Category Archives: Rachel Reeves

Reeves accused of betraying small family firms with inheritance tax rises

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Chancellor also criticised for letting the very rich off the hook with a lower than expected rise in capital gains tax

Tax rises aimed at inherited wealth are at risk of backfiring, after the chancellor was accused of betraying small family businesses while letting private equity bosses off the hook.

Labour’s first budget in 14 years included measures to close inheritance tax (IHT) loopholes and press ahead with scrapping the controversial non-dom tax status, as well as levying higher taxes on private jet flights.

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OBR says budget unlikely to lift economic growth over next five years

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Forecaster says extra spending revealed by Rachel Reeves will give only a short-term lift to economy

Labour has embarked on a “large, sustained increase in spending, tax and borrowing”, according to the government’s economic forecaster, as it judged that Labour’s first budget for 15 years is unlikely to increase economic growth over the next five years.

Assessing Rachel Reeves’s policies, the Office for Budget Responsibility (OBR) said the economy would expand at the same rate as predicted in March by the end of the parliament, despite a £70bn-a-year rise in spending.

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Labour wants to reverse decline – but with a big budget comes a big risk

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The government knows cynical voters will need to see tangible change in public services and to feel better off

At the final political cabinet before Rachel Reeves delivered her first budget this week, ministers were presented with internal party research on what the public was expecting.

In the months since the general election, they had been fed a regular diet of gloomy warnings about the state of the economic inheritance and, more recently, high levels of pre-budget news coverage, so it was firmly on their horizon.

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Wednesday briefing: Five key messages that will define the budget

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In today’s newsletter: Labour has told two stories about Rachel Reeves’ budget. Will it be an end to austerity – or an acceptance of “the harsh light of fiscal reality”?

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Good morning. There will be no triumphalism, no big giveaways and certainly no rabbits out of hats: this, Keir Starmer and Rachel Reeves have been at pains to tell us, is going to be a very grownup budget. And even though Reeves will promise today that “the prize on offer is immense”, we might also therefore expect it to be a painful one. Since the entire thing appears to have been briefed out in advance over the last few weeks, nobody can say they haven’t been warned.

In a way, it feels like two budgets: the optimism and ambition of a minimum wage rise, a major boost for the NHS, and significant new investment in infrastructure; and a bleaker story about misleading pledges, limited ambitions, and the biggest set of tax increases in budget history.

UK news | The suspect charged with the murder of three girls in Southport is to be separately prosecuted on suspicion of possessing terrorist material and producing ricin, a powerful poison, police have said. Axel Rudakubana is due to appear in court on Wednesday.

US election | Kamala Harris urged American voters to elect a “new generation of leadership” in a speech at the same place Donald Trump spoke on January 6 almost four years ago. Likening her opponent to a “petty tyrant”, Harris told the crowd: “Donald Trump would walk into that office with an enemies list … I will walk in with a to-do list.”

Middle East | Israel is not addressing the “catastrophic humanitarian crisis” in Gaza, the US envoy to the UN has said, ahead of a deadline for the Israelis to improve the situation or face potential restrictions on US military aid. The warning came as Gaza’s civil defence agency said 93 people had been killed in an airstrike on a crowded block of flats.

Conservatives | Britain’s former colonies should be thankful for the legacy of empire, Conservative leadership candidate Robert Jenrick has said. Jenrick’s comments, which follow an agreement among Commonwealth leaders that “the time has come” to discuss reparations, were condemned as “an obnoxious distortion of history”.

Mexico | A team of researchers have stumbled on a lost Maya city of temple pyramids, enclosed plazas and a reservoir, all hidden for centuries by the Mexican jungle. The discovery was made possible by the use of laser mapping techniques in an area previously ignored by archaeologists.

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Reeves to promise ‘wealth and opportunity for all’ in major tax-raising budget

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Having announced minimum wage boost, chancellor to say she can spare working people from tax rises

The UK’s national minimum wage is to rise by a higher than expected 6.7% next year, Rachel Reeves has announced before a multi-billion pound tax-raising budget designed to act as the springboard for a decade of national renewal.

Insisting that the increase to £12.21 in the pay floor marks a significant step in Labour’s plan to support the low paid, the chancellor will also say she can spare working people from the tax increases intended to plug the hole in the public finances and avoid a fresh wave of found of public spending cuts.

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Hard-hit Defra to have budget slashed further despite warnings

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Department’s finances were slashed during austerity and campaigners say more cuts will stall progress to meet nature and climate targets

Rachel Reeves has been urged not to cut the government’s environment funding in the budget as analysis shows the department’s finances were slashed at twice the rate of other departments in the austerity years.

