Budget 2024: What could Chancellor Rachel Reeves announce?

Published

1 year ago

October 16, 2024

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Labour’s first budget in 14 years will be delivered on 30 October, and as per the warnings of Rachel Reeves and Sir Keir Starmer, it will not be one the public is likely to welcome.

The chancellor and prime minister have spent months preparing the stage for a “painful” budget, where tax rises are likely in order to help fill the £22bn financial black hole Ms Reeves said she uncovered on entering No 11 Downing Street.

While Labour promised not to increase taxes on working people during the election campaign, the chancellor did leave some wriggle room that is now a point of speculation ahead of the budget.

Here Sky News takes a look at what measures could be included in the budget and what they could mean.

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Employer national insurance contributions

National insurance contributions are the UK’s second-largest tax and are expected to raise just under £170bn in 2024-25, about a sixth of all tax revenue, according to the Institute for Fiscal Studies (IFS).

They are paid by employees and the self-employed on their earnings, and by employers on the earnings of their staff – and at a higher rate than staff members themselves pay.

While Labour repeatedly promised not to increase taxes on “working people” during the election campaign – that is, VAT, national insurance and income tax – what it did not rule out was the possibility of increasing employer national insurance contributions.

Employers currently pay 13.8% on their staff earnings, but the tax does not apply to employee pension schemes – this is something the chancellor could now target in the budget, with the IFS saying it could raise £17bn a year.

The Tories have accused Labour of breaking their manifesto promise not to increase national insurance – although Labour believes it made clear the distinction between employees and employers.

Laura Trott, the shadow chief secretary to the Treasury, said: “In 2021, the chancellor said increasing employer national insurance was a tax on ‘workers’.

“That’s why even in her own words it breaks Labour’s manifesto promise not to increase tax on working people.”

Pension changes

Another measure the chancellor is reportedly considering is reducing the amount people can take out of their pensions tax-free.

At present, the tax-free lump sum most people over the age of 55 can take from their pension pot is 25%, up to a maximum of £268,275.

But according to The Telegraph, government officials have asked a major UK pension provider to look into the impact of cutting that amount to £100,000.

Financial advisers are said to be receiving a growing number of calls from clients wanting to cash in their 25% tax-free lump sum ahead of the budget.

Meanwhile, other changes Ms Reeves could make to pensions in a bid to raise revenue is charging national insurance on private pension incomes; introducing income tax on all inherited pensions and making pension pots liable to inheritance tax in the same way as other assets.

Inheritance tax

At present, inheritance tax – dubbed “the most hated tax” by the Tories – is charged at 40% and applies to estates worth more than £325,000.

There are, however, allowances that can mean it’s only paid on more valuable estates.

If a main residence is being passed to children or grandchildren a £175,000 allowance is added, meaning only amounts of £500,000 are subject to inheritance tax.

The tax rate could be increased, or the value people have to pay inheritance from could be lowered – while several exemptions – including on agricultural land and family businesses – could also be lifted.

Capital gains tax

Given the government’s pledge not to increase the three main taxes, there has been speculation that Labour could set its sights instead on capital gains tax.

Capital gains tax is the tax levied on the profit made on the sale of an asset that has risen in value – including second homes, shares, business assets and most personal possessions worth £6,000 or more, apart from cars.

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At present, people do not have to pay tax on the first £3,000 of profits, or £1,500 for trusts.

The tax-free threshold could be removed and the tax could be imposed on assets that are exempt now.

Alternatively, the tax rate could be increased. Capital gains tax is between 20-28% for those who pay higher rates of income tax, but could be increased to as much as 39%, according to The Guardian.

Asked about capital gains tax recently, the prime minister appeared to dismiss the idea it could be raised to as much as 39%, saying much of the budget speculation that had emerged so far was “wide of the mark”.

Council tax

Another solution the government could reach for is reforming the council tax system so the bands are changed.

