The UK Government has set out the next steps for tax measures from the manifesto on which the Government was elected, including policies to close tax loopholes and tackling tax avoidance.
This is to provide taxpayers with certainty ahead of their final confirmation at the Budget on 30 October 2024.
Further details on all policies including costings will be published at the Budget, and will be certified by the Office for Budget Responsibility.
Ending tax breaks for private schools and raising revenue to fund state education priorities
The Government is publishing a technical note setting out its plan to introduce 20% VAT on education and boarding services provided by UK private schools from 1 January 2025.
o 20% VAT will also apply to pre-payments of fees for terms starting on or after 1 January 2025 made on or after 29 July 2024.
Over 94% of school children in the UK attend state schools and ending the tax breaks on VAT and business rates for private schools will secure additional funding to help recruit 6,500 new teachers and roll out breakfast clubs to all primary schools.
These changes will not impact pupils with the most acute special educational needs, where their needs can only be met in private schools. Where pupils’ places in private schools are being funded by local authorities (LAs) because their needs can only be met in private school (e.g. in England, where attendance at that private school is required by a child’s Education, Health and Care Plan (EHCP), LAs will be able to reclaim the VAT so it does not apply to those fees.
This change will only apply to tuition fees and boarding fees charged by private schools. The VAT treatment of other services or goods provided by private schools – such as nursery care, wrap-around childcare, school meals and holiday clubs, and part time classes operated by third parties within schools – such as music and drama clubs and Sunday schools – will not change. The VAT treatment of state boarding fees will also continue to be exempt from VAT.
The government will also end business rates relief for private schools. This change means private schools in England will no longer be eligible for charitable rates relief and will pay their full business rates liability. This is intended to take effect from April 2025, subject to Parliamentary passage.
The VAT changes will be legislated for in the Finance Bill introduced following the Budget. The business rates changes will be legislated for through a Local Government Finance Bill led by the Ministry for Housing, Communities, and Local Government (MHCLG).
Non-Doms: Removing domicile status from the tax system and implementing a new internationally competitive residence-based regime
The Government is committed to addressing unfairness in the tax system, so that everyone who makes their home in the UK pays their taxes here.
That is why the Government will remove the outdated concept of domicile status from the tax system and replace it with a new internationally competitive residence-based regime, focused on attracting the best talent and investment to the UK.
A policy note has been published to set out the government’s plan to end the use of offshore trusts to avoid inheritance tax and scrapping the 50% tax reduction on foreign income in the first year of the new regime.
From April 2025, anyone who has been tax resident in the UK for more than four years will pay UK tax on their foreign income and gains (FIG), as is the case for other UK residents. This is a simpler and clearer test, with less scope for ambiguity than the current regime.
New arrivals to the UK will benefit from 100% UK tax relief on their FIG for their first four years of tax residence, provided they have been non-resident for the last 10 years. This is more attractive than the current approach, as they will be able to bring FIG into the UK without attracting an additional tax charge, encouraging them to spend and invest these funds in the UK.
To support transition and provide time for adjustment, a Temporary Repatriation Facility (TRF) will be available for individuals to bring pre-6 April 2025 FIG held offshore into the UK at a reduced rate of tax, to encourage these funds to be spent and invested in the UK.
Behavioural impacts and costings will be published at the Budget.
Energy Profits Levy
The Government is publishing a policy document that confirms its intention to increase the rate of the Energy Profits Levy (EPL) by three percentage points to 38% from 1 November 2024.
The levy will also be extended from 31 March 2029 to 31 March 2030.
The Government will remove unjustifiably generous investment allowances from the EPL, starting by abolishing the levy’s core investment allowance from 1 November. The decarbonisation allowance will be retained.
The Government will reduce the generosity of capital allowances (including First Year Allowances) when calculating EPL profits – providing further details on these changes at Budget.
The Energy Security Investment Mechanism will remain, helping to provide operators and their investors with confidence the levy will no longer apply if prices fall to, or below, historically normal levels for a sustained period.
Further details on the Government’s approach to all allowances in the EPL, and costings, will be set out at the Budget.
The Government recognises the importance of providing the oil and gas industry with long-term certainty on taxation after a period of change. The government will work with the industry and others to develop and implement a successor regime for responding to price shocks after the EPL ceases.
The UK Government is also:
Publishing a call for evidence confirming its intention to take action against the carried interest loophole, and to form the basis for detailed engagement with expert stakeholders.
o Carried interest is a form of performance-related reward received by fund managers, primarily within the private equity industry.
o Reforms will ensure fairness, whilst also recognising the vital role that our world-leading asset management industry plays in channelling investment across the UK.
Tackling the tax gap. Reforming the tax system by making policy changes to simplify tax, close loopholes and reduce non-compliance, designing out non-compliance before it happens. At the Budget, the government will provide an update on the implementation and development of measures that form its plan to close the tax gap.
The government will invest in HMRC’s compliance work, hiring around 5,000 additional staff to recover more tax revenues. HMRC has already started the process of recruiting additional staff into compliance roles.
The government will also invest in HMRC’s technology infrastructure, helping to make HMRC more efficient and improve taxpayers’ experience of interacting with HMRC.
This August, in direct response to the debate on ethical fundraising in the arts, a topic impacting many organisations across the UK and further afield, the Festival will host a brand new event aimed at expanding the conversation from a place of polarisation to one of positivity and possibility.
Entitled Clean Money: Can fundraising ever be ethical? the event will be fully interactive in nature and groups of participants will be handed questions, based on real or possible situations, to discuss alongside a range of expert facilitators.
Encouraging audiences to step outside their viewpoints, and consider these important topics from another angle, participants of the event will be required to argue from or for a particular point of view, as opposed to their personal perspective, based on a prompt courtesy of the facilitators.
The event will be guided by Alisha Fernandez Miranda, author and Chair of the award-winning social impact advisory firm I.G. Advisors, and will feature nine other industry peers including Harriette Tillott, Advisor at I.G., and Joni O’Sullivan, trustee at Hastings Contemporary Gallery. Further facilitators will be confirmed nearer the time.
