The government claims to be fixing the economy but households may face more pressure in the months ahead
Labour swept to power in the wake of a cost of living crisis that hit households hard, with the price of food and energy rocketing alongside the impact of Liz Truss’s disastrous mini-budget on mortgage rates.
At 2.3%, inflation is nowhere the 10% peak after Russia’s invasion of Ukraine, but it is creeping up, and could hit 3% in 2025, say forecasters.
Continue reading...Chancellor understood to be determined to keep policy despite Treasury analysing ways to soften impact
Rachel Reeves is holding firm against a U-turn on inheritance tax for farmers, despite the Treasury analysing ways of softening the impact.
The chancellor is understood to be determined not to drop the policy even though some Labour MPs – and even ministers – are worrying about the political fallout that has led to farmers protesting in Westminster this week.
Continue reading...Steve Reed says he may not agree on inheritance tax changes but government will listen to rural Britain
The UK environment secretary has promised to reform the food system to ensure farmers are paid fairly for the food they produce, after many filled the streets of Westminster to campaign against inheritance tax changes.
Speaking at the Country Land and Business Association (CLA) conference, Steve Reed said: “I heard the anguish of the countryside on the streets of London earlier this week. We may not agree over the inheritance tax changes, but this government is determined to listen to rural Britain and end its long decline.”
Continue reading...PM says budget stabilised the economy, while mortgage rates are ‘individual decisions for the banks’
Keir Starmer has conceded he was disappointed in the UK growth figures last week, but denied that his government’s budget was responsible for a recent rise in mortgage rates.
The prime minister told journalists travelling to the G20 summit in Rio: “What we have done with the budget is to stabilise the economy and that, in my view, was the essential first step.
Continue reading...Groups providing vital services say impact of tax and minimum wage rises will lead to cutbacks
Charities have warned of “life-changing consequences” for a million vulnerable children and adults as a result of cuts to state-funded disability services driven by tax changes and wage rises announced in the budget.
The Voluntary Organisations Disability Group (VODG), which represents 100 charities in England, said Rachel Reeves’s decision to raise employers’ national insurance contributions (NICs) had been “ill thought through” and would put many local charity services at risk.
Continue reading...Lord West says Republican victory is chance to show Britain is willing to prioritise military by allocating 3% of GDP
Keir Starmer is being urged to consider an emergency cash injection into defence and to accelerate Britain’s planned review of its military capabilities before Donald Trump’s return to the White House.
Senior defence figures are now assessing how Trump’s victory will shape a strategic defence review (SDR) that was already under way in Whitehall, whose findings are due to be reported in the spring. The SDR comes alongside a crucial review of public spending.
Continue reading...Health and children’s groups urge UK ministers to impose levies on products containing too much salt or sugar
Dozens of health and children’s groups have urged ministers to tackle obesity by imposing taxes on foods containing too much salt or sugar.
New levies based on the sugar tax on soft drinks would make it easier for consumers to eat more healthily by forcing food manufacturers to reformulate their products, they claim.
74% think food firms are not honest about the health impact of their products.
61% worry about the amount of sugar and saturated fat in what they eat.
Only 13% believe producers will make their food more nutritious without government intervention.
72% worry about high levels of processing used in food production.
Continue reading...Both PM and leader of the opposition offer congratulations with more full-throated support from Tory rightwingers such as Truss and Braverman
Another Labour politician who has criticised Donald Trump strongly in the past is Emily Thornberry, shadow foreign secretary when Jeremy Corbyn was Labour leader and now chair of the Commons foreign affairs committee. In an interview on the Today programme this morning she said Trump’s victory (or apparent victory – he still has not officially hit 270 electoral college votes) was “disappointing”, and that it made the world “unpredictable”.
When it was put to her that she described him as a “racist, sexual predator” when he visited the UK during his first term as president, she replied:
Well, he is. But he is the president of the United States, and we need to work with him.
I know that many Londoners will be anxious about the outcome of the US presidential election. Many will be fearful about what it will mean for democracy and for women’s rights, or how the result impacts the situation in the Middle East or the fate of Ukraine. Others will be worried about the future of NATO or tackling the climate crisis …
The lesson of today is that progress is not inevitable. But asserting our progressive values is more important than ever - re-committing to building a world where racism and hatred is rejected, the fundamental rights of women and girls are upheld, and where we continue to tackle the crisis of climate change head on.
Continue reading...Tim Martin blamed increases to the minimum wage and employers’ national insurance contributions
Pubgoers should expect prices to go up as a result of Labour’s first budget in 14 years, the politically outspoken boss of Wetherspoon’s, Tim Martin, has said.
Speaking as the hospitality chain announced record quarterly sales, Martin pinned the blame for an expected increase in pubs’ costs on the chancellor, Rachel Reeves, whose economic “pedigree” he has previously praised.
Continue reading...NIESR warns British economy would be one of the worst affected by protectionist policies
UK growth is likely to be halved by Donald Trump’s victory in the US presidential race if goes on to impose the swingeing new tariffs he has threatened, a leading thinktank has warned.
