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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.

Follow live: All the latest on budget day

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.

Britain's Chancellor of the Exchequer Rachel Reeves poses with the red budget box outside her office on Downing Street in London, Britain October 30, 2024. REUTERS/Mina Kim
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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.

Britain's Chancellor of the Exchequer Rachel Reeves poses with the red budget box outside her office on Downing Street in London, Britain October 30, 2024. REUTERS/Isabel Infantes
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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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COVID-19 report goes a long way to answering inquiry’s critics

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COVID-19 report goes a long way to answering inquiry's critics

This scathing report goes a long way to answer the UK COVID-19 Inquiry’s critics, who have consistently attacked it as a costly waste of time.

They tried to undermine inquiry chair Lady Hallet’s attempt to understand what went wrong and how we might do better, and portray it as a lame exercise that would achieve very little.

Well, we now know that Boris Johnson’s “toxic and chaotic” government could well have prevented at least 23,000 deaths had they acted sooner and with greater urgency.

Follow latest: All four UK governments ‘failed to appreciate’ scale of COVID pandemic threat

File Pic: PA
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File Pic: PA

The response was “too little, too late”. And nobody in power truly understood the scale of the emerging threat or the urgency of the response it required.

The grieving families who lost loved ones in the pandemic want answers. They want names. And they want accountability.

But that is beyond the remit of this inquiry.

More on Boris Johnson

Read more:
‘Toxic and chaotic culture’ at centre of UK government during the pandemic
A timeline of the UK’s response to the pandemic

Everything you need to know about the COVID inquiry

The publication of the report into Module 2 of the inquiry will bring them no comfort, it may even cause them more distress.

But it will bring them closer to understanding why the UK’s response to this unprecedented health crisis was so poor.

Copies of the UK COVID-19 Inquiry's findings into decisions made by former prime minister Boris Johnson and his advisers. Pic: PA
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Copies of the UK COVID-19 Inquiry’s findings into decisions made by former prime minister Boris Johnson and his advisers. Pic: PA

We can easily identify the “advisers and ministers whose alleged rule breaking caused huge distress and undermined public confidence”.

And we know who was in charge of the Department of Health and Social Care as it misled the public by giving the impression that the UK was well prepared for the pandemic when it clearly was not.

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All four UK governments ‘failed to appreciate’ scale of COVID pandemic threat – inquiry finds

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All four UK governments 'failed to appreciate' scale of COVID pandemic threat - inquiry finds

All four UK governments failed to appreciate the scale of the threat posed by COVID-19 or the urgency of the response the pandemic required, a damning report published on Thursday has claimed.

Baroness Heather Hallett, the chair of the inquiry, described the response to the pandemic as “too little, too late”.

Tens of thousands of lives could have been saved during the first wave of COVID-19 had a mandatory lockdown been introduced a week earlier, the inquiry also found.

Noting how a “lack of urgency” made a mandatory lockdown “inevitable”, the report references modelling data to claim there could have been 23,000 fewer deaths during the first wave in England had it been introduced a week earlier.

The UK government first introduced advisory restrictions on 16 March 2020, including self-isolation, household quarantine and social distancing.

Had these measures been introduced sooner, the report states, the mandatory lockdown which followed from 23 March might not have been necessary at all.

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All four UK govts ‘failed to appreciate’ scale of pandemic

COVID-19 first emerged in the Chinese city of Wuhan at the end of 2019, and as it developed into a worldwide pandemic, the UK went in and out of unprecedented lockdown measures for two years starting from March 2020.

More on Covid Inquiry

Lady Hallett admitted in her summary that politicians in the government and devolved administrations were forced to make decisions where “there was often no right answer or good outcome”.

“Nonetheless,” she said, “I can summarise my findings of the response as ‘too little, too late'”.

Report goes long way to answer inquiry’s critics

This scathing report goes a long way to answer the Covid 19 Inquiry’s critics who have consistently attacked it as a costly waste of time.

They tried to undermine Lady Hallet’s attempt to understand what went wrong and how we might do better as a lame exercise that would achieve very little.

Well, we now know that Boris Johnson’s “toxic and chaotic” government could well have prevented at least 23,000 deaths had they acted sooner and with greater urgency.

The response was “too little, too late”. And that nobody in power truly understood the scale of the emerging threat or the urgency of the response it required.

The grieving families who lost loved ones in the pandemic want answers. They want names. And they want accountability.

But that is beyond the remit of this Inquiry.

The publication of the report into Module 2 will bring them no comfort, it may even cause them more distress but it will bring them closer to understanding why the UK’s response to this unprecedented health crisis was so poor.

And we can easily identify the “advisors and ministers whose alleged rule breaking caused huge distress and undermined public confidence”.

Or who was in charge of the Department of Health and Social Care, as it misled the public by giving the impression that the UK was well prepared for the pandemic when it clearly was not.

‘Toxic culture’ at the heart of UK government

The report said there was “a toxic and chaotic culture” at the heart of the UK government during the pandemic.

The inquiry heard evidence about the “destabilising behaviour of a number of individuals” – including former No 10 adviser Dominic Cummings.

It said that by failing to tackle this chaotic culture – “and, at times, actively encouraging it” – former PM Boris Johnson “reinforced a culture in which the loudest voices prevailed and the views of other colleagues, particularly women, often went ignored, to the detriment of good decision-making”.

‘Misleading assurances’

The inquiry found all four governments in England, Scotland, Wales and Northern Ireland failed to understand the urgency of response the pandemic demanded in the early part of 2020.

