Reeves: ‘My budget will match greatest economic moments in Labour history’

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Labour will launch a new era of public and private investment in hospitals, schools, transport and energy as momentous as any in the party’s history in this week’s budget, the chancellor, Rachel Reeves, has said.

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Woman in front of me at the checkout was stocking up on everything she could and I don't blame her.

Surprised there wasn't a big queue at the pharmacy since prescription charges are bound to rise tomorrow, especially for those over sixty years of age?

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Reeves hands young workers £2,500 pay rise despite warnings from business



Rachel Reeves has given young workers a record £2,500 pay rise, despite warnings from businesses that the move will harm Britain’s competitiveness.

The Chancellor has approved a 16 per cent increase in the minimum wage for 18 to 20-year-olds, taking it to £10 an hour.

She has also signed off a 6.7 per cent increase to the National Living Wage, earned by all over-20s, meaning they will pocket £1,400 more. Business leaders warned that the move would undermine competitiveness and force firms to cut investment.

Under the changes, 18 to 20-year-olds on the National Minimum Wage will see their pay rise from £8.60 to £10 an hour from April.

The 16 per cent rise is the start of Ms Reeves’ longer-term plan to move younger workers onto the same level of pay as their elders.

More than three million workers on the National Living Wage will see their hourly wage go from £11.44 to £12.21, a wage rise more than three times higher than inflation.

It comes after Ms Reeves instructed the Low Pay Commission to include cost of living factors when calculating increases to the minimum wage.

The Chancellor said: “This Government promised a genuine living wage for working people. This pay boost for millions of workers is a significant step towards delivering on that promise.”

Angela Rayner, the Deputy Prime Minister, said: “A proper day’s work deserves a proper day’s pay. Our changes will see a pay boost that will help millions of lower earners to cover the essentials as well as providing the biggest increase for 18 to 20-year-olds on record.”

The move will add to tensions between the Government and businesses, which have erupted over Ms Rayner’s plans to boost workers’ rights.

Industry leaders have warned that the package, which includes day one rights to take companies to court for unfair dismissal, will make the UK a less attractive place in which to invest.

Firms are also braced for a battering in Wednesday’s Budget, including a two per cent increase to employers’ National Insurance contributions.

John Foster, of the Confederation of British Industry, said: “Politicians and businesses are united in wanting to ensure people have access to well-paid, fulfilling work. But with productivity stagnant, businesses will have to accommodate this increase against a challenging economic backdrop and growing pressure on their bottom line.

“That pressure will make it increasingly difficult for firms to find the headroom to invest in the tech and innovation needed to boost productivity and deliver sustainable increases in wages.”

Capital Economics, an economic research firm, warned that the 6.7 per cent increase to the living wage would cost businesses an extra £7 billion in wage rises.

Kate Nicholls, the chief executive of UKHospitality, said the announcement would add £1.9 billion to the wage bills of struggling pubs and restaurants.

She added: “Trying to balance the books from the pockets of high street businesses will simply leave hospitality as collateral damage, threatening jobs, future investment, price increases for consumers and business viability.

“Our companies desperately want to be able to support higher wages for staff – but what is being asked of them is simply unsustainable if taxes are going to shoot up at the same time.”

Britain’s largest trade union also sounded the alarm over the increase, warning that it could even lead to an exodus of workers from the NHS. Unison said the huge rise in the living wage meant it was now higher than the minimum wage paid to many health service staff.

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The woman has delusions of adequacy. She has been promoted well over her very mediocre abilities.

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IFS accuses chancellor of ‘undermining trust’



Rachel Reeves has admitted her tax-grabbing Budget will hit the pay packets of working people as the Institute for Fiscal Studies (IFS) accused her of undermining trust in politicians.

The chancellor was forced to accept that her decision to hike employers’ national insurance contributions would lead to workers being paid less.

But, in a damning assessment of Ms Reeves’ claims to have protected workers in Wednesday’s Budget, IFS director Paul Johnson said she risked “further undermining trust”.

“How the Budget red book can include the sentence ‘the government is not increasing the basic, higher or additional rates of income tax, National Insurance contributions or VAT’ is beyond me,” Mr Johnson said.

Labour’s general election manifesto promised not to raise the taxes in a bid to protect “working people”, which a series of ministers and Sir Keir Starmer went on to struggle to define.

But, on Wednesday, Ms Reeves hiked employers’ national insurance contributions from 13.8 per cent to 15 per cent, something she argued does not breach the commitment because it does not show up on employees’ payslips.

Mr Johnson on Thursday said: “The continued pretence that these changes will not affect working people risks further undermining trust.”

The Office for Budget Responsibility estimates that, by 2027, 76 per cent of the costs of the additional tax will be passed on to workers through lower wages.

Joining Mr Johnson, Resolution Foundation boss Mike Brewer said the levy is “clearly a tax on working people”.

In its widely anticipated reaction to the Budget, the IFS said Britain was now in “the decade of higher taxes”.

“The state has grown, and it seems unlikely to shrink again anytime soon,” Mr Johnson said.

And, warning of further tax rises to come, the top economist warned Ms Reeves’ current spending plans look “almost as implausible” as her predecessor Jeremy Hunt’s.

