Key events
But on the Labour benches, they did have to queue up early for a seat, Kate Ferguson from the Sun on Sunday says.
Labour MPs were queueing up from 830am this morning to get a good seat on the green benches to see Rachel Reeves’ first budget. That is 3 hours before doors open and 4 hours before the Budget I’m trying to find out who was the keen bean at the front of the queue
MPs can reserve a seat in the chamber by inserting a prayer card at the start of the day. They don’t have to sit there for three hours.
This is from John Crace, the Guardian’s sketch writer, who is in the press gallery watching the Commons chamber fill up ahead of PMQs and the budget statement.
There’s an advantage in having only 121 seats. Tory MPs don’t have to rush in early to secure a seat for the budget
Keir Starmer is taking PMQs before the budget statement. Here is the list of MPs down to ask a question.
Graeme Wearden
UK government borrowing costs are continuing to drop away from the pre-election highs hit last night.
Analysts suggest we may see a relief rally as the uncertainty surrounding the budget fades today.
Kathleen Brooks, research director at brokerage XTB, says the UK’s 10-year Gilt (government debt) is outperforming its European counterparts, adding:
Is this a sign that the bond market will welcome the fiscal shake up that is set to be announced later today? We could traders see ‘sell the rumour and the buy the fact’ in the UK Gilt market, once the uncertainty of the Budget is out of the way.
The yield (effectively the interest rate) on 10-year UK government debt is now down to 4.22%, down from 4.3% last night [yields fall when bond prices rise].
That takes yields back to levels seen last week, before the Guardian reported that Reeves plans to change the UK’s debt rules, to target public sector net financial liabilities (PSNFL), allowing her to borrow more money within the fiscal rules.
But as Brooks points out (and journalists often forget), government bond yields move for many reasons – geopolitics, interest rate forecasts, and moves in the wider bond market are all factors influencing how much a return a bond investor wants for buying debt.
Brooks says:
Gilt yields have moved in line with their peers in recent weeks, as global bond markets have been shaken up by major elections and new governments with vastly different fiscal plans to their predecessors.
There has also been a larger focus on rising sovereign debt piles in the West. Thus, Rachel Reeves’ fiscal plans cannot be solely blamed for rising UK bond yields [in recent weeks].
While the broad outlines of the budget are already clear, there is a lot of detail yet to be revealed. Mike Brewer, interim chief executive at the Resolution Foundation thinktank, has posted a short thread on social media saying what he will be looking out for.
Spending: General point is that Hunt’s baselines were so tight that any increase won’t necessarily feel like a big splurge. We’ll hear about the envelope for 2026 to 2029, but how tight will 2025-26 be esp outside NHS?
Fiscal and investment: If it’s P-SNFL, how much of new headroom will be spent? and where will that leave investment spending? Is there a convincing 10-year plan?
PSNFL is public sector net financial liabilities, the new definition of debt being used in the fiscal rules.
On tax (1):
How much is employer NI going up, what is happening to thresholds, and what is Govt doing about public sector? Will a rise worsen the tax bias in favour of employer pension contributions?
Fuel duties – petrol is v cheap, but seems a rise is not certain.
On tax (2): what exactly is the package for carried interest, other aspects of CGT, and Inheritance Tax?
On welfare: looks like being a tough Budget, with pressure on DWP to find savings to unlock spending elsewhere. What is the uprating decision, and will we see a change to Local Housing Allowance or the two child limit?
Sally Weale
Nurseries have raised concerns about the impact of the 6.7% increase in the national minimum wage on their salary bill, warning it will have “a huge bearing” on the sector’s ability to deliver the government’s expansion of funded childcare next year.
Early years staff are among the lowest paid in the workforce, and the National Day Nurseries Association (NDNA) said it was right their pay should go up to take into account inflation and the rising cost of living.
Purnima Tanuku, CEO of the NDNA, warned however:
This substantial hike in minimum wages will mean that early years providers have a much bigger salary bill from April 2025.
To deliver the expansion of early education and care places, the sector needs to recruit another 35,000 staff. However, if funding rates do not keep pace with rising wages, it will be impossible for providers to meet demand.
With the government estimated to be buying 80% of all childcare hours from nurseries next year, it’s critical that the sector’s biggest customer pays a fair rate.
Ministers have committed to funding increases linked to inflation, statutory wage rises and average earnings, so they need to meet this commitment when funding rates are published later this year.
Pictured: Reeves with the budget red box outside 11 Downing Street this morning.
Rachel Reeves and her Treasury team have posed for the traditional budget photo outside 11 Downing Street.
According to Arj Singh in the i, the budget will contain measures to stop the Home Office routinely using the aid budget to pay for hotels for asylum seekers. There will be “a review mechanism to ensure the overseas development aid (ODA) budget is better protected from overspending on asylum”, he reports.
The Green MPs Carla Denyer and Siân Berry joined protesters outside Downing Street today saying the government should be introducing a wealth tax. The photocall was organised by the pressure group Green New Deal Rising. Zak Coleman, one of its campaigners, said:
Young people in this country have endured years of Tory austerity, watching our public services collapse and the climate crisis intensify. Today’s Labour budget is a chance to change direction – but we need more than half-measures. While loosening fiscal rules and raising some wealth taxes are steps forward, they don’t go far enough to confront the deep crises we face.
If Labour is serious about securing a just, green future, it’s time to commit to bold solutions. A 2% tax on extreme wealth, targeting those with fortunes over £10 million, could raise £24 billion – a lifeline for rebuilding public services, creating secure jobs, and ensuring a sustainable planet. Young people deserve a government that meets this moment with the scale of solutions that are needed.
Green New Deal Rising says a 2% tax on assets over £10m would raise £24bn a year for investment in public services and the green transition.