you get growth in the economy.
“Instead we’re going to get a bigger state, more bloated, more inefficient and with outcomes frankly that are not commensurate with the money that’s being poured into the public services.”
Scientist and TV presenter Brian Cox criticises reported cuts to research: ‘Nothing short of idiotic'
Scientist and TV presenter Brian Cox has criticised reported cuts to research and development spending in the upcoming budget.
Former minister for science George Freeman MP has written a letter to Rachel Reeves expressing his concern at a reported below inflation spending settlement for UK science, research and innovation.
In his letter, Mr Freeman warned this would mean “deep cuts across other parts of R&D investment, with significant negative consequences for the UK’s world-leading R&D sector, putting the brakes on growth and undermining fragile investor confidence”.
Brian Cox shared the letter on the social media platform X, saying: “I wholeheartedly agree. Cutting UK R&D funding in today’s highly competitive and indeed dangerous world would be nothing short of idiotic.”
Working person is someone whose main income comes from them ‘going out to work everyday’ - education secretary says
Education Secretary Bridget Phillipson is on the media rounds this morning.
She has declined to say whether Labour’s pledge not to raise income tax, VAT or national insurance will remain in place for the next five years. However a government source has now been forced to clarify that the pledge covers the whole of this Parliament.
She also said that a working person in someone “whose main income arises from the fact that they go out to work every day”. There has been a lot of speculation about what Labour meant in their manifesto when they promised to not tax working people.
“What we’re talking about here is people whose main income arises from the fact that they go out to work every day,” the Education Secretary told Sky News’s Sunday Morning With Trevor Phillips programme.
‘We can do great things as a country again'
Rachel Reeves has compared her mission in this week’s Budget to Labour’s historic reform programmes under Clement Attlee, Harold Wilson and Tony Blair.
In an interview with The Observer, she said: “This is only the fourth time that Labour has gone from opposition into government. In 1945, we rebuilt after the war; in 1964, we rebuilt with the white heat of technology; and in 1997, we rebuilt our public services. We need to do all of that now.
“This is a new settlement on Wednesday to rebuild our country and seize the massive opportunites in technology and energy that are out there.
“There is a global race on for those jobs and we need to seize them for Britain. If we can unlock that investment, public and private, then we can do great things as a country again.”
New era of investment in hospitals, schools and transport to be announced in Budget
Rachel Reeves has said that she will launch a new era of public and private investment in hospitals, schools, transport and energy in her Budget.
In an interview with The Observer, Ms Reeves has said that Labour will change the fiscal rules to allow for £50bn of extra borrowing for capital projects.
£1.4bn has already been pledged to rebuild crumbling schools, but further measures for hospitals are expected to be announced.
She told the paper: “We inherited a plan from the previous government in which public sector net investment, capital investment, would be falling sharply over the course of this parliament, and that would mean scores of hospitals not built. It would mean massive opportunities to grow our economy in the digital and energy sector would be missed and those jobs would go elsewhere.”
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