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Chancellor Rachel Reeves has finally unveiled the budget for 2024. Here are the key points:

This page is being updated, refresh to see more as it’s announced.

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Taxes

• The budget raises taxes by £40bn.

National Insurance contributions for employers (not employees) will increase by 1.2 percentage points to 15% from April 2025.

The point at which employers start paying NI will fall from £9,100 a year to £5,000 a year. This will raise £25bn per year.

• The lower rate of capital gains tax (CGT) on the sale of assets will increase from 10% to 18%. The higher rate will go from 18% to 24%. CGT on the sale of residential property will also increase from 18% to 24%.

Tax thresholds will rise, meaning the point at which people pay higher taxes will be increased. These tax bands had been frozen. But this freeze will end in 2028 and the bands will increase at the rate of inflation.

• The freeze on inheritance tax will continue for a further two years until 2030. This means the first £325,000 can be inherited tax-free, rising to £500,000 if the estate is passed to direct descendants, and £1m if it’s passed to a surviving spouse or civil partner.

• From tomorrow the stamp duty surcharge for second homes, or ‘higher rate for additional dwellings’, will increase by two percentage points to 5%.

Benefits

• Health and employment services for people who are disabled and long-term sick will get £240m in funding.

• The minimum wage for people 21 and over will rise by 6.7% to £12.21 an hour. This is the equivalent of £1,400 a year for a full-time worker. Workers aged 18 to 20 will see their minimum wage increase by 16.3% to £10 an hour.

• People will now be able to earn £10,000 or more while claiming Carers Allowance. This will mean an extra £81.90 for those newly eligible.

• The household support fund will receive £1bn to help those in financial hardship with the cost of essentials.

• A new fair repayment rate will mean Universal Credit claimants who have been accidentally overpaid will only have to pay back 15% of their allowance each month, falling from 25%. This means a gain of around £420 a year for roughly 1.2 million of the poorest households.

• Businesses will get an increase in employment allowance, which will mean 65,000 employers won’t pay any National Insurance at all next year with the allowance growing from £5,000 to £10,500. This will mean more than a million businesses will pay the same or less than they did previously.

Business rates relief will fall from the current 75% down to 45% for retail, leisure and hospitality businesses.

NHS / Health

• The day-to-day NHS budget will increase by £22.6bn. There will also be a further £3.1bn investment in its capital budget.

• This will facilitate 40,000 extra hospital appointments and procedures every week and will include £1.5bn for new hospital beds.

Social care

• Local government will receive funding worth “at least” £600m for social care.

Housing

• An investment of £5bn in housing, which will increase the affordable homes programme to a budget of £3.1bn.

• In addition, £1bn will be spent on the removal of dangerous cladding, implementing the findings of the Grenfell inquiry.

Fuel duty

Fuel duty will be frozen this year and next, with the existing 5p cut maintained.

Alcohol duty

• A cut to draft alcohol duty of 1.7%, which could make drinks cheaper by 1p.

• The tax on tobacco will rise at the rate of inflation plus an additional 2%. There will also be an extra 10% on rolling tobacco.

• There will be a new flat rate duty on all vaping liquid from next October.

Schools / education

• VAT will be introduced on private school fees from January 2025 and business rates relief for private schools will be removed from April 2025.

• Some 500 state schools that are old and not fit for purpose will be rebuilt at a total cost of £1.4bn. There will be an extra £300m for school maintenance each year, which will cover dealing with RAC concerns.

• The budget for free school breakfast clubs will be tripled to £30m, in 2025 and 2026. The core budget for schools will also rise by £2.3bn next year.

• An investment of £300m for further education and £1bn for children with special educational needs (SEN).

Transport

• The HS2 rail link between Old Oak Common in west London and Birmingham has been confirmed. Tunnelling work will also begin on extending the line to London Euston.

• Air passenger duty on private jets will rise by 50%, which is the equivalent of £450 per passenger.

Windfall taxes

• The energy profits levy on oil and gas companies will increase to 38% until March 2030.

