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A raft of tax rises is expected in the budget this lunchtime – with the chancellor acknowledging that voters are “angry at the unfairness in our economy”.

In a newly released video, Rachel Reeves said the public is “frustrated at the pace of change” – but vowed to “take the fair and necessary choices” to tackle the cost of living crisis.

And in a dig at the Conservatives – especially former prime minister Liz Truss – she pledged not to impose austerity, lose control of public spending, or engage in more reckless borrowing.

Budget 2025: Follow the latest in the Money blog and Politics Hub

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10 times Labour promised not to hike taxes

Tax rises: What we know so far

Taxation will be a dominant part of the budget as Ms Reeves tries to plug an estimated £30bn black hole in the public finances.

A headline measure is expected to be an extension of the freeze on income tax thresholds for another two years beyond 2028, which should raise about £8bn.

But given the chancellor had ruled out such a measure last year – because it would “hurt working people” and “take more money out of their payslips” – this will attract criticism from opposition parties.

The chancellor has backed away from raising income tax rates outright, a move that would have breached Labour’s manifesto, but she still needs to find the cash to pay for her public spending plans.

Watch our special programme for Budget 2025 live on Sky News from 11am
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Watch our special programme for Budget 2025 live on Sky News from 11am

Some measures already confirmed by the government include:

• Allowing local authorities to impose a levy on tourists staying in their areas

• Expanding the sugar tax levy to packaged milkshakes and lattes

• Imposing extra taxes on higher-value properties

It is being reported that the chancellor will also put a cap on the tax-free allowance for salary sacrifice schemes, raise taxes on gambling firms, and bring in a pay-per-mile scheme for electric vehicles.

Setting the scene ahead of the budget at 12.30pm, Ms Reeves said she will “push ahead with the biggest drive for growth in a generation”, promising investment in infrastructure, housing, security, defence, education, and skills.

Although she has vowed not to “duck challenges” nor “accept that our past must define our future”, she admitted that “the damage done from austerity, a chaotic Brexit, and the pandemic were worse than we thought”.

What are the key timings for the budget?

11am – Sky News special programme starts.

About 11.15am – Chancellor Rachel Reeves leaves Downing Street and holds up her red box.

12pm – Sir Keir Starmer faces PMQs.

12.30pm – The chancellor delivers the budget.

About 1.30pm – Leader of the Opposition Kemi Badenoch delivers the budget response.

2.30pm – The independent Office for Budget Responsibility (OBR) holds a news conference on the UK economy.

4.30pm – Sky News holds a Q&A on what the budget means for you.

7pm – The Politics Hub special programme on the budget.

The fiscal black hole is down to several factors – including a downgrade in the productivity growth forecast, U-turns on cuts to benefits and the winter fuel allowance, as well as “heightened global uncertainty”.

Nonetheless, the chancellor has promised more investment to cut NHS waiting lists, deal with “waste in the public sector”, and reduce the national debt.

“This budget is for you, the British people. So that together we can build a fairer, stronger, and more secure Britain,” she said.

Conservative shadow chancellor Sir Mel Stride has said Ms Reeves is “trying to pull the wool over your eyes” – having promised last year that she would not need to raise taxes again.

Meanwhile, Liberal Democrat deputy leader Daisy Cooper has accused her and the prime minister of “yet more betrayals”.

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What is the ‘milkshake tax’?

What could her key spending announcements be?

As well as filling the black hole in the public finances, these measures could allow the chancellor to spend money on a key demand of Labour MPs – partially or fully lifting the two-child benefits cap, which they say will have an immediate impact on reducing child poverty.

Benefits more broadly will be uprated in line with inflation, at a cost of £6bn, The Times reports.

In an attempt to help households with the cost of the living, the paper also reports that the chancellor will seek to cut energy bills by removing some green levies, which could see funding for some energy efficiency measures reduced.

Other measures The Times says she will announce include retaining the 5p cut in fuel duty, and extending the Electric Car Grant by an extra year, which gives consumers a £3,750 discount at purchase.