Jenny Niven, Director at Edinburgh International Book Festival, said:“We’re excited to be able to curate this vital conversation at the Book Festival.
“In a climate where it can feel harder than ever to have meaningful discussion, and with a vanishingly small number of platforms that truly allow for the exchange of views or tolerance for viewpoints which don’t align with our own, the Book Festival is an unique forum for this type of learning and debate.
“The question of ‘clean money’ brings in everything: climate, conflict, ethics, politics, the role of government, the state of the arts and charitable sector, societal change, and allows us to wrestle with the really thorny questions underpinning the debates recent months.
“The level of public engagement in the topic at the moment is unprecedented and the strength of feeling from many different perspectives has been evident throughout. We hope people with a range of perspectives will join this conversation and help further everyone’s understanding of the issues and the contexts at hand, and help us bring this topic offline and into the daylight.”
Held in the spirit of open dialogue and constructive debate, each participant will be required to only share a first name – no other identifying information can be shared until after the debate, and then only with explicit permission – and the event will follow Chatham House rules, meaning that while information gathered during the event can be shared, it cannot be linked to any individual participant.
Those who do not wish to be quoted, even anonymously are under no obligation and will be invited to sign to this effect.
Future Tense is the first Edinburgh International Book Festival programme from Director Jenny Niven and will unfold for the first time at the Festival’s new home at Edinburgh Futures Institute.
Edinburgh School Uniform Bank has taken another step forward in addressing the needs of children facing poverty by including stationery items in every clothing crisis pack.
This initiative comes in response to feedback from the Child Poverty Action Group Report on the cost of the school day.
By ensuring that children not only have access to proper school uniforms but also essential stationery, ESUB is helping to create a more level playing field.
This move will aid in reducing the stigma associated with poverty and enable children to focus on their education without the added worry of lacking basic school supplies, crucial for fostering an inclusive and supportive learning environment for all students.
This would not be possible without the generosity of our supporters! Thank you!
A fund to help businesses, charities and other organisations adopt fair work practices has opened for applications.
Grants are available to implement changes such as the delivery of workplace training and processes that support flexible working and help to create and sustain a more diverse workforce.
The Fairer Workplaces Fund adds to Scottish Government measures supporting fair work, including making payment of the real Living Wage and providing an effective voice for workers a condition of grant awards.
Employment Minister Tom Arthur visited McAllister Litho Glasgow, a commercial print company, to learn about the benefits of fair work from staff.
The printworks offers its employees the option of working compressed work hours, swapping shifts and making minor adjustments to their hours. During the cost of living crisis, the business also paid its staff an extra £500 a month for six months to help with rising prices.
Employment Minister @ThomasCArthur launched the Fairer Workplaces Fund on a visit to McAllister Litho Glasgow printworks.
Businesses, charities and other organisations can apply to grants of up to £50,000 to support fair work practices.
Mr Arthur said:“Offering flexible shift patterns, remote working and making workplaces more accessible are among the relatively simple steps that can help more people into work and ensure they are able to stay there.
“They are also good for business. Experience shows that adopting fair work practices can help recruitment and improve staff retention. This new fund and the dissemination of the learning from it will help more companies – and Scotland’s wider economy – reap those benefits.
“The company I’m visiting today demonstrate how supporting your workforce goes hand-in-hand with running a successful company.”
Managing Director and Owner of McAllister Litho Janette McAllister said:“The implementation of flexible working at McAllister Litho Glasgow has resulted in a happier and more satisfied workforce. Employee happiness translates into ongoing loyalty and hard work, ultimately benefiting the business.
“We are a team and we need to work together. If someone needs a bit of flexibility and we can provide that, we will because we know we’ll benefit from that person’s loyalty and hard work in return.
“Recognising the pivotal role of a dedicated team, I acknowledge that fostering flexibility not only makes good business sense but also aligns with our commitment to doing what is right.”
The Fund which totals £350,000 is open for applications until Sunday, 1 September 2024.
Mairi Curle won the national Federation of Small Businesses Franchise Award just a year after launching
A Lothian primary school teacher has gone from being forced to take a career break due to long Covid to picking up a national award for her new music and movement franchise.
Mairi Curle took on franchise business Boogie Beat for Edinburgh, Mid and East Lothian at the beginning of 2023, having taken a career break from her job as a primary school teacher in Dalkeith after becoming ill with long Covid.
Boogie Beat, which has over 20 franchisees in the UK, provides a range of children’s workshops and classes which bring music, singing, dancing and storytelling together.
Since launching, Mairi’s area has grown substantially, and she has taken on four teachers to support the delivery of classes in nurseries and at birthday parties.
Having never run a business, Mairi made use of Business Gateway’s Planning To Start Tool to test out if moving into business was a sensible career move.
Mairi also benefitted from a suite of Business Gateway’s start-up services, including one-to-one support from a Business Gateway East Lothian business adviser, who provided advice on her business plan and marketing.
Through Business Gateway, Mairi accessed a £1,000 start-up grant from East Lothian Council’s LA-CER New Business Start Up Support fund, which helped with the costs of equipment to get her classes up and running.
The funding also went towards advertising in publications to reach a wider audience in her sector and the purchase of marketing items for use at events, including a pull-up banner, leaflets and posters.
In February, just a year after launching, Mairi was announced as the winner of the Federation of Small Businesses Franchise Award for Scotland. She then went on to win at the UK finals in May.
Looking to the future, Mairi now plans to develop intergenerational classes, which offer residents of care homes and children from the local community the chance to come together and engage in music, dance, storytelling and movement activities.
She also will continue her work with her charity partner, Love From Jamie, and will donate a portion of her profits to fund the work the charity does to support bereaved families.
Mairi Curle, Owner, Boogie Beats, said:“I always felt like I was wearing the Boogie Beat teacher hat, and not the businesswoman hat, so it felt really surreal to receive an award for the business side of things.
