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

What has been trailed so far from Wednesday’s Budget:

Slash Right to Buy discount

Rachel Reeves is to slash Right to Buy discount given to those purchasing their council house. The move is designed to protect existing stock so thousands more homes remain for rent.

£500m boost for social homes

An extra £500m for the current Affordable Homes Programme will see thousands more houses built. There will also me hundreds of millions of pounds invested in housing projects in Liverpool.

£1.4bn for schools and more childcare

£1.4bn will be set aside in the Budget to rebuild crumbling schools.

£1.8bn will also be allocated for the expansion of government-funded childcare, with a further £15m of capital funding for school-based nurseries.

Ms Reeves has also said she would triple investment in free breakfast clubs to £30m in 2025-26.

In case you missed it, Tory leadership front runner Kemi Badenoch sat down for an interview with The Independent’s Political Editor David Maddox:

Defiant Kemi Badenoch has vowed she will not give up her hard-hitting style, saying: “This is what always happens to strong women. If you don’t play ball, then they will come after you.”

The favourite to become Tory leader next month was responding to claims by Tory critics that she had been “too abrasive” and also to Doctor Who actor David Tennant, who said he wished she would “shut up”.

In a candid interview with Independent TV, she said: “People know that I’m pretty tough. I’m not scared. I will always do the right thing, and I won’t be quiet when it is time to speak up.”

You can read more from her interview here:

The government’s new welfare adviser Paul Gregg has said that Britain is a “sick nation” and that the increased number of young people on sickness benefits is “very scary”.

Mr Gregg, a professor of economic and social policy, was appointed by work and pensions secretary Liz Kendall to chair a new advisory board.

His role will look at ways to reduce inactivity among working-age people, The Sunday Times reported.

Speaking at a lecture in London recently, Mr Gregg said: “We are a sick nation, we have far higher rates of mental health problems and we have far higher rates of obesity and diabetes than other countries. This has come together...to form this surge in economic inactivity.”

He said that the UK was unique in its failure to recover from the pandemic in these areas. He added: “There’s something going wrong and I can’t tell you exactly what it is, but there’s something about our childhood, perhaps later childhood, teenage years, which has gone wrong.”

Historic churches could be forced to close if Rachel Reeves decides to scrap tax relief for repairs in this week’s Budget.

According to The Telegraph, 36 Tory MPs, church leaders and charities have written to the Chancellor calling on her to maintain a scheme which exempts places of worship from paying VAT at 20 per cent on restoration work.

They fear the measure could be scrapped as Ms Reeves looks for ways to fill the £22bn “black hole” that she says she inherited from the Conservatives.

The current commitment to fund the scheme ends in March next year, which means the Treasury has to decide whether to end it.

The first Labour Budget for over a decade will “herald an era of growth for Scotland”, Ian Murray has insisted – with the Scottish Secretary saying SNP ministers at Holyrood must ensure any additional cash they receive goes towards frontline services.

He was speaking as Rachel Reeves prepares to deliver what will be the first Budget from a Labour Chancellor since 2009 on Wednesday.

While Ms Reeves has made clear the economic situation left by the Conservatives will mean difficult choices, she has said her Budget will “begin to fix the NHS and start to rebuild our economy”.

Her cabinet colleague Mr Murray has warned: “No-one should be in any doubt about the scale of the challenge the Labour Government inherited when it comes to the public finances.

“The Tories left us a £22 billion black hole, emptying the reserves meant for disasters and emergencies three times over.”

Rachel Reeves has announced she will earmark £1.4 billion to rebuild crumbling schools as she pledges to prioritise education and childcare in the Budget.

Investment in free breakfast clubs for pupils will also be tripled, while there will be another £1.8 billion to expand government-funded nursery care.

The Chancellor said children “should not suffer for” because of a £22 billion ‘black hole’ Labour says it was left by the last Tory government.

However, experts cautioned that most of the funding would simply be enough to maintain existing programmes.

More than 400 schools which are part of a flagship government rebuilding scheme, set up under the Tories, still don’t have any builders.

Chief political commentator John Rentoul has spelled out how Rachel Reeves could get away with raising taxes on working people in his latest column:

“When George HW Bush said, “Read my lips: no new taxes” as he accepted the Republican nomination for president in 1988, he thought he was on safe ground. And he would have gotten away with it if it hadn’t been for those meddling kids in Congress, where a Democratic majority forced him to put up taxes in a 1990 budget.

Bush insisted that he hadn’t imposed any “new taxes” – he had only increased existing ones. And, surprisingly, American voters seemed to accept this sophistry. He seemed so popular that the Democrats struggled to find a candidate to put up against him in the 1992 election.

But then the economy went into recession and a little-known governor of a small southern state ran against Bush as a New Democrat. Bill Clinton made Bush pay a heavy price for his tax pledge in the end; Bush’s broken promise was played like a broken record in the election campaign.

The other case study for Rachel Reeves as she prepared Wednesday’s Budget was Nick Clegg’s promise in the 2010 election to oppose a rise in university tuition fees. It was followed not just by a breach of the promise, but by the appointment of fellow Liberal Democrat Vince Cable as the cabinet minister who would sponsor the legislation to triple fees.”

Read the rest here:

The Education Secretary has said she is “open-minded” to a ban on smacking children, but she added there are no imminent plans to change the law.

Bridget Phillipson said she would like to hear more from experts on how such legislation could work - a change in tone from the previous Tory government which said it was up to parents to discipline their children.

It comes after Children’s Commissioner Rachel de Souza said a ban is a necessary safeguarding step and suggested similar measures already in place in Scotland and Wales should be adopted in England.

Asked whether she supports that proposal, Ms Phillipson told the BBC’s Sunday With Laura Kuenssberg show: “We are considering it, but this is not an area where we intend to bring forward legislation any time soon.

“I’d be keen to hear from the Children’s Commissioner and from others about how this would work. I’m open-minded on it. It’s not something we intend to legislate on, but I think we do need to look at how we keep children safe.”

She said measures set out in the Children’s Wellbeing Bill, which will be brought forward “by the end of the year”, will address many of issues relating to children’s social care and safeguarding.

Rachel Reeves is set to unveil Labour’s first Budget in a generation on Wednesday – and the first ever written by a female chancellor.

She has warned that it will involve “difficult decisions” – as she blamed the last Tory government for leaving a £22bn black hole in the public finances.

Paul Johnson, the director of the high-respected Institute for Fiscal Studies (IFS) think tank has already said it could be the “biggest tax-raising budget” ever and yet it still could leave “a lot of public services still feeling squeezed”.

Here we take a look at some of the key measures expected:

Rachel Reeves claimed her Budget was for strivers as she tried to draw a line under a furious row over Labour’s definition of working people.

The chancellor, who is expected to raise taxes on Wednesday, warned that she had had to make “tough decisions…Not everything is going to be easy”.

But she said her reforms, which Labour hope will kickstart economic growth, were for “hardworking families up and down the country who have been crying out for change.

“To these people I say, I’ve got your back.... I will deliver for you. It’s a Budget for the strivers,” she wrote in The Sun on Sunday.