The government has already confirmed several key announcements, including:

• An above-inflation £550 a year increase in the state pension for 13 million eligible pensioners

• A freeze in prescription prices and rail fares

• £5m to refresh libraries in secondary schools

Extra funding for the NHS will also be announced in a bid to slash waiting lists, including the expansion of the “Neighbourhood Health Service” across the country to bring together GP, nursing, dentistry and pharmacy services – as well as £300m of investment into upgrading technology in the health service.

And although the cost of this is borne by businesses, the chancellor will confirm a 4.1% rise to the national living wage – taking it to £12.71 an hour for eligible workers aged 21 and over.

For a full-time worker over the age of 21, that means a pay increase of £900 a year.

Read more from Sky News:
Will expected ‘stealth tax’ announcement affect you?
Are we set for another astoundingly complex budget?

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What the budget will mean for you

Britons facing ‘cost of living permacrisis’

However, the Tories have hit out at the chancellor for the impending tax rises, with shadow chancellor Sir Mel Stride saying in a statement: “Having already raised taxes by £40bn, Reeves said she had wiped the slate clean, she wouldn’t be coming back for more, and it was now on her. A year later and she is set to break that promise.”

He described her choices as “political weakness” – choosing “higher welfare and higher taxes”, and “hardworking families are being handed the bill”.

The Liberal Democrat deputy leader Daisy Cooper is also not impressed, and warned last night: “The economy is at a standstill. Despite years of promises from the Conservatives and now Labour to kickstart growth and clamp down on crushing household bills, the British people are facing a cost-of-living permacrisis and yet more betrayals from those in charge.”

She called on the government to negotiate a new customs union with the EU, which she argues would “grow our economy and bring in tens of billions for the Exchequer”.

Green Party leader Zack Polanski has demanded “bold policies and bold choices that make a real difference to ordinary people”.

The SNP is calling on the chancellor to “help families” rather than “hammer them with billions of pounds of cuts and damaging tax hikes that destroy jobs and hurt economic growth”.

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Labour accused of another manifesto breach after major workers’ rights U-turn

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Labour accused of another manifesto breach after major workers' rights U-turn

The Labour government is facing accusations of two manifesto breaches in as many days after turning its back on a promise to protect workers from unfair dismissal from day one in a job.

A day after Rachel Reeves confirmed an extended freeze on income tax thresholds that critics said amounted to a manifesto-breaching tax hike on working people, the business secretary announced a key measure in the flagship Employment Rights Bill would be watered down.

The qualifying period for unfair dismissal is currently two years, and Labour said in their manifesto they would bring it down to one day.

But Peter Kyle announced on Thursday it would now be six months, having faced opposition from businesses.

Mr Kyle defended the change, insisting “compromise is strength”, but Tory leader Kemi Badenoch described it as “another humiliating U-turn” and a number of Labour MPs aren’t happy.

Andy McDonald, MP for Middlesbrough and Thornaby East, branded the move a “complete betrayal”, while Poole MP Neil Duncan-Jordan said the government had “capitulated”.

Former employment minister Justin Madders, who was sacked in Sir Keir Starmer’s reshuffle earlier this year, also disputed claims the move did not amount to a manifesto breach.

“It might be a compromise,” he said, “but it most definitely is a manifesto breach.”

What did the manifesto say?

The Employment Rights Bill was a cornerstone of Labour’s 2024 election manifesto, and also contains measures that would ban zero-hours contracts.

The party manifesto promised to “consult fully with businesses, workers, and civil society on how to put our plans into practice before legislation is passed”.

“This will include banning exploitative zero-hours contracts; ending fire and rehire; and introducing basic rights from day one to parental leave, sick pay, and protection from unfair dismissal,” it said.

Angela Rayner was a key driver of the bill before she left cabinet, but Peter Kyle (below) is now calling the shots. Pic: PA
Image:
Angela Rayner was a key driver of the bill before she left cabinet, but Peter Kyle (below) is now calling the shots. Pic: PA

Pic: Reuters
Image:
Pic: Reuters

How did we get here?

