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Politics latest: Reeves refuses to rule out manifesto-breaking tax rises in the budget

The chancellor used a speech in Downing Street to suggest she would hike taxes in later this month, telling voters "each of us must do our bit". She did not rule out increasing income tax, VAT or national insurance - something Labour promised not to do.

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Tories join calls for trainworker in Peterborough incident to get award

We reported earlier that Lib Dem leader Sir Ed Davey wanted Samir Zitouni to get a medal from the government.

Zitouni was a member of staff on the train on Saturday who helped protect people while an alleged knife attack took place, and is still in hospital.

Richard Holden, the Conservative shadow transport secretary, is now calling for Zitouni to get a gong.

In a letter to the Honours and Appointments Secretariat, Holden wrote: I am writing to request Mr Samir Zitouni, an employee of London North Eastern Railway (LNER) be considered for recognition through the UK Honours system for acts of selfless and outstanding bravery."

He added: "Mr Zitouni sustained life-threatening injuries during the attack and remains in hospital.

"Despite this, the accounts given by passengers, police, and colleagues make clear that his actions were intentional, self-sacrificial, and taken in full awareness of the danger he faced. BTP have publicly described his conduct as 'nothing short of heroic'."

Holden finished the letter: "His conduct clearly exceeds the threshold for recognition for a gallantry award, and I respectfully ask that his case be urgently considered."

One tax rise in particular will be seen as a broken promise if Reeves makes it, polling suggest

With all the talk around the budget now mentioning tax rises - and Labour promising they wouldn't do so in the election campaign - it is unsurprising to see polling companies ask the public for their thoughts.

That's just what YouGov has done, surveying 2,109 people last week.

What they found was that 69% of people think raising income tax at the lowest band - below £50,270 - would be considered a broken promise.

This falls to 45% thinking it's a broken promise if the £50,270 to £125,140 band is increased, and 34% for the highest band.

A YouGov spokesperson said: "It is worth noting that relatively high numbers of people - 27% to 36% - answered 'don't know' to these questions, and this is even more the case for the alternative proposals for adjusting tax rules that have been trailed in the papers."

They added: "When it comes to those voters who backed the government last year, there is more willingness to see these measures as technically within the spirit of Labour's promises. 

"This is particularly the case when it comes to raising tax on the highest earners, which 46% of 2024 Labour voters say would not be a broken promise."

Unsurprisingly, higher earners are less fond of tax rises for higher income bands, polling found.

Older people are also more likely to have a dim view of tax rises - although a sizeable chunk of younger voters fall into the "don't know category" than actively backing higher rates.

Why Chancellor Rachel Reeves chose 'shock and awe' 8am news conference

To understand why Rachel Reeves stood up at 8am in Downing Street in an unprecedented news conference to foreshadow the budget, you need to understand the depth of the problems facing the chancellor.

In 22 days, she must perform the biggest U-turn it is possible for a chancellor to make.

She must hike taxes to the tune of tens of billions of pounds, having promised in the election manifesto that this would not be necessary, and reiterated this promise under a year ago after an initial £40bn of rises.

Not many inhabitants of Number 11 would stay in post if they had to make such a pivot.

But Sir Keir Starmer cannot lose her and know for sure that he also stays in place.

So Ms Reeves is battling for her credibility - and ultimately the survival of this government. The stakes are high.

So back to this morning. Ever since the summer, those in Westminster have known tax rises are on the way in the autumn budget. A Treasury source told me that pitch-rolling for the budget began in July - yet their issue is that to date, almost no-one had noticed.

Davey calls for train attack victims to receive bravery medal

The Liberal Democrats have called for two people injured in an alleged knife attack on a high-speed train to receive medals for bravery.

Sir Ed Davey has said that Nottingham Forest fan Stephen Crean and rail worker Samir Zitouni should both receive the George Cross, the highest honour for gallantry for civilians.

The medal is seen equal in stature to the Victoria Cross, the highest medal for members of the military.