Defence

• The annual defence budget will fall below 2.5% of GDP next year – with an increase of £2.9bn for the Ministry of Defence.

• A commitment of £3bn a year for Ukraine for “as long as it takes”.

Economy

Public finances will be in surplus, rather than in deficit, by the 2027-2028 financial year. The government claims this means reaching stability two years earlier than planned.

• The Office for Budget Responsibility (OBR) predicts UK GDP growth to be 1.1% in 2024, 2.0% in 2025, 1.85% in 2026, 1.5% in 2027, 1.5% in 2028, 1.6% in 2029.

• The OBR expects public sector net borrowing to be £105.6bn in 2025-26, £88.5bn in 2026-27, £72.2bn in 2027-28, £71.9bn in 2028-29 and £70.6bn in 2029-30.

• Consumer price index (CPI) inflation will hit 2.5% this year, according to OBR forecasts. Next year it will rise to 2.6% before falling to 2.3% in 2026, 2.1% in 2027, 2.1% in 2028 and 2% in 2029. It’s the goal of the Treasury to bring inflation down to 2%. The Bank of England has raised interest rates to bring the rate of price rises to 2%.

The Budget

• The price of soft drinks will rise, with an increase to the drinks levy in line with inflation every year. Nearly £1bn a year will be raised thanks to the measure.

• All government departments will have their budgets reduced by 2% next year. This will be achieved by “using technology more effectively and joining up services across government”.

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Labour’s Lucy Powell will take a ‘submarine approach’ as deputy PM – for now

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Labour's Lucy Powell will take a 'submarine approach' as deputy PM - for now

Lucy Powell’s had quite the political comeback. Sacked from cabinet by the prime minister but weeks ago, she’s back with her own powerbase and voice at the top of the party as the deputy Labour leader.

She was not Keir Starmer‘s choice and, while the prime minister was quick to embrace her on Saturday as the result was announced, he is probably right to feel some unease about the outcome for a few different reasons.

For in Powell, the party has a new, alternative figurehead that sits outside of the government machine.

Politics live: Follow updates as Labour names new deputy leader

The PM congratulates Lucy Powell after she is announced as new deputy leader. Pic: PA
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The PM congratulates Lucy Powell after she is announced as new deputy leader. Pic: PA

She ran a campaign in which she pledged to be the voice of the membership to the leadership and the membership picked her. She will have serious influence on the National Executive Committee, and sit in the political cabinet.

What she won’t do is return to the cabinet table, which means that she has power and profile, but will remain an independent voice, free from collective cabinet responsibility.

More on Keir Starmer

As I understand it, Powell doesn’t want to destabilise the leadership – for now at least.

She will take a submarine approach when it comes to interventions around government policy rather than offering a running commentary on Starmer’s government and choose her battles.

That way, when she does weigh in, she is harder to ignore.

She could also over time become a lightning rod for discontent should the party’s fortunes remain as parlous as they are now.

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Powell aims to unite Labour Party

On Friday, Labour suffered a cataclysmic defeat in the Caerphilly by-election, coming third in a seat it has held for over a century as Labour endured their biggest ever drop in support in a Welsh by-election.

It’s a terrible omen for next May’s Sennedd election. Labour have been the governing party in Wales since the Senedd’s beginning in 1999. That could be about to change.

When I asked Keir Starmer about the loss on Friday, he didn’t try to deflect, saying: “I’m deeply disappointed by the results.”

When I asked him if it was a gut punch, he said: “I’m not going to suggest otherwise. I spoke to the first minister on Saturday morning, and clearly we need to reflect and regroup, and double down on the delivery, in Wales. And we clearly need to do much more.”

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Phillipson: Powell has my full support

Powell’s position now is that the party needs to pull together, get campaigning and try to build support with their voters.

But she is equally clear that this has to be down to delivery of the “national renewal” Labour promised voters in the election of 2024.

