Rachel Reeves is set to hit thousands of Britain’s most expensive properties with a new levy as she prepares to lay out her highly anticipated Budget this week.
The chancellor is said to be targeting the wealthy with new taxes as she hopes to balance the books with a series of measures to be announced on Wednesday.
A new levy could be applied to some of the most valuable homes, known as a “mansion tax”. The move would reportedly revalue some of the most valuable properties across council tax bands F, G and H and hit 100,000 of them with a new surcharge.
The mansion tax was being suggested as a 1 per cent levy on properties worth £2m or more, but there is an expectation that it may be set much lower at a maximum of £5,000 because of concerns about the London housing market.
It is one of a series of wealth taxes Reeves is set to unveil to fill the spending black hole in her budget with other measures expected to include a profits tax on gambling companies demanded by former PM Gordon Brown, and a levy on bank profits.
Key Points
- Rachel Reeves set to hit thousands of properties with new mansion tax
- When is the Budget?
- OBR to 'downgrade growth forecasts for every year of this parliament'
- Minister apologises for Budget speculation
- CBI warns businesses are ‘not just a resource to be taxed when the going gets tough’
- Editorial: After all the hype and confusion, Reeves’s Budget must deliver clarity, stability and direction
The Independent’s Whitehall Editor Kate Devlin reports:
Business secretary Peter Kyle has told the CBI conference in London there are “some reasons for optimism” about the economy.
These include a number of long term reforms.He suggested the UK’s planning changes that would, for instance, support Heathrow expansion.
He also named the UK’s post-Brexit reset deal with the EU, although the fine print of that has yet to be agreed, as well as the expanded global talent visa.
He also told British businesses: “I am relentless. My whole life I have never accepted no for an answer”.
His dyslexia had taught him, he said: “If you are bloody minded and have a bloody minded determination to get things done - it works”.
“I am determined to fight for you - British businesses every day”.
Analysis: Business is running out of patience with Labour
10:24 , Athena StavrouThe Independent’s Whitehall Editor Kate Devlin reports:
Before the last election Labour was seen as the party of business - a key change that helped it win a landslide victory last summer.
Those days have gone.
At the CBI conference in central London today it is clear that businesses are losing patience with, and faith in, the Labour government.
“Lasting reform takes partnership not a closed door” the boss of the CBI told delegates, but her message was really for ministers.
Peter Kyle addressing business leaders
10:17 , Athena StavrouBusiness secretary Peter Kyle is speaking at the Confederation of British Industry (CBI) this morning ahead of the government’s crunch Budget on Wednesday.
He insisted the government’s priority “is and remains” economic growth.
He also acknowledged that this government “gets where [businesses] come from”, said he wants to “turn the corner” on “low, slow, uneven growth” in Britain.
CBI boss warns Labour that businesses are ‘not just a resource to be taxed when the going gets tough’
10:10 , Athena StavrouThe Independent’s Whitehall Editor Kate Devlin reports:
The CBI is holding its annual conference a year on from when Rachel Reeves told the same event she would not be coming back for more large taxes after her first Budget.It has not worked out like that.
The chancellor is widely expected to increase levies on Wednesday as she scrambles to fill a multi-billion pound black hole in the nation’s finances.
Opening her conference the CBI boss Rain Newton-Smith warned the government that businesses are“not just a resource to be taxed when the going gets tough”.
Ouch.
Farmers take to roads across UK in Day of Unity protests ahead of Budget
10:03 , Athena StavrouMinister to address business leaders ahead of Budget
09:53 , Athena StavrouBusiness secretary Peter Kyle is set to speak at the Confederation of British Industry (CBI) this morning ahead of the government’s crunch Budget on Wednesday.
Mr Kyle will lay out plans to cut the cost of energy bills for companies.
But the speech comes almost exactly year after Rachel Reeves addressed the CBI - where she told them her 2024 Budget was a extraordinary and she was “not coming back with more borrowing or more taxes”.
However, it now seems the chancellor will not be keeping her word on this as she prepares to unveil a series of measures to balance the books.
OBR to 'downgrade growth forecasts for every year of this parliament'
09:35 , Athena StavrouThe Independent’s political correspondent Millie Cooke reports:
Britain's fiscal watchdog will reportedly downgrade its economic growth forecasts for every year of the rest of this parliament when the chancellor announces her Budget this week.
The news will come as a major blow to the Labour government, which has put economic growth at the centre of its plan for Britain.
