Budget 2024 latest: ‘Big and difficult choices’ warns health secretary as tax threshold freeze not ruled out

Sir Keir Starmer has been told to “listen to voters” and block his Chancellor’s plans to impose deep cuts in this year’s Budget.

Rachel Reeves is looking to raise up to £40 billion through tax hikes and spending in her 2024 autumn Budget at the end of the month.

But she has faced backlash from within her own party with some ministers unhappy at being asked to reduce spending by as much as 20%.

Stephen Flynn, the SNP’s leader at Westminster, has written to the Prime Minister urging him to intervene and stop the cuts.

He said that Sir Keir must “listen to voters and your own cabinet colleagues: intervene now, overrule the Chancellor and stop the cuts, or people in Scotland will never forgive the Labour Party”.

Claiming the Chancellor’s Budget was “descending into total chaos” he urged the Prime Minister to “immediately intervene and block the Chancellor’s plans for devastating austerity cuts”.

Rachel Reeves will seek to make around £3 billion of cuts to welfare over the next four years by restricting access to sickness benefits, it is understood.

The Chancellor is expected to commit to the previous Tory government’s plans to save the sum by reforming work capability rules, as first reported by The Telegraph.

Under Conservative proposals, welfare eligibility would have been tightened so that around 400,000 more people who are signed off long-term would be assessed as needing to prepare for employment by 2028/29, reducing the benefits bill by an estimated £3 billion.

It is understood that Ms Reeves will commit to the plan to save £3 billion over four years, but Work and Pensions Secretary Liz Kendall will decide how the system will be changed in order to achieve this.

A record number of UK businesses are facing a serious financial strain, as post-Covid debts squeeze all corners of the economy, a report has found.

The warning comes after a series of businesses have been on the brink of collapse or faced insolvency this year, including retailers Ted Baker and Carpetright, restaurant group TGI Fridays and construction firm ISG.

There were 632,756 firms flagged as being in “significant” financial distress between July and September.

Ric Traynor, the executive chairman of Begbies, said the decline in the level of firms heading toward collapse was a “welcome surprise after a challenging year”.

“That said, it is too early to say if this is a trend that will continue into the autumn – traditionally a busy period for corporate insolvencies,” he added.

“While there are tentative signs of a recovery, uncertainty continues to loom over UK businesses.

“In response, many business leaders are holding their breath as they await clarity over what the forthcoming Budget will bring.”

Many business leaders “expect companies and investors to bear the brunt of changes to the tax regime”, he said, with an increase to employer national insurance among the measures which the Government has not ruled out.

Experts have long anticipated that Labour will put capital gains tax up in the Budget on 30 October. This is the levy is paid on the profit made when an asset which has increased in value is sold. This includes houses, assets and shares, all paid between 20 and 28 per cent.

The latest reports indicate that Ms Reeves will respond to calls to raise capital gains tax in line with income tax bands – meaning rates of 20 to 40 per cent – but will exempt property from the new rates.

Rachel Reeves is considering raising the tax on vaping products in the upcoming Budget as figures lay bare how many children access them in the UK, The Guardian reports.

The tax on vaping products was originally announced by the Conservatives in March, to come in to force in 2026. It is now understood that Ms Reeves could look to increase this.

Under current plans, the new rates from April 2026 will range from £1-3 per 10ml of liquid, depending on nicotine level.

The chancellor is reportedly planning to confirm that the heightened stamp duty threshold will drop back to previous levels in March, costing housebuyers up to £2,500 more.

In 2022, the Conservatives under Liz Truss increased the ‘nil rate’ threshold – when stamp duty starts being paid – from £125,000 to £250,000. For first-time buyers, it rose from £300,000 to £425,000.

The approach is expected to raise £1.8 billion a year by 2029-30, but experts have warned the news will cause “chaos” in the property market as buyers rush deals to save money.

Property expert Kirstie Allsopp told Times Radio: “It’s become so complicated that I can no longer tell anyone what they would be paying in stamp duty.”

“It won’t claw back any money. Stamp duty is a dead tax.”

Prime Minister Sir Keir Starmer has said that the government will keep to manifesto pledges ahead of the Budget.

Asked about whether reported tax changes under consideration would keep to their promise of not increasing taxes for working people, Sir Keir told a press conference in Berlin: “We are going to keep our manifesto pledges.”

He added: “I’m not going to pre-empt the individual measures that will be outlined by the Chancellor in due course.

“This is going to be a Budget that will fix the foundations and rebuild our country.”

When asked further about potential tax rises, the Prime Minister said that “you’ll just have to wait until the Chancellor lays that out in full, but the structure if you like, the framework, is going to be to fix the foundations and to rebuild our country.”

Chancellor Rachel Reeves will deliver Labour’s first Budget on Wednesday 30 October.

Each year, the chancellor of the exchequer - who is in charge of the government's finances - makes a Budget statement to MPs. .

The speech outlines the government's plans for spending and taxes.

The Budget speech usually starts around 12:30pm and lasts about an hour. The Independent will be bringing you all the latest updates on the big day.

Ms Reeves may be considering pushing the freeze beyond its current expiry date of 2028 in a move that could raise £7 billion, according to the Financial Times.

Other measures reported to be under consideration include increasing employers’ national insurance contributions, raising fuel duty for the first time since 2010, changes to rules on inheritance tax and stamp duty, and a levy on e-cigarettes, according to reports across the media.

The Treasury has so far declined to comment on Budget speculation.