The Chancellor’s statement on October 30 threatens to be “a real horrorshow for taxpayers” as Labour seizes cash to fund pay rises for public sector workers and projects including a state-owned energy company.
Chancellor Rachel Reeves (Image: Getty)
Labour’s election manifesto and policies inherited from the last Government mean taxes will rise by almost £40 billion but Ms Reeves has already indicated she will go further, saying the Budget will include “difficult decisions on tax, on spending, and on welfare.”
The Government is to raise £1.5 billion from applying VAT and removing business rate relief from private schools and £1.2 billion from extending the energy profits levy, a windfall tax imposed on energy firms after prices shot up following the Ukraine war. Taxes on non-doms, foreigners buying property in the UK and fund managers will also rise.
Ms Reeves is also expected to raise around £9.2 billion by allowing a number of temporary tax cuts to come to an end. Ending the freeze on fuel duty is set to raise £4.8 billion from motorists while another £2.6 billion will come from allowing cuts to business rates introduced during the Covid-19 pandemic to expire. The Treasury is expected to raise £1.8 billion from allowing a temporary cut to stamp duty to end.
The Chancellor is also expected to press ahead with plans drawn up by the last Tory Government to freeze income tax and National Insurance thresholds – which is an effective increase, due to inflation.
According to Treasury watchdog the Office for Budget Responsibility, this is the equivalent of putting up the basic rate of income tax by 4p and will raise an extra £26.7 billion in the 2025-26 financial year.
It means the Budget is set to add £39.74 billion to the annual tax bill just from measures that are already known about.
However Ms Reeves is also considering introducing new taxes. Options include capping up-front tax relief on pension contributions at 20 percent, increasing tax by £1.5 billion on higher earners who save into a pension.
Ending the 25 percent tax free sum on withdrawals from many pension funds would raise another £5.5 billion at the expense of pensioners.
Making employers pay National Insurance on pension contributions would raise £9 billion and making more family homes liable for inheritance tax would raise £2 billion.
The Chancellor is also thought to be planning changes to capital gains tax which could raise £8 billion.
In total these measures would mean tax hikes of almost £80 billion.
Ms Reeves is also under pressure to introduce a wealth tax, after the party’s annual conference last month voted for plans drawn up by trade union Unite. If the Chancellor accepts the union’s demands, it is likely to mean an additional one-off tax of £50 billion.
Elliot Keck, head of campaigns at the TaxPayers’ Alliance, said: “The upcoming budget is threatening to be a real horror show for taxpayers.
“With significant tax rises already baked in, households will fear that things can only get worse given the enormous pressure being placed on the chancellor to raise revenues through a tax grab on workers, families and businesses.
“Labour should show their commitment to growth and to easing the burdens on the British people and stand firm against the demands to hike taxes.”
Labour Chancellor Rachel Reeves claims the previous Government left a £22 billion “black hole” in the public finances which will require “difficult decisions”.
Speaking at Labour’s annual conference last month, she insisted: “Because of that legacy left by the Conservatives, the road ahead is steeper and harder than we expected.”
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Wes Streeting reveals his 10-year plan to ‘save NHS’ and says ‘reform or die’
The ambulance crews who had to make split second decisions; receptionists fielding calls from panic-stricken parents; security clearing corridors to shield as many people as possible from the horror; the surgical teams fighting to save those young lives.
At Alder Hey, the staff had undergone training with the military following the Manchester Arena bombings to prepare for a disaster like this. At Southport, staff who usually only deal with adults, applied every bit of their knowledge, skills and instincts to fight for the little girl who had arrived in their care, while Alder Hey staff gave them support virtually until some of their own number arrived in person – blue-lighted by the Police, who carried them there at 130 miles per hour. The mental health staff picking up the pieces weeks later.
Wes Streeting (Image: Getty)
There really aren’t the words to describe how I felt listening to their accounts of that day. Humbling? Yes. Awe-inspiring? Certainly. The best of humanity confronting the worst.
This is the paradox of the NHS today. Staffed by some of the most heroic, expert, dedicated people you will meet. Yet it is also going through the biggest crisis in its history, letting down patients daily.
I feel an enormous weight of responsibility – to those staff and to millions of people across the country who rely on the NHS – to get our NHS back on its feet and make sure it’s fit for the future.
It starts with honesty. The Conservative government attempted to brush its failings under the carpet to protect their reputation. Others misguidedly excuse poor care in an attempt to protect the reputation of the NHS. But that is just killing the NHS with kindness.
That’s why I asked Lord Darzi to conduct a thorough investigation into the NHS – warts and all. His report gave a full and frank assessment – infants left waiting six hours in A&E, the UK miles behind other countries when it comes to cancer care, and the NHS 15 years behind the private sector on technology.
Tomorrow, MPs will come together in Parliament to debate Lord Darzi’s landmark report and the future of our NHS. This will be a moment for humility and honesty about the challenges that lie ahead. But also the opportunities.
Nothing Lord Darzi saw in his investigation, or anything I have seen in my first three months as Health Secretary, has shaken our conviction that the NHS may be broken, but it is not beaten. Not when it has so much going for it.
So there’s a choice before us. Undertake the major surgery required, or do nothing to arrest the patient’s decline. It’s reform or die, and we choose reform.
Through our ten-year plan, we will get the NHS back on its feet and make it fit for the future. That will include three big shifts: from a focus on hospital care to community; analogue to digital; and sickness to prevention. I am determined to deliver this agenda, even if it means taking on vested interests, ideological knee-jerk opposition, or busting through bureaucracy.
This week I told the Royal College of GPs conference in Liverpool that the ten-year plan will require them to share patients’ medical records with hospitals and vice versa, so that whoever is treating you, GP or hospital consultant, they know your medical history.
Through the ten-year plan, we will give NHS patients the same information, choice, and control over their healthcare as those who can afford to go private. We will ensure patients’ right to choose where they’re treated, and make sure it’s a genuine choice. If there’s capacity in the private sector, patients should be able to choose to go there, free at the point of use, paid for by the NHS. Some on the left may cringe or cry ‘marketisation.’ But this Labour government believes working people deserve to be treated on time, not just the wealthy.
And as Peter Kyle and I have announced today, we are marrying Britain’s leading scientific minds in pharmaceuticals with the care and compassion of the NHS, to put Brits at the front of the queue for cutting edge treatments and the latest medicines.
These are just the first steps we’re taking – there’s so much more to do. It will take time and it won’t be easy.
But I am determined to do what it takes. I can’t do it alone. Together with 1.4 million staff across the health service, we will pull together as a team to get the NHS back on its feet and make it fit for the future.