The National Institute of Economic and Social Research (NIESR) said the protectionist measures planned by the Republican challenger for the White House would result in weaker activity, rising inflation and higher interest rates from the Bank of England.
Continue reading...Rachel Reeves throws down budget gauntlet to new Tory chief as party’s first black leader is congratulated on win
Labour has thrown down an immediate challenge to the new Tory leader, Kemi Badenoch, to back Rachel Reeves’s budget plans for big increases in tax, spending and borrowing, as a huge political divide threatened to open up over economic policy and the future of public services.
All the main party leaders congratulated Badenoch on Saturday on becoming the first black leader of a main UK party after she stormed to victory over former immigration minister Robert Jenrick with 56.5% of the vote among Conservative party members.
Continue reading...Care providers, GPs and pharmacists warn increased costs will cause cuts and job losses
Services that support some of England’s most vulnerable people have warned that tax increases in the budget will lead to cuts and closures that could devastate the charity sector.
Although the NHS and councils are protected from the impact of the rise in employers’ national insurance contributions (NICs) announced in Wednesday’s budget, charities that provide services say the increase means they will face “existential” financial pressures.
Continue reading...David Goldstone to advise chancellor and chief secretary to the Treasury on ways to cut public spending
David Goldstone, the government’s new value for money chair, will receive a daily salary rate of £950, it has been reported.
The position was announced by the chancellor, Rachel Reeves, as part of Wednesday’s budget statement. She said Goldstone, who will be in post for a year, would “help us realise the benefits from every pound of public spending”.
Continue reading...Warning from comes after Rachel Reeves’s record tax-raising budget sent tremors through financial markets
Rachel Reeves has been warned an extra £9bn of tax rises may be required to avoid a fresh austerity drive in key public services as her record tax-raising budget sent tremors through the financial markets.
Threatening to undermine the chancellor’s claim that her budget would restore economic stability to Britain, government borrowing costs rose sharply in the City on Thursday as traders turned on Reeves’s tax and spending measures.
Continue reading...Labour said it would bring taxation of performance-related pay in the industry in line with others – but the chancellor had a change of heart
It has been almost two decades since Nicholas Ferguson, a grand figure in the private equity business, caused a storm by talking out loud about his industry’s dirty little secret. It could not be right, he said, that highly remunerated private equity executives could pay less tax than a cleaner or other low-paid workers.
Things have moved on a bit since 2007. So-called “carried interest”, or carry – the portion of an investment profit that the private equity managers retain as a bonus for success – is now taxed at 28% under the capital gains regime; in the old days, rates in effect as low as 10% could be secured thanks to various exceptions.
Continue reading...Rachel Reeves made funding the NHS a priority but people working in other areas said they were disappointed
Rachel Reeves’s first budget emphasised raising taxes to help the NHS, as the health service tries to cope with huge waiting lists and an ageing population. Funding the NHS was a top priority but people in other sectors – from universities to social care – feel the budget was a missed opportunity to tackle impending crises or introduce desperately needed reforms in their areas.
Continue reading...Institute for Fiscal Studies says budget ‘looks like the same silly games’ as seen under the Conservatives
Rachel Reeves is now being interview on ITV’s Good Morning Britain.
She is being interviewed by Ed Balls, the former Labour shadow chancellor who is now a TV presenter. He asks her to confirm that workers will end up losing out because of the employers’ national insurance contributions (NICs) increase.
Continue reading...Institute for Fiscal Studies says budget allows for rise in public service spending this year and next, but not thereafter
Rachel Reeves could be forced to find more money to fix public services after her budget made a start at reversing the “unrealistic” and irresponsible spending plans of the Conservatives, the Institute for Fiscal Studies (IFS) has said.
Britain’s leading experts on the government’s finances said the chancellor’s tax measures on Wednesday had allowed for a substantial short-term increase in public service spending this year and next, but not thereafter.
Continue reading...Lib Dem leader says rise in employer’s contribution risks worsening NHS crisis
The Liberal Democrats have called on the government to exempt the social care sector from the increase in national insurance in Labour’s budget, as an organisation representing many smaller care providers warned that the impact would be substantial.
In the biggest fiscal measures of Wednesday’s budget, raising an additional £25bn a year by the end of the parliament, Rachel Reeves announced an increase of 1.2 percentage points on the national insurance paid by employers, with the salary threshold at which this begins falling from £9,100 a year to £5,000.
Continue reading...Headlines featured numerous ‘nightmare’ allusions for budget delivered the day before Halloween
After Rachel Reeves‘ first budget as chancellor, which included £40bn in tax rises, newspaper headlines in the UK featured “nightmare” and “horror show” allusions as it came a day before Halloween.
The Financial Times’ front page featured a picture of smiling Reeves headlined “Reeves unveils £40bn budget tax rise”. The paper reported the chancellor’s aims of fixing public services, and the “broken” finances, saying businesses and the wealthy would “bear bulk” of the “heaviest fiscal burden” in a generation.
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