Currently council tax is set in bands that are based on the 1991 value of homes, which has been branded “absurd” by the IFS and “incredibly poorly designed” by the Institute for Government.

Former shadow minister Jonathan Ashworth told Sky News during the election campaign that Labour would not change council tax bands – but there has nevertheless been reports the government could replace the banding system in favour of a 0.5% tax on the value of a property per year.

This would mean that someone in a property worth £350,000, for example, would pay £1,750 a year.

There was also speculation that the government could scrap the 25% council tax discount for single-occupant households, but this has subsequently been ruled out.

Stamp duty

Stamp duty is paid on the cost of a property over £250,000, with more paid for second homes and by non-UK residents.

Those buying their first home are entitled to relief in order to help people get on to the housing ladder – but this is due to be cut from April next year.

Labour has confirmed the threshold for stamp duty for first-time buyers will fall back to £300,000, after it was raised to £425,000 in 2022 by Rishi Sunak.

Labour could change the tax so it is focused on annual land value tax instead of on a transaction – but that could be a hard sell with the party.

Gambling tax

A report in The Guardian recently suggested the government was considering hiking taxes on “higher harm” products such as online casino games, in a move the left-leaning Institute for Public Policy Research said could raise up to £3.4bn by 2030.

The newspaper claimed the 15% general betting duty, levied on high-street bookmakers’ profits, could be doubled, while remote gaming duty could go from 21% to 50%.

Fuel duty

In 2022 Mr Sunak cut fuel duty by 5p – until March next year.

This could be scrapped, with the RAC saying the cut costs the Treasury £2bn a year.

Fuel duty has otherwise been frozen for more than a decade.

Politics

Why are abuse survivors losing faith in the grooming gang inquiry?

Published

2 hours ago

October 22, 2025

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Why are abuse survivors losing faith in the grooming gang inquiry?

The grooming gangs inquiry has been plunged into disarray this week before it has even started, as four survivors have quit the panel and two frontrunners for chairperson have withdrawn.

The inquiry was announced in June, but frustrations have grown over the pace of progress towards launching it, with pressure mounting on the government to appoint a chair and set out its terms of reference.

Survivors Fiona Goddard and Ellie-Ann Reynolds were first to stand down from their roles over concerns about who could head the inquiry and fears it may be “watered down” – something Sir Keir Starmer has denied, insisting that “injustice will have no place to hide”.

Both candidates shortlisted to lead the inquiry have now pulled out.

Here’s what we know about why panel members have quit and what the government has said in response.

Concerns over inquiry chairs

The resignations came after Sky News revealed the two shortlisted chairs for the inquiry were former police chief Jim Gamble and social worker Annie Hudson.

Ms Goddard was the first to resign from the survivors’ liaison panel, expressing deep reservations about the candidates: “One has a background in police and the other, a social worker. The very two services that contributed most to the cover-up of the national mass rape and trafficking of children.

“This is a disturbing conflict of interest, and I fear the lack of trust in services from years of failings and corruption will have a negative impact in survivor engagement with this inquiry.”

The other survivors who resigned also took issue with the shortlisted chairs in their statements.

Ms Hudson withdrew her candidacy on Tuesday, while Mr Gamble pulled out of the running on Wednesday.

In a letter to Home Secretary Shabana Mahmood explaining his decision, Mr Gamble said it was “clear that a lack of confidence due to my previous occupation exists among some” and that he did not want to proceed without a consensus among the victims.

A Home Office spokesperson said: “We are disappointed that candidates to chair that inquiry have withdrawn. This is an extremely sensitive topic, and we have to take the time to appoint the best person suitable for the role.”

Speaking to Sky News after Mr Gamble’s resignation, Ms Reynolds said: “The minute that we found out their former employment, it raised red flags.”

She claimed they represented “the very institutions that have failed us” and that their views would not have been “unbiased” or “impartial”.

During Prime Minister’s Questions on Wednesday, Sir Keir said his government “will find the right person to chair the inquiry”, but did not mention names.