The report reads: “This was compounded, in part, by misleading assurances from the Department of Health and Social Care and the widely held view that the UK was well prepared for a pandemic.”

The report notes how the UK government took a “high risk” when it significantly eased restrictions in England in July 2020 – “despite scientific advisers’ concerns about the public health risks of doing so”.

Lady Hallett has made 19 key recommendations which, if followed, she believes will better protect the UK in any future pandemic and improve decision-making in a crisis.

Repeated failings ‘inexcusable’

In a statement following the publication of Thursday’s report, Lady Hallett said there was a “serious failure” by all four governments to appreciate the level of “risk and calamity” facing the UK.

She said: “The tempo of the response should have been increased. It was not. February 2020 was a lost month.”

Read more:
A timeline of the UK’s response to the pandemic

Lady Hallett said the inquiry does not advocate for national lockdowns, which she said should have been avoided if at all possible.

She said: “But to avoid them, governments must take timely and decisive action to control a spreading virus. The four governments of the UK did not.”

Lady Hallett said none of the governments were adequately prepared for the challenges and risks that a lockdown presented, and that many of the same failings were repeated later in 2020, which she said was “inexcusable”.

She added: “Each government had ample warning that the prevalence of the virus was increasing and would continue to do so into the winter months. Yet again, there was a failure to take timely and effective action.”

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Fresh weather warnings issued as parts of UK threatened with blizzard conditions

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Fresh weather warnings issued as parts of UK threatened with blizzard conditions

Fresh yellow weather warnings for ice have been issued for many areas of the UK, as some areas are threatened with blizzard conditions on Thursday.

An amber warning for snow – covering northeast England, including Scarborough, Whitby and parts south of Middlesbrough – is in force until 9pm on Thursday.

UK weather latest: Blizzard warning for amber area

The Met Office said there could be “significant snow accumulations” over the North York Moors and parts of the Yorkshire Wolds with up to 25cm (10ins) on hills above 100m (330ft).

“Gusty winds, giving occasional blizzard conditions, and perhaps a few lightning strikes, may accompany some of the showers, posing as additional hazards,” the warning added.

Some A-roads in North Yorkshire were reported to be “gridlocked”, according to Shingi Mararike, Sky News’ North of England correspondent, but he added gritters are out to deal with the bad weather.

A car overturns on the A19 near Sunderland. Pic: PA
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A car overturns on the A19 near Sunderland. Pic: PA

The Glenshane Pass in County Londonderry has been coated in snow. Pic: PA
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The Glenshane Pass in County Londonderry has been coated in snow. Pic: PA

Snowy conditions near Skipsea in the the East Riding of Yorkshire. Pic: PA
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Snowy conditions near Skipsea in the the East Riding of Yorkshire. Pic: PA

Snow ploughs have been hard at work on the North York Moors and a thick coat of snow is covering the A169 between Pickering and Whitby.

More on Uk Weather

Dozens of schools have been closed in North Yorkshire and Scotland.

Amber warning for snow in parts of northeast England and south of Middlesbrough until 9pm on Thursday. Pic: Met Office
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Amber warning for snow in parts of northeast England and south of Middlesbrough until 9pm on Thursday. Pic: Met Office

A number of yellow warnings are also in force for snow and/or ice across large parts of Britain.

In many of the warnings issued by the Met Office, there are concerns that where “showers persist and/or snow partially thaws and then refreezes overnight, this will bring a risk of ice”.

Weather warnings in the UK for snow and ice across various regions on Thursday (left) and ice on Friday (right). Pic: Met Office
Image:
Weather warnings in the UK for snow and ice across various regions on Thursday (left) and ice on Friday (right). Pic: Met Office

Jo Wheeler, Sky’s weather presenter, said clear skies will allow temperatures to tumble again as Thursday night approaches, “with an early and severe frost expected, and the associated risk of icy stretches on untreated roads and pavements”.

Coldest night so far

Overnight Wednesday into Thursday was the coldest of the season so far, according to the Met Office.

Temperatures dropped as low as -6.6C (20F) in Benson, Oxfordshire. There were two -6.4C (20F) temperatures recorded in Wales (in Sennybrigde) and in Scotland (Dundreggan).

While in Northern Ireland it fell to -2.8C (27F) in Altnahinch Filters.

Cold health alerts in force

As well as the one amber weather warning covering parts of the UK, there are two amber health alerts in place in three areas of England from the UK’s Health Security Agency.

An amber health alert is designed to prepare health services, including for the potential for a rise in deaths among the over-65s and people with health conditions.

The alerts are in effect in North East and North West England, along with the Yorkshire and the Humber region until 8am on 22 November.

Yellow cold-health alerts are in place for the rest of England and also expire at the same point.

Walk like a penguin

NHS Greater Glasgow and Clyde (NHSGGC) is recommending that people should walk like penguins to avoid dangerous slips and trips on icy surfaces.

The technique, which went viral in previous winters, is back for 2025 as part of the health board’s winter campaign.

Laura Halcrow, falls prevention lead at NHSGGC, said: “It might look funny, but waddling really works. A slip on ice can cause painful injuries and even hospital stays, especially for older people.”

Turning wet and windy

Sky’s weather presenter, Jo Wheeler, adds that the forecast is set to change this weekend.

“We’ll trade the cold sunshine and wintry showers for wet and windy conditions with rain turning heavy as it crosses the country on Saturday.”

“The British weather, fickle as always, looks like delivering a brief change to this milder westerly flow followed by an equally quick change back to a chilly northerly flow.”

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