Ministers mulling tax rise and cuts in Budget as they meet City bosses

Changes to inheritance tax, fuel duty, stamp duty, and a levy on e-cigarettes are among the measures said to be up for consideration by Rachel Reeves in her October 30 fiscal announcement, according to reports across the media on Friday morning.

The Chancellor is also expected to honour the previous Tory government’s plans to make around £3 billion of cuts to welfare by reforming work capability rules.

Work and pensions minister Alison McGovern did not steer away from the reports when asked about them by broadcasters, but said Labour was making its “own reforms” to the benefit system.

Ms Reeves is meanwhile convening the first meeting of the British infrastructure taskforce on Friday, in a bid to get more private investment into major infrastructure projects.

Multiple changes to inheritance tax are being considered by ministers, according to reports by the BBC, though it is not certain how many people will end up paying more money, nor how much more they might pay.

The levy does not affect the vast majority of the public at the moment, with only 4% of deaths resulting in an inheritance tax charge as the threshold for the 40% charge is an estate above £325,000.

Ms Reeves is also said to be considering bringing a stamp duty discount introduced by the Tories to an end, the Times newspaper reports, which is expected to raise £1.8 billion a year by 2029.

Other reports suggest a tax on vapes could be raised, and that fuel duty could be hiked for the first time in 14 years.

Ms Reeves is looking to raise up to £40 billion from tax hikes and spending cuts in the Budget as the Government seeks to avoid a return to austerity.

As part of the reported welfare cut proposals, it is understood Ms Reeves will commit to the plan to save £3 billion over four years, but Work and Pensions Secretary Liz Kendall will decide how the system will be changed in order to achieve this.

Ms McGovern, a minister in the Department for Work and Pensions, suggested Labour was making its own reforms rather than sticking to previous Tory commitments.

She told Times Radio: “We will not go ahead with the Tory plan because that was theirs. We will need to make savings like all departments, but we will bring forward our own reforms.”

The move has been criticised by anti-poverty charity Z2K, which said Labour needed a “proper plan to improve the nation’s health and rebuild our public services, not a return to the same old failed approach of cutting benefits”.

Ahead of what is expected to be a Budget full of change, Sir Keir Starmer has faced a Cabinet backlash, with several ministers writing to the Prime Minister directly to express concern about proposals to reduce their departmental spending by as much as 20%.

Downing Street has warned that “not every department will be able to do everything they want to” and “tough decisions” would have to be made.

Finance chiefs from HSBC, Lloyds and M&G will be among those involved in the Chancellor’s talks on Friday at the first meeting of Labour’s British infrastructure taskforce.

Ms Reeves said their expertise will be “invaluable in the weeks and months ahead” as the Government pursues its “number one mission to grow the economy and create jobs”.

Chief Secretary to the Treasury Darren Jones said the taskforce would aim to end “the cycle of underinvestment that has plagued our infrastructure systems for over a decade.”