Budget 2024 LIVE: Rachel Reeves guarantees ‘extra kilos in pockets’ regardless of tax cuts

Tory claims PM and Chancellor ‘lied to and misled the British public’

Chris Philp, the shadow Commons leader, has claimed Labour had “misled the British public” in order to win power live on TV.

The Tory mandarin told Sky News: “During the election campaign, Keir Starmer and Rachel Reeves said that nothing in their plans required tax increases that went over and above what was in their manifesto and from all of the pre-briefing we have seen it now looks very likely, near certain, there are going to be enormous tax increases coming despite the fact they told the public in the election campaign that wouldn’t happen.

“So I think they lied to the British public, they misled the British public, in order to get elected and now we are seeing their true colours, now we are seeing what their plans really are.”

£3bn boost for armed forces expected in Labour first budget for 14 years

The armed forces are in line for a £3 billion boost, according to reports, as Rachel Reeves prepares to unveil the Labour Government’s first Budget.

The Chancellor is set to announce an increase in the defence budget for next year in her fiscal statement in the Commons on Wednesday, part of which will be used to give soldiers a pay rise backdated to April, the Telegraph reported.

The funding will also be used to buy weapons, with the aim of replenishing stockpiles depleted by donations to Ukraine. A pathway to increasing defence spending to 2.5% of national economic output demanded by the Tories will not be in the Budget.

Labour government ‘chooses investment over decline’ as Chancellor gears up for big day ahead

A big day await for Rachel Reeves – the first female Chancelllor in Britain’s history and Labour’s first to take the Despatch Box in nearly 15 years.

Taking to Twitter this morning, Reeves set out her agenda as she pledged to fix Britain’s financial black hole, tweeting: “Today’s Budget will deliver on the promise of change. Fixing the foundations of our economy. Investing in our future. Rebuilding Britain.”

Today’s Budget will deliver on the promise of change.

Fixing the foundations of our economy.

Investing in our future.

Rebuilding Britain.

— Rachel Reeves (@RachelReevesMP) October 30, 2024

And an hour later, at 8am, she returned to the platform and tweeted: “Politics is about choices. This Labour government chooses investment over decline.”

It comes after the Chancellor said the Budget would help to end “neglect” of the health service, amid plans to spend £1.5 billion on new surgical hubs and scanners and £70 million for radiotherapy machines during a visit to a south London hospital on Tuesday morning.

Politics is about choices.

This Labour government chooses investment over decline.

— Rachel Reeves (@RachelReevesMP) October 30, 2024

But she warned that turning around public services would take time, saying: “I don’t think in one Budget you can undo 14 years of damage.”

What will the minimum and living wage rises mean for Brits?

On Tuesday, the Chancellor confirmed a 6.7% increase in the minimum wage, meaning it will rise to £12.21 an hour next year.

The increase, recommended by the Low Pay Commission, will mean an extra £1,400 a year for a full-time worker earning the main minimum wage rate, known as the national living wage, from April.

Labour has also promised not to increase the headline taxes on the pay cheques of “working people”: national insurance, VAT and income tax.

Chancellor pledges to ‘put more pounds in people’s pockets’ and fix the NHS

Rachel Reeves will pledge to put more money in the pockets of Brits, while at same time gorwing the economy – despite recent warnings of tough times ahead.

Britain’s first ever female Chancellor is expected to say the “prize on offer” for Labour’s plans is “immense”, and will lay out new funding to cut hospital waiting lists, pave the way for more affordable homes and rebuild crumbling schools.

Alongside its Budget analysis, fiscal watchdog the Office for Budget Responsibility (OBR) will publish a report on the Conservatives’ legacy in government, which is expected to account for the so-called £22 billion “black hole” in the public finances.

Despite warnings from ministers that the Budget will include tough decisions on tax rises and spending cuts, Ms Reeves is expected to say: “My belief in Britain burns brighter than ever. And the prize on offer to today is immense.”

She will add: “More pounds in people’s pockets. An NHS that is there when you need it. An economy that is growing, creating wealth and opportunity for all. Because that is the only way to improve living standards.

“And the only way to drive economic growth is to invest, invest, invest. There are no short cuts. To deliver that investment we must restore economic stability.”

Explained: What are the Budget traditions?

One of the more unusual Parliamentary customs is that the Chancellor is the only MP allowed to drink alcohol in the Commons – but only when delivering the Budget.

In (fairly) recent times Tory Ken Clarke drank whisky, while Geoffrey Howe sipped a gin and tonic as he addressed the nation’s finances. Go back even further and you’ll find William Ewart Gladstone glugging a sherry and beaten egg.

However all the Chancellors since Gordon Brown haven’t taken advantage, opting for water instead. Ms Reeves is not expected to have an alcoholic drink to help her through either.

