Category Archives: Rachel Reeves

UK inflation falls below 2% for first time since 2021 in boost to Rachel Reeves

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Surprise annual drop to 1.7% in September raises chance of interest rate cuts, increasing budget leeway

Inflation in the UK has fallen to its lowest level in three and a half years, giving a pre-budget boost to Rachel Reeves as expectations grow for the Bank of England to cut interest rates.

Figures from the Office for National Statistics show the consumer prices index dropped sharply to 1.7%, down from 2.2% in August, in a bigger fall than anticipated in financial markets, driven by lower air fares and petrol prices.

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Rachel Reeves tells cabinet UK still faces £100bn black hole over next five years

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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.

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Starmer steps into cabinet row over P&O to rescue global summit in London

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The PM has backed transport secretary Louise Haigh after she called ferry firm a ‘rogue operator’, threatening investment summit

Keir Starmer expressed his full confidence on Saturday in the transport secretary, Louise Haigh, after an explosive cabinet row cast fresh doubt over his Downing Street operation and threatened to overshadow a key international investment summit in London.

Government sources said the prime minister and Haigh had spoken and made up on Saturday after Starmer appeared to rebuke her on Friday for branding P&O Ferries a “rogue operator” in a statement and then calling for customers to boycott the company in a subsequent media interview.

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Private equity barons lean on Rachel Reeves to water down proposals for higher taxes

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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.

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Pressure mounts on Rachel Reeves to drop ‘dangerous’ £1.3bn cut to benefits for disabled

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Thousands could lose up to £4,900 a year if the plan is retained in the forthcoming budget

Rachel Reeves is coming under intense pressure to use the budget to abandon a £1.3bn cut to benefits for people with disabilities, first announced by the Tory government, amid warnings it will lead to hundreds of thousands of the most vulnerable people losing almost £5,000 a year.

The leading independent thinktank, the Resolution Foundation, has called on the chancellor to drop or delay changes to the work capability assessment (WCA), arguing that key aspects of the policy have not been thought through, and that around 420,000 people who are unable to work through disability or ill-health could lose up to £4,900 a year.

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Labour considers up to £3bn tax raid on gambling firms

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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.

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Will Rachel Reeves’s rules on debt and spending survive the budget?

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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.

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Labour needs £25bn a year in tax rises to rebuild public services, warns IFS

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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.

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Wednesday briefing: Inside Labour’s plan to move the fiscal goalposts – and tackle debt

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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.

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Rachel Reeves to decide by Wednesday whether to change fiscal rules

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Move could unlock up to £57bn in additional spending on infrastructure in October’s budget

Rachel Reeves must decide by Wednesday whether to change the government’s fiscal rules to potentially unlock up to £57bn in additional spending on infrastructure at this month’s budget.

Sources close to the Treasury said the chancellor would need to make a decision before submitting the “major measures” for her tax and spending event on 30 October to the Office for Budget Responsibility (OBR).

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Doubts grow over Labour’s VAT plan for private schools

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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”.

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Cabinet set for split over support for England and Wales assisted dying bill

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Some senior ministers expected to vote against measure in free vote, while others are still undecided

MPs backing a new bill to legalise assisted dying in England and Wales hope to secure a Commons vote by Christmas, but cabinet ministers are set for a big split over support for the legislation.

The bill, due to be brought forward by the Labour backbencher Kim Leadbeater this month, is to be a free vote but some senior cabinet ministers are expected to vote against – and several, including the chancellor, Rachel Reeves, and the health and social care secretary, Wes Streeting – remain undecided.

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Labour to commit almost £22bn to fund carbon capture and storage projects

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Investment will fund two CCS clusters – but environmental campaigners have criticised plans

Rachel Reeves is paving the way for a multibillion-pound increase in public-sector investment at the budget after the government announced plans to commit almost £22bn over 25 years to fund carbon capture and storage projects.

In what is expected to be one of the biggest green spending promises of the parliament, the chancellor, prime minister and the energy secretary, Ed Miliband, will unveil the details on a visit to the Liverpool city region on Friday declaring a “new era” for clean energy jobs.

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Why official register of MPs’ financial interests is now a must-read

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Revelations about gifts of clothes and tickets to sporting events have put MPs’ declarations in the spotlight

Revelations that Keir Starmer and his team have accepted donations of clothes, accommodation and sports tickets have focused attention on the official register of MPs’ interests, usually published every couple of weeks.

