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Sky News
an hour ago
- Business
- Sky News
Jobless rate above predicted peak as budget tax hikes kick in
The UK's jobless rate ticked up to 4.6% in April while payrolled employment has fallen sharply since, according to official figures covering the period when budget tax hikes on businesses came into effect. The Office for National Statistics (ONS) said the new unemployment rate covered the three months to April. It had previously stood at 4.5% - a total of more than 1.6 million people. At 4.6%, it is above the peak level predicted for this year, just in March, by the Office for Budget Responsibility. Figures from the taxman also highlighted by the ONS showed the number of people in payrolled employment during May fell by 109,000 - double April's revised figure of 55,000. The ONS Labour Force Survey data was the first to cover April's rises in employer national insurance contributions and the national living wage - hikes to costs for businesses which lobby groups had warned would result in job losses, price rises and lower wage settlements. The ONS figures showed average weekly earnings, excluding the effects of bonuses, over the three months to April were down from 5.6% to 5.2% year on year. Despite the easing, that level remains comfortably ahead of the 3.5% rate of inflation but will be welcomed by the Bank of England as its rate-setters continue to fret that strong wage growth represents an inflation risk ahead.
Yahoo
2 hours ago
- Business
- Yahoo
Jobless rate above predicted peak as budget tax hikes kick in
The UK's jobless rate ticked up to 4.6% in April while payrolled employment has fallen sharply since, according to official figures covering the period when budget tax hikes on businesses came into effect. The Office for National Statistics (ONS) said the new unemployment rate covered the three months to April. It had previously stood at 4.5% - a total of more than 1.6 million people. At 4.6%, it is above the peak level predicted for this year, just in March, by the Office for Budget Responsibility. Figures from the taxman also highlighted by the ONS showed the number of people in payrolled employment during May fell by 109,000 - double April's revised figure of 55,000. The ONS Labour Force Survey data was the first to cover April's rises in employer national insurance contributions and the national living wage - hikes to costs for businesses which lobby groups had warned would result in job losses, price rises and lower wage settlements. The ONS figures showed average weekly earnings, excluding the effects of bonuses, over the three months to April were down from 5.6% to 5.2% year on year. Despite the easing, that level remains comfortably ahead of the 3.5% rate of inflation but will be welcomed by the Bank of England as its rate-setters continue to fret that strong wage growth represents an inflation risk ahead. This breaking news story is being updated and more details will be published shortly. Please refresh the page for the fullest version. You can receive Breaking News alerts on a smartphone or tablet via the Sky News App. You can also follow @SkyNews on X or subscribe to our YouTube channel to keep up with the latest news.
Metro
18 hours ago
- Business
- Metro
Seven key things that will be decided in Rachel Reeves' spending review
This Wednesday is going to be one of the most important days for Keir Starmer's government since they took over power almost a year ago. The words 'comprehensive spending review' might not suggest edge-of-your-seat excitement, but the decisions announced by Chancellor Rachel Reeves will have a massive impact. She will be setting out the budgets for different government departments until 2030 – making it clear to the public where her priorities lie. After last year's budget, we've become used to the language of 'difficult choices'. Think of the changes to the winter fuel payment and inheritance tax, both cited as ways to get the economy back on track. This time around, expect a new approach from the Chancellor. She'll be announcing billions of pounds to help ministers achieve what they want to. But while there will be high-profile winners, it's inevitable there will also be painful cuts to other areas of government. Craig Munro breaks down Westminster chaos into easy to follow insight, walking you through what the latest policies mean to you. Sign up here. That's because the spending review is not a budget: Reeves won't be announcing any changes to how the Treasury raises cash. She can only allocate the cash it has, or knows it is going to get. Health and social care is already comfortably the most expensive single item that the government spends money on. According to the Office for Budget Responsibility, the expected spend on health and social care for 2024/25 is £193.3 billion. But of course, it's not like the NHS is in an ideal state at the moment. It's expected that Health Secretary Wes Streeting will get a significant financial boost to his department to pay for his ambitious plans. Home Secretary Yvette Cooper is believed to still be in negotiations with the Treasury, barely 48 hours before the spending review is unveiled. That's because an increase in funding to areas like health, defence and education is expected to come at the expense of cuts to her already-stretched department. Yesterday, it was reported in the Sunday Times that police budgets were expected to receive a real-terms rise, but that's likely to mean other parts of the Home