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Rachel Reeves is set to announce immediate steps to cut costs as she is expected to reveal the government faces a £20 billion black hole in its accounts.
In a speech in the House of Common, the chancellor will accuse the previous Conservative government of “covering up the true state of the public finances”.
She will also lay out the results Treasury spending audit she commissioned and announce the date of her first autumn Budget as she pledges to “restore economic stability”.
But the announcement comes with fears after cabinet minister Pat McFadden left the door open to future tax rises to fill shortfall left by the Tories.
The cabinet minister said that the chancellor’s statement would set out spending plans but he refused to rule out potential rises later this year.
It comes as Kemi Badenoch officially announced she is running to become the next leader of the Conservative Party.
Key Points
- Labour leaves door open to tax rises ahead of chancellor’s speech
- Reeves set to announce steps to cut government costs
- Reform’s Richard Tice claims Labour black hole claim is a ‘con’
- Reeves says previous government ‘covered up’ financial turmoil
- Pat McFadden claims Tory government misled the OBR
- Shadow minister hits out at Braverman for Tory ‘infighting’
Labour rejects claims Reeves set to announce cuts to public spending
Labour MP Torsten Bell, who is Pat McFadden’s private secretary, has dismissed claims that Rachel Reeves’ announcement will unveil cuts to public spending.
The former Resolution Foundation think tank chief tweeted: “Public service notice (given lots of confused coverage this morning): you’re not ‘cutting public spending’ if you’re not changing any budgets but instead revealing that the previous government announced transport schemes without the budgets to make them happen.”
Salma Ouaguira29 July 2024 11:02 1722247102How could Labour raise taxes?
With Rachel Reeves set to unveil a £20 billion ‘black hole’ in public finances today, there are rumours that Labour’s first autumn statement will bring new tax raising measures. The party says it will better manage existing resources to cut costs, as well as attract investment from the private sector to help finance some public projects.
But it is now likely that the government will look to new ways to raise revenue. Here are some of the key measures they could implement in the autumn statement:
- Taxing pensions savings: Pension tax relief is a reduction on the amount of tax paid on private pensions. It helps workers save for retirement by boosting their pension pots. The measure would raise around £3 billion a year, with 7 million earners paying more tax. But it would be better news for basic rate earners, who would actually begin receive a 10 per cent boost to their pension contributions.
- Closing Inheritance Tax loopholes: Inheritance Tax is a levy on the estate of someone who has died. This is their property, money and possessions. Crucially, it is not paid if the value of these things are below £325,000. The economic think tanks said ending these measures alone would raise £4.8 billion a year by 2029.
- Changing Council Tax: Council tax is a local tax which provides funding for the local authority to which it is paid. The amount will vary by area, but can range from £1,500 a year to upwards of £4,000 depending on area and property value.
- Raising Capital Gains Tax: Capital Gains Tax (CGT) is paid on the profit made when an asset that has increased in value is sold. It is applies 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 assests. 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.
Reeves to axe projects to fix £20bn black hole in finance review
The chancellor is expected to unveil billions of pounds worth of cuts to plug the gap in public finances.
Rachel Reeves will announce the cancellation of multiple nationwide projects in roads and rail sector, and a spending reduction on external consultants.
The plans will see the Treasury scrapping large infrastructure developments including the £500 million Restoring Your Railway Fund, the £1.7 billion A303 dual carriageway Stonehenge by pass and the A27 Arundel bypass in West Sussex.
In a speech in the Commons, Ms Reeves will say: “It is time to level with the public and tell them the truth.
“The previous government refused to take the difficult decisions. They covered up the true state of the public finances. And then they ran away. I will never do that.”
Salma Ouaguira29 July 2024 10:50 1722246142Labour: Tories left UK finances in worst state since Second World War
Salma Ouaguira29 July 2024 10:42 1722245722Poll: Two thirds believe UK economy is in a bad state
According to a new YouGov poll, almost tow-thirds of people in the UK think the economy is in a bad state.
The survey, conducted between 19-22 July found a whopping 64 per cent of voters had a negative view of the state of the economy.
And only one in ten people had a positive assessment.
