Autumn Budget 2024: Live updates as Chancellor Rachel Reeves unveils Labour’s plan for £35 billion tax raid

Rachel Reeves is expected to focus heavily on the health service in today’s Budget.

She will unveil plans to raise capital spending on new hospitals, scanners and technology to the highest level since 2010.

Unless we’ve got a growing economy with more good jobs paying decent wages, then you’re not going to be able to either improve living standards or bring in the tax revenue to improve our public services alongside the reform that’s needed.

But we do need that immediate injection of cash now, because otherwise we won’t be able to arrest the decline in the health service.

So that immediate injection, but then it’s through growth and reform that we ensure our public services are properly funded.’

by Hugo Duncan and Emily Hawkins from This is Money

Rachel Reeves was last night accused of turning her back on economic growth as business braces for a Budget onslaught that will drive up costs and threaten livelihoods.

The Chancellor will today hit corporate Britain with an increase in employer national insurance contributions of up to 2p having previously branded the levy a ‘tax on jobs’.

The national insurance raid – which could raise as much as £20billion – comes alongside an inflation-busting 6.7 per cent increase in the minimum wage and a workers’ rights package costing firms £5billion a year.

Rishi Sunak, who will respond to the Budget today in one of his last acts as Tory leader, said the expected rise in NI would be a clear breach of Labour’s manifesto, which pledged not to increase income tax, National Insurance or VAT.

The former PM pointed out that the Chancellor had previously condemned the idea of raising employers’ NI as a ‘jobs tax’.

Rachel Reeves promised that her plans were fully funded, and she promised that she wouldn’t change the debt target because that would be “fiddling the figures”.

We already know that those promises are totally worthless because she is going to change her fiscal rules so she can go on a borrowing spree.

If she was to compound that by breaking her promise to the British people not to raise taxes on working people by increasing National Insurance, that would be a complete betrayal.

Rachel Reeves has posed for Budget prep pictures alongside an image of a former Communist education minister from the 1940s.

The Treasury released a photo of the Chancellor in her No11 study, with a portrait of Ellen Wilkinson proudly displayed on the wall behind her.

Ms Reeves has put Wilkinson, who helped found the British Communist Party and met both Lenin and Trotsky, in the place previously occupied by Tory ex-chancellor Nigel Lawson.

Chancellor Rachel Reeves will press ahead with an inflation-busting rise in the minimum wage today, despite warnings it will cost jobs.

She has signed off a 6.7 per cent hike in the National Living Wage, taking it to £12.21 per hour – almost four times the current inflation of 1.7 per cent. Ms Reeves has also agreed a record 16.3 per cent in the rate for those aged 18 to 20, taking it to £10 an hour.

She last night described the move as a ‘significant step’ towards Labour’s manifesto promise to introduce a ‘genuine living wage for working people’.

But she was warned that the bumper rise, coming on top of an expected Budget hike in employers’ national insurance, could cost jobs.

Baroness Stroud, chairman of the Low Pay Commission, which advises ministers on the minimum wage, said there were growing signs firms were struggling to cope with a series of rapid rises:

The Government have been clear about their ambitions for the national minimum wage and its importance in supporting workers’ living standards. At the same time, employers have had to deal with the adult rate rising over 20 per cent in two years.

Robert Colvile, of the Centre for Policy Studies think-tank, said: ‘Given the state of the employment market there is a real risk that this will result in fewer jobs overall.’

Millions of the lowest-paid are in line for an inflation-busting pay boost after Rachel Reeves last night revealed large increases to minimum wage rates.

On the eve of her first Budget, the Chancellor announced the National Living Wage – for those aged 21 and over – will rise from £11.44 to £12.21 an hour in April next year.

The Treasury said the 6.7 per cent increase would be worth £1,400 a year for an eligible full-time worker and will directly benefit more than three million workers.

Meanwhile, the National Minimum Wage – for 18 to 20-year-olds – will rise from £8.60 to £10 an hour from April in a 16.3 per cent increase.

This will be the largest increase on record, with the £1.40 hike meaning full-time younger workers will have their pay boosted by £2,500 next year.

Labour said it was the first step towards achieving their general election manifesto pledge of removing age bands in minimum wage rates.