But the legislation – which was spearheaded by former deputy prime minister Angela Rayner – has been caught in parliamentary ping pong with the House of Lords.

Last month, some peers objected to the provisions around unfair dismissal, suggesting they would deter some businesses from hiring.

They also opposed Labour’s move to force employers to offer guaranteed hours to employees from day one, arguing zero-hour contracts suited some people.

Ministers said reducing the qualifying period for unfair dismissal turned the bill into a “workable package”.

Read more:
Budget 2025: The key points at a glance
Starmer insists Labour ‘kept to our manifesto’

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Employment Rights Bill is ‘anti-growth blueprint’

Businesses have largely welcomed the change, but unions gave a more hostile response.

Sharon Graham, the general secretary of Unite, said the bill was now a “shell of its former self”.

“With fire and rehire and zero-hours contracts not being banned, the bill is already unrecognisable,” she said.

The TUC urged the House of Lords to allow the rest of the legislation to pass.

Paul Nowak, the general secretary, said: “The absolute priority now is to get these rights – like day one sick pay – on the statute book so that working people can start benefitting from them from next April.”

‘Strikes the right balance’

The Resolution Foundation said the change in the unfair dismissal period was a “sensible move that will speed up the delivery of improvements to working conditions and reduce the risk of firms being put off hiring”.

It said the change “strikes the right balance between strengthening worker protections and encouraging businesses to hire” and deliver “tangible improvements to working conditions”.

The Confederation of British Industry (CBI) added: “Businesses will be relieved that the government has agreed to a key amendment to the Employment Rights Bill, which can pave the way to its initial acceptance.

“This agreement keeps a qualifying period that is simple, meaningful and understood within existing legislation.

“It is crucial for businesses confidence to hire and to support employment, at the same time as protecting workers.”

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Budget 2025: Reeves urged to ‘make the case’ for income tax freeze – as PM hits out at defenders of ‘failed’ policy

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Budget 2025: Reeves urged to 'make the case' for income tax freeze - as PM hits out at defenders of 'failed' policy

Rachel Reeves needs to “make the case” to voters that extending the freeze on personal income thresholds was the “fairest” way to increase taxes, Baroness Harriet Harman has said.

Speaking to Sky News political editor Beth Rigby on the Electoral Dysfunction podcast, the Labour peer said the chancellor needed to explain that her decision would “protect people’s cost of living if they’re on low incomes”.

In her budget on Wednesday, Ms Reeves extended the freeze on income tax thresholds – introduced by the Conservatives in 2021 and due to expire in 2028 – by three years.

The move – described by critics as a “stealth tax” – is estimated to raise £8bn for the exchequer in 2029-2030 by dragging some 1.7 million people into a higher tax band as their pay goes up.

Rachel Reeves, pictured the day after delivering the budget. Pic: PA
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Rachel Reeves, pictured the day after delivering the budget. Pic: PA

The chancellor previously said she would not freeze thresholds as it would “hurt working people” – prompting accusations she has broken the trust of voters.

During the general election campaign, Labour promised not to increase VAT, national insurance or income tax rates.

Sir Keir Starmer has insisted there’s been no manifesto breach, but acknowledged people were being asked to “contribute” to protect public services.

He has also launched a staunch defence of the government’s decision to scrap the two-child benefit cap, with its estimated cost of around £3bn by the end of this parliament.

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Prime minister defends budget

‘A moral failure’

The prime minister condemned the Conservative policy as a “failed social experiment” and said those who defend it stand for “a moral failure and an economic disaster”.

“The record highs of child poverty in this country aren’t just numbers on a spreadsheet – they mean millions of children are going to bed hungry, falling behind at school, and growing up believing that a better future is out of reach despite their parents doing everything right,” he said.

The two-child limit restricts child tax credit and universal credit to the first two children in most households.

The government believes lifting the limit will pull 450,000 children out of poverty, which it argues will ultimately help reduce costs by preventing knock-on issues like dependency on welfare – and help people find jobs.

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Budget winners and losers

Speaking to Rigby, Baroness Harman said Ms Reeves now needed to convince “the woman on the doorstep” of why she’s raised taxes in the way that she has.

