“Rachel Reeves will unveil £15bn of extra benefits spending in this week’s Budget, funded by a tax raid on the middle classes. The Chancellor will end the two-child benefit cap in its entirety and increase benefit payments by nearly 4 per cent, while financing about-turns on winter fuel cuts and welfare reform. She will also drag an estimated nine million people into paying higher rates of income tax by freezing thresholds in a move critics argue breaks Labour’s election manifesto pledges. The annual cost of the four policies comes to £15bn, which, added to changes in Ms Reeves’s 2024 Budget, amounts to an extra £18bn to the benefits bill since Labour took power last year, according to Telegraph analysis. The plans have fuelled warnings that the Treasury is “vulnerable” to a market backlash unless the country’s public spending, which is being pushed up by welfare bills, is controlled. But Sir Keir Starmer is under pressure to keep Labour MPs onside amid speculation about plots against his leadership, with fewer than one in five voters supporting his party in the polls. Writing in The Telegraph, Mel Stride, the Conservative shadow chancellor, argued that the Budget “welfare splurge” was being funded by “the very people who are already struggling” via tax rises.” – Daily Telegraph
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> Today:
“Rachel Reeves will hit more than 100,000 of Britain’s most expensive properties with a surcharge worth an average of £4,500 as she seeks to balance the books by increasing taxes on the wealthy. The chancellor has pared back plans for the property tax, increasing the threshold at which it applies from £1.5 million to £2 million to ensure that the most expensive properties are affected. Reeves plans to raise £400-£450 million from the levy, which will be collected through council tax bills. More expensive homes will pay significantly more. The Treasury is expected to use the existing council tax system as the basis for the charge by revaluing 2.4 million of the most valuable properties across bands F, G and H. More than 100,000 of the most valuable properties would be subject to the charge, which is expected to use an escalator with different bands depending on the value of the property… The government will allow people to defer paying the tax until they move house or die to avoid people having to sell up to cover the cost. The Times has been told that the Office for Budget Responsibility, the budget watchdog, has suggested that the plans could lead to a slowdown at the top of the housing market.” – The Times
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> Today:
“Kemi Badenoch will warn on Monday that Labour’s workers’ rights legislation will destroy Christmas jobs by putting firms off hiring seasonal workers. The Employment Rights Bill, drawn up with the trade unions and championed by Angela Rayner, contains a raft of changes such as the right to demand flexible working from day one and lower thresholds for launching strikes. Mrs Badenoch, the Conservative leader, will use a speech to the Confederation of British Industry (CBI) on Monday to intensify her campaign against what she calls “job-destroying” proposals. She will single out the bill’s provision to give employees regular, consistent hours and argue it could have the unintended consequence of slowing hiring for short-term jobs over the holidays. Mrs Badenoch will address the “de facto ban on seasonal and flexible work”. She will say: “If a university undergrad chooses to get a Christmas job and works 40 hours a week in the three weeks before December, they then have the right to those same hours in January, February and March. Great. Except there’s no demand then, and revenue falls off a cliff. A measure designed to ensure employment in January will effectively mean firms don’t hire in December and everyone loses. You know what happens then? Rational employers stop taking on seasonal staff at all. The farm does not hire the extra pickers. The hotel does not staff-up for the summer. The high street shop stops offering Christmas jobs. Those are the very opportunities that got many of us started. My first jobs were on the high street. Many people would have had their first job on a summer holiday or Christmas shift. We risk these opportunities disappearing.” The Tories have insisted that the package of measures undermines declarations by Sir Keir Starmer and Rachel Reeves, the Chancellor, that Labour is prioritising economic growth.” – Daily Telegraph
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