“The support I’ve received from Business Gateway has been fundamental in helping my business start and grow. Their fantastic resources and networking events are fantastic. I wouldn’t be where I am today without their help.”
Irene Ramsay, Business Gateway East Lothian business adviser, said:“Taking on a franchise can be really daunting, but Mairi has worked tirelessly over the last 18 months to ensure her Boogie Beat region has been a success.
“I’ve no doubt her birthday party offering will continue to be popular over the summer months and look forward to watching the intergenerational classes develop.”
To find out more about how Business Gateway can help your business, visit https://bgateway.com.
Chancellor reveals £22 billion of unfunded pressures inherited from the previous Government
Findings of a Treasury spending audit reveal £22 billion of unfunded pledges inherited from the previous Government this year.
Chancellor takes “difficult decisions” to find £5.5 billion of savings this year and £8.1 billion next year.
A set of non-negotiable fiscal rules will be confirmed at Budget on 30th October, alongside further difficult decisions on tax and spending.
Finalised departmental budgets for this financial year and the next will be confirmed in October and a multi-year Spending Review will conclude in Spring 2025 to embed mission-led government and transform public services.
Addressing the House of Commons today (Monday 29th July) the Chancellor pledged to ‘restore economic stability’ after revealing £22 billion of unfunded pressures inherited from the previous Government.
Findings from a Treasury audit commissioned by the Chancellor expose billions of pounds of unfunded commitments from the previous Government, including the Rwanda scheme, the Advanced British Standard and the New Hospital Programme.
The previous Government also failed to increase Departmental budgets to cover public sector pay settlements, which were £11-12 billion higher than accounted for at the last Spending review. All of which were made on top of pressures resulting from higher inflation, increased asylum costs and funding for Ukraine.
Taking immediate action, the Chancellor announced £5.5 billion of savings this year and £8.1 billion next year to tackle the overspend. She also commits to set out full fiscal plans, alongside a Spending Review, at the Budget on 30th October.
Chancellor of the Exchequer, Rachel Reeves said: “This is not the statement I wanted to give today, and these are not the decisions I wanted to make. But they are the right decisions in difficult circumstances.”
The difficult decisions taken by the Chancellor have secured savings including over £1 billion next year, rising to over £4 billion by 29/30 by not proceeding with the previous government’s unfunded adult social care charging reforms.
Around £1.5 billion will be saved per year by targeting Winter Fuel Payments meaning households with someone aged over State Pension age receiving Pension Credit, Universal Credit, Income Support, income-based Jobseeker’s Allowance and income-related Employment and Support Allowance will continue to receive Winter Fuel Payments. This will better target support for heating costs at those who need it.
Immediate savings include £800 million this year and £1.4 billion next year from scrapping the Rwanda migration partnership and scrapping retrospection of the Illegal Migration Act, £70 million this year by cancelling the Investment Opportunity Fund and other small projects, £185 million next year from cancelling the Advanced British Standard and £785 million next year from stopping unaffordable road and railway schemes.
The Chancellor also announced a review of the underdelivering New Hospital Programme.
To provide certainty for public sector workers and help put an end to devastating strikes costing billions of pounds, the Chancellor accepted the independent Pay Review Body recommendations and confirm pay uplifts averaging 5.5% for public sector workers.
To ensure that no Government is faced with a spending cliff-edge like this again the Chancellor set out plans to ensure Spending Reviews are set every two years to cover a three-year period, with a one year overlap with the previous Spending Review, helping build in greater certainty and stability over public finances.
Transparency over in year spending pressures will also be enhanced, with more information being provided to the OBR. In the House the Chancellor also re-committed to a single major fiscal event a year.
The Chancellor also outlined long-term plans to tackle unacceptably high levels of welfare fraud and error as well as addressing falling public sector productivity and a new Office of Value for Money.
During her statement the Chancellor outlined next steps in delivering tax commitments from the manifesto, to provide taxpayers with certainty ahead of their final confirmation at the Budget.
This includes ending the VAT tax breaks for private schools from 1 January 2025 to help recruit 6,500 new teachers, as well as replacing the outdated non-domicile regime with a new internationally competitive residence-based regime.
As also set out in the manifesto, the Chancellor confirmed plans for the Energy Profits Levy to be extended one year to 31 March 2030, have its investment allowances tightened and to increase the rate of the levy by three percentage points to 38% from 1 November 2024.
A call for evidence confirming the government’s intention to take action on the carried interest loophole has also been published, as well as a commitment to update on policies at the Budget to help close the tax gap further.
Further details for all tax policies, including costings certified by the Office for Budget Responsibility, will be published at the Budget.
Chancellor of the Exchequer Rachel Reeves statement to the House of Commons on 29/07/2024:
Mr Speaker, on my first day as Chancellor of the Exchequer, I asked Treasury officials to assess the state of public spending.
That work is now complete, and today I am presenting it to this House.
In this statement, I will do three things.
First, I will expose the scale – and the seriousness – of what has been uncovered.
Second, I will lay out the immediate action we are taking to deal with the inheritance.
And third, I will set out our longer-term plans to fix the foundations of our economy.
Let me take each of these in turn.
First, the inheritance.
Before the election, I said that we would face the worst inheritance since the Second World War.
Taxes at a seventy year high.
Debt through the roof.
An economy only just coming out of recession.
Mr Speaker, I knew all those things.
I was honest about them during the campaign.
And the difficult choices it meant.
The British people knew them too.
That is why they voted for change.
But upon my arrival at the Treasury three weeks ago, it became clear that there were things I did not know.
[Redacted political content]
That is why we are today publishing a detailed audit of the real spending situation, a copy of which will be laid in the House of Commons Library.
I want to take the opportunity to thank Treasury officials for all their work in producing this document.
Let me explain what it has uncovered.
Mr Speaker, the government published its plans for day to day departmental spending at the Spring Budget in March.