Salma Ouaguira29 July 2024 10:35 1722245242Whittle becomes second contender for Scottish Tory leadership
MSP Brian Whittle has become the second candidate to declare in the race for the Scottish Tory leadership.
Mr Whittle – a former Olympian sprinter – announced his plans to stand to replace Douglas Ross on Monday.
Writing in the Scotsman, the West of Scotland MSP leaned heavily on his sporting background, saying the leadership contest was “when we decide how we pick ourselves up and prepare for the next race”.
His announcement follows fellow MSP Russell Findlay throwing his hat into the ring last week.
Mr Ross announced in the middle of the General Election campaign he would quit after polling day, following backlash over his decision to stand in the stead of former MP David Duguid – who party bosses deemed too ill to run.
Announcing his intentions, Mr Whittle said the party had “never been a serious contender” to take over in Scotland in the 25 years of the Scottish Parliament.
“We can do better than that,” he added. “As a party we must be more pro-active. It is not enough to respond to events. We must shape them.”
His candidacy, he said, has three “core principles” – education, enterprise and empowering people.
Shadow secretary mocks Reeves’ £20billion black hole claim
Shadow science secretary Andrew Griffith has attacked Labour’s claim about a £20billion black hole in public finances left by the Tories.
The Conservative MP for Arundel and South Downs tweeted:
Salma Ouaguira29 July 2024 10:20 1722244402Minister meeting charity over ‘scandal’ of Carer’s Allowance overpayments
The Government has promised a plan to “put things right” on overpayments to carers which have led to many unwittingly racking up unmanageable levels of debt and some quitting their jobs as a result.
The issue of people being penalised for going over their earnings limit for Carer’s Allowance even by as little as a few pence per week has been branded a “scandal” by a charity.
Carers UK said some people have been left owing “hundreds, thousands and sometimes tens of thousands of pounds” to the Department for Work and Pensions.
The organisation said “many carers” had told them they felt they had to leave their employment as a result of receiving an overpayment and “many more” had reduced their hours and turned down pay rises amid fears of breaching the earnings limit.
The charity has called for “concrete changes” to the system, including a rise in the earnings limit for the allowance, for debts to be written off in certain cases, and for clearer information and communication with carers.
A Government report written in 2021 but only published in May this year suggested 3% of their sample of claimants had received an overpayment of carer’s allowance.
With about 1.3 million people receiving carer’s allowance, the Carers Trust charity said this could equate to tens of thousands of people having been overpaid.
Then-work and pensions committee chairman Sir Stephen Timms said the issue had caused people “distress” and the report called on the Government of the time to “get a grip of the problem”.
On Monday, Carers UK said it was meeting with Sir Stephen to present its report into the devastating impacts of the issue.
Salma Ouaguira29 July 2024 10:13 1722244031Labour denies plans for EU freedom of movement for young people
Sir Keir Starmer reportedly discussed the possibility of a youth mobility scheme with the Spanish prime minister Pedro Sánchez.
Mr Sánchez raised the proposal to Starmer in a bilateral meeting during the European Political Community summit earlier this month.
Under the plans, young people aged between 18 and 30 would be granted free movement for up to four years allowing them to live, study or work in the EU.
But Downing Street has now denied that the government is considering such scheme insisting the UK will not reintroduce freedom of movement.
A government spokeswoman said: “We have been clear that we won’t rejoin the single market, customs union or reintroduce freedom of movement, and we are not considering a youth mobility scheme.”
VOICES: I wish Cameron had heeded my warnings about leaving the ECHR
As the Conservative leadership race gets underway, candidates appear hidebound to promise to withdraw the UK from the body that guarantees fundamental human rights in law.
To do so would be wildly irresponsible – and only help keep the Tories out of power, says former attorney general Dominic Grieve:
Cameron fired me over my support for the ECHR – but he should have listened to me
As the Conservative leadership race gets underway, candidates appear hidebound to promise to withdraw the UK from the body that guarantees fundamental human rights in law. To do so would be wildly irresponsible – and only help keep the Tories out of power, says former attorney general Dominic Grieve
Salma Ouaguira29 July 2024 10:03 Newer1 / 4OlderDisclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
