Budget 2024: Employers’ national insurance will raise more than predicted as chancellor seeks to increase taxes by £40bn
The budget will increase taxes by £40bn, with the lion’s share coming from a £25bn rise in employers’ national insurance contributions, the chancellor announced at the budget.
Rachel Reeves said the amount businesses will pay on their employees’ national insurance contributions will increase from 13.8% to 15% from April 2025, with the current £9,100 annual threshold lowered to £5,000, in what she called a “difficult choice” to make.
The Office for Budget Responsibility (OBR), which monitors the government’s spending plans and performance, said most of the burden from the increase will be passed on to workers through lower wages, and consumers through higher prices.
It estimated the national insurance hike would reduce the average hours worked by the equivalent of 50,000 hours.
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The £40bn rise in taxes is thought to be the largest increase at a budget since John Major’s government in 1993 and is set to more than fill the £22bn “black hole” Labour said the Conservative government left them with.
Ms Reeves also announced the current freeze on income tax thresholds will end in 2028/29 and will be uprated in line with inflation after that.
The previous Conservative government froze the thresholds which meant more people paying higher rates of tax as their salary increases and they move into higher tax bands.
The OBR said the tax burden will reach “a historic high of 38% of GDP by 2029/30” and predicted inflation and interest rates will both be higher as a result of the budget.
Ms Reeves said a “line-by-line breakdown” of the black hole will be published, which she said shows there were “hundreds of unfunded pressures on the public finances” under the Conservatives.
The chancellor, who said she was “deeply proud” to be the country’s first female chancellor, insisted the Labour government would “invest, invest, invest” and put “more pounds in people’s pockets”.
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‘This budget raises taxes by £40bn’
Some of the other major changes the chancellor also announced include:
• Fuel duty will stay frozen next year and 5p cut to remain
• Capital gains tax lower rate will increase from 10% to 18%, higher rate from 20% to 24%
• Residential property capital gains tax will remain at 18% and 24%
• Two “permanently lower” business tax rates for retail, hospitality and leisure properties
• 40% relief on business rates in 2025-26 up to a £110,000 cap
• Inheritance tax thresholds frozen until 2030
• Higher rate stamp duty for second homes increased to 5% from Thursday
• Alcohol duty rates on non-draught drinks to increase in line with RPI from February
• Draught alcohol duty cut by 1.7% – 1p off a pint
• HS2 will go to Euston in central London
• Every government department must make 2% cuts by next year
• £22.6bn extra for the NHS’ day-to-day health budget, £3.1bn more for the capital budget
• £2.3bn for schools to hire teachers next year, £6.7bn for the schools capital budget
• £2.9bn for Armed Forces next year
• £500m increase in road budgets next year.
Rachel Reeves and her Treasury team before the budget. Pic: Reuters
The chancellor started her budget speech by saying the country “voted for change” and “responsible leadership” on 4 July at the general election – and went on to attack the “irresponsibility” of the previous Conservative government.
“We must restore economic stability and turn the page on the last 14 years,” she said.
Ms Reeves added: “The party opposite failed our country. Their austerity broke our National Health Service. The British people have inherited their failure.”
“They called an election to avoid making difficult choices,” she continued.
The chancellor outlined her priorities as economic growth and the NHS, and pledged an end to “short-termism”.
Labour promised to keep the triple lock on pensions, where the state pension goes up each year by whichever is higher of 2%, inflation or earnings growth.
She said that means it will be uprated by 4.1% next year so more than 12m pensioners will be up to £470 better off.
She also set aside £11.8bn for compensation for victims of the infected blood scandal, and £1.8bn for victims of the Post Office IT scandal.
Ahead of the first Labour budget since Alistair Darling’s in 2010, Labour committed in its election manifesto to not increase income tax, national insurance or VAT on “working people”, which Ms Reeves said she had kept to.
Various ministers got into a tangle over who exactly qualified as a working person in the weeks before the budget.
Pic: Reuters
A few plans were leaked or announced ahead of the budget, including:
• All private school fees will include VAT from January, business tax relief to be removed from private schools in April
• An increase on employers’ national insurance – but they did not say by how much
• A change to the fiscal rules – the way in which the government borrows and pays back money – in order to allow for greater investment spending
• An increase to the bus fare cap by 50% to £3
• A boost to the national living wage, with the minimum someone aged 21 and over can be paid increasing by 6.7% to £12.21 an hour
• The national minimum wage, for 16 to 20-year-olds, will also increase – by 16.3% to £10 an hour.
