Prime Minister Sir Keir Starmer has assured the public that the government will uphold its manifesto promises ahead of the Budget. Reports suggest that Chancellor Rachel Reeves is considering extending the freeze on income tax thresholds beyond 2028, potentially raising £7 billion. This move could help fill the £40 billion gap that the Chancellor is trying to address to avoid austerity.
In addition to the income tax freeze, other potential measures being considered include increasing employers’ national insurance contributions, raising fuel duty for the first time since 2010, changes to inheritance tax and stamp duty rules, and implementing a levy on e-cigarettes. The Treasury has yet to comment on these speculations, but Sir Keir Starmer emphasized that the government will stick to its manifesto pledges.
The Budget is scheduled for Wednesday, October 30th, and it will be Labour’s first Budget under Chancellor Rachel Reeves. The speech will outline the government’s plans for spending and taxes, and updates will be provided on The Independent’s live blog.
Scotland’s First Minister, John Swinney, has called for increased public investment in the Budget, describing it as a “make or break moment” for the UK. He emphasized the need for bold investments to drive economic renewal and improve living standards.
The New Economics Foundation (NEF) highlighted the wider economic benefits of scrapping the two-child limit policy, suggesting that the potential economic gains would outweigh the costs. The NEF stressed the importance of investing in public services to stimulate economic growth and reduce poverty.
There have been discussions about potential changes to the fiscal rules governing the government’s spending and tax decisions. Labour has pledged not to return to austerity and promised not to raise major taxes on working people. However, further tax rises and adjustments to debt reduction targets are being considered.
Labour faces challenges in funding public services, with commitments to address existing financial gaps and protect key departments from cuts. Chancellor Rachel Reeves is tasked with plugging a £40 billion funding gap to ensure a firm economic foundation.
The government is also moving forward with ending tax breaks for private schools to fund new teachers in state schools. Education Minister Baroness Smith of Malvern defended this decision, emphasizing the importance of investing in the state sector.
In light of potential Budget cuts, SNP leader Stephen Flynn has urged Prime Minister Sir Keir Starmer to listen to voters and block the Chancellor’s plans. Flynn warned against devastating austerity cuts and called for immediate intervention to prevent chaos in the Budget process.