Rachel Reeves will deliver her Budget on Wednesday after a whirlwind of speculation and leaks about which taxes she will hike to help balance the books.
The OBR will publish its latest forecasts following the chancellor’s Budget speech, with sources telling Sky News that it will downgrade its growth forecasts for 2026 and for the remaining years of the current parliament.
The watchdog was already expected to downgrade its official productivity forecasts, leaving a gap in the public finances of around £20bn.
Ms Reeves is poised to raise taxes in an effort to bridge the multibillion-pound gap in her spending plans and rescue Britain’s ailing public finances.
What is a mansion tax?
09:19 , Athena StavrouThe rumours around a mansion tax are one of many that have hit the headlines ahead of the chancellor’s speech on Wednesday.
The chancellor has reportedly scaled back plans for a property tax but is now expected to apply a tax to homes worth more than £2 million in a move which could raise between £400m and £450m for the Treasury.
Some 2.4 million properties in the top three council tax bands - F, G and H - will be revalued to determine which will be subject to the surcharge, which will be worth an average of £4,500, according to The Times.
People will be able to defer the cost until they die or move house to avoid forcing them to sell up, according to the newspaper.
Earlier reports had suggested that a mansion tax would apply to homes worth more than £1.5million and would have pulled tens of thousands more households in. But The Times reports that the threshold has been raised amid concerns it could affect those who are “asset rich and cash poor”, particularly in London.
Full story: Reeves to hit 100,000 high-value properties with mansion tax in Budget
09:07 , Athena StavrouRachel Reeves could hit more than 100,000 high-value properties with a mansion tax at this week’s Budget as she seeks to raise money to fill her financial blackhole.
The Independent’s political correspondent Caitlin Doherty has the full story:
Reeves to hit 100,000 high-value properties with mansion tax in Budget
Minister insists 'life will get better' off back of Labour growth
08:58 , Athena StavrouBusiness Secretary Peter Kyle insisted “we can break out of this cycle of high tax and low growth” and “things are getting better in our country”.
He told BBC Breakfast: “We’re trying to make sure that we reassure people that we are going to get a grip on the basics.
“We understand where people are at the moment.
“Things are getting better in our country. We are investing in our public services. We are laying the foundations for economic growth, and that matters to people, because economic growth in our country means that people can do more next year than they could this year – better holidays, they can spend more with their families and on their families, life will get better.
“That’s why growth is so important. We know it means a lot to people, so we are doubling down on those measures.”
He added: “We need to do more of it so we can break out of this cycle of high tax and low growth.”
When is the Budget?
08:51 , Athena StavrouRachel Reeves will deliver her highly anticipated Budget this week.
The chancellor will make her statement in the Commons on Wednesday 26 November.
She will begin after PMQs, which usually finishes at around 12:30pm.
Editorial: After all the hype and confusion, Reeves’s Budget must deliver clarity, stability and direction
08:41 , Athena StavrouBritain deserves more than mixed messaging and policy drift.
After weeks of premature proposals, the chancellor must deliver a Budget that provides the confidence and coherence so far lacking in both her stewardship and Labour’s broader economic direction.
Read The Independent’s editorial here:
After all the confusion, Reeves’ Budget must deliver clarity, stability and direction
Freezing tax thresholds will 'break the letter' on Labour manifeso
08:40 , Athena StavrouHelen Miller, director of the influential think tank the Institute for Fiscal Studies, said freezing the income tax threshold would “break the letter” of Labour’s manifesto.
“Assuming that it’s done the same way that it’s been done so far, it will also be a freeze in national insurance thresholds.
“It will therefore also be an increase in national insurance, and if so, in my mind, it would also break the letter of the manifesto, which said no increase in national insurance,” she told The Westminster Hour on BBC Radio 4.
Minister apologises for Budget rumours
08:36 , Athena StavrouRachel Reeves set to hit thousands of properties with new mansion tax
08:36 , Athena StavrouRachel Reeves is set to hit thousands of Britain’s most expensive properties with a new levy in her Budget.
A new tax could be applied to some of the most valuable homes, known as a “mansion tax”. The move would reportedly revalue some of the most valuable properties across council tax bands F, G and H and hit 100,000 of them with a new surcharge.
The mansion tax was being suggested as a 1 per cent levy on properties worth £2m or more, but there is an expectation that it may be set much lower at a maximum of £5,000 because of concerns about the London housing market.
