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Rachel Reeves will announce Labour’s first Budget in 15 years later this month, leading one of the most highly-anticipated fiscal events in over a decade.
As the chancellor looks to fill the £22bn “black hole” in public spending she announced in late July, speculation has mounted about what measures will be included on 30 October.
During Labour’s first few months in power, ministers have warned that “tough decisions” will be required to balance the books. Prime minister Sir Keir Starmer has said the event is going to be “painful” but that there is “no other choice given the situation that we’re in”.
This likely means tax rises and spending cuts can be expected. The government has already come under fire for its decision to cut back winter fuel payments for millions of pensions, sparking a row which has hung over its first 100 days in power.
In the run-up to the Budget, inflation fell below the 2 per cent target for the first time in three years, sparking hopes of an interest rate cut to come in November.
We’ll be bringing you all the latest updates ahead of the big event on 30 October here, on The Independent’s liveblog.
Key points
- Inflation falls below 2% target for first time in three years
- Budget 2024: Proposed national insurance hike sparks row
- Preview: What will be in Labour’s Budget?
- Ex-Bank of England chief urges Reeves to raise national insurance
Pinned: Inflation falls below 2% target for first time in three years
UK inflation has decreased to below the 2 per cent target for the first time in over three years.
The consumer price index (CPI) has dropped to 1.7 per cent, down from 2.2. per cent in August, according to the Office for National Statistics.
The figure has beaten expert predictions, which largely estimated a more modest drop to 1.9 per cent.
Inflation falls below 2% target for first time in three years
Experts say the drop should pave the way for strong interest rate cuts
Albert Toth16 October 2024 08:02 1729080857ICYMI: Ex-Bank of England chief urges Rachel Reeves to raise national insurance
In an open letter published in The Independent, Mervyn King warns the chancellor against higher borrowing
“Be courageous, be bold, and ensure that the economic inheritance we leave to our grandchildren is one of which both they and we can be proud.
“One day, you will look back on your time as chancellor and you will want to remember the far-reaching changes you made – not the political compromises that others will urge on you.”
Albert Toth16 October 2024 13:14 1729076014Controversial weight-loss jab policy revealed ahead of Budget
Ahead of the Budget on 30 October, it has been revealed that a trial is underway where unemployed people will be given weight-loss jabs to assist them back into work.
The UK’s life sciences sector will receive £279 million from drugs giant Eli Lilly, to invest in developing new medicines and ways to deliver treatment.
“The long-term benefits of these drugs could be monumental in our approach to tackling obesity. For many people, these jabs will be life-changing, help them get back to work and ease the demands on our NHS,” health secretary Wes Streeting wrote in The Telegraph.
Unemployed to be given weight-loss jab to help them back into work, government says
The new trial aims to gather evidence of the effects of the drug tirzepatide – sold by pharmaceutical company Lily under brand name Mounjaro
Albert Toth16 October 2024 11:53 1729069415
Rachel Reeves boosted by big drop in inflation as she seeks £40bn in Budget tax rises
Rachel Reeves has been boosted by a sharp drop in inflation as she seeks to find £40bn of tax hikes and spending cuts in this month’s Budget.
The chancellor will welcome the dip, which saw inflation fall under the Bank of England’s 2 per cent target for the first time in more than three years, as she prepares for what promises to be a brutal Budget.
Rachel Reeves boosted by big drop in inflation as she seeks £40bn in Budget tax rises
The fall in inflation comes as Rachel Reeves looks for £40bn of spending cuts and tax hikes in the October 30 Budget
Albert Toth16 October 2024 10:03 1729069239Would raising employer national insurance be a ‘tax on working people’?
Labour came under criticism in recent days after several ministers refused to rule out that an increase in employer national insurance contributions (NICs) will be announced in the upcoming budget.
Ministers and Treasury officials have indicated the government’s position is that the measure would not break their manifesto pledge. Meanwhile, Institute for Fiscal Studies director Paul Johnson has argued it would be a “straightforward breach.”
Here are the facts about the debate and how the measure could affect you:
Fact check: Would a employer national insurance hike be a ‘tax on working people’?
One expert has called Labour’s rumoured plan a “straightforward breach” of its manifesto
Albert Toth16 October 2024 10:00 1729062000ICYMI: Reeves warned national insurance hike would be ‘straightforward breach’ of manifesto
Rachel Reeves has been warned that hiking employer national insurance contributions would be “a straightforward breach” of the Labour manifesto.
The chancellor has been told by Paul Johnson, director of the influential Institute for Fiscal Studies (IFS), that the party said “very clearly” it would not make the change.
Reeves warned over ‘straightforward breach’ of manifesto if national insurance hiked
Speculation is mounting that the chancellor is considering raising employer contributions
Albert Toth16 October 2024 08:00 1729054800Budget rumours: Inheritance Tax reform
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 is below £325,000.
The tax rate is 40 per cent, but it’s only charged on the part of the estate that’s above the threshold. In 2023/24, only 5 per cent of deaths generated an inheritance tax bill, raising around £7 billion.
However, the IFS writes that the tax measure “is littered with special exemptions”. These include a business relief, the ability to pass on agricultural land tax-free, and the tax-free passing on of pension pots.
The economic think tank says that ending these measures alone would raise £4.8bn a year by 2029.
Albert Toth16 October 2024 06:00 1729044000Tell us what you’d like to see announced in Labour’s first budget
We would like to hear your thoughts on what you would like to see introduced in Reeves’ Budget. Should she focus on measures to support homeowners, such as the Freedom to Buy scheme? Or would you prefer a focus on closing tax loopholes, such as abolishing non-dom status, to ensure a fairer tax system?
Share your views:
Tell us what you’d like to see announced in Labour’s first budget
Prime Minister Keir Starmer has already warned of ‘difficult decisions’ – but what measures and policies would you like to see introduced in Labour’s first autumn statement?
The Independent16 October 2024 03:00 1729033260Budget rumours: Taxing pension savings
Pension tax relief is a reduction of the amount of tax paid on private pensions. It helps workers save for retirement by boosting their pension pots.
The amount of tax relief a person is granted is based on their income tax. It will effectively cancel out tax on pension contributions up to a maximum of £60,000.
After this, contributions will be taxed at either 20, 40, or 45 per cent, depending on which income tax rate the worker falls into.
However, the chancellor is thought to be considering a flat 30 per cent pension tax relief rate. This would mean that higher earners would effectively pay 10 per cent in tax, while those on the additional rate would pay 15.
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 to receive a 10 per cent boost to their pension contributions.
Evaluating the idea last year, the IFS said it would “redistribute the burden of taxation from the bottom 80 per cent to the top 20 per cent of earners.”
Albert Toth16 October 2024 00:01 1729026029Budget rumours: Capital Gains reform
It has been reported that Rachel Reeves is considering tweaking Capital Gains Tax at the 2024 Budget.
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.
Albert Toth15 October 2024 22:00 Newer1 / 2OlderDisclaimer: 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.
