• A new levy on vaping products • Help for first time buyers, such as 99% mortgages • A tax on air passenger duty for business class travel • Cutting back plans to increase departmental spending to save money
Labour said that whatever is announced, it won’t be enough to “undo the economic vandalism of the last decade” – and the tax burden is still set to rise to a record high.
With Sir Keir Starmer’s party ahead by around 20 points in the polls, some Tory MPs want Mr Hunt to go further and cut personal income tax with an election approaching.
This is seen as a more headline-grabbing measure that benefits more voters, including pensioners.
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But the chancellor is said to have decided against this after forecasts from the UK’s fiscal watchdog, the Office for Budget Responsibility (OBR), gave him less fiscal headroom than hoped.
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0:37
Patel: ‘Budget should back working people’
‘Conservatives know lower tax means higher growth’
A 2p cut to income tax would cost around £14bn, whereas the 2p cut to NI will cost around £10bn.
Combined with the 2p cut to NI announced in November, the move will save 27 million workers £900 on average.
In comments released by the Treasury on Tuesday night, Mr Hunt said: “Of course, interest rates remain high as we bring down inflation.
“But because of the progress we’ve made… delivering on the prime minister’s economic priorities, we can now help families with permanent cuts in taxation.
“We do this not just to give help where it is needed in challenging times. But because Conservatives know lower tax means higher growth. And higher growth means more opportunity and more prosperity.”
Image: Jeremy Hunt prepares his budget. Pic: Flickr
Mr Hunt added that growth “cannot come from unlimited migration”, but “can only come by building a high-wage, high-skill economy”.
He also took aim at Labour, claiming a government under Sir Keir Starmer would “destroy jobs” and “risk family finances with new spending that pushes up tax”.
Tories ‘overseeing 14 years of economic failure’ – Labour
But shadow chancellor Rachel Reeves said Labour is “now the party of economic responsibility” as she accused the Tories of overseeing “14 years of economic failure” with the overall tax burden still rising.
She said: “The Conservatives promised to fix the nation’s roof, but instead they have smashed the windows, kicked the door in and are now burning the house down.
“Taxes are rising, prices are still going up in the shops and we have been hit by recession. Nothing the chancellor says or does can undo the economic vandalism of the Conservatives over the past decade.
“The country needs change, not another failed budget or the risk of five more years of Conservative chaos”.
Image: Sir Keir Starmer and Rachel Reeves preparing for Wednesday’s budget. Pic: PA
How will Hunt pay for Budget 2024 giveaway?
Experts have warned that a 2p national insurance cut would not be enough to stop the tax burden rising because of previously announced freezes to personal tax thresholds.
There are also questions about whether Mr Hunt can afford to pay for the measure.
He has said he will not pay for tax cuts with borrowing, meaning a combination of spending cuts and tax rises elsewhere will be necessary.
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2:41
‘Tax at highest level since WWII’
Revenue-raisers Mr Hunt is said to be considering include reducing the scope of non-dom tax relief, which Labour has said it would scrap to fund services such as the NHS.
A new levy on vaping is on the cards, as is a tax on air passenger duty for business class travel and a tax crackdown on those who rent out second homes for holiday lets.
The chancellor is also considering cutting back plans to increase departmental spending by just 0.75% a year, instead of 2%, to raise around £5bn.
Lib Dem leader Sir Ed Davey – who will be targeting Mr Hunt’s “Blue Wall” seat at the election – described the Conservatives as “the great tax swindlers” and said they should be prioritising the NHS.
He said: “Rishi Sunak has led the economy into a recession and forced families to pick up the tab. They have no shame.
“The Conservatives must put the NHS at the heart of the budget. It is no wonder the economy isn’t growing when millions of people are stuck on NHS waiting lists, unable to work.”
Watch Sky News’s coverage of the Budget live from 11am.
UK car production fell by more than a quarter (27.1%) last month as a cyberattack at Jaguar Land Rover halted manufacturing at the plant, industry figures show.
The total number of vehicles coming off assembly lines – including cars and vans – fell an even sharper 35.9%, according to September data from the Society of Motor Manufacturers and Traders (SMMT).
“Largely responsible” for the drop was the five-week pause in production at Jaguar Land Rover (JLR) due to a malicious cyber attack, as other car makers reported growth.
JLR’s assembly lines in the West Midlands and Halewood on Merseyside were paused from late August to early October as a result.
