Increases to national insurance and income tax ruled out under Labour – as Reeves promises cash ‘injection’
Labour has ruled out increasing income tax or national insurance if they were to win the election.
Shadow chancellor Rachel Reeves said she and Labour leader Sir Keir Starmer want to lower taxes for working people but she would not put forward “unfunded proposals”.
Ms Reeves said: “None of our plans require increasing taxes.”
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She also said she did not want to make public spending cuts. However, she could not give guarantees and said there would have to be a spending review if she was in charge of the Treasury.
She said: “We want taxes on working people to be lower and we certainly will not be increasing the rates of income tax or National Insurance, and that applies to all the bands of income tax.
“We would like taxes on working people to be lower, but unlike the Conservatives I would never make pledges that are not fully costed and fully funded.
“It’s only by having pledges that are fully costed and fully funded that people can actually believe what you’re going to say.”
She refused to say when Labour would increase defence spending to 2.5% of GDP, as promised, but said it would happen “as quickly as possible”.
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Ms Reeves earlier promised there is “not going to be a return to austerity” under Labour and would boost frontline services with a “down payment on the changes that we want to make”.
“But in the end, we have to grow the economy, we have to turn around this dire economic performance,” she told the BBC’s Sunday With Laura Kuenssberg programme.
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The shadow chancellor said there would be an “immediate injection” of cash into public services – for the NHS, more police and more teachers.
That would be funded by ensuring those with non-dom status “pay their fair share of tax” and cracking down on tax avoidance, she argued.
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Labour would also place VAT and business rates on private schools “to recruit 6,500 additional state school teachers”, she said.
And she insisted Labour “will end fire and rehire”, where companies sack their staff and then bring them back on worse contracts.
The Unite union had criticised Labour for excluding an outright ban on the practice but Ms Reeves said: “We will not allow that to happen.”
A growing demand for US dollar-tied crypto stablecoins could help push down the interest rate, says US Federal Reserve Governor Stephen Miran.
The Donald Trump-appointed Miran told the BCVC summit in New York on Friday that the dollar-pegged crypto tokens could be “putting downward pressure” on the neutral rate, or r-star, that doesn’t stimulate or impede the economy.
If the neutral rate drops, then the central bank would also react by dropping its interest rate, he said.
The total current market cap of all stablecoins sits at $310.7 million according to CoinGecko data, and Miran suggested that Fed research found the market could grow to up to $3 trillion in value in the next five years.
“My thesis is that stablecoins are already increasing demand for US Treasury bills and other dollar-denominated liquid assets by purchasers outside the United States and that this demand will continue growing,” Miran said.
“Stablecoins may become a multitrillion-dollar elephant in the room for central bankers.”
Organizations, including the International Monetary Fund, have warned that stablecoins pose a threat to traditional financial assets and services, as they could potentially compete for customers. US banking groups have also urged Congress to tighten oversight of stablecoins with yield, arguing they could attract would-be bank users.
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Regulation to pave the way
During his speech, Miran praised the GENIUS Act for setting out clear guidelines and consumer protections, as he indicated that the regulatory framework will play a key role in spurring broader adoption of stablecoins.
“While I tend to view new regulations skeptically, I’m greatly encouraged by the GENIUS Act. This regulatory apparatus for stablecoins establishes a level of legitimacy and accountability congruent with holding traditional dollar assets,” he said, adding:
“For the purposes of monetary policy, the most important aspect of the GENIUS Act is that it requires U.S.-domiciled issuers to maintain reserves backed on at least a one-to-one basis in safe and liquid US dollar–denominated assets.”
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The crypto market could soon see some much-needed relief after the US Senate reached an agreement on a three-part budget deal to end the government shutdown, Politico reports.
Pending legislation to fund the US government has more than enough support to pass the 60-vote threshold, Politico reported on Sunday, citing two people familiar with the matter.
It was Republican Senate Majority Leader John Thune’s 15th attempt to win Democratic support for a House-approved bill, putting the record 40-day government shutdown within reach of being lifted.
An official vote is still needed to finalize the agreement.
Ongoing uncertainty over when the US government would reopen has been a key factor holding back Bitcoin (BTC) and the broader crypto market from mounting a rebound.
Bitcoin initially rallied to a new high of $126,080 six days into the government shutdown on Oct. 6, but has since fallen over 17% to $104,370, CoinGecko data shows.
Bitcoin’s fall over the past month saw it drop by double-digit percentage points on Oct. 10 after US President Donald Trump’s announcement of 100% tariffs on China sent shockwaves throughout the markets.
Bitcoin rallied 266% after last government shutdown lifted
The last US government shutdown occurred between late December 2018 and late January the following year in Trump’s first term.
After it ended on Jan. 25, 2019, Bitcoin rose over 265% from $3,550 to $13,000 over the next five months.
Prediction markets back shutdown to end this week
Bettors on prediction market Polymarket are backing that the government shutdown will be lifted on Thursday, with the market showing a 54% chance it will happen between Tuesday and Friday.
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Those odds were just 27% a day ago.
Odds on competitor platform Kalshi are similar, estimating the government shutdown will end on Friday, 44 days into the shutdown.
It comes as Trump announced on Sunday that most Americans will receive a $2,000 dividend from tariff revenue.
Approximately 85% of adults will be eligible, excluding high-income earners, he said.
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