Office will face serious cuts. It's no secret that this government is keen to pour a significant amount of money into defence, with the main disagreement over how significant it should be. After last week's strategic defence review grabbed headlines, there's a question mark over whether Keir Starmer will accept Nato recommendations to raise his defence spending target from 3% of GDP to a massive 5% of GDP. Such a huge rise – in 2024, the UK spent 2.3% of GDP on defence – would, of course, force cuts to other parts of government. But even the existing commitments are causing a serious squeeze. The Chancellor's biggest announcement over the weekend was the science and tech budget, which will be £86 billion. Drug and battery technology will be among the areas set to benefit, while local leaders across the country will be sent cash to develop what are described as 'innovation clusters'. Expect to hear a lot about AI on Wednesday too – not just how it'll be funded for sectors around the country, but also how government department will be encouraged to use the shiny new tech. Alongside health and defence, education is expected to be one of the big winners from Wednesday's announcement. Last week, Education Secretary Bridget Phillipson revealed the expansion of free school meals for all pupils in families that receive universal credit, with the aim of tackling child poverty. In an interview with the Observer, Reeves said schools will get an additional £4.5 billion a year, which will go towards teachers' pay rises and reforms to Special Educational Needs and Disabilities (SEND) provision. Another major pre-spending review announcement last week was investment in buses, trams and local train infrastructure for England's city regions. There is also speculation one of the big projects included in the review may be a high-speed rail link between Liverpool and Manchester. More Trending However, the squeeze could mean plans such as the DLR and Bakerloo extensions in London may be scrapped and schemes like the bus fare cap could come under pressure. Like Yvette Cooper, Local Government Secretary Angela Rayner has also been locked into negotiations with the Treasury – though she reportedly reached an agreement yesterday. The government has very ambitious targets for housing over the next few years, and those plans could fall short if serious cuts are made. Greater Manchester Mayor Andy Burnham and London Mayor Sadiq Khan are among the local leaders who are asking for powers to introduce a tourist levy, though a source close to Khan said this looks unlikely. Get in touch with our news team by emailing us at webnews@ For more stories like this, check our news page. MORE: Government finally reveals who will get winter fuel payout after U-turn MORE: New solar panels 'could cut people's bills by £530 per year' MORE: Universal digital 'BritCards' on an app could soon be used to prove who you are
Glasgow Times
20 hours ago
- Business
- Glasgow Times
Rachel Reeves reveals changes to Winter Fuel Payments
Rachel Reeves has revealed the change which will see nine million pensioners in England and Wales receive payments this winter as all pensioners with an income of, or below, £35,000 a year will be eligible for the cash. The payments are devolved in Scotland but the Scottish Government will get an increase in funding as a result of the decision. The Scottish Government had already announced, last year, that every pensioner household in Scotland would receive a winter fuel payment in 2025. The UK Government's previous decision to limit it to only those on pension credit meant a £140m cut in Scotland and last winter 900,000 Scots pensioners missed out. The Chancellor and Prime Minister received a backlash after they made the changes that scrapped the payments for all but those on the lowest incomes last year. Reeves said the change extends eligibility to the vast majority of pensioners, with around 9 million, or more than three-quarters, benefitting. This threshold is well above the income level of pensioners in poverty and is broadly in line with average earnings, balancing support for lower income pensioners with fairness to the taxpayer The change will cost around £1.25 billion in England and Wales and see means-testing of the Winter Fuel Payment save around £450 million, subject to certification by the Office for Budget Responsibility compared to the system of universal Winter Fuel Payments. The costs will be accounted for at the Budget and incorporated into the next OBR forecast. The payment of £200 per household, or £300 per household where there is someone over 80, will be made automatically this winter. More than 12 million pensioners across the UK will also benefit from the Triple Lock, with their State Pension set to increase by up to £1,900 this parliament. Chancellor of the Exchequer Rachel Reeves said: 'Targeting Winter Fuel Payments was a tough decision, but the right decision because of the inheritance we had been left by the previous government. "It is also right that we continue to means-test this payment so that it is targeted and fair, rather than restoring eligibility to everyone, including the wealthiest. 'But we have now acted to expand the eligibility of the Winter Fuel Payment so no pensioner on a lower income will miss out. This will mean over three quarters of pensioners receiving the payment in England and Wales later this winter.' Approximately 2 million individuals in England and Wales over State Pension age have taxable incomes above £35,000.