Between 2009/10 and 2018/19, the environment department budget declined by 35% in monetary terms and 45% in real terms, according to Guardian analysis of annual reports from the Department for the Environment, Food and Rural Affairs (Defra), the Environment Agency and Natural England. By comparison, the average cut across government departments during the Conservative austerity programme was about 20%. During the first five years of austerity, it was the most cut department.

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‘Cock-up with the comms’: how Labour announced five non-existent freeports

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Erroneous announcement traced back to briefing note prepared by Treasury officals, ahead of PM’s Samoa trip

When Keir Starmer announced a shake-up in his No 10 operation last month he hoped to put an end to the missteps of his first few months in office. But an embarrassing error by Downing Street this weekend demonstrates how many pitfalls there are for a new government still learning the ropes.

In a press release on Friday, Downing Street said five new freeports would be announced in the budget. The Guardian and other outlets covered the news, which was given first to reporters who had travelled with Starmer to Samoa for the Commonwealth summit. Both the prime minister and his aides answered questions on the policy they had unveiled.

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London’s Aim shrinks to smallest since 2001 amid fears of tax relief changes

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UHY Hacker Young says 92 companies have delisted and only 10 floated on junior stock market in past year

The UK’s Alternative Investment Market (Aim) has shrunk to its smallest size in 23 years as business owners and investors anticipate an abolition of inheritance tax relief in the budget this week.

The accountancy group UHY Hacker Young calculated that 92 companies have delisted from Aim, London’s junior stock market, in the past year, reducing the total number of companies on Aim to 695.

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Keir Starmer vows to ‘embrace harsh light of fiscal reality’ ahead of budget

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PM will defend Labour plans in speech and insist working people need better public services more than lower taxes

Keir Starmer will promise to “embrace the harsh light of fiscal reality” on Monday as his chancellor prepares to unveil a budget that includes billions of pounds’ worth of tax rises and spending cuts.

The prime minister will give a speech in the West Midlands defending Labour’s approach to the economy, as Rachel Reeves prepares to announce what she promises will be as momentous a budget as any in the party’s history.

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OBR to publish breakdown of claimed £22bn ‘black hole’ on budget day

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Former chancellor Jeremy Hunt says decision to publish findings of review on Wednesday is ‘significant concern’

Britain’s fiscal watchdog is to publish a detailed breakdown of the £22bn “black hole” that Labour says it inherited after Rachel Reeves presents the budget on Wednesday.

The Office for Budget Responsibility will release the conclusion of its review of how the forecast for departmental spending for its last economic and fiscal outlook, published for the March budget, was prepared.

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Reeves: ‘My budget will match greatest economic moments in Labour history’

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The chancellor says she will invest to reverse Tory decline, but stands accused of breaking party manifesto promises

Labour will launch a new era of public and private investment in hospitals, schools, transport and energy as momentous as any in the party’s history in this week’s budget, the chancellor, Rachel Reeves, has said.

In an interview with the Observer before the first budget by a female chancellor, Reeves draws comparisons with Labour’s historic reform programmes begun in 1945 by Clement Attlee, in 1964 under Harold Wilson and in 1997 under Tony Blair.

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Rachel Reeves has promised not to raise taxes, so how can she fill budget coffers?

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Chancellor said to be planning measures including raising employer NI contributions and capital gains tax rates. We consider the likelihood of each and the potential for a row

During the general election campaign, Paul Johnson of the Institute for Fiscal studies repeatedly accused both main parties of indulging in a “conspiracy of silence” over their economic policies. Neither Labour nor the Tories would admit, he complained, that if they won they would have to announce huge tax rises or spending cuts to restore the public finances to anything resembling good health.

On Wednesday, 118 days after Labour won the election, Rachel Reeves will prove Johnson right. In her first budget she will spell out plans to raise an eye-watering sum of about £40bn from tax rises and spending reductions to wipe the slate clean and to pump funds into public services. She will also confirm changes to debt rules that will release up to £50bn more to borrow for long-term investment in new national infrastructure.

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Chancellor pledges extra £500m for social homes in budget

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Treasury plans £5bn total investment in housing supply and a reduction in discounts under the right-to-buy scheme

The Treasury has announced an extra £500m for social homes in the budget, in what appears to be a compromise with the housing department, led by Angela Rayner, over the scale of ambition required in the sector.

