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.
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.
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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.
Image: 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.
Image: 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
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An inquiry into the case of a hospital worker who sexually abused dozens of corpses has concluded that “offences such as those committed by David Fuller could happen again”.
It found that “current arrangements in England for the regulation and oversight of the care of people after death are partial, ineffective and, in significant areas, completely lacking”.
Phase 2 of the inquiry has examined the broader national picture and considered if procedures and practices in other hospital and non-hospital settings, where deceased people are kept, safeguard their security and dignity.
During his time as a maintenance worker, he also abused the corpses of at least 101 women and girls at Kent and Sussex Hospital and the Tunbridge Wells Hospital before his arrest in December 2020.
His victims ranged in age from nine to 100.
Phase 1 of the inquiry found he entered one mortuary 444 times in the space of one year “unnoticed and unchecked” and that deceased people were also left out of fridges and overnight during working hours.
‘Inadequate management, governance and processes’
Presenting the findings on Tuesday, Sir Jonathan Michael, chair of the inquiry, said: “This is the first time that the security and dignity of people after death has been reviewed so comprehensively.
“Inadequate management, governance and processes helped create the environment in which David Fuller was able to offend for so long.”
He said that these “weaknesses” are not confined to where Fuller operated, adding that he found examples from “across the country”.
“I have asked myself whether there could be a recurrence of the appalling crimes committed by David Fuller. – I have concluded that yes, it is entirely possible that such offences could be repeated, particularly in those sectors that lack any form of statutory regulation.”
Sir Jonathan called for a statutory regulation to “protect the security and dignity of people after death”.
After an initial glance, his interim report already called for urgent regulation to safeguard the “security and dignity of the deceased”.
On publication of his final report he describes regulation and oversight of care as “ineffective, and in significant areas completely lacking”.
David Fuller was an electrician who committed sexual offences against at least 100 deceased women and girls in the mortuaries of the Kent and Sussex Hospital and the Tunbridge Wells Hospital. His victims ranged in age from nine to 100.
This first phase of the inquiry found Fuller entered the mortuary 444 times in a single year, “unnoticed and unchecked”.
It was highly critical of the systems in place that allowed this to happen.
His shocking discovery, looking at the broader industry – be it other NHS Trusts or the 4,500 funeral directors in England – is that it could easily have happened elsewhere.
The conditions described suggest someone like Fuller could get away with it again.
BBC director-general Tim Davie has said MasterChef can survive its current scandal as it is “much bigger than individuals” – but the corporation must “make sure we’re in the right place in terms of the culture of the show”.
After the report was published, Wallace, 60, said he was “deeply sorry” for causing any distress, and never set out to “harm or humiliate”.
Torode, 59, said he had “no recollection of the incident” and said he “did not believe that it happened,” and said he was “shocked and saddened by the allegation”.
Mr Davie said the BBC’s leadership team would not “tolerate behaviour that is not in line with our values,” while BBC chair Samir Shah acknowledged there were still pockets within the broadcaster where “powerful individuals” can still “make life for their colleagues unbearable”.
They said several BBC staff members had been dismissed in the last three months, following an independent review into workplace culture.
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Wallace, who was sacked from MasterChef last week, is not included in that count as he was not directly contracted by the corporation, but employed by independent production company Banijay.
The corporation has yet to decide if the unseen MasterChef series – filmed with both Wallace and Torode last year – will be aired or not.
Image: BBC Broadcasting House in Portland Place, London. Pic: Jordan Pettitt/PA
News of the findings in the Gregg Wallace report came just hours before the BBC was deemed to have breached its editorial guidelines by failing to disclose that the child narrator of a Gaza documentary was the son of a Hamas official.
Media watchdog Ofcom subsequently launched its own investigation into the programme.
While the 2024-25 annual report showed a small rise in trust overall for the corporation, Mr Davie acknowledged it had been a year which saw the reputation of the BBC damaged by “serious failings” in the making of the documentary.
The BBC boss acknowledged: “It was important that the BBC took full responsibility for those failings and apologised for them,” and later in response to a question, called the documentary – Gaza: How To Survive A Warzone – “the most challenging editorial issue I’ve had to deal with”.
He went on: “The importance of fair balance reporting, the need for high-quality homegrown programming in the face of massive pressure, I think has never, ever been greater. And I believe my leadership and the team I’ve assembled can really help the BBC thrive in that environment and very competitive environment.”
Image: BBC Director-General Tim Davie. Pic: PA
BBC boss has chair’s ‘full support’
Despite a series of failings in recent months – including livestreaming the controversial Bob Vylan set at Glastonbury last month – Mr Davie insisted he can “lead” the organisation in the right direction.