 Davey said: "Samir Zitouni and Stephen Crean are heroes who saved lives. 

"They showed the best of Britain: putting themselves in harm's way to protect others.

"They both deserve the George Cross in recognition of their incredible bravery."

It follows a mass-stabbing on a high-speed train in Cambridgeshire on Saturday, which saw 11 people injured. 

Both men played roles in stopping the alleged attacker and both were stabbed in the process.

Zitouni remains "critically unwell" but is now stable in hospital, while Crean is home but now needs plastic surgery.

Anthony Williams has been charged with 11 counts of attempted murder over the mass stabbing.

Is the chancellor saying she will raise taxes?

Has the chancellor been telling the public that she'll be raising taxes? 

That's the question our political editor Beth Rigby has been asking, as she analysed Rachel Reeves's speech this morning, which addressed the UK's economic situation ahead of the budget on the 26 November.

As Beth points out is that decisions are "yet to be made", with more forecasts from the Office for Budget Responsibility (OBR) to come, and 22 days to go,

But she suggests that Reeves has now firmly shown "is the direction in which she is going".

Watch her analysis in full below.

Chancellor told not to hike taxes on businesses ahead of autumn budget

The British Chambers of Commerce has said it agrees with Rachel Reeves's "ambition to grow the economy, reduce inflation and boost productivity" - but warned to not raise any more taxes on private companies. 

Jonny Haseldine, from the BBC, said none of the chancellor's goals are possible if "costs continue to pile up on firms".

Reacting to the chancellor's speech this morning - widely seen as a public warning that taxes are coming - Haseldine added: "Our message is clear – no more tax on business. 

"The chancellor spoke this morning about choices. Hitting firms in the pocket once again would be the wrong choice.

"Our latest research shows business confidence and investment levels continue to suffer. 

"A fifth of firms are expecting lower turnover for the next year, and a quarter have scaled back investment plans."

Instead, he called on Reeves to use the budget to boost trade, tackle the skills problem and turbocharge infrastructure. 

He added: "Firms across the UK are already feeling bruised and many are struggling to keep their heads above water.

"November 26th is a make-or-break moment for British business – the budget must deliver."

Chancellor's speech about 'setting out the broad context', says Downing Street

Rachel Reeves's speech was about "setting out the broad context", Downing Street has insisted.

A Number 10 spokesperson today was aksed why the chancellor did not explicitly use the phrase "tax rises" during her speech this morning, ahead of the budget later this month. 

But they responded: "I think the chancellor has been clear this morning that she is not going to get ahead of the budget in a few weeks' time.

"That will be set out then and not beforehand. 

"But as I say, this morning was about setting out the broad context for that budget. As she said, the public can see the challenges that we face."

Given the lack of any significant policy detail, the spokesperson was asked what the point of the speech was then. 

They responded: "The chancellor said she'd be upfront with the public about the problems facing government, and that's exactly what she did.

"People deserve to know about the economic choices we have to take, and why we have to take them," they said.

"That's what she set out this morning."

PM tells cabinet that Reeves's budget will be a 'very significant moment'

 The cabinet has met this morning following the speech by Rachel Reeves, ahead of the budget later this month.

We've now been given a read-out, sharing a little of what was discussed between the PM and his ministers. 

Sir Keir Starmer began by thanking the chancellor and backing her approach, warning that further borrowing would "not mean money going to teachers, nurses or doctors, but to hedge funds".

He also said the government would not do "down the road of austerity", and said previous governments had done this, but this had "made things worse".

The PM also said the upcoming budget on 26 November will be "a very significant moment".

Responding to those remarks, Rachel Reeves thanked the PM and said "she had been clear she would not repeat the mistakes of the past".

The chancellor said sticking by her fiscal rules would build trust in the UK again, but this means taking the "right decisions" at the budget.

The culture secretary then updated the cabinet on the government's national youth strategy, saying there hasn't been one for more than two decades. 