The promise of an additional £500m for the government’s affordable homes programme (AHP) is intended to add up to 5,000 extra social homes. The Treasury said it will bring total investment in housing supply to £5bn.

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No 10 clarifies ‘working people’ tax pledge amid confusion over definition – UK politics live

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PM hinted at tax rises for those who earn income from shares and property, saying they did not fit his definition of ‘working people’

Downing Street is blocking moves to include a ban on smoking outdoors in the upcoming Tobacco and Vapes bill amid fierce opposition by the hospitality trade.

No 10 officials privately believe that banning people from lighting up in pub gardens is “an unserious” policy and is not backed by good evidence showing that it harms non-smokers.

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NatWest urges Reeves to ‘get balance right’ when changing debt rules

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Bank’s boss says chancellor must signal intentions clearly amid risk to borrowing and mortgage rates

Rachel Reeves must “get the balance right” when announcing changes to Britain’s debt rules in next week’s budget given the potential knock-on effects to borrowing and mortgage rates, the boss of NatWest has said.

The bank’s chief executive, Paul Thwaite, said markets would be sensitive to the chancellor’s reasons for releasing up to £50bn of borrowing headroom after she confirmed in Washington on Thursday that she planned to rewrite her fiscal rules.

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State-backed loans to go to firms importing critical minerals into UK

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Rachel Reeves to encourage import of raw materials from Commonwealth countries to counter China’s grip on market

Businesses that import critical minerals to the UK will be given access to state-backed loans in a move to counter China’s dominance in the market.

The chancellor, Rachel Reeves, is expected to announce extra government support to encourage the import of critical minerals such as lithium, graphite and cobalt in her budget next week. Companies that bring supplies of critical minerals into the UK will be able to access state-backed loans under the UK export finance mechanism.

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Budget will reverse huge cuts in UK’s public investment, Reeves confirms

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Chancellor pledges to spend, but says there will be no Truss-style splurge when she changes fiscal rules in budget

Rachel Reeves will pledge to reverse huge cuts in public investment in her budget next week after she confirmed that rules limiting her spending power will be overhauled to enable the government to release as much as £50bn for infrastructure spending.

The chancellor said she would revise how the Treasury calculated shortfalls in the government budget over the rest of the parliament to free up funds to invest in public infrastructure.

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Jeremy Hunt claims Labour changing debt definition will ‘punish families with mortgages’ – as it happened

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Former chancellor says ‘increasing borrowing means interest rates would be higher for longer’ as Reeves says it will ‘make space for investment’

Nigel Farage, the Reform UK leader, has said that “no one knows” who Robert Jenrick, the Tory leadership contender, is.

Of the two candidates left in the contest, Jenrick is the one who is doing most to appeal to Tories who defected to Reform UK, because he is saying Britain should leave the European convention on human rights.

I know the fella. Is he the chap that one day was on the very much on the left of the Conservative party and is now on the right of the Conservative Party?... No one knows who he is.

I’m sure government can agree that support and providing opportunities for young people should be central to the policy of any government. We are glad to see the government working to build closer economic and cultural ties with Europe. We want to forge a new partnership with our European neighbours, built on cooperation, not confrontation and move to a new comprehensive agreement.

We must build rebuild confidence through seeking to agree partnerships or associations helping to restore prosperity and opportunities for British people.

We are not going to give a running commentary on the negotiations. We will obviously look at EU proposals on a range of issues, but we are clear that we will not return to freedom of movement.

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Reeves to announce major change to fiscal rules releasing £50bn for spending

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After weeks of speculation, chancellor will tell IMF in Washington that UK’s debt measure will be redefined to permit borrowing for investment

Rachel Reeves will announce at the International Monetary Fund a plan to change Britain’s debt rules that will open the door for the government to spend up to £50bn extra on infrastructure projects.

After weeks of speculation, the chancellor will confirm at the fund’s annual meetings in Washington on Thursday that next week’s budget will include a new method for assessing the UK’s debt position – a move that will permit the Treasury to borrow more for long-term capital investment.

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Lloyds backs Reeves budget plans despite mooted tax increases

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Bank expects ‘constructive, pro-growth agenda’ by chancellor next week and seeks to be part of it

Lloyds Banking Group has backed the Labour government’s forthcoming budget and played down the impact of any tax increases, which it said would probably be part of a “constructive, pro-growth agenda”.

The chief financial officer of the UK’s biggest mortgage lender, William Chalmers, said he would welcome a budget package that was consistent with government pledges to kickstart growth and investment in key areas such as energy, infrastructure and housing.

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