Spending is set to rise by 4.3 per cent this year and 2.6 per cent next year, but then by just 1.3 per cent each year after.

“I am willing to bet a substantial sum that day-to-day public service spending will in fact increase more quickly than supposedly planned after next year,” Mr Johnson said, adding that further tax rises would likely be needed.

“Rachel Reeves was faced with a genuinely difficult inheritance and the last government must take a lot of the responsibility,” he said.

But while accepting the tricky situation for the chancellor, Mr Johnson lashed out at her lack of willingness to pursue major tax changes elsewhere.

He said: “The lack of any apparent strategy or appetite for reform is deeply disappointing.

“That the chancellor decided to increase stamp duty, if only on second properties, is most disappointing of all.

“The failure to increase rates of fuel duties in line with inflation, and pretend that it will rise in the future, continues the absurd behaviour of chancellors past.”

And Mr Johnson said if the government wants to boost growth it must introduce “a much more coherent tax strategy than we saw yesterday”.

“Let’s hope for better next year,” he said.

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May I put it more simply? She lied!

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They kept this very quiet!

Housing benefit payments to be frozen next year

The amount of housing benefit that private renters can claim will be frozen again next year, the government has confirmed.

It means payments will not keep track of rent rises, sparking warnings that claimants whose rent goes up would see shortfalls.

Housing benefit has not automatically reflected rent rises since 2013, with the Conservatives freezing it for seven for the last 12 years.

Charity Shelter said rising rents, combined with a shortage of social housing, was putting families at risk of homelessness.

The Joseph Rowntree Foundation (JRF), an anti-poverty charity, said the move meant the cap would drift "further out of step" with the cost of renting.

Housing benefit rates used to be automatically linked to the cost of rents in different areas, but this ended under the Tory-Lib Dem coalition in 2012.

Under the Conservatives, rates have been frozen in seven years since then, including the latest freeze period between 2020 and 2024.

But campaign groups expressed disappointment that LHA rates will again be frozen next year, after the government confirmed the move alongside the Budget.

The JRF, which has been campaigning for the cap to be permanently relinked to local rents, has estimated that a freeze next year will leave private renters who get housing benefits £243 per year worse off on average.

Chief Executive Paul Kissack said renters would feel "let down" by the move, adding that rent prices had "soared in recent years".

The NRLA, a which represents landlords, also complained that next year's freeze would mean support for housing costs would bear "no resemblance to rents".

Polly Neate, chief executive of homelessness charity Shelter, said a lack of social housing meant that "as rents continue to skyrocket", the freeze on housing benefits meant low-income families in the private sector were at risk of losing their homes.

"The government must unfreeze local housing allowance so that families can afford to keep their homes," she added.

And I still believe prescription charges are going up even though there's been no official announcement as yet.

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Asda boss Stuart Rose brands the Budget 'very, very damaging'



One of Britain's leading businessmen has warned that Rachel Reeves's 'very, very damaging' Budget will push up prices and hit jobs and pay.

Stuart Rose, the former boss of Marks & Spencer who runs Asda, said the Chancellor's tax raid on employers would cost it £100million next year.

He said the supermarket would 'try hard' to mitigate the higher costs in order to offer shoppers competitive prices.

But he warned: 'We can't just magic it up from some magic money tree. So we have to look hard at our planning, and at the end of the day, there'll probably be a bit of inflationary price increases going through at some point.'

Rose added: 'It will curb, I'm afraid, the ability for us to keep paying our staff, and we have seen an increase in the national minimum wage, so we'll have to look very hard this year.'

In her first Budget last week, Reeves raised the national insurance rate paid by employers on staff wages from 13.8 per cent to 15 per cent and cut the threshold at which firms start paying it from £9,100 to £5,000 a year.

Rose called this 'a very, very damaging piece of extra taxation on business'.

The national insurance increase on employers, which the Treasury hopes will raise £25billion a year, appeared to contradict Labour's manifesto pledge not to increase the tax. The Chancellor also announced an inflation-busting increase in the minimum wage on top of a new package of workers' rights that will cost businesses £5billion a year.

Rose's views echo similar remarks from the heads of M&S, Sainsbury's, Morrisons and Primark this week – underlining the level of anger among business leaders over the Budget.

Sainsbury's said it faced extra costs of £140m next year while M&S put the bill at £120m and Morrisons £75m. Primark cited 'several tens of millions' of extra costs.

Outsourcing giant Serco, a leading government contractor, yesterday said the national insurance hike will add £20m to its costs.

The prospect of higher prices – as well as lower pay and fewer jobs – makes a mockery of Labour's vow to 'protect working people' ahead of the Budget, a spokesman said.

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Chancellor Rachel Reeves promises she will not raise taxes again

There will be no more tax rises or borrowing for the duration of this government's term, Chancellor Rachel Reeves has said.

She told business leaders there will not be another budget like her maiden announcement, which included a rise in employers' national insurance contributions and the national minimum wage.

"I'm not coming back with more borrowing or more taxes. And that is why at this budget, we did wipe the slate clean to put public finances and public services on a firm footing," she told attendees at the Confederation of British Industry (CBI) conference.

"As a result, we won't have to do a budget like this ever again."

Yeah, right!