Rachel Reeves aims to find £40bn in budget but several ministers have written to Keir Starmer about spending cuts
Cabinet ministers have pushed back against planned cuts to their departments in the upcoming budget, with several writing to Keir Starmer to contest them.
Several are understood to have shared their concerns at the likelihood of deep cuts to unprotected departments such as housing and transport.
Continue reading...Latest PMQs comes as sources say chancellor is briefing ministers that £40bn will need to be found in the budget
Robert Jenrick has finished his speech, and he is now taking questions.
Q: Kemi Badenoch says she is Labour’s worst nightmare. Is she right?
I think that our party faces an existential challenge right now. Our party has no divine right to exist. That’s why we need to get the choice right in this leadership election, and that’s why I stand for ending the drama, ending the excuses, and actually delivering for the British people.
Continue reading...Chancellor’s words will be interpreted as signal she will not give in to ministers over cuts she imposes in budget
Rachel Reeves has told the cabinet that the UK still faces a £100bn black hole in the public finances over the next five years amid concerns that ministers are yet to grasp the full scale of the fiscal deficit ahead.
At a meeting of the political cabinet, the chancellor said the £22bn gap this year – which the government has blamed on their poor economic inheritance from the Tories – would be a recurring cost each year of this parliament.
Continue reading...Thinktank reports saying sector should be hit with extra £900m to £3bn in levies prompts market selloff
Shares in British gambling companies have dropped sharply, reducing the stock market value of large operators by more than £3bn, after the Guardian reported that Treasury officials could tap the sector for between £900m and £3bn in extra taxes.
The chancellor, Rachel Reeves, has come under pressure from two influential thinktanks to raise taxes on the industry, as she pulls every available lever to plug a £22bn “black hole” in the nation’s finances.
Continue reading...Jonathan Reynolds says Labour pledge not to increase NICs applies to employees and does not rule out other changes
The business secretary has said Labour’s manifesto pledge not to raise national insurance applied to employees but he did not rule out raising employers’ contributions in the budget.
Speaking on Sky’s Sunday Morning with Trevor Phillips, Jonathan Reynolds was asked if the pledge applied to employees’ and employers’ national insurance contributions (NICs).
Continue reading...With the budget and Starmer’s investment summit approaching, the industry’s lobbyists are in full cry over ‘carried interest’
When the future deputy prime minister Angela Rayner walked the floor of a bespoke kitchen outfitter’s warehouse in October 2022, she was doing more than gladhanding local workers in her Greater Manchester constituency.
The real reason Rayner had been invited to tour Goyt Kitchen Fabrications in Ashton-under-Lyne was not to see how the firm had fared through the Covid pandemic, but to be sold the benefits of private equity. Goyt’s bosses had taken a £200,000 investment from Welsh-government-backed FW Capital.
Continue reading...Group says government policy would force many to close and leave deeply religious families with no alternatives
Independent faith schools have held talks with ministers over a proposal to exempt small private establishments from VAT if their fees are far below those charged by elite schools such as Eton.
The group, representing more than 270 Jewish, Muslim and Christian independent faith schools that often rely on donations and volunteers to survive, say the government’s policy of adding 20% VAT to fees from this January would force many to close and leave deeply religious families with no alternatives.
Continue reading...Multimillionaire Derek Webb, a Labour donor, goes all-in with support for levy on online casinos and bookmakers
As a former professional poker player, Derek Webb is used to rising from the table holding more chips than he started with.
Vanquished opponents are left scratching their heads, wondering how they have been bested by a softly spoken, bespectacled septuagenarian with a Derby accent.
Continue reading...Treasury weighing proposals as chancellor attempts to plug £22bn hole in public finances
Ministers are considering a tax raid of up to £3bn on the gambling sector as Rachel Reeves casts around for funds to shore up the public finances.
Treasury officials are understood to be weighing up proposals, put forward by two influential thinktanks and backed by one of the party’s top five individual donors, to double some of the taxes levied on online casinos and bookmakers.
Continue reading...The chancellor desperately needs more money to finance growth and public spending so expect a bit of tweaking to supposedly strict constraints
Change*. If Labour’s one-word campaign slogan had an asterisk, it would have directed voters to Rachel Reeves’s budget.
Later this month the chancellor will attempt to walk the line between repairing Britain’s battered public realm, while sticking to a manifesto promise to balance the books without raising taxes on working people.
Continue reading...Thinktank says tax increases in budget will be necessary even if Rachel Reeves changes fiscal rules
Keir Starmer’s promise to end austerity and rebuild public services will require tax increases of £25bn a year in the coming budget even if debt rules are changed to provide scope for extra investment spending, a leading thinktank has said.
In its preview of the first Labour budget in 14 years, the Institute for Fiscal Studies said Rachel Reeves would need to raise taxes to fresh record levels to meet the government’s policy goals. The chancellor was also warned of the risk of a Liz Truss-style meltdown if the City responded badly to substantially higher borrowing.
