UK Politics

Labour minister apologises for speculation around budgetRachel Reeves is set to hit thousands of Britain’s most expensive properties with a new levy as she prepares to lay out her highly anticipated Budget this week.The chancellor is said to be targeting the wealthy with new taxes as she hopes to balance the books with a series of measures to be announced on Wednesday.A new levy could be applied to some of the most valuable homes, known as a “mansion tax”. The move would reportedly revalue some of the most valuable properties across council tax bands F, G and H and hit 100,000 of them with a new surcharge.The mansion tax was being suggested as a 1 per cent levy on properties worth £2m or more, but there is an expectation that it may be set much lower at a maximum of £5,000 because of concerns about the London housing market.It is one of a series of wealth taxes Reeves is set to unveil to fill the spending black hole in her budget with other measures expected to include a profits tax on gambling companies demanded by former PM Gordon Brown, and a levy on bank profits.What are salary sacrifice schemes?A tax raid on salary sacrifice schemes could be announced in Wednesday’s Budget, reports suggest, raising fears that some people’s retirements could be put at risk.Salary sacrifice schemes allow people to “give up” a chunk of their salary for a different benefit from their employer.Employers may offer salary sacrifice as part of their pension scheme as a tax efficient way to help workers boost their pots.When someone pays into a pension using salary sacrifice, the employer will pay the whole amount into the employee’s pension, including the employer’s contribution.( More

Speculation about Rachel Reeves’ upcoming Budget continues to mount as she prepares to outline measures to address the deficit in public funds on Wednesday.The chancellor has told the public she has no “easy choices” on Wednesday, after the Institute for Fiscal Studies (IFS) estimated she needs to find at least £22bn to fill the gap in the public finances. The lead up to the fiscal event has been rife with rumours about what could be to come, including the expectation – and then apparent U-turn on – an increase to income tax.It looked as if Ms Reeves would break Labour’s election-winning manifesto and increase income tax. She later abandoned that plan, following more optimistic forecasts received by the Treasury from the budget watchdog.We already know some measures which will feature in Wednesday’s announcement. Rail fares will be frozen in the Budget, saving commuters on pricier routes more than £300 a year, and the cost of an NHS prescription in England will also be frozen at £9.90.Ms Reeves is expected to reaffirm Labour’s commitment to the triple lock on state pensions, and confirm that 13m pensioners are set to benefit from an above inflation rise next April.Here, we look at how other measures in the Budget could affect pensioners.Freezing income tax thresholdsSir Keir Starmer refused to rule out freezing income tax thresholds at the Budget, which could result in people paying more tax by “stealth”.At Prime Minister’s Questions last Wednesday, Sir Keir declined to answer a number of questions from opposition leader Kemi Badenoch on the issue of threshold freezes.The tax-free personal allowance was frozen at £12,570 until 2028 by the previous Conservative government. Frozen tax thresholds can be used to raise more money for the Treasury, in effect rising taxes by stealth.Even if income tax rates are not increased, people could end up paying more tax as a result of the freezes. Freezing tax thresholds can create what economists call “fiscal drag” – more people are pulled into higher tax brackets as average earnings increase, but the thresholds stay the same.As mentioned earlier, Ms Reeves is expected to reaffirm the government’s commitment to the triple lock on state pensions in the Budget. But frozen tax thresholds could affect a rising state pension.The state pension has been £11,973 per year since April 2025 and, as a result of the triple lock, it is expected to rise to at least £12,578 per year in April 2027.The triple lock means the state pension increases annually, by whatever is highest of inflation, average growth in earnings or 2.5%.On Wednesday, the Chancellor will reveal the Government’s latest set of tax and spending policies More

Months of political speculation will come to an end on Wednesday as Rachel Reeves delivers her long-awaited autumn Budget. Myriad tax rises and spending cuts have been floated, some on firmer authority than others, leaving millions of Britons waiting to find out how they will be affected.Many economists predict that substantial tax rises can be expected in the Budget, as Ms Reeves looks to counteract the country’s ailing economic performance.Researchers from the Institute for Fiscal Studies (IFS) have found that the chancellor will need to find at least £22bn to make up a shortfall in the government’s finances, as rising borrowing costs and weak growth forecasts drastically reduce her room for manoeuvre.Speaking from Downing Street earlier in November, Ms Reeves said: “Politicians of recent years have become addicted to shelling out for short-term sticking-plaster solutions rather than making long-term economic plans.”Adding further fuel to speculation is the seeming reluctance from No 10 to recommit to Labour’s manifesto pledges not to raise the headline rates of VAT or national insurance contributions.Chancellor Rachel Reeves will oversee Labour’s second Budget on 26 November More