When asked if he would resign, he replied: “I simply think I’m in a place where I can work to improve dramatically the BBC and lead it in the right way.
“We will make mistakes, but I think as a leadership and myself, I’ve been very clear, and I think we have been decisive.”
He said the organisation was setting a “global standard” for media.
Mr Shah, reiterated his support for Mr Davie.
“Tim Davie and his team, and Tim in particular, has shown very strong leadership throughout all this period and he has my full support.”
The report also revealed its top earners, which saw former Match Of The Day host Gary Lineker top the chart once again.
Meanwhile, Australian children’s cartoon Bluey proved a boon for the broadcaster, and was the most watched show in the US across all genres – with 55 billion minutes viewed.
The top 10 shows watched over Christmas 2024 were also all from the BBC.
Recent annual reviews have been overshadowed by the Huw Edwards scandal and allegations of a toxic environment around flagship show Strictly Come Dancing.
This breaking news story is being updated and more details will be published shortly.
The iconic Sycamore Gap tree “can never be replaced” but its stump is showing signs of life, the National Trust has said, as the two men who felled it face sentencing.
Adam Carruthers, 32, and Daniel Graham, 39, drove 30 miles through a storm from Cumbria to Northumberland on 27 September 2023 before felling the landmark in less than three minutes.
Prosecutors said their “moronic mission” caused more than £620,000 worth of damage to the tree and more than £1,000 worth of damage to Hadrian’s Wall, where it fell.
They took a wedge as a trophy, which has never been recovered, and seemed to revel in the media coverage, exchanging messages and voice notes about the story going “wild” and “viral”.
Footage of the moment the tree was felled was played during the men’s trialat Newcastle Crown Court, where they both denied but were found guilty of two counts of criminal damage.
Image: Adam Carruthers and Daniel Graham. Pic: Northumbria Police/PA
Image: A picture of the tree taken hours before it was felled. Pic: CPS
In a victim impact statement read at their sentencing hearing, National Trust general manager Andrew Poad, said the “iconic tree can never be replaced”.
“While the National Trust has cared for it on behalf of the nation, it belonged to the people,” he wrote.
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“It was a totemic symbol for many; a destination to visit whilst walking Hadrian’s Wall, a place to make memories, take photos in all seasons; but it was also a place of sanctuary – a calming, reflective space that people came to year after year.
“While what was lost cannot be replaced, the stump is showing signs of life, with new shoots emerging at the base – as the decades progress, there is hope that some may grow and establish.”
Mr Poad said the “outpouring of emotion” to the felling was “unprecedented”, with one message from a member of the public described it as “like losing a close family member”.
Pictures were shown in court of a “celebration room” in memory of the tree, including a note which says: “How dare he steal our JOY,” while another reads: “Nature at it’s best over 300 years. Humanity at its worst over one night”.
Mr Poad added: “The overwhelming sense of loss and confusion was felt across the world.
“When it became clear that this was a malicious and deliberate act the question was why anyone would do this to such a beautiful tree in such a special place, it was beyond comprehension.”
Image: The pair were found guilty of criminal damage
Graham has a previous caution for theft after he cut up a “large quantity of logs using a chainsaw”, the court heard.
He also has convictions for violence including battery and public order offences, which were said to be “relationship-based”, while Carruthers has no previous cautions or convictions.
The tree, which had stood for more than 100 years in a dip in the landscape, held a place in popular culture and was featured in the 1991 Kevin Costner film Robin Hood: Prince Of Thieves.
It also formed part of people’s personal lives, as the scene of wedding proposals, ashes being scattered and countless photographs.
A 6ft section of the trunk is now on public display at The Sill: National Landscape Discovery Centre, around two miles from where it once stood, while 49 saplings taken from the tree have been conserved by the National Trust.
Graham and Carruthers, who were once close friends, gave no explanation for why they targeted the tree, and since their arrests, they have fallen out and come to blame each other.
At their trial, Graham claimed Carruthers had a fascination with the sycamore, saying he had described it as “the most famous tree in the world” and spoken of wanting to cut it down, even keeping a piece of string in his workshop that he had used to measure its circumference.
Carruthers denied this and told the court he could not understand the outcry over the story, saying it was “just a tree”.
Prosecutor Richard Wright KC said the pair have now accepted they went on the mission in pre-sentencing reports.
But Carruthers claimed he was “drunk” and didn’t realise what happened until the next day, while Graham said it was “only when the blade made contact with the tree he realised it was serious,” the court heard.
Mr Wright added: “The court can be sure they were sober, prepared and planned to do exactly what they did.”