Ms Reynolds and other victims have called for a judge to chair the inquiry, but Sir Keir said he ruled that out because it would require all ongoing criminal proceedings to finish before the inquiry could begin, leading to lengthy delays.

“We’ve waited years for the truth,” Ms Reynolds said. “The timing really doesn’t matter. As long as we know that it’s going to be done properly and impartially… we would be able to wait to ensure that that’s done.”

The full statutory inquiry into how cases of child sexual exploitation have been handled across England and Wales was announced by Sir Keir after an audit by Baroness Louise Casey found children had been failed by the systems in place to protect them.

On Wednesday, Sir Keir said Baroness Casey would be working in support of the inquiry.

Claims about poor treatment of survivors

Ms Reynolds said survivors were “kept in the dark” and “treated with contempt and ignored” when they asked about Home Office meetings and decisions. She said it was made clear that “speaking openly would jeopardise our place on the panel”.

She told Sky News that victims were “gaslit” and “manipulated” during the process and they had “very little faith in authorities and systems”.

Similarly, Ms Goddard claimed a “toxic, fearful environment” had been created for survivors on the panel, with “condescending and controlling language” used towards them.

Safeguarding Minister Jess Phillips has said she “regrets” resignations from the inquiry and that it was “always sad when victims feel that they can’t take part in a process”.

On Wednesday, Sir Keir said: “I respect the views of all the survivors, and there are different views, I accept that.”

He added that the door was open for people to return to the inquiry panel if they wished.

Fears of ‘diluted’ inquiry

The survivors say they fear the inquiry could be diluted, suggesting the Home Office could broaden its scope beyond group-based sexual abuse and push for it to have a regional focus rather than being truly national.

Ms Goddard said the survivors had “repeatedly faced suggestions from officials to expand this inquiry” and that it risked being “watered down”.

Ms Reynolds said the “final turning point” in her decision to quit the panel was the “push to widen the remit of the National Inquiry in ways that downplay the racial and religious motivations behind our abuse”.

Ms Phillips said allegations that the inquiry is being diluted or intentionally delayed were “false” and that it would “remain laser-focused on grooming gangs”.

Ms Goddard claimed this amounted to the minister calling her “a liar” and said she should apologise and resign.

Ms Reynolds also said she believed Ms Phillips was “unfit for the role”.

During PMQs on Wednesday, Sir Keir defended the safeguarding minister, saying she and Baroness Casey were the “right people” to take the inquiry forward.

He insisted the inquiry “is not and will never be watered down” and that “its scope will not change”.

“It will examine the ethnicity and religion of the offenders, and we will find the right person to chair the inquiry,” he said.

‘They should start again’

The father of a grooming gang victim says the government “should start again” with the national inquiry.

Marlon West, whose daughter Scarlett was a victim of sexual exploitation in Manchester, told Sky News that public “faith” has been “lost”.

He described Ms Phillips in parliament this week as “unprofessional” and “defensive rather than listening to what survivors are saying.”

“I doubt she will resign but she has lost any kind of faith from the public, and more importantly with survivors and families.

He wants to see an inquiry with family members included alongside survivors on the panel.

“Not that I want to go on it, if I’m honest,” he said, “but it’s the families who are dealing with the services, not so much the survivors.

“It’s really important that they get family perspective. I think they should start again.”

Government denies ‘watered down’ approach

Home Secretary Shabana Mahmood responded to the resignations saying the scope of the inquiry “will not change” and that it will leave “no hiding place” for those involved in the scandal.

In an article for The Times, she vowed the probe “will never be watered down on my watch” – and said it will focus on how “some of the most vulnerable people in this country” were abused “at the hands of predatory monsters”.

The home secretary also insisted the inquiry will be “robust and rigorous” – with the power to compel witnesses, and examine the ethnicity and religion of the offenders.

Speaking to Times Radio on Wednesday, Ms Goddard said the Home Secretary’s statement was “reassuring” but reiterated that Ms Phillips should resign.