Budget 2024 live: Reeves to pledge more ‘pounds in people’s pockets’ as minimum wage to rise to £12.21

Rachel Reeves has accused shadow chancellor Jeremy Hunt of “lashing out” at the Office for Budget Responsibility (OBR).

It comes after Mr Hunt, who served as chancellor for the Tories’ final two years in power, wrote to the country’s top civil servant arguing the OBR risked “straying into political territory and failing to follow due process” in its handling of this year’s review of government spending plans.

The OBR review was launched when a Treasury audit discovered what the government described as a £22 billion “black hole” in the plans Ms Reeves had inherited after taking 11 Downing Street in July.

Mr Hunt complained to cabinet secretary Simon Case that the report has not been shown to Tory former treasury ministers, and that it “will be used for highly political purposes”.

He said a failure to follow normal process is “deeply problematic for perceptions of the impartiality of the Civil Service”, claiming that she has invented a “fictitious black hole”.

But Ms Reeves hit back: “I think it is important we don’t deny the seriousness of the situation that we face with the black hole in the public finances. Combined with lashing out at independent economic institutions, (it) suggests that he’s got more in common with Liz Truss or Kwasi Kwarteng than perhaps we thought.

Lower borrowing costs have led to a surge in mortgage approvals, as home buyers aim to lock in better rates following the interest rate cut in the summer.

The number of approvals for homebuyers rose to a fresh two-year high in September, with 65,600 loans being approved – 700 more than in August, according to the Bank of England.

Alice Haine, personal finance analyst for pension firm Bestinvest, said: “Lower inflation, improving borrowing conditions and robust income growth have eased the affordability challenge for many buyers in recent weeks following the Bank of England’s decision to make its first interest rate cut since the start of the pandemic.”

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Trade union leaders are already squaring up for a fight with Rachel Reeves over pay, even before she has published her first Budget.

The Independent has been told that union bosses have made it clear they expect massive public sector rises in the new year “after 14 years of Tory austerity and wage constraint”.

It is another headache for the chancellor who is expected to be forced to bring in some of the biggest tax rises in history to cover a £40bn black hole in Labour’s spending plans. Ms Reeves is expected to increase employers national insurance contributions and capital gains tax among a range of measures.

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Rachel Reeves has shared a picture of her putting the final touches onto tomorrow’s budget.

Pictured behind Ms Reeves is Ellen Wilkinson, the Labour MP for Jarrow famed for being a figurehead in the 1936 Jarrow March, an organised protest against unemployment and poverty in the town.

Ms Wilkinson later became Chairman of the Labour Party, before serving as education minister in Clement Attlee’s postwar cabinet.

Chancellor Rachel Reeves has hinted at a reform to business rates in Wednesday’s Budget.

Asked by Liberal Democrat deputy leader Daisy Cooper about business rates, Ms Reeves committed to a “five-year roadmap” for business rates, the fees which councils collect from companies to support local services.

The Chancellor told MPs: “Small businesses and high street businesses are the lifeblood of all of our communities, including hers in St Albans, and it is important that we support them.

“In our manifesto, we committed to have reform of our business rate system.

“I’ll be setting out more details in the Budget tomorrow, as well as a business tax roadmap, because a business tax roadmap is what will give businesses certainty about the tax environment that they will be working with for the next five years.”

The Treasury has posted a picture on social media of the Budget’s front cover ahead of tomorrow’s event. The subheading reads: “Fixing the foundations to deliver change.”

Speaking in Commons, Conservative shadow innovation minister Saqib Bhatti pressed the chancellor to clarify reported plans to end the ongoing freeze on fuel duty.

Mr Bhatti suggested “any rise in fuel duty, which the Conservatives froze or cut for 14 years, would be a tax on those hardworking people or those hardworking small business owners”.

The Chancellor replied: “The previous government factored into their forecast an increase in fuel duty this year. I will set out our plans in the Budget tomorrow.”

The fuel duty cut – of 5p per litre on diesel and unleaded fuels – was due to end in March 2025, according to the previous government’s spending plans.

The updated ministerial code will close the “Tory freebie loophole”, Cabinet Office minister Nick Thomas-Symonds has said.

Labour MP Kevin Bonavia (Stevenage), asked if the Government will “confirm that we will honour the pledges it made at the election”.

Mr Thomas-Symonds replied: “One of the many things that the Conservative government over 14 years destroyed, trust, I’m afraid was one of them, something this Government is determined to rebuild.”

James Wild, Conservative MP for North West Norfolk, asked: “why has the Prime Minister not yet published an updated version of the ministerial code? Are they still working out whether it is right to accept suits and glasses?”

Mr Thomas-Symonds replied: “We have already said that the Prime Minister will update the ministerial code and publish it shortly, and it’s making sure that it is fit for purpose, dealing with problems like the Tory freebie loophole, and that it meets the high standards the Prime Minister expects.”

Ahead of the Budget, Sir Keir Starmer chaired a political Cabinet meeting, without civil service officials.

A Labour spokesman said: “This Budget is about investment with Labour versus decline under the Conservatives. The Prime Minister opened the political Cabinet meeting by saying that ‘politics is about choices’ and that the Budget tomorrow will show that ‘we are choosing to fix the NHS, rebuild Britain and protect the payslips of working people’, to deliver on our mandate for change.

The Chancellor told ministers “there would have to be difficult decisions on spending, welfare and tax” to deal with the legacy she inherited.

“She said the Labour Party promised there would be no return to austerity and the Budget tomorrow would deliver on that promise. She said the choices the Government is taking will restore economic stability.

“She said the Budget would fix the foundations of the economy and deliver on the promise of change.”

Union leaders are braced for increased taxes and spending cuts in Rachel Reeves’ Budget.

The chancellor has already warned she has had to make “difficult” choices in her first Budget, and the first one ever to be delivered by a female chancellor.

Labour is expected to increase employers’ national insurance contributions, extend the freeze on income tax thresholds, increase in capital gains tax on shares, and close inheritance tax loopholes.

One union leader told the Independent: “The impression we are getting is that no-one is going to be happy”.