But when I arrived at the Treasury…
… on the very first day…
… I was alerted by officials that this was not how much the previous government expected to spend this year.
Not even close.
In fact, the total pressure on these budgets across a range of areas was an additional £35bn.
Once you account for the slippage in budgets you usually see over a year…
… and the reserve of £9bn to deal with genuinely unexpected events…
… it means, Mr Speaker, that I have inherited a projected overspend of £22bn.
A £22bn hole in the public finances now – not in the future.
[Redacted political content]
If left unaddressed it would have meant a 25% increase in the government’s financing needs this year, pushing gilt issuance further into record highs outside of the pandemic.
So I will today set out the urgent work I have already done to reduce that pressure on the public finances by £5.5bn this year and over £8bn next year.
And let me be clear: I am not talking about bills for future years they signed up to but did not include, like the compensation for infected blood.
I am not talking about the state of public services in the future, like the crisis in our prisons, which they have left for us to fix.
I am talking about the money they were spending this year and had no ability to pay for…
[Redacted political content]
Resulting in the position that we have now inherited:
The reserve, spent three times over only three months into the financial year.
[Redacted political content]
Mr Speaker, the scale of this overspend is not sustainable.
Not to act is simply not an option.
We have already seen official ONS figures this month showing borrowing is higher this year than the OBR expected. [Redacted political content]
[Redacted political content]
There are very clear instances of specific budgets that were overspent…
… and unfunded promises that were made…
…but that, crucially, the OBR were not aware of for their March forecast.
I will now take each of those instances in turn.
First, the asylum system.
The forecast for the number of asylum seekers has risen dramatically since the last Spending Review, and costs for asylum support have risen sevenfold in the last three years.
But instead of reflecting those costs in the Home Office budget for this year, the previous government covered up the true extent of the crisis and its spending implications.
The document I am publishing today reveals a projected overspend on the asylum system, including their failed Rwanda plan, for this year alone of more than £6.4bn.
That was unfunded and undisclosed.
Next, in the wake of the pandemic, demand for rail services fell.
But instead of developing a proper plan to adjust for this new reality, the government handed out cash to rail companies to make up for passenger shortfalls, but failed to budget for this adequately.
Because of that, and because of industrial action, there is now an overspend of £2.9bn in the transport budget.
That was unfunded and undisclosed.
Mr Speaker, since 2022, the government – with the support of this whole House – has rightly provided military assistance to Ukraine in response to the Russian invasion.
The spending audit has found that there was not enough money set aside in the reserve to fund all these costs.
We will continue to honour these commitments in full.
[Redacted political content]
On top of these new pressures, since 2021, inflation was above the Bank of England’s target for 33 months in a row – hitting 11% at its peak.
But the government has not held a Spending Review since 2021.
That means they never fully reflected the impact of inflation in departmental budgets.
This had a direct impact on budgets for public sector pay.
When the last Spending Review was conducted, it was assumed that pay awards would be 2% this year.
Ordinarily, the government is expected to give evidence to the Pay Review Bodies on affordability.
But extraordinarily, this year, the previous government provided no guidance on what could or could not be afforded to the Pay Review Bodies.
This is almost unheard of.
But that is exactly what they did.
[Redacted political content]
I will not repeat their mistakes.
Where the previous government provided no transparency to the public, and no certainty for public services…
… we will be open about the decisions which are needed…
… and the steps we are taking.
That begins with accepting in full the recommendations of the independent Pay Review Bodies, and the details of these awards are being published today.
That is the right decision for the people who work in and most importantly the people who use our public services…
… giving hardworking staff the pay rise they deserve…
… while ensuring we can recruit and retain the people we need.
It should not have taken this long to come to these decisions.
And I do not want us to be in this position again.
So, I will consider options to reform the timetable for responding to the Pay Review Bodies in the future.
This decision is in the best interests of our economy too.
The last government presided over the worst set of strikes in a generation.
This caused chaos and misery for the British public.
And it wreaked havoc on the public finances.
Industrial action in the NHS alone cost the taxpayer £1.7bn last year.
That is why I am pleased to announce today that the Government and the BMA have agreed an offer to the Junior Doctors, on which my RHF the Health Secretary will set out further details.
And let me pay tribute today to my RHF, whose leadership on this issue has paved the way to ending a dispute which has caused waiting lists to spiral, operations to be delayed and agony for patients to be prolonged.
Today marks the start of a new relationship between the government and staff working in our National Health Service – and the whole country will welcome that.
Mr Speaker, where the previous government ducked the difficult decisions, I am taking action.
Because knowing what they did about the state of the public finances, they continued to make unfunded commitment after commitment that they knew they could not afford.
[Reacted political content]
Leaving us with an overspend of £22bn this year.
Where they presided over recklessness, I will bring responsibility.
I will take immediate action.
Let me set this out in detail.
First, pay.
I have today set out our decision to meet the recommendation of the Pay Review Bodies.
Because the previous government failed to prepare for these recommendations in departmental budgets, they come at an additional cost of £9bn this year.
So, the first difficult choice I am making is to ask all departments to find savings to absorb as much of this as possible…
… totalling at least £3bn.
To support departments as they do this, I will work with them to find savings ahead of the Autumn budget…
… including through measures to stop all non-essential spending, such as on consultancy and government communications.
And I am asking departments to find 2% savings in their back-office costs.
I will now deal with a series of commitments made by the previous government which they did not fund.
Because if we cannot afford it, we cannot do it.
First, [Redacted political content] the former Prime Minister announced the introduction of a new qualification: the “Advanced British Standard”.
That is a commitment costing nearly £200m next year, rising to billions in future years.
Mr Speaker, this was supposed to be the Prime Minister’s legacy.
But it turns out, he didn’t put aside a single penny to pay for it.
So we will not go ahead with that policy.
Because if we cannot afford it, we cannot do it.
Next, the Illegal Migration Act, passed by the previous government, made it impossible to process asylum applications or remove people who have no right to be here.