There will surely come a point, further down the road, where this new deputy leader will become more robust in her critique of the government if it fails to deliver and the party suffers.

This race has also exposed the ugliness in a party that is uneasy with its leadership and seems intent on infighting.

The constant briefing wars that emanate from Number 10 cascade down in what has been, at times, a dirty fight.

Lucy Powell accused Bridget Phillipson’s team of “throwing mud” and briefing against her in the Labour deputy leadership race on our Electoral Dysfunction podcast, while Phillipson also said she was at the sharp end of vicious smears.

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Powell hits back at claims she ‘can’t be trusted’

👉 Click here to listen to Electoral Dysfunction on your podcast app 👈

For all the talk on Saturday for coming together and unity, it is hard to see that materialising while doubts persist over Starmer’s leadership and while rivals, such as Powell’s close ally Andy Burnham, are waiting in the wings.

There is also the big question of apathy. Only 16.6% of party members, trade union members and affiliates chose to vote in this election, against 59% in 2020.

This is partly distorted because in the last leadership election, members were voting for both the leader and deputy leaders. But what it also suggests is disengagement from the wider Labour movement.

In 2020, there were 552,000 party members eligible to vote, out of a total membership which stood at 782,000, including union-affiliated members who are perhaps less likely to cast a vote.

This time around there were 970,000 eligible voters – but the Labour Party did not reveal how many actual party members cast a vote.

This might be because membership figures are dropping, and it didn’t want to reveal that information. At the end of last year, party membership stood at 332,000, which is around 200,000 members less than the end of 2019.

For now, Powell insists that she and Starmer will work as a team and the message from both Powell and the PM following her victory is that all of those party must put its shoulder to the wheel to try and see off the threat of Reform.

She is undoubtedly starting out as the party’s campaigner in chief, but I suspect she may become a far more critical – and dangerous – voice, if Starmer looks like he can’t get the party in good enough shape to win the next general election.

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Who is Labour’s new deputy leader Lucy Powell and what does she stand for?

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Who is Labour's new deputy leader Lucy Powell and what does she stand for?

Lucy Powell has been elected as the deputy leader of the Labour Party.

But who is she and what does she stand for?

Powell began her career in politics working for Labour MPs Glenda Jackson and Beverley Hughes.

She then worked for a pro-EU campaign group.

After that, she ran Ed Miliband’s successful Labour leadership campaign and was his deputy chief of staff until she was elected as the MP for Manchester Central in 2012.

She has been at the forefront of Labour politics for over a decade, serving under Ed Miliband, Jeremy Corbyn and Keir Starmer.

After Labour won the last general election, she was appointed as the leader of the House of Commons in Starmer’s cabinet.

But last month she was sacked in the cabinet reshuffle and came to be seen as the anti-Starmer candidate.

During the deputy leadership campaign, Powell promised to “provide a stronger, more independent voice” for members of the Labour Party.

And in her acceptance speech, she said the government hadn’t been bold enough, and that it needed to step up.

So how much of a problem is she going to be for Keir Starmer?

Her new role – and being outside the cabinet – means she will be free to criticise the government, which could make life more difficult for the prime minister.

Read More:
Lucy Powell named Labour’s new deputy leader
Powell will take a ‘submarine approach’ – for now

Powell has been outspoken about her desire for the government to lift the two child benefit cap – and also called for the country to work for the many and not the few – a Corbyn-era slogan – and that Labour must stop handing the megaphone over to Reform and letting them run away with it.

Starmer will be conscious that an MP he sacked not long ago is now in a powerful role able to speak freely and attack his decisions.

But Powell is not free from her own controversies.

In May, Lucy Powell called grooming gangs a dog whistle issue – something she later had to clarify after it caused outrage among campaigners and opposition parties.

She also vocally defended Labour’s unpopular cut to winter fuel allowance while in cabinet, before the government then U-turned on the policy – she then criticised the proposed welfare cuts after she was sacked from government.

Powell insists she wants to help Keir Starmer, providing constructive criticism and a voice for Labour members.