Continue reading...In today’s newsletter: Rachel Reeves calculates that changing debt rules could help boost the UK economy, but what does it really mean?
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Good morning.
There are just three weeks to go until the biggest fiscal and political event for any government: the budget.
Middle East | Israel has said it is expanding its ground operation in Lebanon with the deployment of a fourth division after another night of intense airstrikes. The reservist 146th division was sent to southern Lebanon overnight, meaning the number of troops on the ground is now likely to number 15,000. The Lebanese health ministry said late on Tuesday 36 people have been killed and 150 have been injured in Israeli attacks over the past 24 hours.
Environment | Florida’s western coast was making emergency preparations on Tuesday for the impact of Hurricane Milton, with thousands of evacuees clogging highways, contending with fuel shortages, and the mayor of Tampa warning residents bluntly “you are going to die” if they stayed behind.
Conservatives | James Cleverly has topped the latest MPs’ vote in the Conservative leadership contest, making him the new favourite, as Tom Tugendhat became the latest candidate to be eliminated.
Poverty | More than 9 million people in the UK experience levels of poverty and hunger so extreme they are vulnerable to reliance on charity food handouts, according to research by the charity Trussell.
Society | Deaths have outstripped births in the UK for the first time in almost half a century, excluding the start of the pandemic, official figures showed.
Continue reading...The Treasury refuses to confirm 1 January start date as unions, tax experts and school leaders say it is unworkable
Government plans to impose VAT on private schools from 1 January next year may have to be delayed because of warnings from unions, tax experts and school leaders that meeting the deadline will cause administrative chaos and teacher job losses, and put pressure on the state sector.
The Treasury on Saturday night refused to confirm that the plan to impose 20% VAT on private school fees would go ahead from 1 January, as confirmed by the chancellor, Rachel Reeves, in July, instead saying it would be introduced “as soon as possible”.
Continue reading...Exclusive: Watchdog may conclude that emigration of wealthy individuals could actually cost Treasury revenue
Keir Starmer’s promised tax crackdown on non-doms could yield no extra funds for the Treasury, leaving a £1bn hole in the government’s planned spending for schools and hospitals.
Labour planned to use the money raised from wealthy individuals who are registered overseas for tax purposes to invest in ailing public services.
But the Guardian understands that Treasury officials fear estimates due to be released by the government’s spending watchdog may suggest the policy will fail to raise any money because of the impact of the super-rich non-domiciles leaving the UK.
Continue reading...Oxfam says ‘commonsense solution’ would reduce emissions and raise urgently needed climate finance
Fair taxes on superyachts and private jets in the UK could have brought in £2bn last year to provide vital funds for communities suffering the worst effects of climate breakdown, campaigners say.
Private jet use in the UK is soaring. It was home to the second highest number of private flights in Europe last year, behind only France, according to figures from the European Business Aviation Association.
Continue reading...Spokesperson for Keir Starmer says focus was instead on encouraging pensioners to seek additional support
Ministers did not carry out a specific impact assessment on the withdrawal of the winter fuel payment from the bulk of pensioners, such as the potential effect on illness and death rates among older people, Downing Street has said.
After days of No 10 refusing to comment, Keir Starmer’s deputy spokesperson said the only assessment made before the policy announcement was a standard legal one of potential equalities impacts.
Continue reading...Peers said they were raising a ‘big red flag’ and tough choices will be needed
The pressing risk of the national debt becoming unsustainable will force Britain into the unenviable choice of paying higher taxes or the state doing less, a House of Lords committee has warned.
A report by peers said tough decisions and a new set of rules for the public finances were needed in order to put debt – currently just under 100% of annual national income – on a decisive downward path.
Continue reading...Rachel Reeves tells Labour MPs that axing allowance for all but poorest pensioners will help plug £22bn hole in finances
The chancellor has faced down would-be rebels in a private meeting of Labour MPs ahead of the crunch vote on the government’s controversial plan to scrap the winter fuel allowance.
Rachel Reeves told a gathering of the parliamentary Labour party that the move was necessary, despite fears about the impact on millions of less-well-off pensioners, as it would help to plug a £22bn gap in the public finances.
Continue reading...Simon Case criticises Tory government’s failure to hold regular spending reviews in letter to Jeremy Hunt – who had challenged figure
Simon Case, the head of the civil service, has backed the government’s figures showing that a £22bn shortfall was left by the previous Conservative administration.
The cabinet secretary said the Tories’ failure to hold regular spending reviews had contributed to the financial uncertainty.
Continue reading...Stella Creasy says she wants to put school and hospital debts and impact of trade deals ‘on nation’s books’
A senior Labour backbencher is seeking to have liabilities from schools and hospitals built under private finance initiative (PFI) deals scrutinised under a new budget responsibility bill.
Stella Creasy, who has tabled two amendments to the bill, said this would help highlight the scale of debt incurred. She also wants trade deals such as the post-Brexit arrangement with the EU to fall under its remit, arguing these can have an even greater fiscal impact.
Continue reading...