[Redacted political content]
We need a properly controlled and managed asylum system where rules are properly enforced so that those with no right to be here are swiftly removed.
So we have scrapped their failed Rwanda scheme, which placed huge pressure on the Home Office budget.
To bring down these costs as soon as possible, my RHF the Home Secretary has already laid legislation to remove the retrospective element of the Illegal Migration Act…
… which will significantly reduce the use of hotel accommodation.
These measures will save nearly £800m this year and avoid costs spiralling even further next year.
This was a bad use of taxpayers’ money and we will not do it.
Mr Speaker, the previous government claimed it was “levelling up” our country.
[Redacted political content]
At Autumn Statement last year, the former Chancellor announced nearly £150m for an “Investment Opportunity Fund”.
But not a single project has been supported from the Fund.
So, following discussions with my RHF the Deputy Prime Minister, I am cancelling it today.
The previous government also made a series of commitments on transport.
Promises that people expected to be delivered.
[Redacted political content]
We have seen from the National Audit Office the chaos that the previous government presided over.
Projects over budget and delayed again and again.
The spending audit has revealed nearly £800m of unfunded transport projects that have been committed next year.
So my RHF the Transport Secretary will undertake a thorough review of all these commitments.
As part of that work, she has agreed not to move forwards with projects that the previous government refused to publicly cancel, despite knowing full well they were unaffordable.
That includes proposed work on the A303 and the A27…
… and my RHF will also cancel projects in the “Restoring our Railways” programme which have not yet commenced.
If we cannot afford it, we cannot do it.
Mr Speaker, the previous government had plans for a retail sale of Natwest shares.
We intend to fully exit our shareholding in NatWest by 2025-26.
But having considered advice I have concluded that a retail share sale offer would involve significant incentives that could cost taxpayers hundreds of millions of pounds.
It would therefore not represent value for money, and it will not go ahead.
This is a bad use of taxpayers’ money and we will not do it.
Next, let me address the unfunded pressures in our NHS and our social care sector.
In October 2020, the government announced that 40 new hospitals would be built by 2030.
Since then, only 6 have started their main construction activity.
And less than half of the 40 hospitals have even started construction.
The National Audit were clear that delivery was wildly off track.
But since coming into office, it has become clear that the previous government continued to maintain its commitment to 40 hospitals…
… without anywhere close to the funding required to deliver them.
[Redacted political content]
We need to be straight with the British people about what is deliverable and what is affordable.
So we will conduct a complete reset of the New Hospitals Programme, with a thorough, realistic and costed timetable for delivery.
Mr Speaker, adult social care was also neglected by the previous government.
The sector needs reform to improve care and to support staff.
In the previous parliament, the government made costly commitments to introduce adult social care charging reforms.
But then, they pushed them back repeatedly…
… including just two years ago…
… because they knew that local authorities were not ready…
… and that their promises were not funded.
So it will not be possible to take forward these charging reforms. This will save over £1bn by the end of next year.
Mr Speaker, the previous government made commitment after commitment without knowing where the money was going to come from.
They did this repeatedly, knowingly and deliberately.
[Redacted political content]
And I am taking the first steps to clean up what they have left behind.
But the scale of the inheritance we have been left, means the decisions we have so far announced will not be enough. This level of overspend is not sustainable.
It therefore falls to us to take further difficult decisions on spending that generate in year savings.
Mr Speaker, the last Labour government lifted over one million pensioners out of poverty.
And I repeat today the commitment we gave that we will protect the Triple Lock.
But the scale of the situation we are dealing with means incredibly tough choices.
So that is why today, I am making the difficult decision that those not in receipt of Pension Credit will no longer receive the Winter Fuel Payment from this year onwards.
The Government will continue to provide Winter Fuel Payments worth £200 to households receiving Pension Credit…
… or £300 for households in receipt of Pension Credit with someone aged over 80.
Let me be clear: this is not a decision I wanted to make.
Nor is it one that I expected to make.
But it is a necessary and urgent decision I must make – It is the responsible thing to do to fix the foundations of our economy and bring back economic stability.
Alongside this change, I will work with my Right Honourable Friend the Work and Pensions Secretary to maximise the take up of Pension Credit by…
… bringing forward the adminstration of Housing Benefit and Pension Credit, pushed back by the previous government…
… and working with older peoples’ charities and local authorities to raise awareness of Pension Credit, and help identify households not claiming it.
Mr Speaker, this is the beginning of a process, not the end.
I am announcing today that I will hold a Budget on October 30th alongside a full economic and fiscal forecast from the Office for Budget Responsibility.
I have to tell the House that Budget will involve taking difficult decisions to meet our fiscal rules across spending, welfare and tax. [Redacted political content]
It will be a Budget to fix the foundations of our economy.
And it will be a Budget built on the principles that this new government was elected on.
First, we will treat taxpayers’ money with respect by ensuring that every pound spent is well spent…
… and we will interrogate every line of public spending to ensure it represents value for money.
Second, I can repeat – from the despatch box – our manifesto commitment that we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.
And today my Right Honourable Friend the Exchequer Secretary is publishing further detail on our manifesto commitments to close tax loopholes and clamp down on tax avoidance…
… to ensure we bring that money in as quickly as possible.
My third principle is that we will meet our fiscal rules.
We will move the current budget into balance…
… and we will get debt falling as a share of the economy by the end of the forecast.
These are the principles that will guide me at the Budget.
But let me be honest: challenging trade-offs will still remain.
So today I am also launching a multi-year Spending Review.
The review will set departmental budgets for at least three years, providing the long-term certainty that has been lacking for too long.
As part of that process, final budgets for this year and budgets for next year – 2025-26 – will be set alongside the Budget on 30th October.
I will look closely at our welfare system…
… because if you can work, you should work.
That is the principle of this government.
Yet under the previous government, welfare spending ballooned while inactivity has risen sharply in recent years.
So we will ensure the welfare system is focused on supporting people into employment…
… and we will assess the unacceptable levels of fraud and error in our welfare system, and take forward action to bring that down.