Wales Online
20 hours ago
- Business
- Wales Online
Rachel Reeves makes statement after reversing Winter Fuel Payment cut
Rachel Reeves makes statement after reversing Winter Fuel Payment cut Reeves said there was still 'work to do to ensure the sums always add up' Chancellor of the Exchequer, Rachel Reeves Chancellor Rachel Reeves has made a statement after it was announced the cuit to the Winter Fuel Payment would be cut, meaning nine million pensioners will qualify this year. Rachel Reeves insisted she had 'listened to people's concerns' as she announced changes to the threshold for winter fuel payments. The Chancellor told broadcasters: 'From this winter, nine million pensioners will now receive winter fuel payments. It will be still means-tested, but at a higher level, we've listened to people's concerns around the level of the means test. 'Because of changes we've made and the stability we've brought back to the economy, we are able to increase that amount. We will set out in the normal way, in the budget, how everything is funded, but no-one should be in any doubt about my commitment to the fiscal rules to ensure that the sums always add up.' Reeves said there was still 'work to do to ensure the sums always add up'. The Chancellor told Sky News: 'The Office for Budget Responsibility increased the growth forecast for every other year in the forecast, they said that our reforms to the planning system would make the economy £6.8 billion bigger, bringing in additional tax revenue as well. 'And in the first quarter of this year, we were the fastest growing economy in the G7. There's still work to do to ensure that the sums always add up, but because of the decisions that we've made, because of the stability we've returned to the economy, we are now able to pay the winter fuel payment to more pensioners. Article continues below 'We're not going back to the universal system. I don't think it is right that the very richest pensioners have their fuel bills subsidised, but this year nine million pensioners will get the winter fuel payments.' Downing Street said an improved economy was the reason it could raise the threshold for winter fuel payments. The Prime Minister's press secretary said: 'We are confirming the changes now to give people certainty and ensure the payments can be received in time for winter. 'No pensioner will need to take any action as they will automatically receive the payment this winter. Targeting winter fuel payments was a tough decision, but it was the right decision. We inherited a £22 billion black hole from the Tories who lost control of the economy, leaving working people paying the price. 'We had to stabilise the economy with tough decisions and it's because of those tough decisions that the economy is beginning to improve. We've had the highest growth in the G7, four interest rate cuts in a row and real wage levels have risen by more since July 2024 than over the first 10 years of the previous Tory government.' She added: 'As the economy improves, we want to make sure that more people feel those improvements in their everyday lives. That's why we are acting to ensure that more pensioners are eligible for winter fuel payments going forward.' Some nine million pensioners in England and Wales will receive the winter fuel payment this winter, the Chancellor has announced. The payment, worth up to £300, will be restored to the vast majority of pensioners who previously received it because anyone with an income of under £35,000 a year will now get the payment automatically. Those with an income above this threshold will also receive the payment, but it will then be reclaimed from them in tax. To be eligible for the winter fuel allowance, a person will need to have reached state pension age by the week starting September 15 this year. Devolved authorities in Scotland and Northern Ireland will each receive a funding uplift so they too can meet the new threshold. Pensioners who do not want to receive the payment will be able to opt out, according to the Treasury. The decision to limit the winter fuel payment to only those who claimed pension credit was one of Labour's first acts in Government, aimed at balancing what was described as a £22 billion 'black hole' in the public finances. This meant the number of pensioners receiving the payment was reduced by around 10 million, from 11.4 million to 1.5 million. But Sir Keir Starmer announced there would be a partial U-turn on the policy in May, after it was thought to have contributed to Labour's drubbing in the local elections. The Treasury claims the new arrangement will cost £1.25 billion in England and Wales, while means-testing winter fuel will save the taxpayer £450 million. Reeves said: 'Targeting winter fuel payments was a tough decision but the right decision because of the inheritance we had been left by the previous government. 'It is also right that we continue to means test this payment so that it is targeted and fair, rather than restoring eligibility to everyone including the wealthiest. But we have now acted to expand the eligibility of the winter fuel payment so no pensioner on a lower income will miss out. 'This will mean over three-quarters of pensioners receiving the payment in England and Wales later this winter.' Some two million pensioners who earn more than £35,000 will see their winter fuel payments clawed back via the taxman, the Treasury estimates. Kemi Badenoch, Leader of the Opposition, claimed the Prime Minister had 'scrambled to clear up a mess of his own making'. The Conservative leader added: 'I repeatedly challenged him to reverse his callous decision to withdraw winter fuel payments, and every time Starmer arrogantly dismissed my criticisms. This humiliating U-turn will come as scant comfort to the pensioners forced to choose between heating and eating last winter. The Prime Minister should now apologise for his terrible judgment.' Liberal Democrat Leader Sir Ed Davey said: 'Finally the Chancellor has listened to the Liberal Democrats and the tireless campaigners in realising how disastrous this policy was, but the misery it has caused cannot be overstated. Countless pensioners were forced to choose between heating and eating all whilst the Government buried its head in the sand for months on end, ignoring those who were really suffering. 'We will now study the detail of this proposal closely to make sure those who need support actually get that support. The pain they went through this winter cannot be for nothing.' Independent Age Chief Executive Joanna Elson CBE said: 'We are pleased that the UK Government has listened to the voices of older people on a low income and reconsidered what was an incredibly damaging change to the Winter Fuel Payment. By widening the eligibility criteria, more older people in financial hardship will now receive this vital lifeline in time for winter. Article continues below 'Our helpline receives thousands of calls from older people making drastic cutbacks just to get by and the changes to the Winter Fuel Payment made this worse. For millions living on low incomes, the entitlement supports them to turn their heating on and stock up on food during the colder months. 'While the changes to the Winter Fuel Payment are positive, they are not a silver bullet that will end pensioner poverty. Around 2 million older people still live in poverty, and measures must be taken to ensure the long-term financial security of all people in later life. There needs to be a cross-party consensus on the adequate income needed in later life to avoid financial hardship. Once this is established, every older person should be supported to receive this amount. Nobody should have to live in poverty as they age.'