During this time, not a single vehicle was made. Production has since restarted, but the attack is believed to have been the “most financially damaging” in UK history at an estimated cost of £1.9bn, according to the security body the Cyber Monitoring Centre.
It was the lowest number of cars made in any September in the UK since 1952, including during the COVID-19 lockdown.
More on Cyber Attacks
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3:53
Are we in a cyber attack ‘epidemic’?
Despite the restart, the sector remains “under immense pressure”, the SMMT’s chief executive Mike Hawes said.
The phased restart of operations led to a small boost in manufacturing output this month, according to a closely watched survey.
Of the cars that were made, nearly half (47.8%) were battery electric, plug-in hybrid or hybrid.
The vast majority, 76% of the total vehicles output, were made for export.
The top destinations are the European Union, US, Turkey, Japan and South Korea.
JLR was just the latest business to be the subject of a cyberattack.
Harrods, the Co-Op, and Marks and Spencer, are among the companies that have struggled in the past year with such attacks.
Championship club Sheffield Wednesday have filed for administration, according to a court filing, which will result in the already struggling side being hit with a 12-point deduction.
The South Yorkshire club currently sit bottom of the Championship, the second tier of English football, with just six points from 11 games.
Known as The Owls, Wednesday are one of the oldest surviving clubs in world football, with more than 150 years of history.
Court records confirm the club have filed for administration. A notice was filed at a specialist court at 10.01am.
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2:58
Sky’s Rob Harris reports on the news that Sheffield Wednesday have filed for administration
What has happened?
The Owls, who host Oxford United on Saturday, have been in turmoil for a long time.
On 3 June, owner Dejphon Chansiri, a Thai canned fish magnate who took over the club in 2015, was charged with breaching EFL regulations regarding payment obligations.
Image: Sheffield Wednesday fans protest the ownership at a game away to Leeds United in January. Pic: Reuters
Weeks later, Mr Chansiri said he was willing to sell the club in a statement on their official website.
Image: Sheffield Wednesday’s troubles have sparked furious protests from fans. Pic: PA
Their crisis deepened just days later when another embargo was imposed on the club relating to payments owed to HMRC, before players and staff were not paid on time on 30 June.
In the months that followed, forwards Josh Windass and Michael Smith left the club by mutual consent. Manager Danny Rohl, now at Rangers, also left by mutual consent.
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2:12
Frustrated Sheffield Wednesday supporters have targeted their embattled club’s owner in a highly-visible protest during their opening match of the season.
The Owls were forced to close the 9,255-capacity North Stand at Hillsborough after a Prohibition Notice was issued by Sheffield City Council.
‘Current uncertainty’
On 6 August, the EFL released a statement, saying: “We are clear that the current owner needs either to fund the club to meet its obligations or make good on his commitment to sell to a well-funded party, for fair market value – ending the current uncertainty and impasse.”
On 13 August, the Prohibition Notice was lifted, but a month later, news emerged of a winding-up petition over £1m owed to HMRC.
Last season, Wednesday finished 12th. They had already been placed under registration embargoes in the last two seasons after being hit by a six-point deduction during the 2020/21 campaign, for breaching profit and sustainability rules.
With a 12-point deduction, the Owls would be 15 points away from safety in the Championship.
Doing well were computer and telecommunications retailers as the iPhone 17 launched in the month, while online jewellers reported strong demand for gold despite the price hovering around record highs.
Gold has been in demand, and in recent days reached a record high, as some investors moved money out of the US dollar and government bonds amid the ongoing government shutdown.
It came despite a rainy month – which typically keeps shoppers at home – and a five-day tube strike in London.
The impact of the rain could be seen, however, in the boost to online spending, which rose to one of the highest levels since the end of the pandemic.
A fall was recorded in food shop sales from August to September, signalling a response to high food price inflation.
A good week for the economy?
Retail sales figures are significant as they measure household consumption, the largest expenditure in the UK economy.
Growing retail sales can mean economic growth, which the government has repeatedly said is its top priority.
Earlier this week, another key economic measure came in better than expected.
Inflation remained at 3.8% rather than rising to the widely expected 4% – double the target rate set by the interest rate-setters at the Bank of England.
Consumers were feeling better about their finances, a closely watched measure of consumer confidence showed on Friday.
Buying sentiment is up from last month, according to market research company GFK, as intentions to buy big-ticket items like electrical goods and furniture rose.
Combined, it suggests people are not feeling too gloomy in the run-up to the November budget.