UK budget 2024 live: Rachel Reeves’ expected tax hike will hit workers, says ex-Bank of England governor

Working people will not see higher taxes on their payslip, a minister said as she acknowledged “frustrations” over the government’s refusal to spell out who will be hit by greater levies ahead of the Budget.

Education Secretary Bridget Phillipson repeated warnings that Wednesday’s financial statement will include “tough choices”, but she insisted it is a choice between investment or decline for the UK.

Facing broadcasters on Sunday morning, the Cabinet minister was repeatedly pressed to define the Labour Government’s use of the term “working people” – who it has promised to protect from tax hikes in the Budget.

“You are inviting me to speculate about the nature of the question that you’re asking,” she told the BBC’s Sunday With Laura Kuenssberg show.

“What I’m saying is that when people look at their payslips, they will not see higher taxes.”

Ahead of the Budget on 30 October, there has been fevered speculation about changes to pension savers’ tax allowances and other perks.

Reports that pensioners could have tax breaks cut or axed led to savers withdrawing chunks of their retirement pots ahead of Chancellor Rachel Reeves’s big announcement.

Other speculation focused on tax breaks for workers planning to retire, spurring them to do the opposite, and pack more cash into their pensions in case their own tax incentives are slashed.

Read more about what you should do with your savings from Howard Mustoe here:

Sir Keir Starmer’s chief of staff Morgan McSweeny and deputy prime minister Angela Rayner are battling for influence in No10, according to a report in The Telegraph.

The friction is reportedly over the government’s plans for devolving power across the regions and nations. While Ms Rayner is meant to be overseeing the plans, The Telegraph has reported that the most important meetings are happening behind her back.

Mr McSweeney is reportedly holding monthly calls with the mayors, while Ms Rayner is not invited.

Rachel Reeves is expected to make three key pledges in her Budget on Wednesday.

According to a report in The Sunday Times, the chancellor will promise to “do everything in my power to protect working people”, “fix the NHS” and “rebuild Britain”.

Ms Reeves will emphasis the terrible public spending situation she inherited from the Conservatives, and the Office of Budget Responsibility (OBR) will publish a document providing a detailed breakdown of the £22bn ‘black hole’ that Labour has said it has inherited, the Sunday paper reports.

Ms Reeves will also reportedly announce an end to big changes in the Spring statement, pledging that the Budget will be the only time big economic plans are set out.

Keir Starmer has denied misleading the public over tax rises in the Budget after he suggested “working people” did not make money from property or shares.

The prime minister also rejected claims he had waged a “war on middle Britain”.

Labour made manifesto pledges to not hike taxes on what it described as “working people,” explicitly ruling out increases to VAT, national insurance, and income tax.

Read more from our Whitehall Editor Kate Devlin here:

The Education Secretary said she would “love to go faster” on improving family support services and bolstering protections for vulnerable children but it will “take time”.

Bridget Phillipson said the government’s commitment to extra help for foster and kinship carers - with £44 million in support announced on Sunday - “cannot be the extent of” its measures to help with safeguarding.

“This cannot be the extent of it... the children’s social care system just isn’t working,” she told the BBC’s Sunday With Laura Kuenssberg programme.

Ms Phillipson said the government would legislate for a register of children not in school in order to know “where children are” and whether they are safe.

Asked whether she believed social services should be more proactive in stepping in when there are concerns about a child, following a series of high-profile cases of children being abused and killed by their parents such as Arthur Labinjo-Hughes, she said: “What I do think needs to happen though, alongside that - and there will always be cases where the state has to step in - we need to do a lot more when our children are younger, and we need to put in much put in much more support around families.

“Because sometimes problems do escalate and the situation does get worse, and we have seen the steady erosion of family support services.”

Richard Tice, the deputy leader of Reform UK, has admitted his party’s policy of picking up and taking migrants back to France could result in a “friendly stand-off” between the countries.

Speaking to Sky News’s Sunday Morning With Trevor Phillips programme, he said: “It’s very simple. The government’s policy of smashing the gangs is clearly not working, and sadly people are literally dying... The only way to stop the boats is a variant of what Australia did.

“We’ve talked about it before. I will repeat it again: You’ve got to safely pick up and take back to France, which we are legally entitled to do under the 1982 UN Convention of the Law of Sea.

“And by the way France has a legal obligation to do the same, which they are in breach of. So we are legally entitled to do this.

“If the French coastguards say ‘you’re not coming in’ they’re in breach of international law.”

When pressed on what would happen if French authorities refused, Mr Tice said: “Well then we’ve got a stand-off... I’m not saying go to war but you can have a friendly stand-off with friends. It’s the only way you’re going to stop the deaths. Ours is the kind and compassionate policy.”

Deputy leader of Reform UK Richard Tice has said he expects Labour’s Budget to be “the most socialist budget in living memory”.

Speaking to Sky News’s Sunday Morning With Trevor Phillips programme, he said: “What we’re going to get on Wednesday, I fear, is the most socialist budget in living memory.

“I think it’ll be an assault on jobs, I think it’ll be an assault on small businesses, on entrepreneurship, on hard work and that will end up being an assault on growth.

“We’re in a crisis. You can’t tax your way out of a crisis. You’ve got to grow your way out of a crisis, and that means reducing the size of the state and motivating people with hard work, taking risks, setting up businesses, being an entrepreneur. And that’s how you get growth in the economy.

“Instead we’re going to get a bigger state, more bloated, more inefficient and with outcomes frankly that are not commensurate with the money that’s being poured into the public services.”

Scientist and TV presenter Brian Cox has criticised reported cuts to research and development spending in the upcoming budget.

Former minister for science George Freeman MP has written a letter to Rachel Reeves expressing his concern at a reported below inflation spending settlement for UK science, research and innovation.

In his letter, Mr Freeman warned this would mean “deep cuts across other parts of R&D investment, with significant negative consequences for the UK’s world-leading R&D sector, putting the brakes on growth and undermining fragile investor confidence”.

Brian Cox shared the letter on the social media platform X, saying: “I wholeheartedly agree. Cutting UK R&D funding in today’s highly competitive and indeed dangerous world would be nothing short of idiotic.”