“I think Rachel really answered it very, very clearly when she said, ‘well, actually, we haven’t broken the manifesto because the manifesto was about rates’.

“And you remember there was a big kerfuffle before the budget about whether they would increase the rate of income tax or the rate of national insurance, and they backed off that because that would have been a breach of the manifesto.

“But she has had to increase the tax take, and she’s done it by increasing by freezing the thresholds, which she says she didn’t want to do. But she’s tried to do it with the fairest possible way, with counterbalancing support for people on low incomes.”

Read more:
Labour’s credibility might not be recoverable
Budget 2025 is a big risk for Labour’s election plans

She added: “And that is the argument that’s now got to be had with the public. The Labour members of parliament are happy about it. The markets essentially are happy about it. But she needs to make the case, and everybody in the government is going to need to make the case about it.

“This was a difficult thing to do, but it’s been done in the fairest possible way, and it’s for the good, because it will protect people’s cost of living if they’re on low incomes.”

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Prostate cancer: NHS screening programme could come one step closer today

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Prostate cancer: NHS screening programme could come one step closer today

An NHS screening programme for prostate cancer could come one step closer if it’s backed today by a key committee that advises the government.

The National Screening Committee, comprised of doctors and economists, will reveal whether it now believes the benefits of screening outweigh any risks, and whether testing could be done at a reasonable cost to the NHS.

When it last looked at the evidence in 2020, it rejected calls for screening, even though prostate cancer kills 12,000 men a year.

But in recent months, there has been growing pressure for screening from high-profile public figures such as Olympian Sir Chris Hoy and former Sky News presenter Dermot Murnaghan.

Both have been diagnosed with advanced prostate cancer, yet the disease is curable if detected in its early stages.

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Sir Chris Hoy and Dermot Murnaghan on facing cancer

Former prime minister David Cameron has also backed the campaign for screening this week after revealing he had been treated for the cancer.

The committee will decide whether new research has tipped the scales in favour of screening older men, or whether to target only those at higher risk, such as black men and those with a family history of the disease.

The case for…

Lithuania is currently the only country to screen all men aged 50-69 with a blood test for PSA, a protein released by prostate cells.

A low level is normal. But levels can rise steeply in men with cancer.

A recent study showed that regular PSA testing of men over 50 could reduce deaths by 13%.

That’s about the same survival benefit of breast screening.

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Cameron treated for prostate cancer

…and the case against

But the PSA blood test isn’t completely reliable.

One in seven men with prostate cancer actually have a normal PSA level.

And even those with a high level may have a cancer that is so slow growing that it’s just not a threat.

That’s why the National Screening Committee has warned in the past that PSA screening could lead men to have surgery or other treatment that they don’t actually need. Treatment can result in incontinence or impotence.

But the evidence has moved on.

These days men with a high PSA should have an MRI scan of their prostate, which significantly reduces the risk of unnecessary treatment. And the treatment itself is getting safer.

But the committee may judge that the risks and benefits of screening all men in their 50s and 60s are still too finely balanced to give the go-ahead.

They may wait for results from the Transform trial, which has just been launched and will compare different screening strategies. That could take many years.

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‘When I was diagnosed, it was too late’

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U-turn over unfair dismissal policy

But campaigners are hopeful that the committee will recommend the screening of men at higher risk of prostate cancer in the meantime.

Black men have twice the risk of those from other ethnic groups.

Men whose father or brothers have had prostate cancer are two and a half times the risk.

And there is also an increased risk for men whose mother or sisters have had breast or ovarian cancer.

Roughly 1.3 million men fall into one of the risk groups.

But identifying and inviting them for screening could prove tricky. GPs don’t always note a patient’s ethnicity in their medical records, and they would usually only know about a patient’s family history if they have been told.

If the committee recommends screening in some form, it is likely to go out to a public consultation before landing on the desk of Health Secretary Wes Streeting for a final decision.

Ultimately, it is his call whether at least some men are screened for what is now the most common cancer in England.

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