Here are just some of the announcements we should hear when Rachel Reeves delivers her statement in the Commons:

• Employers’ National Insurance to rise by up to 2p – The threshold at which NI is paid will also be cut as part of a package raising around £20 billion.
• Income tax –The six-year freeze in thresholds, which is due to end in 2028 will be extended for another year, dragging hundreds of thousands of people into higher tax bands.
• Private schools – From January, government will remove VAT exemption and end business rates relief for private schools.
• Bus fares – The £2 fare cap on a single journey will be raised to £3, with the scheme extended until the end of 2025.
• Minimum wage – National living wage to jump 6.7 per cent to £12.21 per hour, with 16.3 per cent rise for under-21s, who will get £10 per hour.
• Fiscal rules – Ms Reeves will change the Treasury’s definition of debt to allow the government to borrow up to £50 billion extra for investment in infrastructure, although she is expected to spend only half that today to limit the risk of a market backlash.
• Stamp duty – Ms Reeves will end a temporary cut, meaning that the tax-free threshold will be halved from £250,000 to £125,000.
• Fuel duty – The industry expects Ms Reeves to end the temporary 5p-a-litre cut in fuel duty introduced after Russia’s invasion of Ukraine. But she is thought to be backing away from a bigger hike and could even freeze it for the remainder of the parliament.
• Inheritance tax –The Chancellor will tighten reliefs for agricultural land and could extend the time someone has to stay alive after passing on money as a gift tax-free from seven years to 10.
• Capital gains – The rate paid on the sale of assets like shares will be increased, but Ms Reeves is expected to spare second home owners a further rise.
• NHS – Billions of pounds of funding, including £1.5 billion for new surgical hubs and scanners to cut waiting lists.
• Energy – The Chancellor will increase the windfall tax on the big energy firms, despite warnings that a fall in the oil price means it will yield nothing.
• Education – Ms Reeves will confirm £1.4 billion to rebuild crumbling schools, along with cash to fund new breakfast clubs.
• Housing – Discounts for people looking to buy their own council home will be slashed by up to two-thirds as part of a plan to boost the stock of social housing.
• Smoking – The Chancellor is expected to increase tax on both e-cigarettes and traditional tobacco products to discourage their use.

Before we build-up for today’s Budget, let’s take a look at how The Daily Mail newspaper previews the Chancellor’s statement

by Jason Groves, Political Editor of The Daily Mail

Rachel Reeves will unveil a £35 billion tax bomb today, in what critics dubbed ‘the biggest heist in modern political history.’

In one of the most consequential Budgets for years, the Chancellor will set Britain on a course of high tax, high spending and high borrowing in a gamble designed to kickstart growth.

In remarks released last night, Ms Reeves said: ‘The only way to drive economic growth is to invest, invest, invest.

Rachel Reeves, Britain’s first female Chancellor, will make further history today when she delivers her maiden Budget in Parliament this afternoon.

So who is she? How did she come into politics?

Reeves was born in Lewisham, south-east London in 1979 just months before Margaret Thatcher was elected prime minister.

She once told the BBC that her family ‘weren’t poor but we didn’t have money to waste’ as he recalled how her mother would tick off items on a bank statement against receipts.

Her parents separated when she was at primary school which meant she was shuttled between homes along with her sister Ellie, also a Labour MP.

She became a national under-14 chess champion after her father taught her at an early age which she credits as helping her to think ahead and plan a strategy.

She joined the Labour Party aged 16 and studied philosophy, politics and economics (PPE) at Oxford University before later enrolling at the London School of Economics.

She later worked as a Bank of England economist before she was elected to the seat of Leeds West at the 2010 general election.

Reeves first joined the front bench under Ed Miliband’s leadership but returned to the backbenches when Jeremy Corbyn was Leader of the Opposition.

In May 2021, Keir Starmer appointed her shadow chancellor during a reshuffle following the demotion of Anneliese Dodds.

• Age: 45
• Place of birth: Lewisham
• Education: New College, Oxford and the London School of Economics
• Family: Married to Nicholas Joicey, a senior civil servant and former speechwriter to Gordon Brown during his time as chancellor. They have two children.
• Parliamentary constituency: Leeds West and Pudsey

Today’s Autumn Budget is the first one to be delivered by a Labour government and comes 118 days after Sir Keir Starmer swept to power with a landslide majority at the general election.

The showpiece fiscal event is traditionally held once a year by governments to set out their plans on whether to raise or lower taxes as well as spending on health, schools, the police and other public services.

New governments often set out a budget quickly into their first term to outline their priorities that were perhaps included in the party manifesto before an election victory.

Rachel Reeves will deliver her maiden budget in the Commons after Prime Minister’s Questions in a speech usually lasting an hour.

When she sits down, the Conservatives will immediately respond with former prime minister Rishi Sunak likely to lead the charge in one of his final acts as leader before his successor is declared on Saturday.

Hello and welcome to MailOnline’s live coverage of the Autumn Budget – the first to be delivered by a Labour government in 14 years.

Chancellor Rachel Reeves will today embark on the most momentous day of her political career when she arrives at the Commons with her red box to outline the government’s tax plans.

She will address MPs at around 12:30pm amid intense speculation over how she will balance the books after she accused the Tories of leaving her with a £22 billion black hole.

Stick with us as we bring you the latest developments throughout the day including analysis and reaction from our political reporters in Westmimster and our This Is Money team who will break down how the Budget affects you and your finances going forward.

As always, we’re keen to hear from our readers so let us know what you think by emailing jamie.bullen@mailonline.co.uk.