Mr Speaker, to fix the foundations of our economy, we must ensure that never again can a government keep from the public the true state of our public finances.
The fiscal framework which I have inherited had several flaws.
It allowed the government to run down the clock on departmental budgets…
… avoid difficult decisions
[Redacted political content]
So I am announcing the most significant set of changes to our framework since the inception of the Office for Budget Responsibility, which will come into effect this Autumn.
First, we have introduced legislation to ensure every significant and permanent tax or spending announcement must be accompanied by an OBR forecast through our “fiscal lock”, so we can never again see a repeat of the mini-budget.
Second, we will require the Treasury to share with the Office for Budget Responsibility its assessment of immediate public spending pressures, and enshrine that rule in the Charter for Budget Responsibility…
… so no government can ever again cover up the true state of the public finances.
And finally, we will ensure that never again do public service budgets get set at only a few months’ notice.
Instead, Spending Reviews will take place every two years, with a minimum planning horizon of three years, to avoid uncertainty for departments and to bring stability to the public finances.
I have already spoken to the Chair of the Office for Budget Responsibility to brief him on the findings of our audit and our reforms.
He has welcomed those, and will initiate his own review into the information provided to the OBR by the Treasury ahead of the Spring Budget. The Treasury stands ready to support this work.
Mr Speaker, by launching the Spending Review I am also today firing the starting gun on a new approach to public service reform to drive greater productivity in the public sector.
We will embed an approach to government that is…
… mission-led…
… that is reform driven, with a greater focus on prevention and integration of services, at both a national and a local level..
… and that is enabled by new technology, including through the work of my RHF the Secretary of State for Science, Innovation and Technology on the opportunities of AI to improve our public services.
And we will establish a new Office of Value for Money, with an immediate focus on identifying areas where we can reduce, stop or improve the value of spending….
… and we will appoint a Covid Corruption Commissioner, to bring back money owed to taxpayers after contracts worth billions of pounds were handed out by the previous government during the pandemic.
Ahead of the Spending Review, I will also review the cost of our political system, including restricting eligibility for ministerial severance payments based on time in office.
I expect all levels of government to be run efficiently and effectively and I will work with leaders across our country to deliver that.
That means effective local government …
… a civil service delivering good value for the British taxpayer…
… and reform of our political institutions, including the House of Lords, to keep costs as low as possible.
The Budget and Spending Review will also set out further progress on our number one mission: to grow our economy.
Because economic growth is the only way to sustainably improve our public services and sustainably improve our public finances.
So we will use the Spending Review to prioritise specific areas of capital investment that leverage in billions more in private investment.
It won’t happen overnight.
It will take time and it will take focus.
But we have already made significant progress.
Planning reforms to get Britain building.
A National Wealth Fund to catalyse private investment
A pensions investment review to unlock capital for our businesses.
Skills England to create a shared national ambition to boost skills across our country.
And work across government on a new industrial strategy…
… driven forward by a Growth Mission Board to ensure we deliver on our commitments.
We have fundamental strengths on which we can build.
And I look forward to welcoming business leaders to the International Investment Summit in Britain later this year.
Because I know that if we can create the stable conditions which investors need to thrive, we can build on the UK’s strengths and return confidence to our economy..
… so that entrepreneurs and businesses big and small know that this is a place to do business as that is the bedrock on which economic growth must be built.
Mr Speaker, the inheritance from the previous government is unforgiveable.
Wet weather and low temperatures causinghavoc for butterflies during Big Butterfly Count
Leading wildlife charity Butterfly Conservation has revealed very low numbers of butterflies have been spotted so far in its annual Big Butterfly Count. On average participants are seeing just over half the number of butterflies they were spotting this time last year.
The unusually wet and windy spring, coupled with the colder than usual temperatures so far this summer could be contributing to the lack of butterflies. While there is a chance of a later emergence of the insects if there is a prolonged sunny spell, numbers are currently the lowest recorded in the 14-year history of Butterfly Conservation’s Big Butterfly Count.
With just one week remaining of the Big Butterfly Count, scientists are calling on the public to get outside for 15 minutes and record the number and type of butterflies they see – and to enter their results even if they see very few or no butterflies – as this will help them to understand more about how butterflies in the UK are faring.
Dr Dan Hoare, Director of Conservation at Butterfly Conservation, explains: “Butterflies need some warm and dry conditions to be able to fly around and mate. If the weather doesn’t allow for this there will be fewer opportunities to breed, and the lack of butterflies now is likely the knock-on effect of our very dreary spring and early summer.”
However, the charity is also warning that it is not only this year’s weather that is contributing to the lack of butterflies being seen. 80% of butterflies in the UK have declined since the 1970s, with habitat loss, climate change and pesticide use the main drivers of this decline.
With populations of butterflies already depleted, they are less resilient to the impact of poor weather.
Dr Dan Hoare continues: “The lack of butterflies this year is a warning sign to us all. Nature is sounding the alarm and we must listen. Butterflies are a key indicator species. When they are in trouble we know the wider environment is in trouble too.
“People are telling us that they aren’t seeing butterflies, but simply telling us is not enough, we need everyone to record what they are or aren’t seeing by doing a Big Butterfly Count as this will give us the evidence we need to take vital action to conserve our butterfly species.”
Butterfly Conservation’s Big Butterfly Count is the largest citizen-science project of its kind and is a positive action everyone can take to help collect important scientific data which informs policy decision making and conservation effort.
The public are asked to spend just 15 minutes outside when in a sunny spot and record the number and type of butterflies they see.
Whether done with friends and family, or in a moment of quiet and calm solitude, the Big Butterfly Count is free, fun and quick to do. It is open to anyone, of any age, in any part of the UK – towns, cities or the countryside. No green space is too small – a back garden, a small terrace or balcony with some pot plants, a public park, allotment, or country lane are all important spaces to explore, track and report.