But will Keir Starmer see it that way?

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Twenty warnings for Sir Keir Starmer from new deputy leader Lucy Powell

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Twenty warnings for Sir Keir Starmer from new deputy leader Lucy Powell

Labour’s new deputy leader Lucy Powell promised to be Sir Keir Starmer’s ally.

Yet in her victory speech she criticised his government and its record no fewer than 20 times. And told him to raise his game, or else.

Politics live: Follow for updates as Labour names new deputy leader

Here’s what she said – and what she meant:

  1. “Division and hate are on the rise. Discontent and disillusionment widespread.” What she meant: The Labour government has been a huge disappointment.
  2. “The desire for change is impatient and palpable.” What she meant: You’ve had 16 months to deliver change – voters are saying, “Get on with it”.
  3. “We have to offer hope, to offer the big change the country’s crying out for.” What she meant: Stop tinkering. Get more radical. You’ve got a huge Commons majority, after all.
  4. “We must give a stronger sense of purpose, whose side we’re on and of our Labour values and beliefs.” What she meant: We’re not doing enough for working people or tackling inequality.
  5. “People feel that this government is not being bold enough in delivering the kind of change we promised.” What she meant: Our voters are deserting us because they don’t see change.
  6. “I’ll be a champion for all Labour values and boldness in everything we do.” What she meant: Watch out! I’m going to hound you and hold your feet to the fire!
  7. “We won’t win by trying to out-Reform Reform, but by building a broad progressive consensus.” What she meant: Stop the lurch to the Right on immigration. We’re better than that.
  8. “It starts with wrestling back the political megaphone and setting the agenda more strongly.” What she meant: We need to sharpen up our communication and selling our message.
  9. “We’ve let Farage and his ilk run away with it.” What she meant: The Reform UK leader is running rings round us in communicating and campaigning. We’re too sluggish and flat-footed.
  10. “For too long the country and the economy has worked in the interests of the few and not the many.” What she meant: Winter fuel payment cuts were a disaster and the two-child benefit cap has to go.
  11. “Trickle down economics hasn’t worked.” What she meant: No more tax cuts for the rich. It’s time for a wealth tax, for example, to redistribute wealth.
  12. “Life has just got harder and harder, less and less secure in work, in housing, in making ends meet.” What she meant: We’re failing to tackle the cost of living crisis and housing shortages.
  13. “The deep-seated inequalities that have widened in wealth in regions in class in health need fundamentally redressing.” What she meant: We’re failing to look after our “red wall” voters.
  14. “Re-unite our voter coalition and re-unite the country.” What she meant: Start governing for everyone, urban and rural, rich and poor, North and South. Stop neglecting poorer regions.
  15. “We need to step up.” What she meant: For goodness sake, sort out the chaos in 10 Downing. Stop blaming aides and civil servants and sacking them. Get a grip!
  16. Members and affiliates “don’t feel part of the conversation or party of the movement right now. And we have to change that.” What she meant: Stop ignoring and alienating activists, MPs and unions.
  17. “Unity and loyalty comes from collective purpose, not from command and control.” What she meant: Stop the control freakery in parliament and party management. It’ll backfire.
  18. “Debating, listening and hearing is not dissent. It’s all strength.” What she meant: Listen to your backbenchers and stop suspending them when they vote against policies like welfare cuts.
  19. “As your deputy, my commitment is to change the culture.” What she meant: I’m going to stand up for rebels and critics and force you to ditch the control freakery and bad decisions.
  20. “At the election 16 months ago the British people voted for change. I’m here to do everything I can to make that change a reality.” What she meant: Raise your game, or else!

Read more from Sky News:
The one thing Farage and Polanski have in common
China ‘enemy’ reference removed from witness statement

She said it all with a smile, but there was menace there.

As deputy leader, Lucy Powell was always going to be a critical friend. So there you go, prime minister. Here’s 20 things you need to do for her to be more friend than critic.

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