UK Politics

Business leaders have sent a warning to Rachel Reeves over an inflation-busting hike to the minimum wage which they fear will drive unemployment and hit economic growth.The chancellor has unveiled an 8.5 per cent rise in the hourly minimum wage for 18- to 20-year-olds – to £10.85 – as well as a 4.1 per cent rise for the living wage, for those aged 21 and over, to £12.71 per hour. Meanwhile, 16- and 17-year-olds, as well as those on apprenticeships, will see an increase of 6 per cent to £8 per hour. The announcement, on the eve of Ms Reeves’ Budget, will mean a pay rise for millions of workers, with the chancellor promising that those on low incomes will be “properly rewarded” for their work. But it comes just 24 hours after revelations that growth projections in the UK are set to be downgraded by the Office of Budget Responsibility until 2029 and after business leaders warned that tax rises, hikes in the minimum wage and new employment rights legislation was making it impossible for them to deliver economic growth for the country.There is still anger over the rise in employer national insurance contributions, unveiled in Ms Reeves’ Budget last year, which has hit the jobs market.Reacting to the minimum wage rise, Anna Leach, chief economist at the Institute of Directors, warned the move would increase joblessness among young people.She said: “These changes benefit only those who remain employed, but the rising cost and risk of employment are already reducing job opportunities. “The sharper increase in the youth rate is especially concerning, as it is likely to accelerate the loss of jobs among young people – at a time when nearly a million are already not in education, employment, or training.”The number of so-called NEETs (young people not in employment, education or training) has risen to almost 1 million, latest figures show. The chancellor has unveiled an 8.5 per cent rise in the hourly minimum wage for 18- to 20-year-olds More

Wes Streeting has made a major eve-of-Budget speech arguing that his party needs to do more to tackle child poverty amid speculation that he is planning to make a bid to become leader.Sources close to the health secretary denied that the speech to Barnardo’s and the King’s Fund was a leadership bid, but the issue of child poverty has become a touchstone for the Labour Party.Speaking at a conference in London, Mr Streeting discussed his own childhood, where his family faced poverty in London’s East End.Wes Streeting spoke at a conference hosted by the King’s Fund More

When Rachel Reeves walked into the Treasury as the new chancellor on 5 July 2024, she arrived with a “number one mission” of providing economic growth.Without it, she said, the UK could not pay for the improved public services that Labour wanted to deliver.But 18 bruising months later, those hopes for economic growth in a flatlining economy are in tatters, with the Office for Budget Responsibility (OBR) now expected to downgrade already low growth projections until 2029.As she prepares to stand up at 12.30 pm on Wednesday and deliver her second Budget, Ms Reeves has abandoned the language of economic growth. When she spoke to Labour MPs on Monday evening – in a bid to rally them ahead of her Budget – the word “growth” did not even pass her lips.Read our live Budget updates hereRachel Reeves has abandoned the language of economic growth in recent appearances More

Dozens of leading disability charities have urged Rachel Reeves not to cut Motability at Wednesday’s Budget as the chancellor reportedly considers axing up to £1bn in tax breaks for the scheme.Leasing around 300,000 vehicles a year to eligible disabled people, Motability has been the topic of intense debate in recent months as some politicians disagree about whether it is provides good value for the taxpayer.The reported proposals would see cars leased through the scheme no longer exempt from VAT and insurance premium tax, meaning more claimants would need to make an advance payment for their cars.In an open letter shared with The Independent, disability charity Transport for All and 41 other groups warn that the changes could have “dire consequences” as it would see disabled people “priced out of the scheme.” The proposals have left many with “high levels of uncertainty and anxiety”, they add.Around 815,000 people now have a Motability car More

Banking stocks gave the FTSE 100 a lift on Tuesday amid rumours that the sector will be spared a tax hit in Chancellor Rachel Reeves’ budget.The FTSE 100 index closed up 74.62 points, 0.8 per cent, at 9,609.53. The FTSE 250 ended up 205.83 points, 1.0 per cent, at 21,617.41, and the AIM All-Share closed up 4.93 points, 0.7 per cent, at 742.09.High street lenders Lloyds Banking Group rose 3.8 per cent, NatWest Group climbed 3.7 per cent and Barclays advanced 2.4 per cent.It came as the Financial Times said that Ms Reeves is unlikely to impose further tax hikes on UK banks, calming fears that they could be hit.The chancellor will deliver the budget statement to Parliament around 12.30pm on Wednesday, after Prime Minister’s Questions.The FTSE 100 index closed up 74.62 points, 0.8 per cent, on Tuesday More

Chancellor Rachel Reeves is reportedly poised to announce a three-year stamp duty holiday for new UK stock market listings in Wednesday’s Budget.The proposed scheme would exempt investors from the current 0.5 per cent stamp duty on shares in newly listed UK companies for three years following their initial public offering (IPO), providing a significant incentive for new domestic listings.The initiative seeks to buoy the London market’s competitiveness, addressing concerns that it is losing ground to overseas rivals. A raft of firms have defected abroad in recent years, including gambling giant Flutter Entertainment, the owner of Paddy Power, which has switched its main listing to New York. Other British companies have also been acquired by foreign competitors.Emma Wall, the chief investment strategist at Hargreaves Lansdown, said the stamp duty move would be a “welcome boost” for London’s IPO market and demand for UK shares.She said: “London has been losing out to New York in recent years, as businesses favour the funding and regulatory environment of the New York Stock Exchange.Rachel Reeves is looking to buoy the City’s competitiveness for IPOs More

Sir Keir Starmer refused to rule out freezing income tax thresholds at Wednesday’s Budget, prompting concern that more people will begin payin extra tax by ‘stealth’.At Prime Minister’s Questions on Wednesday, Sir Keir declined to answer a number of questions from opposition leader Kemi Badenoch on the issue of threshold freezes. His refusal to answer came after chancellor Rachel Reeves had been expected to breach Labour’s manifesto promises and increase income tax as part of her plans to plug the gap in the public finances. The chancellor is instead widely expected to raise other taxes on 26 November.Additionally, frozen tax thresholds could 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.The tax-free personal allowance was frozen at £12,570 until 2028 by the previous Conservative government. 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.Rachel Reeves will deliver the Budget next week More