Budget Day is also notable for the use of a red box containing the speech. Gladstone’s was carried by Chancellors for more than 100 years, between 1860 and 1965. Mr Brown commissioned a new one in 1997, but George Osborne used Gladstone’s for his speech in 2010.

Read more: What time is the Budget 2024 – and all you need to know

Explained: What is the budget?

The Budget is a statement made to MPs presenting any changes to tax and spending. On the same day, the Office for Budget Responsibility (OBR) publishes its independent analysis of the UK economy. The Treasury publishes a report alongside of its Budget with further detail on the decisions made and how much everything costs.

The Chancellor makes the statement to MPs in the House of Commons. It is usually a lively affair as the chamber is full of politicians groaning or cheering depending on the announcements made. After the Chancellor’s speech, MPs may need to approve any immediate changes to taxes. There is then a debate in the chamber that usually lasts four days.

After the date, MPs are asked to agree to resolutions to approve tax proposals. Finally, a Finance Bill which gives permanent legal power to the Budget’s plans is introduced.

Chancellor says there are ‘no shortcuts’ for fix inheritance of Tories

Ms Reeves will say there are no shortcuts to fixing the dire inheritance left behind by the Tories but will offer hope to Brits exhausted by doom and gloom.

“My belief in Britain burns brighter than ever. And the prize on offer to today is immense,” she will say.

“More pounds in people’s pockets. An NHS that is there when you need it. An economy that is growing, creating wealth and opportunity for all.

“Because that is the only way to improve living standards. And the only way to drive economic growth is to invest, invest, invest. There are no shortcuts. To deliver that investment we must restore economic stability.”

Labour Party ‘rebuilding Britain’

The Chancellor will say: “In 1945, it was the Labour Party that rebuilt our country out of the rubble of the Second World War. In 1964, it was the Labour Party that rebuilt Britain with the white heat of technology.

“And in 1997, it was the Labour Party that rebuilt our schools and hospitals. Today, it falls to this Labour Party, this Labour government, to rebuild Britain once again.”

Chancellor promises ‘more pounds in pockets’

Rachel Reeves will promise more “pounds in pockets” as she vows to use her first Budget to “rebuild Britain” from the mess left behind by the Tories.

Evoking the spirit of Clement Attlee’s post-war Government, Ms Reeves will say it falls to Labour once more to remake the country from the rubble by rebuilding public services.

But she will admit it means difficult choices, with up to £40billion in tax rises and spending cuts expected to balance the books.

Main Budget announcements we know so far

• A 6.7% increase in the minimum wage – confirmed by Ms Reeves – meaning it will rise to £12.21 an hour next year
• More funding for the NHS, including £1.5 billion for new surgical hubs and scanners and £70 million for radiotherapy machines
• Increases to tax including fuel duty, inheritance tax and capital gains tax are reportedly under consideration
• Labour has promised not to increase the headline taxes on the pay cheques of “working people”: national insurance, VAT and income tax
• Reforms to business rates could be on the way, Ms Reeves hinted in the Commons, “as well as a business tax road map”
• £240million in funding for local services will be spent on helping people get back to work, Sir Keir Starmer revealed earlier this week
• The £2 cap on bus fares across England will rise to £3

Armed forces in line for £3billion boost

The armed forces are in line for a £3billion boost following the Budget, according to reports.

The Chancellor is set to announce an increase in the defence budget for next year in her fiscal statement in the Commons on Wednesday, part of which will be used to give soldiers a pay rise backdated to April, the Telegraph reported.

The funding will also be used to buy weapons, with the aim of replenishing stockpiles depleted by donations to Ukraine.

A pathway to increasing defence spending to 2.5% of national economic output demanded by the Tories will not be in the Budget.

End to non-dom status

Non-dom tax status has been contentious for years.

It caused a massive furore when it emerged Rishi Sunak’s wife Akshata Murty used it, potentially saving millions of pounds as a result. A non-dom only pays UK tax on money they earn in this country.

This grants them an exemption on overseas earnings – a legal entitlement the Government vowed to change. Labour’s manifesto pledged to use the extra cash to help fund 40,000 more NHS appointments per week.

VAT private school fee loophole to shut

This was a key Labour pledge in the build-up to the General Election.

The Government wants to introduce VAT on school fees in order to fund extra teachers across England. It is expected the move will raise £1.5billion, according to the Institute for Fiscal Studies (IFS) think-tank.

This is enough to pay for 6,500 much-needed teachers across the country’s state schools. At the moment there is an exemption on the 20% VAT charge for private school fees.

But critics warn it could cause an exodus by parents who have to pay hundreds of pounds more. Rachel Reeves will announce that military families will be exempted.

£240million fund to get people back to work

The Prime Minister has confirmed that £240million will be spent on local services to get people back to work.

In a speech on Monday Mr Starter said: “As a Labour government we will always help those who cannot support themselves, but the UK is the only G7 country where economic inactivity is still higher than it was before Covid.