The read-out says that Lisa Nandy said it was "striking that young people were the most digitally connected yet most isolated generation in history, making Britain an outlier internationally".

Nandy warned that many young people have "retreated to their bedrooms, creating a perfect storm of isolation".

The minister also pledged to be the first government to make a "tangible difference" by offering young people things to do and places to go, such as through sporting bodies.

Finally, Wes Streeting gave an update on the health service and said it is finally "on the road to recovery".

Finally, the health secretary said that while there are challenges ahead with winter approaching, "a lot had been done and there was a lot more to do".

Badenoch insists voters trust the Tories - and says Reeves must 'admit she's got things wrong'

Kemi Badenoch has insisted that people do trust the Conservatives - and has hit out at Rachel Reeves.

Speaking to our political editor Beth Rigby, the Tory leader said it's "quite clear that the public are distrustful of all politicians with the economy".

But she insisted that "they trust us more than anybody else".

The Tory leader spoke to Paste BN following a speech in which she pledged to "get Britain working again".

Badenoch also:

  • Said that "if Labour had been in charge [during the pandemic], we'd still be in lockdown"
  • Admitted that the Tories "got things wrong", but said she doesn't "have a time machine to go back into the past"
  • Questioned when Reeves will "admit that she's got anything wrong"
  • Defended the triple lock on pensions

You can watch the full interview below.

Which taxes could Rachel Reeves raise?

Labour promised at the 2024 general election that it would not raise income tax, national insurance, or VAT.

But Rachel Reeves delivered a speech from Downing Street in which she all but hinted that she may have to do just that in order to fill a "black hole" of tens of billions of pounds in the public finances.

So how much would raising those taxes bring in for the Treasury?

According to the independent Institute for Fiscal Studies (IFS), if the chancellor were to break her own manifesto pledges, here is what she could raise.

  • Income tax: Increasing all rates of income tax by 1p could raise an estimated £10.9bn a year by 2029-30.
  • National insurance: A 1p increase could raise £8.5bn a year by 2030.
  • VAT: Increasing the main rate by one percentage point could raise £9.9bn a year by 2029-30.

Watch: Beth Rigby on the chancellor's 'unprecedented' speech

What are the chancellor's other options?

Influential Labour think tank the Fabian Society has urged Reeves to raise £12bn by extending the freeze on income tax thresholds for another two years, after it is set to end in 2027/28 - something she committed to at last year's budget.

The IFS has also said funding could be raised in the following ways:

  • Adding a council tax surcharge on the most expensive properties: £4.4bn.
  • Scrapping the inheritance tax allowance on passing on a property to a descendant: £6bn.
  • Ending forgiveness of capital gains tax at death: £2.3bn.

Watch: Sam Coates on the chancellor's tax warning

Other options include:

  • Imposing national insurance on limited liability partnerships (LLPs) - a type of business used by lawyers, GPs and accountants to be considered self-employed - to raise £2bn;
  • Making landlords - who only currently pay income tax - pay national insurance;
  • A cap on the amount of money that can be gifted to someone tax-free, potentially of around £100,000;
  • An extension on the amount of time between a gift and the giver's death before inheritance tax has to be paid from seven to 10 years;
  • Cutting the tax-free ISA limit from £20,000 to £10,000 per year;
  • A new tax on the sale of homes worth more than £500,000 to replace stamp duty;
  • Increasing fuel duty from 1p to 2p per litre;
  • Increasing gambling taxes - suggested by the Institute for Public Policy Research (IPPR) think tank and backed by Gordon Brown - which would earn the Treasury about £3.2bn extra a year;
  • An annual 1% charge on the amount a property's value exceeds £2m - a £10,000-a-year levy for homes worth £3m;
  • Charging capital gains tax when selling a home on the increase in value since it was purchased - although reports suggest this would only be applied to the most expensive properties.

There are many options for the chancellor, but none are likely to make the public happy.