Budget: Rachel Reeves has left herself with very few political levers to pull to get hold of large sums of cash
In a classic piece of political understatement, a government source justified the coming £20bn rise in employer national insurance as “asking businesses to help out”.
This language of throwing a few quid in the collection pot belies the size of this tax hike.
It is huge. But that’s the point.
Having ruled out pushing up the big revenue raisers, Rachel Reeves has left herself with very few levers to pull to get hold of large sums of cash.
This move will be the largest tax rise in the budget, filling half of the £40bn the chancellor is trying to find.
The fact that national insurance is paid by businesses big and small increases the size of the net – meaning relatively small headline changes can yield big sums.
That’s also the downside though.
Groups representing small companies have already said this will make jobs harder to create and maintain.
So what of the politics?
At £20bn, the value of these tax rises mirrors almost exactly the cost of all 4p worth of cuts to employee national insurance pushed through by the last Tory government (with the support of Labour).
We’re essentially seeing a shift in the national insurance burden from workers to businesses.
But again, maybe that’s the point.
Analysis: Are Starmer and Reeves on the same page?
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Those with assets ‘not working people’
Much has been made of the fuzziness around Sir Keir Starmer’s attempts to define who the ‘working people’ are that he is seeking to protect from tax rises.
Government comms on the matter have been clunky.
But there’s also been something of a misreading of what that two-word phrase represents.
For some this has been a conscious and political choice.
Such as when one Tory MP suggested the prime minister believed anyone who owns a (tax-free) ISA doesn’t count as a working person.
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Will the chancellor’s fiscal plan work?
In fact, isn’t it more likely that the now fabled ‘working person’ was never meant as a technical definition, but rather a statement of political intent?
Consider these statements – reproduced here without endorsement – that Labour would like you to ingest:
If you’re among the 97% who doesn’t pay capital gains tax, we’re on your side.
If you’re among the 94% who doesn’t pay inheritance tax, we’re on your side.
Much has been made of Sir Keir’s definition of ‘working people’. Pic: PA
And yes, if you’re among the overwhelming majority of people whose biggest tax outlays are income tax, national insurance and VAT, we’re on your side too.
Set against that backdrop – even if we’re still unclear about who a ‘working person is’ – it becomes pretty obvious who the prime minister believes is not one.
And it’s a familiar and traditional Labour answer.
It’s the 1% as opposed to the 99%. The few, not the many. The rich rather than the poor.
But drawing a line like that when it comes to policy is harder.
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The modest-earning family with a few stocks and shares may wonder why they are now thrown in with the serial investors.
The small family-run bakery will ask why they are seeing their payroll taxes whacked up alongside the big corporates.
And economists will argue that business taxes like national insurance are always ultimately paid by workers eventually in the form of lower wages and fewer jobs.
Which leads us to what will likely be one of the central tensions in the budget.
The only solution to pay for public services in the long term is economic growth.
But can that growth be achieved when the interim funding fix relies on upping taxes on the rich and the private sector?
The chancellor will try to square that circle on Wednesday by announcing billions of pounds of extra investment borrowing.
But firms may still feel the government has bought them a fancy pair of trainers only to then break both their legs.
UK
Teenager living in ‘continuous pain’ after surgeon Dr Yaser Jabbar carried out ‘inappropriate’ operations
A 15-year-old boy who was operated on twice by a now unlicensed Great Ormond Street surgeon is living with “continuous” pain.
Finias Sandu has been told by an independent review the procedures he underwent on both his legs were “unacceptable” and “inappropriate” for his age.
The teenager from Essex was born with a condition that causes curved bones in his legs.
Aged seven, a reconstructive procedure was carried out on Finias’s left leg, lengthening the limb by 3.5cm.
A few years later, the same operation was carried out on his right leg which involved wearing an invasive and heavy metal frame for months.
He has now been told by independent experts these procedures should not have taken place and concerns have been raised over a lack of imaging being taken prior to the operations.
Yaser Jabbar rescinded his UK medical licence last year. Pic: LinkedIn
His doctor at London’s prestigious Great Ormond Street Hospital was former consultant orthopaedic surgeon Yaser Jabbar. Sky News has spoken to others he treated.