“That is not just bad for our economy, it’s also bad for all those who are locked out of opportunity. So the Chancellor will announce £240 million in funding to provide local services that can help people back into work, and the dignity it brings.”

VAT, National Insurance and Income Tax for ‘working people’

During the election campaign, Keir Starmer made a vow not to increase taxes on “working people” with the Labour Party manifesto saying: “We will not increase National Insurance, the basic, higher or additional rates of Income Tax, or VAT”.

Don’t expect any of these rates to change at the Budget today, however the Chancellor is considering extending the freeze on income tax thresholds – first introduced by the Tories – which could push more people into paying higher rates.

Thresholds normally rise in line with inflation but Rishi Sunak imposed a freeze in 2021 to claw back cash after the Covid pandemic.

It means more people are dragged into paying income tax – and higher earners can end up moving to another tax band.

Chancellor set to announce changes to borrowing rules

The Chancellor will tweak debt rules she inherited from the Tories in order to invest billions in major infrastructure projects, such as schools, hospitals and railways.

Speaking in Washington DC last week, she said without the change the UK would be forced to continue on the “path of decline” as she explained: “I don’t want that path for Britain when there are so many opportunities in industries from life sciences to carbon capture, storage and clean energy to AI and technology, as well as the need to repair our crumbling schools and hospitals.”

The major change in rules, which could free up around £50billion, cannot be used for day-to-day government spending such as public sector pay.

Bus fares being hiked – but new cash for local services

Keir Starmer confirmed on Monday that the £2 bus fare cap across England will rise to £3.

The Prime Minister was quizzed by The Mirror following concerns that the measure – which saves some passengers over £10 per trip – could be scrapped altogether. The Lib Dems responded by branding the rise a “bus tax”.

The Department for Transport (DfT) said the cap – which was due to expire in December – is being funded by £151million from the Government until the end of next year. On top of that, an additional £925million will be pledged to improve bus services across the country during the 2025/26 financial year.

This brings the total funding to be announced on Wednesday to over £1billion. Local authorities will be able to use the extra money to bring in new bus routes, make services more frequent and protect crucial services for local communities.

Chancellor says NHS is ‘lifeblood’ of Britain

Ahead of the Budget, Ms Reeves described the NHS as “the lifeblood of Britain” and vowed to put and end to the “neglect and underinvestment” it has experienced for over a decade.

The Chancellor said: “Our NHS is the lifeblood of Britain. It exemplifies public services at their best, there for us when we need it and free at the point of use, for everyone in this country.

“That’s why I am putting an end to the neglect and underinvestment it has seen for over a decade now.

“Billions of pounds will be set aside for the NHS in an attempt to slash waiting lists – a key priority for the new Labour government.”

Labour to announce new funding for NHS

Billions of pounds will be set aside for the NHS in an attempt to slash waiting lists.

The Chancellor has prioritised fixing the crisis-hit health service as Treasury insiders warned it faces a £9billion black hole without extra funding.

The exact figure will be revealed at the Budget today, but the government has already announced £1.5billion for new surgical hubs and scanners to help free up capacity in the NHS.

An extra £70million will also be set aside for new radiotherapy machines.

Minimum wage rising by 6.7% from April 2025

The national minimum wage will rise by 6.7% from April 2025. It will mean that the national minimum wage for over 21s will increase from £11.44 to £12.21 an hour – a boost of £1,400 a year for a full-time worker.

Deputy PM Angela Rayner declared: “A proper day’s work deserves a proper day’s pay.”

For those under 21, the minimum wage will increase from £8.60 to £10.00 – a hike of £1.40 an hour and the largest increase on record.

The Treasury said the changes will impact 3.5million workers in total and marks the “first step” in creating a single adult wage rate.

Labour’s election-winning manifesto promised to ensure the minimum wage is a “genuine living wage” and also vowed to remove the “discriminatory age band”.

What is the Budget?

The Budget is a statement made to MPs presenting any changes to tax and spending. On the same day, the Office for Budget Responsibility (OBR) publishes its independent analysis of the UK economy.

The Treasury publishes a report alongside of its Budget with further detail on the decisions made and how much everything costs. The Chancellor makes the statement to MPs in the House of Commons.

It is usually a lively affair as the chamber is full of politicians groaning or cheering depending on the announcements made.

After the Chancellor’s speech, MPs may need to approve any immediate changes to taxes. There is then a debate in the chamber that usually lasts four days.

After the date, MPs are asked to agree to resolutions to approve tax proposals. Finally, a Finance Bill which gives permanent legal power to the Budget’s plans is introduced.

When is the Budget?

Chancellor Rachel Reeves will take to the despatch box in the House of Commons at 12:30pm today to set out the next year’s plan for the Treasury.

The Budget statement will take place after Keir Starmer takes part in his weekly Prime Minister’s Questions session in the Commons chamber.

It is a major opportunity for Labour to set out its plan for the country after being elected to Government in July.