Rachel Reeves signals first budget will be painful mix of spending cuts, tax rises and higher borrowing

Published

11 months ago

September 11, 2024

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Chancellor Rachel Reeves has signalled her first budget as chancellor could be a painful mix of spending cuts, tax rises and increased borrowing.

Speaking to Sky News after official figures showed the economy flatlined in July with GDP growth of 0.0%, she refused to rule out increasing business and wealth taxes, or further cuts to already strained departmental budgets, as she seeks to address what she says is a dire economic inheritance from the last government.

“I’ve been really honest that there are difficult decisions to come in the budget, on spending, on taxation and welfare, after the mess that the previous government created with the public finances and the state that they are in, that was inevitable,” she said.

“I was clear during the election campaign that, if I became chancellor of the exchequer, tough choices lie ahead.”

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Ms Reeves has ruled out increasing personal income taxes, National Insurance and VAT as well as corporation tax, leaving a limited field of other taxes on private wealth and business.

She said her choices in the budget would be directed at getting a grip on the public finances.

“It is important to bring stability back to our economy, but we will do that in a way that helps promote growth, so we can grow our economy and make our country better off,” she said.

The need to stimulate growth was emphasised by the figures from the Office for National Statistics that showed the economy stalled in June and July, consecutive months of zero expansion, after above-expectation growth in the first half of the year.

The new administration has pinned its entire programme for government on stimulating growth to allow public spending to increase and stay within strict fiscal rules limiting borrowing.

At the same time, they are imposing new obligations on businesses including a slate of workers’ rights reforms that industries fear will increase costs.

Ms Reeves cited an £8bn investment by Amazon Web Services in new data centres as evidence that businesses back her vision.

“Microsoft are investing £8bn here in Britain to create new jobs in technical skills, in AI and digital infrastructure,” she said.

“They’re making those investments, and other businesses too, because this government is bringing stability back to our economy and working in partnership with business to unlock the huge potential. And if we can do that, we can make our country better off.”

The chancellor also defended her decision to remove winter fuel payments from 10 million pensioners, after the government weathered a 50-strong rebellion by its own MPs in a parliamentary vote last night.

She said it was a response to a £22bn “black hole” in public finances for this year that had to be addressed, and that the loss of up to £300 would be compensated by rising pensions.

“These were not decisions that I wanted to make, but they were the right decisions in the circumstances that we faced,” she said.

“All pensioners this winter have benefited from the increase in the new state pension, which means pensions are worth £900 more than they were a year ago. The state pension is likely to go up by a further £460 next year. That’s not means-tested.

“So we are protecting the most vulnerable pensioners, whilst also starting to get a grip on our public financing years of mismanagement because we expect.”

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The chancellor also suggested more cuts to public services are likely.

Asked if the prisons and justice system could absorb further cuts despite having to release thousands of prisoners early, she said: “On spending, on taxation and on welfare, but those decisions are necessary to start to get a group of our public finances so that we can turn our economy around.

“I am determined not to allow these problems to continue to fester in the way that the previous government allowed that we’re honest about the challenges that we face.”

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Clampdown on social media ads for Channel crossings unveiled

Published

47 mins ago

August 3, 2025

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Clampdown on social media ads for Channel crossings unveiled

Anyone who advertises Channel crossings or fake passports on social media could face up to five years in prison under new government plans.

Research suggests about 80% of migrants arriving to the UK by small boat used internet platforms during their journey – including to contact agents linked to smuggling gangs.

While it is already illegal to assist illegal immigration, ministers hope the creation of a new offence will give police more powers and disrupt business models.

Home Secretary Yvette Cooper is also planning to introduce a fast-track scheme to tackle the asylum backlog, meaning decisions will be made within weeks.

It comes as official figures show more than 25,000 people have arrived on small boats so far in 2025 – a record for this point in the year.

Ms Cooper said it is “immoral” for smugglers to sell false promises online, adding: “These criminals have no issue with leading migrants to life-threatening situations using brazen tactics on social media.

“We are determined to do everything we can to stop them, wherever they operate.”