Last year more than 135,000 Big Butterfly Counts took place up and down the country, with participants spending a combined total of almost four years counting butterflies. The information gathered helps scientists to understand how butterflies and moths and faring, informs conservation projects, government policies, and supports other experts with their research and vital work to protect our planet.
This year’s Big Butterfly Count ends on Sunday 4 August. For more information and to take part simply visit www.bigbutterflycount.org or download the free Big Butterfly Count app.
Five star attraction commits to long-term future as part of reconfigured destination on Leith’s waterfront
T
OT (Ocean Terminal) and The Royal Yacht Britannia have agreed a new 25 year lease which will cement OT’s position as the leading tourist destination on Leith’s waterfront.
The five-star attraction voted Tripadvisor’s No.1 UK Attraction 2023 – 2024 has committed to a long-term future with OT as part of the redevelopment project and multi-million pound redevelopment of the site.
Chris Richardson, Managing Director of Ambassador Investment Management, the Scottish owners of Ocean Terminal, said:“This is a significant development for the reconfiguration of the site, and we are absolutely thrilled that The Royal Yacht Britannia, one of the UK’s most popular visitor attractions, has agreed a 25 year lease with OT.
“I am in no doubt this will be a formidable partnership, cementing our position as a leading tourist destination on Leith’s waterfront, furthering our ambitions for the wider regeneration of Leith, and the local community around the site.”
A spokesperson for The Royal Yacht Britannia added: “We are delighted to have secured the long-term future for The Royal Yacht Britannia in Leith as part of the exciting redevelopment of Ocean Terminal, and we look forward to moving into our state-of-the-art visitor centre and fantastic new gift shop in early 2025.”
Britannia is one of the most famous ships in the world, travelling more than a million nautical miles, serving the Royal Family for over 44 years.
Today, she is a five-star visitor attraction and exclusive evening events venue.
The BBC’s annual report shows ‘a year of creative excellence and transformation against financial pressures and a challenging media market’
The report shows that the BBC is at the heart of national life and is the go-to media brand in the UK, with 95% of UK adults using our services on average per month, says the BBC’s Media Office.
We continue to deliver for audiences across the UK, and abroad, but we know we must accelerate the pace of change to increase relevance and value in a time of limitless choice and interactivity.
In March, we set out a long-term ambitious plan to prioritise, and focus our resources on, three essential roles: to pursue truth with no agenda; to back the best homegrown storytelling; and to bring people together.
Samir Shah, BBC Chair, said: “The BBC matters deeply to the UK, and continues to play an important role on the global stage.
“With the Board, I look forward to overseeing progress with the solid plans in place to preserve the benefits of public service broadcasting for all, and to ensure the BBC can deliver for audiences well into the future.”
Tim Davie, BBC Director-General, said: “This year’s Annual Report shows how we are transforming at pace to deliver for all audiences in the digital age.
“We remain firmly focussed on prioritising our resources into building a BBC for the future that can deliver crucial benefits for the UK at a critical time – and help support a healthy democracy, a thriving creative economy, and a strong society.”
Content
More people, by far, get their news from the BBC than from any other source and – across all our services – 35 million UK adults came to the BBC per day across 2023/24.
We are now the only UK provider to appear in the top five most-used media brands for young people and it was another record-breaking year for BBC Sounds and BBC iPlayer, with both seeing a significant increase in the number of weekly active accounts.
The BBC was the place to go for unmissable moments. We brought people together for the Coronation of King Charles III, watched by an average audience of 14.6 million, and the Eurovision Grand Final in Liverpool, watched by an average audience of 10 million on the night.
We saw huge audiences for homegrown storytelling across all genres, from Doctor Who and Planet Earth III to Ghosts and The Traitors. It was an incredible year for distinctly British drama from across the UK, including Blue Lights, Shetland, Steeltown Murders, Sherwood and The Responder.
BBC Radio continues to be the market leader in the audio space, with over 30 million adults listening on average per week – more than any other broadcast radio company or on-demand player. Radio 2 is the UK’s number one station overall, Radio 4 the number one speech station and 6 Music the biggest digital-only service.
Across the UK
Our Across the UK plan remains mission critical and has now entered its second phase. It is currently on track to exceed its £700 million spend target outside of London. To date, the programme has seen the BBC deliver more than £200 million of cumulative investment across its programming and services, including more than 350 roles being relocated outside of London. Over 54% of our workforce are now based outside of London.
In 2023/24, the BBC achieved its target to spend 60% of the Network TV budget outside of London and we are on track to sustain this permanently by 2026. While 44% of total radio and music production spend was outside of London, and we are well on the way to achieving the 50% target by the end of the current Charter.
Transparency and impartiality
We’re building trust with our audiences with a laser-sharp focus on transparency, spearheaded by the launch of BBC Verify. The team fact-check, counter disinformation, analyse data and explain complex stories in the pursuit of truth. This year we’ll be taking BBC Verify to audiences worldwide.
In May, we demonstrated our continued commitment to impartiality by publishing our second independent thematic review, on BBC coverage of migration, and announced the next review into our output on authentic and accurate portrayal and representation.
Finance and commercial
BBC Studios achieved a solid year of performance, despite a backdrop of challenging trading conditions, with sales of £1.9 billion (2022/23: £2.1 billion). An increase to our borrowing limits has kickstarted further investment and the recent acquisition of streaming service BritBox International demonstrates our sustainable future growth plans.
We aim to double our commercial business by 2027/28, generating additional content and funding for the BBC.
While licences in force declined by 2% year-on-year, the vast majority of our audiences remained committed to paying the licence fee and 95% of public service spend was directed to content and its delivery.
In real terms, the licence fee generated 30% more income in 2010/11 than it does today – a difference of more than £1 billion a year. We have been clear that the significant funding pressure we are under means we need to make further savings, on top of the major savings and reinvestment we have already made, to deliver the most value for audiences.
Transformation
We are becoming a leaner, more agile organisation, and we are accelerating our digital-first approach to reach audiences where they are. Public service roles continue to reduce this year, with headcount down 10% in the last five years; a reduction of almost 2,000 roles.
