UK Politics

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

An overwhelming majority of Tory members believe that their party will need to prop up a Reform government led by Nigel Farage after the next election, according to a new survey.The survey of Conservative members by the ConHome website reveals that despite the two party leaderships attacking one another, they believe that the two will need to work together after the next election.When asked if Nigel Farage will be prime minister after the next election, the survey found that 53.9 per cent thought it was either highly likely (15.8 per cent) or likely (38.1 per cent).Then asked what sort of government would be required to keep Mr Farage’s Reform UK in power 24.4 per cent favoured a coalition with the Tories and 45 per cent a confidence and supply arrangement between the Tories and Reform.More than half of Tories polled said they believed Nigel Farage will become PM More

Official files have revealed that Boris Johnson took four days off during a crucial period in the run up to locking down the UK when the Covid pandemic struck.The revelation has come after the group campaigning for families of the Covid bereaved described the former prime minister as being “beyond contempt” for his attack on the damning report produced by the inquiry into his government’s handling of the pandemic.Mr Johnson has refused to apologise for an estimated 23,000 extra deaths the inquiry stated he caused by delaying lockdown for a week.Instead he used his column in a national newspaper to lambast the inquiry’s chair Baroness Heather Hallett and argue that Professor Neil Ferguson, whose estimates the figure was based on, was “hysterical”.Baroness Heather Hallett found Boris Johnson failed to exercise ‘proper leadership’ during the pandemic (Lucy North/PA) More

A key ally of Nigel Farage has broken Reform UK’s silence on its former party leader in Wales who was jailed last week for taking bribes from Russia.Zia Yusuf, the party’s former chairman and key member of Reform’s leadership, claimed that it was “unreasonable” to link Gill’s crime with the softer stance that the party and Mr Farage have taken on Vladimir Putin’s Russia and its criticism of the Ukraine war.Mr Yusuf described Gill as “treasonous, horrific, awful” in an interview with Sir Trevor Phillips on his Sunday morning political show on Sky News.Nathan Gill received £40,000 for making pro-Russian statements in the European Parliament (James Manning/PA) More

Keir Starmer and Rachel Reeves are set to tack hard to the left in the budget to buy themselves time and prevent an attempted leadership coup by backbenchers.The Independent has been told that the chancellor will bow to pressure scrapping the two child benefit cap altogether and unveiling a series of wealth taxes to fill the spending black hole in her budget.Backbenchers and senior party members have been assured that the tax raid will include a mansion tax on properties worth more than £2 million, a profits tax on gambling companies demanded by former PM Gordon Brown, and a levy on bank profits.Added to that transport secretary Heidi Alexander refused end speculation that fuel duty could rise for the first time in 15 years and electric cars will be subject to a new pay by the mile tax.Chancellor Rachel Reeves is finally set to unveil her budget after months of speculationThe minister was challenged on the issues on Sunday morning by Sir Trevor Phillips on Sky News and Laura Kuenssberg on the BBC.Ms Alexander pointed out that the government is freezing rail fares but after being asked three times about fuel duty, she said: “You would not expect me to speculate on what is going to be contained in the budget next week.”It is also being briefed that Ms Reeves will raise capital gains tax but will fall short of equalising it with income tax levels.A minister told The Independent: “The ink definitely won’t dry on this budget until Tuesday night but it looks like the PLP [parliamentary Labour Party] is getting what it wants…wealth taxes and an end to the child benefit cap.”The contents of the budget now though are being tied to the future of Sir Keir and Ms Reeves with continuing speculation that the PM could be ousted following a Downing Street briefing accusing Wes Streeting of plotting to replace him.Along with Mr Streeting, former deputy prime minister Angela Rayner, energy secretary Ed Miliband and home secretary Shabana Mahmood have been the centre of leadership speculation in the last fortnight.A senior party source told The Independent: “The PM and chancellor are buying themselves time. There will be elements of the media who hate these taxes but it will please members and the PLP.”It has also emerged that the decision to ditch an income tax rise breaking the manifesto commitment also came after pressure from backbenchers.One Labour MP said: “The message went up that it is hard enough for us to get a hearing on the doorstep as it is but if we did that [raise income tax], then the doors would have been closed on us and not reopened.“People would have just said ‘you lied, we can never trust you again.’”Health Secretary Wes Streeting was accused of trying to orchestrate a leadership coup (PA) More

Rachel Reeves is set to announce a £1.5bn subsidy for electric vehicles in a bid to persuade motorists to turn their backs on fossil fuels.The handouts to bring down the cost of electric vehicles comes as the chancellor is expected to introduce a new pay-by-the-mile tax on drivers of EVs in a move which has already been criticised by the industry.The revelation also comes as campaigners push for Ms Reeves to not raise fuel duty for the first time in 15 years.A petition signed by 152,000 will be delivered to Downing Street on the issue on Tuesday by campaign group FairFuelUK.But Ms Reeves’s decision appears to be a statement of intent in support of the drive towards net zero on carbon emissions after both the Tories and Reform UK made it clear they would abandon the goals.Ms Reeves’s subsidy for EVs also comes as she agrees to further subsidise rail fares with a freeze on ticket prices next year saving some commuters on busy lines £300.The measures come in a difficult Budget for the chancellor where she is widely expected to have to raise new taxes to close a spending black hole of at least £20bn and to give her headroom of more than £10bn to deal with unexpected economic shocks next year.Rachel Reeves is set to deliver the Budget next week More

Workers’ pensions could shrink by tens of thousands of pounds if the chancellor introduces national insurance on salary sacrifice schemes in next week’s Budget, a survey suggests.Research by the Confederation of British Industry (CBI) suggests businesses would mostly not be able to absorb the costs if tax liabilities are changed in the Autumn Budget.Salary sacrifice schemes allow workers to give up a portion of their pay for a different benefit, like pension contributions. The chancellor is said to be preparing to cap the amount of someone’s salary that can be sacrificed to £2,000 a year. After that, national insurance contributions would be incurred.But nearly three-quarters of UK firms agreed they would not increase their employer contributions to offset the new liability if such a measure came in. Just 13 per cent of respondents said they would.Pensions UK and the Federation of Small Businesses (FSB) have sent a joint letter to Chancellor Rachel Reeves, urging her not to curb salary sacrifice schemes or wider pensions tax relief More

A poll of Labour members has confirmed that there is an appetite to replace Sir Keir Starmer, with Andy Burnham as the favourite choice to succeed him.According to a poll of 1,013 Labour members by Survation for LabourList, Mr Burnham would be favoured over Sir Keir by 58 per cent to 32 per cent.Norwich South MP Clive Lewis last week offered to give up his seat so Mr Burnham could run for parliament to allow him to become leader.Former deputy prime minister Angela Rayner also has a strong lead of 19 points over the PM by 52 per cent to 33 per cent despite being forced to resign over a failure to pay £40,000 of stamp duty.Energy secretary Ed Miliband, who lost the 2015 election as Labour leader, is also preferred to Sir Keir by four points with 44 per cent to 40 per cent.And health secretary Wes Streeting, who was at the centre of accusations recently from Downing Street that he was plotting to overthrow the PM, would win by 33 per cent to 31 per cent.Andy Burnham is the favoured replacement for Keir Starmer by Labour members More