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Andrew Tate and his brother Tristan Tate have been charged with rape and other offences in the UK.
Andrew Tate, 38, faces 10 charges, including rape, actual bodily harm, human trafficking and controlling prostitution for gain, relating to three women.
His brother Tristan Tate, 36, faces 11 charges relating to one woman – including rape, actual bodily harm and human trafficking.
The charges were authorised in January 2024, but full details have only been released now.
Bedfordshire Police issued an international arrest warrant for the brothers over allegations, which they “unequivocally deny”, said to have occurred between 2012 and 2015.
The Tate brothers are facing separate allegations of trafficking minors, sexual intercourse with a minor and money laundering in Romania.
They are also accused of human trafficking and forming a criminal gang to sexually exploit women in a different case, which has been sent back to prosecutors.
They are due to be extradited to the UK following the conclusion of proceedings in Romania.
Andrew Tate and his brother Tristan outside a Bucharest court in January. File pic: Inquam Photos/Octav Ganea via Reuters
A Crown Prosecution Service (CPS) spokesperson said: “We can confirm that we have authorised charges against Andrew and Tristan Tate for offences including rape, human trafficking, controlling prostitution and actual bodily harm against three women.
“These charging decisions followed receipt of a file of evidence from Bedfordshire Police.
“A European Arrest Warrant was issued in England in 2024, and as a result the Romanian courts ordered the extradition to the UK of Andrew and Tristan Tate.”
The spokesperson added: “However, the domestic criminal matters in Romania must be settled first.
“The Crown Prosecution Service reminds everyone that criminal proceedings are active, and the defendants have the right to a fair trial.
“It is extremely important that there be no reporting, commentary or sharing of information online which could in any way prejudice these proceedings.”
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Representatives for Andrew Tate have been contacted by Sky News for comment.
Lawyer Matt Jury, of McCue Jury & Partners, representing several alleged British victims of Andrew Tate, said: “We welcome the clarity from the Crown Prosecution Service that our authorities are working to ensure the Tates face justice here in the UK – they cannot be allowed to escape extradition.
“At the same time, we ask once more that CPS admit its mistake in failing to prosecute Tate when he lived in the UK and finally charge him for the rape and assault of the other three women, our clients, who originally filed criminal complaints against him as long ago as 2014 but were failed by the system.
“They deserve justice, too.”
The allegations were subject to a police investigation, which was closed in 2019.
Merseyside Police has been given more time to question a 53-year-old man arrested over the Liverpool parade collision.
The suspect is being held on suspicion of attempted murder, dangerous driving and drug driving after a car was driven into a crowd at Liverpool FC’s victory parade on Monday.
Police have said the extra time they have been given to question the suspect runs into Thursday.
The force believes the vehicle which struck pedestrians on Water Street had followed an ambulance crew that was attending to someone suffering a heart attack, after a road block was temporarily lifted.
Earlier, new footage emerged showing a car being driven into the crowd as panicked fans watched in horror and tried to avoid being hit.
The CCTV footage showed supporters attempting to move out of the way as the vehicle ploughed into supporters.
Cries could be heard from the crowd – before police and members of the public chased after the car.
In an update on Wednesday, Merseyside Police said it was in contact with 79 people who were injured in the crash – an increase on the 65 people who were confirmed injured in the force’s previous update.
Seven people remain in hospital in a stable condition following the collision, the force added.
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Moment car drives into crowds in Liverpool
Detective Superintendent Rachel Wilson said: “I’m pleased to say that the number of people in hospital is reducing as they continue to recover from the awful incident.
“We continue to support those still receiving treatment and as part of our ongoing enquiries we are identifying more people who were injured.
“I want to reassure the public of Merseyside that detectives are making significant progress as we seek to establish the full circumstances that led to what happened.”
Water Street where the collision happened has reopened. Pic: Reuters
Pic: Reuters
DS Wilson said that “extensive CCTV enquiries” were being carried out across Liverpool to “establish the movements of the car, a Ford Galaxy, before the incident took place”.
She added: “We have already had an incredible response from many of those who were there on the day, and I thank them for their co-operation with our investigation.