Over the course of the next two years, we will look to further move the money we have into the priority areas that provide real value for audiences. This means, in public service, we will close and transfer roles in some areas, and create roles in growth areas. By the end of March 2026, we expect to see a total reduction of around 500 public service roles.
Workforce diversity
We’ve made progress towards our overall 50:20:12:25 Diversity and Inclusion targets for the year, but there is much to do to ensure we remain representative of our audiences as we get smaller as an organisation. Disability and ethnicity are behind our expected ambition and both will be a focus of our refreshed D&I strategy which will be released in the coming year.
The report demonstrates delivery on all three of our key pillars.
We pursue the truth with no agenda ;
75% of UK adults use BBC News on average per week – well ahead of the next nearest provider
1.3m 12-15 year olds in the UK follow the news with the BBC – higher than any other organisation
We carry the UK’s voice, values, and influence to a weekly audience of 450 million people worldwide
We are the world’s most trusted international news provider
We back the best homegrown storytelling;
We contributed almost £5 billion to the UK economy last year and for every £1 of the BBC’s direct economic activity, £2.63 is generated in the UK economy
Half of our economic impact is outside London – versus 20% for the wider industry
99% of our original content is made in the UK – we are the largest single investor in UK-made programming.
We won 14 BAFTA TV awards in 2024 – more than any other broadcaster or streamer
We bring people together;
BBC coverage reached 25.2m people in the UK on the day of the Coronation of HM The King and HM The Queen Consort
There were a record 8.1bn streaming requests on BBC iPlayer – up 10% on the year before
Of the UK’s top 10 most viewed programmes in 2023, seven were on the BBC, highlighting our ongoing importance and relevance for today’s audiences
People spent 5hrs 44m watching BBC TV/iPlayer on average per week – more than all the big SVOD streamers combined
National Museums Scotland has announced the acquisition of an ornate early 18th-century sundial of exceptional precision and design. The Ilay Glynne dial, which is now on display at the National Museum of Scotland in Edinburgh, is a masterpiece of both art and science.
The Ilay Glynne dial, made around 1715, was used to measure local time from the Sun, providing the most accurate means of setting clocks available at the time. It could be used at any latitude, and its form models the celestial sphere, showing the Sun’s apparent motion around the Earth.
The acquisition of the dial, which has important connections to post-Union Scotland, has been supported by the National Heritage Memorial Fund and Art Fund.
The dial was commissioned by and belonged to Archibald Campbell, Earl of Ilay and later 3rd Duke of Argyll (1682-1761).
Ilay was hugely influential figure in post-Union Scotland. He had control over royal patronage in Scotland, and managed Scottish affairs, making him the most politically powerful figure in the first half of the 18th century.
He was a founder and the first governor of the Royal Bank of Scotland. His likeness used to appear on all RBS banknotes, and still appears on the £100 note today. Through his patronage, including at Scottish universities, he became an important sponsor and promoter of the culture of the Scottish Enlightenment
It is signed by Richard Glynne (1681-1755), a successful and well-regarded maker of mathematical instruments and a member of the Clockmakers’ Company. In his business, skills and innovations, Glynne was closely integrated with a growing community of British instrument makers and produced instruments of outstanding quality, of which this dial is the most important surviving example.
The dial is of a type first made for figures such as Peter I of Russia and Queen Anne’s consort, Prince George of Denmark, suggesting Ilay commissioned it from Glynne as a projection of his reputation as a nobleman of wealth and status.
Of imposing size, in brass and silvered brass, it is surmounted with the Ilay coat of arms, with leopard supporters, coronet and motto, and the central plate is decorated with the monogram ‘AC’, for Archibald Campbell, beneath an earl’s coronet.
Dr Rebekah Higgitt, Principal Curator of Science at National Museums Scotland, said: “We’re delighted to be able to acquire the spectacular Ilay Glynne dial and hugely grateful to the funders who have made it possible.
“It is an addition which reflects the breadth of our collections, being at once a significant scientific instrument, an object of great beauty and one with strong connections to key developments in Scotland’s history.”
Dr Simon Thurley, Chair of the National Heritage Memorial Fund, said: ”The Ilay-Glynne dial is a magnificent example of scientific endeavour, and we are delighted to have supported National Museums Scotland to acquire it for a UK public collection.
“Not only is it an exquisite instrument, but its provenance offers an opportunity to explore important stories about scientific, intellectual and cultural currents that saw the birth of the Scottish Enlightenment.”
Jenny Waldman, Director, Art Fund said: “This stunning sundial offers a unique insight into scientific innovations in 18th century Scotland. The precision and detail of the craftsmanship is exquisite, a true work of art.
“I’m so pleased that Art Fund has been able to support National Museums Scotland to acquire this remarkable object for their permanent collection, ensuring it will continue to enlighten visitors from Scotland and beyond on public display in the Spirit of the Age gallery.”
The Ilay Glynne dial reveals the Earl of Ilay not just as the politically powerful and wealthy figure he is best known as, but also as a patron of arts, science and learning. It is through this patronage that Ilay is widely believed to have contributed to the Scottish Enlightenment.
Those he supported include philosopher Francis Hutcheson, chemist Joseph Black, astronomer Alexander Wilson, poet Allan Ramsay and other ingenious individuals who created emblematic works of 18th-century Scottish culture.
In Scotland, Ilay pursued agricultural and infrastructure projects, the development of fisheries and promotion of the linen trade. As founder and governor of the Royal Bank of Scotland and the British Linen Company he aimed to encourage others to invest and improve.
Some of these investments were in overseas trading companies, such as the African Company, East India Company and South Seas Company, which profited from colonisation and the exploitation of enslaved people, an important reminder of a key source of wealth that underlay economic and cultural change in 18th-century Scotland.
The dial has undergone extensive cleaning and conservation work, and is now on permanent display in the Spirit of the Age gallery in the National Museum of Scotland. Admission is free.
