UK Politics

Local leaders will be allowed to levy a “tourist tax” on overnight stays, the government has announced. Local leaders in England will be given the power to impose a “modest charge” on visitors, the Ministry of Housing, Communities and Local Government said.Announcing the measures ahead of the Budget on Wednesday, local government secretary Steve Reed said: “Tourists travel from near and far to visit England’s brilliant cities and regions.“We’re giving our mayors powers to harness this and put more money into local priorities, so they can keep driving growth and investing in these communities for years to come.” England is currently the only G7 country where local authorities are prevented from implementing tourist taxes. London mayor Sadiq Khan, who has been a vocal proponent of the measure, welcomed the announcement, saying it is “great news for London.”He added: “The extra funding will directly support London’s economy, and help cement our reputation as a global tourism and business destination. It also shows what can be done when ministers work closely with Mayors to devolve more powers to cities and regions.“As part of developing our plans for the levy we will work closely with the hospitality and tourism sectors to ensure it delivers the maximum benefits for London and our brilliant businesses.”A research report from the Greater London Authority in 2017 estimated that a 5 per cent levy on the cost of accommodation could raise £239m per year in the capital. A consultation on details of the measure will run until February 18.This is a breaking news story. More to follow… More

The sugar tax will be applied to packaged milkshakes and lattes for the first time, Wes Streeting has announced. The health secretary told the House of Commons that ministers are removing the exemption for milk-based drinks and that ministers would not look away “as children get unhealthier”. The threshold for the tax will also be lowered to 4.5g of sugar per 100ml, from the existing 5g per 100ml. The move comes ahead of Wednesday’s Budget, in which Rachel Reeves is expected to announce a raft of tax rises as she looks to plug the gap in the public finances. Speaking at health questions on Tuesday, the health secretary said: “Obesity robs children of the best possible start in life, hits the poorest hardest, sets them up for a lifetime of health problems and costs the NHS billions.“So, I can announce to the House, we’re expanding the soft drinks industry levy to include bottles and cartons of milkshakes, flavoured milk and milk substitute drinks.“We’re also reducing the threshold to 4.5 grams of sugar per 100 millilitres. This Government will not look away as children get unhealthier and our political opponents urge us to leave them behind.”The move will affect packaged milkshakes and coffees, but not drinks made in cafes or restaurants. The sugar tax is to be extended to cover milk drinks including lattes, Health Secretary Wes Streeting is expected to announce (Alamy/PA) More

With Labour’s second autumn Budget taking place on Wednesday, speculation about further tax rises has grown rife. Chancellor Rachel Reeves may need to find at least £22bn next month, pre-Budget research from the respected Institute for Fiscal Studies (IFS) found, as rising borrowing costs and weak growth forecasts drastically reduce her room for manoeuvre.She has warned she will not be making “easy choices” at the fiscal event on 26 November, as No 10 looks appears less concrete on its commitment not to raise taxes on “working people”. This means no increase to the headline rates of income tax, VAT or national insurance contributions.Should these three largest bases of tax revenue closed off, the chancellor has fewer places to look to raise revenue, making it more likely she will pick from a diverse range of taxation tweaks.Changes to how property and capital gains are taxed have now been forecast by many economists, but some have also predicted that changes to pension policy could make an appearance.Pre-Budget research has found that the chancellor may need to find at least £22bn next month More

One of Britain’s leading tax experts has raised serious questions over Rachel Reeves’ planned mansion tax on high-value homes expected in her make-or-break Budget.Dan Neidle, the founder of Tax Policy Associates, is in favour of property tax reform, but has questioned proposals to hit 100,000 of the most expensive properties with an average charge of £4,500, as they would be based on out-of-date valuations.Ms Reeves is understood to be looking to revalue bands F, G and H to raise more cash to fill a black hole in her spending plans of at least £20bn.It comes as her hopes for economic growth to fill the spending gap appear to have been dashed, after reports that Britain’s leading economic watchdog, the Office for Budget Responsibility (OBR), has downgraded its growth forecasts until 2029.The Chancellor is reportedly preparing to bring in a mansion tax (Leon Neal/PA) More

Rachel Reeves is poised to deliver her Budget this week, with intense speculation surrounding potential tax increases designed to stabilise the nation’s finances. The Chancellor is anticipated to outline measures addressing a significant public funds deficit and establishing a more robust financial reserve, aiming to reduce future demands on taxpayers. These proposals are expected to be announced at approximately 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.Sources familiar with Budget preparations have told the Financial Times that Reeves will cut the annual cash ISA limit from £20,000 to £12,000 in order to push more households to invest their savings into the UK stock market.Rail fares Commuters on the more expensive routes will save more than £300 a year More

As the UK prepares for the budget announcement, familiar debates are taking shape. Should Chancellor Rachel Reeves cut welfare spending? Or reform the “triple lock” on state pensions?Other debates focus on revenue: how should she raise money without breaking Labour’s manifesto promise not to increase taxes on working people? But these discussions are being held in a strange vacuum, where the three enormous expenditures that led the UK to this point are not mentioned.COVID debt, energy support schemes and Brexit have fundamentally shaped the UK’s financial woes. Yet voters and politicians alike seem determined not to talk about them. Instead, they’re treated as shocks imposed on the country, although they involved hugely consequential political choices.Gloomy vibes accompany this Advent budget, and Britain’s awkward collective amnesia is preventing the country from learning the lessons needed for future crises and from talking honestly about the best route forward.Chancellor Rachel Reeves will outline her next Budget in the Commons on 26 November 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

Sir Keir Starmer was forced to apologise to a teacher after encouraging pupils to take part in the viral “6-7” trend during a visit to a school in Peterborough.The prime minister was reading with pupils at Welland Academy on Monday, as part of a visit to discuss the importance of free school meals, when one pupil pointed out they were on page 67. Sir Keir then made the hand gesture that accompanies the reference, with many students quickly joining in.The term “6-7” is a nonsensical expression often blurted out when “six” and “seven” are mentioned together, with one person saying “six” and others responding “seven.” It also comes with an accompanying “juggling” hand gesture.The prime minister participated in the viral ‘6-7’ trend complete with ‘juggling’ hand gesture More