The new offence prohibiting the online promotion of Channel crossings is set to be included in the Border Security, Asylum and Immigration Bill already going through Parliament.

Officials from the National Crime Agency already work with tech giants to remove such posts – with more than 8,000 taken offline last year.

A Preston-based smuggler who was jailed for 17 years had posted videos of migrants thanking him for his help.

Meanwhile, Albanian smugglers have created promotions for £12,000 “package deals” which claim to offer accommodation and a job in the UK on arrival.

The Conservatives have described the measures as “too little, too late” – and say automatic deportations are the only way to tackle small boat crossings.

Shadow home secretary Chris Philp said: “Labour still has no clear plan to deter illegal entry, no effective enforcement and no strategy to speed up removals. This is a panicked attempt to look tough after months of doing nothing.”

It comes as protests outside hotels believed to be housing asylum seekers continue in towns and cities across the UK.

Several demonstrators were detained – with police breaking up brief clashes – outside the Thistle City Barbican Hotel in north London yesterday.

The government is legally required to provide accommodation and subsistence to destitute asylum seekers while their claims are being decided, most of whom are prohibited from working.

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China’s crypto liquidation plans reveal its grand strategy

Published

13 hours ago

August 2, 2025

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China’s crypto liquidation plans reveal its grand strategy

China’s plan to liquidate confiscated crypto through Hong Kong exchanges isn’t simply a policy — it’s to control global digital asset markets and outmaneuver the US.

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Make ‘significant adjustments’ to Online Safety Act, X urges govt

Published

1 day ago

August 2, 2025

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X criticises Online Safety Act - and warns it's putting free speech in the UK at risk

The Online Safety Act is putting free speech at risk and needs significant adjustments, Elon Musk’s social network X has warned.

New rules that came into force last week require platforms such as Facebook, YouTube, TikTok and X – as well as sites hosting pornography – to bring in measures to prove that someone using them is over the age of 18.

The Online Safety Act requires sites to protect children and to remove illegal content, but critics have said that the rules have been implemented too broadly, resulting in the censorship of legal content.

X has warned the act’s laudable intentions were “at risk of being overshadowed by the breadth of its regulatory reach”.

It said: “When lawmakers approved these measures, they made a conscientious decision to increase censorship in the name of ‘online safety’.

“It is fair to ask if UK citizens were equally aware of the trade-off being made.”

X claims the timetable for platforms to meet mandatory measures had been unnecessarily tight – and despite complying, sites still faced threats of enforcement and fines, “encouraging over-censorship”.

“A balanced approach is the only way to protect individual liberties, encourage innovation and safeguard children. It’s safe to say that significant changes must take place to achieve these objectives in the UK,” it said.

A UK government spokesperson said it is “demonstrably false” that the Online Safety Act compromises free speech.

“As well as legal duties to keep children safe, the very same law places clear and unequivocal duties on platforms to protect freedom of expression,” they added.

Users have complained about age checks that require personal data to be uploaded to access sites that show pornography, and 468,000 people have already signed a petition asking for the new law to be repealed.

In response to the petition, the government said it had “no plans” to reverse the Online Safety Act.

Reform UK’s leader Nigel Farage likened the new rules to “state suppression of genuine free speech” and said his party would ditch the regulations.

Technology Secretary Peter Kyle said on Tuesday that those who wanted to overturn the act were “on the side of predators” – to which Mr Farage demanded an apology, calling Mr Kyle’s comments “absolutely disgusting”.

Regulator Ofcom said on Thursday it had launched an investigation into how four companies – that collectively run 34 pornography sites – are complying with new age-check requirements.

These companies – 8579 LLC, AVS Group Ltd, Kick Online Entertainment S.A. and Trendio Ltd – run dozens of sites, and collectively have more than nine million unique monthly UK visitors, the internet watchdog said.

The regulator said it prioritised the companies based on the risk of harm posed by the services they operated and their user numbers.

It adds to the 11 investigations already in progress into 4chan, as well as an unnamed online suicide forum, seven file-sharing services, and two adult websites.

Ofcom said it expects to make further enforcement announcements in the coming months.