Mr Jabbar also did not arrange for updated scans or for relevant X-rays to be conducted ahead of the procedures.
The surgeries have been found to have caused Finias “harm” and left him in constant pain.
“The pain is there every day, every day I’m continuously in pain,” he told Sky News.
“It’s not something really sharp, although it does get to a certain point where it hurts quite a lot, but it’s always there. It just doesn’t leave, it’s a companion to me, just always there.”
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Finias’s surgery pictures
Care of over 700 patients being assessed
Mr Jabbar rescinded his UK medical licence in January last year after working at Great Ormond Street between 2017 and 2022.
The care of his 700-plus patients is being assessed, with some facing corrective surgery, among them Finias.
“Trusting somebody is hard to do, knowing what they have done to me physically and emotionally, you know, it’s just too much to comprehend for me,” he said.
“It wasn’t something just physically, like my leg pain and everything else. It was emotionally, because I put my trust in that specific doctor. My parents and I don’t really understand the more scientific terms, we just went by what he said.”
Doctors refused to treat Finias because of his surgeries
Finias and his family relocated to their native Romania soon after the reconstructive frame was removed from his right leg in the summer of 2021.
The pain worsened and they sought advice from doctors in Romania, who refused to treat Finias because of the impact of his surgeries.
Dozens of families seeking legal claims
His mother Cornelia Sandu is “furious” and feels her trust in the hospital has been shattered. They are now among dozens of families seeking legal claims.
Cyrus Plaza from Hudgell Solicitors is representing the family. He said: “In cases where it has been identified that harm was caused, we want to see Great Ormond Street Hospital agreeing to pay interim payments of compensation for the children, so that if they need therapy or treatment now, they can access it.”
Finias is accessing therapy and mental health support as he prepares for corrective surgery later in the year.
A spokesperson for Great Ormond Street Hospital told Sky News: “We are deeply sorry to Finias and his family, and all the patients and families who have been impacted.
“We want every patient and family who comes to our hospital to feel safe and cared for. We will always discuss concerns families may have and, where they submit claims, we will work to ensure the legal process can be resolved as quickly as possible.”
Finias with his mother and sister
Service not ‘safe for patients’
Sky News has attempted to contact Mr Jabbar.
An external review into the wider orthopaedic department at the hospital began in September 2022.
It was commissioned after the Royal College of Surgeons warned the hospital’s lower limb reconstruction service was not “safe for patients or adequate to meet demand”.
The investigation is expected to be completed by the end of the year.
Sir Keir Starmer has said closer ties with the EU will be good for the UK’s jobs, bills and borders ahead of a summit where he could announce a deal with the bloc.
The government is set to host EU leaders in London on Monday as part of its efforts to “reset” relations post-Brexit.
A deal granting the UK access to a major EU defence fund could be on the table, according to reports – but disagreements over a youth mobility scheme and fishing rights could prove to be a stumbling block.
The prime minister has appeared to signal a youth mobility deal could be possible, telling The Times that while freedom of movement is a “red line”, youth mobility does not come under this.
His comment comes after Kaja Kallas, the EU’s high representative for foreign affairs, said on Friday work on a defence deal was progressing but “we’re not there yet”.
Sir Keir met European Commission president Ursula von der Leyen later that day while at a summit in Albania.
Ursula von der Leyen and Sir Keir had a brief meeting earlier this week. Pic: PA
If agreed, the deal will be the third in two weeks, following trade agreements with India and the US.
Sir Keir said: “First India, then the United States – in the last two weeks alone that’s jobs saved, faster growth and wages rising.
“More money in the pockets of British working people, achieved through striking deals not striking poses.
“Tomorrow, we take another step forward, with yet more benefits for the United Kingdom as the result of a strengthened partnership with the European Union.”
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Conservative leader Kemi Badenoch has said she is “worried” about what the PM might have negotiated.
Ms Badenoch – who has promised to rip up the deal with the EU if it breaches her red lines on Brexit – said: “Labour should have used this review of our EU trade deal to secure new wins for Britain, such as an EU-wide agreement on Brits using e-gates on the continent.
“Instead, it sounds like we’re giving away our fishing quotas, becoming a rule-taker from Brussels once again and getting free movement by the back door. This isn’t a reset, it’s a surrender.”
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