“I would encourage anyone who has not yet contacted police who may have information on this incident to do so.
“An extensive investigation into the precise circumstances of the incident is ongoing, and we continue to ask people not to speculate on the circumstances surrounding the incident and refrain from sharing distressing content online.”
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Emergency service on Water Street after the collision. Pic: Reuters
It comes after Water Street was reopened to vehicles and pedestrians on Wednesday after the police cordon was lifted.
Street cleaning teams worked overnight to clear the road, which had been littered with bottles, cans and football scarves and flags.
One remaining Liverpool flag was removed from the top of a set of traffic lights by a worker wearing hi-vis.
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On Tuesday night, Liverpool manager Arne Slot decided not to attend the League Managers Association’s annual awards ceremony “in solidarity with those affected by the incident on Monday”.
Meanwhile, speaking at an awards ceremony on Tuesday, former Liverpool boss Jurgen Klopp said the collision on Water Street “showed the two faces of life”.
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Klopp sends ‘thoughts and prayers’ to victims
He said: “The most beautiful face for a long, long time: the parade was incredible, the mood was incredible and from one second to another everything changed and we learned again there are more serious things in the world than football.
“Thoughts and prayers go to the injured people and their families as well.
“It should have been one of the greatest days in the history of the city, after a long, long time, because we didn’t have the opportunity to do it last time. I don’t know how and why it happened but we know what happened and that’s very bad.”
The heartbroken mother of a Scottish teenager who vanished three weeks ago has told Sky News she fears he could have been “picked up in a car”.
Cole Cooper, 19, was last seen by an old school friend on Wednesday 7 May in the village of Longcroft near Falkirk.
Prior to that, he was captured on CCTV a few days earlier after leaving a house party in the area.
His mum, Wendy Stewart, 42, allowed Sky News into her home as she revealed the pain her family is enduring.
Cole’s mother Wendy Stewart (L) and his aunt Aimee Tennie
Wiping away tears, Ms Stewart said: “I don’t know what’s happened. He has not been seen. Is it a possibility he has been picked up by a car?
“I don’t want to start speculating but I just want answers. Somebody please come and tell us.”
She added: “It’s total heartache. It’s just so surreal. Is this actually happening? I have been wanting to wake up and it’s just been a big nightmare.”
Pic: Police Scotland
Cole’s family say the joinery apprentice recently started up his own fencing and decking business, which was thriving.
His aunt Aimee Tennie who has arranged community searches and erected missing posters, has said he is a popular young man who enjoys karaoke.
The 32-year-old told Sky News: “He is well liked. He is well respected. He is a lovely boy. If he is out there, we want you to come home.
“We want answers. We miss you. We love you.”
Pic: Police Scotland
Pic: Family handout
Police Scotland said more than 220 properties have been visited and more than 1,000 hours of CCTV footage collected as part of the force’s efforts to find the teenager.
Specialist resources from across the country have been mobilised to help, including the police helicopter and drones from the air support unit, as well as officers from the dive and marine unit.
Ms Stewart said she would not lose hope of finding her son.
She said: “I am still praying that we get the outcome that we want which is Cole to come back home with us and to make more happy memories.”
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Cole was reported missing on Friday 9 May.
Police said he was earlier captured on CCTV in the Longcroft area at about 6am on Sunday 4 May.
The last confirmed sighting was at 8.45pm on the A803 at its intersection with Cumbernauld Road, Longcroft, on Wednesday 7 May.
Police Scotland said an incident and welfare support unit will remain in the area while extensive searches and door-to-door enquiries continue.
An online portal has also been set up to allow members of the public to submit information directly to the investigating officers.
Cole – who has links to the Denny, Cumbernauld and Paisley areas – has been described as around 5ft 10in, of medium build, with short brown hair.
He was last seen wearing a black puffer-style jacket with black jogging bottoms.
Chief Inspector Alex Hatrick said there was “a lot of work going on behind the scenes” to find the teenager.
He added: “While this may not be as visible, please be assured we are working tirelessly to find Cole.”
Speaking to Sky News, the police chief said there had been no evidence of criminality.
“This is very much a missing person enquiry,” he added.
“There’s no information to suggest that Cole’s come to any harm at this time. Our focus is very much on tracing Cole safe and well.”
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