Here are some highlights from the latest version, published on Wednesday.

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Winter fuel cut savings will be far less than Reeves expected, new analysis finds

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A surge in claims for pension credit will make thousands more people eligible for the payments and other benefits

Rachel Reeves has been warned that her cut to pensioner winter fuel payments risks saving hundreds of millions less than anticipated, in a new blow to her attempts to close the hole in Britain’s finances.

The chancellor and her Treasury team are already re-examining parts of a plan to crack down on non-dom tax status over concerns that it may not raise any money.

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Labour crackdown on non-doms may raise no money, officials fear

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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.

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‘Davos on the Mersey’: key conference takeaways as Labour tries to woo business

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As the budget looms, where the party stands on investment in the UK economy, workers’ rights and more

For a second year running, corporate Britain descended on Liverpool for Labour’s annual conference, in an event so packed with executives that some insiders joke the socialist gathering has developed into a full-blown “Davos on the Mersey”.

Like last year, the exhibition and conference fringe had sponsored events, lounge areas and advertising from exhibitors including Gatwick, National Grid, Ikea and Specsavers. This year, however, business leaders were looking for clues about how Labour will govern after July’s election landslide.

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Cutting winter fuel payments ‘right decision’, says Reeves, as No 10 says no change to council tax discount for single people – Labour conference live

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Chancellor says £22bn gap in current spending budget and state pension rise meant she had to make decision on means-testing fuel payments

In interview this morning Rachel Reeves, the chancellor, defended her own decision to accept clothing donations worth £7,500 when she was in opposition.

Speaking on the Today programme, she said:

I can understand why people find it a little bit odd that politicians get support for things like buying clothes.

Now, when I was an opposition MP, when I was shadow chancellor of the exchequer, a friend of mine who I’ve known for years [Juliet Rosenfeld] – she’s a good personal friend – wanted to support me as shadow chancellor and the way she wanted to support me was to finance my office to be able to buy clothes for the campaign trail and for big events and speeches that I made as shadow chancellor.

It’s never something that I planned to do as a government minister, but it did help me in opposition.

It’s rightly the case that we don’t ask taxpayers to fund the bulk of the campaigning work and the research work that politicians do, but that does require, then, donations – from small donations, from party members and supporters, from larger contributions, from people who have been very successful in life and want to give something back.

We appreciate that support. It’s part of the reason why we are in government today, because we were able to do that research work, and we were able to do that campaigning.

Unite and the Communication Workers Union (CWU) have put forward motions which were due to be debated on Monday afternoon, with strong support expected from other unions.

Sources said unions were told late on Sunday that the debate is being moved to Wednesday morning.

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Reeves packs up her troubles until budget day and smiles, smiles, smiles | John Crace

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The chancellor beamed her way through a conference speech that offered hope at least but little of substance

Stop all the clocks, cut off the telephone. If you had thought that maybe today was the day when you made that call to Dignitas, then think again. Cancel that flight to Zurich. At least postpone it. Things might not be quite as bad as you had been led to believe. Or rather, they are that bad but there is some small flicker of hope if you can hold on long enough. There will be pain in the short and medium term. There’s no avoiding that. Try to think of it as character building. But possibly, just possibly, you might come through. We happy few. Blinking into the light of the promised land.

This was Rachel Reeves’s day. And she knew everything was going to be just fine the moment she woke up to find that Liz Truss had posted yet another cry for help on X. You can now follow the Trusster’s decline in real time on social media. It’s got so bad that she now films herself in front of a bookcase where everything is arranged by colour. The kindest explanation is that she thinks she’s filming a hostage video and the books are a coded message for “I’m being held against my will”.

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Rachel Reeves orders investigations into £600m of Covid contracts

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Chancellor will confirm inquiries in conference speech as Labour tries to move on from donations scandal

Rachel Reeves will announce on Monday that she has ordered investigations into more than £600m worth of Covid contracts awarded under the Conservatives as Labour struggles to get back on the front foot over questions of ethics.

After days of bruising allegations over donations, the chancellor will confirm that she will refer more than half of contracts for material such as masks to the incoming Covid corruption commissioner, after the previous government recommended dropping any attempt to investigate them.

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