Rachel Reeves is poised to deliver her Budget this week, following intense speculation regarding potential tax increases aimed at stabilising the nation’s finances. The Chancellor is expected to unveil measures designed to address a significant deficit in public funds and establish a more robust financial reserve, thereby reducing the need for future demands on taxpayers. Here we look at some of the measures the Chancellor might announce at around 12.30pm on Wednesday, 26 November. Income taxChancellor Rachel Reeves has reportedly abandoned plans for a significant income tax hike, a move that would have broken manifesto pledges. This U-turn follows less pessimistic forecasts received by the Treasury from the budget watchdog, leading to the measure being dropped from what Speaker Sir Lindsay Hoyle described as the “hokey cokey budget”.Instead, Ms Reeves is now said to be favouring an extension of the existing freeze on income tax thresholds. Should this be implemented alongside a freeze on National Insurance thresholds, it could generate an estimated £8.3 billion annually for the Exchequer by 2029/30.By not increasing the thresholds, she will benefit from a process called “fiscal drag”, where as wages go up people are dragged into paying tax for the first time or shifted into a higher rate.Rail fares Commuters on the more expensive routes will save more than £300 a year More

Labour is set to announce an end to the two-child benefit cap at Wednesday’s Budget, following months of intense pressure from backbenchers, campaign groups and political opponents.Ahead of the fiscal event on 26 November, government insiders have told The Independent that the chancellor will scrap the controversial policy in a bid to appease discontented MPs and boost ailing poll results.Rachel Reeves hinted earlier this month that Labour could abolish the controversial policy, saying she does not think it is right that children are “penalised” for being part of large families.Speaking on BBC Radio 5Live, the chancellor said it was important not to let the “costs to our economy in allowing child poverty to go unchecked”. She added: “In the end, a child should not be penalised because their parents don’t have very much money.”Rachel Reeves said it was important not to let the ‘costs to our economy in allowing child poverty to go unchecked’ More

Rachel Reeves could hit more than 100,000 high-value properties with a mansion tax at this week’s Budget as she seeks to raise money to fill her financial blackhole.The chancellor has reportedly scaled back plans for a property tax but is now expected to apply a tax to homes worth more than £2 million in a move which could raise between £400m and £450m for the Treasury. Some 2.4 million properties in the top three council tax bands – F, G and H – will be revalued to determine which will be subject to the surcharge, which will be worth an average of £4,500, according to The Times. People will be able to defer the cost until they die or move house to avoid forcing them to sell up, according to the newspaper.Follow our live updates on the Budget HEREEarlier reports had suggested that a mansion tax would apply to homes worth more than £1.5million and would have pulled tens of thousands more households in. But The Times reports that the threshold has been raised amid concerns it could affect those who are “asset rich and cash poor”, particularly in London. Chancellor Rachel Reeves will deliver the Budget on Wednesday (Leon Neal/PA) More

Rachel Reeves has been given a stark warning from business to avoid “death by a thousand taxes” in her long-awaited Budget this week. The CBI’s director general, Rain Newton-Smith, will tell the chancellor on Monday that the UK risks being stuck in “Groundhog Day”, where politics trumps growth and no bold decisions are taken. In a speech to hundreds of business leaders at the QEII centre in London, the government will be urged to “change course… and work with business to fix what’s broken”. “We face a fork in the road,” Ms Newton-Smith is expected to say. “Where our biggest fear is, if we get the wrong choices on Wednesday… more short-term tinkering; more bold choices not made; more politics over growth … then we risk getting locked in a stop-start economy.“Where large tax rises rear their head every year or even every autumn and spring. That is not the road to growth. That is a cycle of doubt and uncertainty. That is the road to decline.” Chancellor Rachel Reeves will deliver the Budget on Wednesday More

New research has suggested that 1.3 million more people will be dragged into paying the higher 40p tax rate if Rachel Reeves, as expected, freezes the threshold again.The chancellor is now widely believed to be ready to break her party’s manifesto promise on not raising income tax with what critics describe as “a stealth tax” on earners with another freeze in the point that tax rates start to apply.It comes as Ms Reeves is set to confirm that pensioners will benefit from a £550 rise in the state pension with an inflation busting increase of 2.5 per cent as she maintains the triple lock despite growing pressures on the government finances.Chancellor of Exchequer Rachel Reeves will finally unveil her Budget on Wednesday (Paul Grover/Daily Telegraph/PA) More