Budget 2024 latest news: ‘Big and difficult choices’ warns Wes Streeting as tax threshold freeze not ruled out

Public services including the NHS and local councils are struggling across the UK, as they grapple with an ageing population, backlogs caused by the pandemic, and the aftermath of the coalition-era austerity programme.

Labour has brokered a pay deal for a swathe of public servants after several years of industrial action, a spending commitment worth £9 billion by some estimates.

Ms Reeves has also claimed the previous Conservative government did not account for the costs of some of its promises, which now need to be met or scaled back.

These commitments, alongside keeping the Government’s ongoing costs “standing still”, made up the so-called £22 billion “black hole” in the public finances which Labour said it needs to fill.

However, Ms Reeves is said to have since identified a far larger £40 billion funding gap which she will seek to plug to protect key departments from real-terms cuts and put the economy on a firmer footing.

The wider benefits of scrapping the two-child limit such as the future earnings potential of young people who avoid poverty as a result are being ignored, a think tank has said.

Prime minister Sir Keir Starmer has faced pressure, including from some of his own Labour MPs, since being elected in July to scrap the controversial Conservative policy but has insisted he cannot do so in the current economic climate.

The New Economics Foundation (NEF) said its UK-wide analysis suggests that retaining both the two-child limit and the benefit cap – which a number of campaigners have said should also be axed – could see almost half (49.4%) of families with three or more children living in relative poverty after housing costs by the end of this Parliament five years from now.

Scrapping both from April 2025 could cost the Government £2.5 billion a year, rising to £3.5 billion by 2029/30, the organisation said.

Much of these costs are taken up by the two-child limit at £1.9 billion and £2.6 billion respectively, the NEF said, but it argued this would be “significantly offset by short, medium and longer-term economic gains”.

Liberal Democrats deputy leader Daisy Cooper said the party will oppose the increase of national insurance contributions for employers, if the rumoured policy is in the Government’s Budget later this month.

The party’s Treasury spokeswoman said she was worried about the impact on care providers, which could send some from a state of “crisis to collapse”.

Speaking to Trevor Phillips on Sky News, Ms Cooper said: “I think we are deeply uncomfortable about that proposal.

“One of our concerns in particular is that there are many very small care homes and small care providers around the country, and they… are on the cliff edge as it stands.

“If the Government were to put up employer contributions, particularly for these small businesses, for these small care homes, I think we might see many of them go from a state of crisis to a state of collapse with no choice but to close their doors.”

She went on to say: “The rumour as it stands is that the Government intend to raise the national insurance contributions on all companies, irrespective of whether they’re small or large… I think we probably end up having to vote no against that.”

Scotland’s First Minister will use a speech on Monday to urge the Chancellor to increase spending, as he said the Budget presents a “make or break moment” for the UK.

First Minister John Swinney is expected to make his most outspoken intervention on the budget and push the Chancellor to invest in public services.

Speaking at an event in Edinburgh on Monday in front of academics, think tanks and representatives of the private, public and voluntary sector, the First Minister is expected to describe the past seven years – which has seen Brexit, the pandemic, the war in Ukraine and the subsequent energy price and inflation hikes – as a “long, dark economic winter”.

He will add: “What is needed now is a collective commitment to public investment for economic renewal, investment that will allow us to move into an economic spring, with new growth, new opportunities and new hope.”

Wes Streeting said he had reached a deal on NHS funding with the Chancellor, but could not fix the problems of the last 14 years in one Budget.

Asked about potential funding increases at the Budget, the Health Secretary told Sunday Morning With Trevor Phillips: “I’m not going to get into specific figures.

“I’ve settled with the Chancellor, but we are not going to fix 14 years in one Budget.”

He also stressed the need for reform as well as investment in the NHS, saying he was “conscious” that money spent on health was money that could not be spent in other areas.

He added: “There isn’t a single part of Government and the public sector where there aren’t real crises.”

Wes Streeting has refused to rule out that the Government will freeze income tax thresholds in the upcoming Budget.

Mr Streeting had previously voted against the measure in opposition while Rishi Sunak was prime minister.

Speaking on Sunday Morning With Trevor Phillips on Sky News, Mr Streeting said: “I’m not going to speculate on what the Chancellor might do in the Budget.

“If you’re asking me whether I would vote against anything in the Chancellor’s Budget? The answer is no, of course I’m not going to do that.”

He went on to say: “This country is paying a heavy price for Conservative failure, and we’re going to have to make some big and difficult choices in this Budget to make sure we fix the foundations of the economy and we don’t end up back here.”

He later added: “What we’re not going to do is duck the difficult decisions, have Government by gimmick, short-term sticking plasters, because that is exactly how we ended up in this situation.”

Rachel Reeves is considering raising the tax on vaping products in the upcoming Budget as figures lay bare how many children access them in the UK, The Guardian reports.

The tax on vaping products was originally announced by the Conservatives in March, to come in to force in 2026. It is now understood that Ms Reeves could look to increase this.

Under current plans, the new rates from April 2026 will range from £1-3 per 10ml of liquid, depending on nicotine level.

Chancellor Rachel Reeves will deliver Labour’s first Budget on Wednesday 30 October.

Each year, the chancellor of the exchequer – who is in charge of the government’s finances – makes a Budget statement to MPs. .

The speech outlines the government’s plans for spending and taxes.

The Budget speech usually starts around 12:30pm and lasts about an hour. The Independent will be bringing you all the latest updates on the big day.

Ms Reeves may be considering pushing the freeze beyond its current expiry date of 2028 in a move that could raise £7 billion, according to the Financial Times.

Other measures reported to be under consideration include increasing employers’ national insurance contributions, raising fuel duty for the first time since 2010, changes to rules on inheritance tax and stamp duty, and a levy on e-cigarettes, according to reports across the media.

The Treasury has so far declined to comment on Budget speculation.