Cabinet ministers write to Starmer in urgent attempt to soften spending cuts in budget

Published

7 months ago

October 16, 2024

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Cabinet ministers are writing to the prime minister in an urgent attempt to soften some of the spending cuts being demanded ahead of the budget.

The main measures for the budget have to be decided by the end of Wednesday and sent to the Office for Budget Responsibility before the Treasury shuts up for the evening.

Sky News can confirm letters from cabinet ministers complaining about the budget have gone over the head of Chancellor Rachel Reeves to Sir Keir Starmer and Number 10.

Politics latest: Cabinet members deeply concerned over scale of cuts

Some of these letters are believed to have gone in over the last couple of days.

After today, only small changes can ordinarily be made to the budget, typically around involving items of tens or hundreds of millions rather than billions. The existence of the letters was first reported by Bloomberg.

Some cabinet ministers are deeply concerned about the scale of the cuts being demanded in some areas to fund pay rises and spending increases elsewhere.

It is understood that Number 10 has received complaints from four government departments: the Ministry of Housing, Communities and Local Government, the Department for Transport, the Department for Environment, Food and Rural Affairs, and the Ministry of Justice.

Not all of these complaints were made through the medium of a letter.

It is understood the call for an intervention by Number 10 has helped soften a small portion of the cuts for some cabinet ministers’ departments.

But largely the shape of the budget, which is for the most part wrapped up tonight, has remained unchanged – and so have the nerves about how it will land in two weeks.

At the weekend, Sky News revealed one cabinet minister said: “The briefing doesn’t match the reality. It’s pain this year, and pain next year. We’re simply going to be digging a hole which we end up filling in later in the year.”

Ms Reeves will loosen the borrowing rules in the budget in order to give herself more room for spending, along with raising up to £40bn in tax rises and welfare cuts in order to relieve pressure on budgets.

But the cost of significant public sector pay rises, which are still going to have to be found from within departmental budgets, mean cuts this year and next are still being demanded by the Treasury.

Some ministers believe the cuts are unsustainable, while some have pointed to the first round of spending reductions announced before the summer – including the winter fuel allowance changes – as evidence more input from Number 10 is needed ahead of the budget and spending review on 30 October.

One government source told Sky News: “The whole of Number 10 is focused on the budget at the moment and there isn’t much bandwidth for anything else.”

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Government figures insist that letters voicing concern are routinely sent at this point in a spending review process and that this is all normal.

Both Sir Keir and Ms Reeves are out of the country next week, the week before the budget. However, only smaller changes can typically be made after today to the shape of it.

Politics

UK to require crypto firms to report every customer transaction

Published

3 hours ago

May 18, 2025

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UK to require crypto firms to report every customer transaction

United Kingdom crypto companies will need to collect and report data from every customer trade and transfer beginning Jan. 1, 2026 as part of a broader effort to improve crypto tax reporting, the UK government said.

Everything from the user’s full name, home address and tax identification number will need to be collected and reported for every transaction, including the cryptocurrency used and the amount moved, the UK Revenue and Customs department said in a May 14 statement.

Details of companies, trusts and charities transacting on crypto platforms will also need to be reported.

Failure to comply or inaccurate reporting may incur penalties of up to 300 British pounds ($398.4) per user. The UK Revenue and Customs department said it would inform companies on how to comply with the incoming measures in due course.

However, UK authorities are encouraging crypto firms to start collecting data now to ensure compliance readiness.

The new rule is part of the UK’s integration of the Organisation for Economic Development’s Cryptoasset Reporting Framework to improve transparency in crypto tax reporting.

The changes reflect the UK government’s aim to establish a more robust regulatory framework that supports industry growth while ensuring consumer protection.

UK Chancellor Rachel Reeves also introduced a draft bill in late April to bring crypto exchanges, custodians and broker-dealers within its regulatory reach to combat scams and fraud.

“Today’s announcement sends a clear signal: Britain is open for business — but closed to fraud, abuse, and instability,” Reeves said at the time.

A study from the UK’s Financial Conduct Authority last November found that 12% of UK adults owned crypto in 2024 — a significant increase from the 4% reported in 2021.

UK’s approach contrasts with EU’s MiCA

The UK’s move to integrate the crypto rules into its existing financial framework contrasts with the European Union’s approach, which introduced the new Markets in Crypto-Assets Regulation framework last year.

According to the MiCA Crypto Alliance, one key difference is that the UK will allow foreign stablecoin issuers to operate in the UK without needing to register.

There will also be no cap on stablecoin volumes, unlike the EU’s approach, which may impose controls on stablecoin issuers to manage systemic risks.

Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight

Politics

Hong Kong police busts $15M laundering ring that used crypto, 500 bank accounts

Published

8 hours ago

May 18, 2025

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Hong Kong police busts M laundering ring that used crypto, 500 bank accounts

Hong Kong police arrested 12 people involved in a cross-border money laundering scheme that relied on crypto and over 500 stooge bank accounts to launder HK$118 million ($15 million), local news outlets reported.

The syndicate was dismantled on May 15, resulting in the arrest of nine men and three women in mainland China and Hong Kong.

The suspects allegedly recruited others to open bank accounts to receive proceeds from fraud cases, which were then converted into crypto at crypto exchange shops to launder the illicit funds, Hong Kong Commercial Daily reported on May 17.

The criminal organization rented a residential unit in the Hong Kong neighborhood of Mong Kok to plan and carry out its money laundering activities. Of the $15 million laundered, more than $1.2 million was linked to 58 reported fraud cases.

Caught in action

The bust followed police surveillance on May 15, when two recruits left the syndicate’s Mong Kok base — one visiting a bank, the other an ATM — before both went to convert the cash into crypto at a crypto exchange shop in the neighborhood of Tsim Sha Tsui.

Police arrested both individuals on the spot, seizing around HK$770,000 ($98,540) in cash before the funds could be laundered. The other 10 individuals, aged between 20 and 41, were arrested soon after.

Police seized approximately HK$1.05 million ($134,370) in cash, over 560 ATM cards, multiple mobile phones, bank documents and records related to crypto transactions.

Senior Inspector Tse Ka-lun of Hong Kong’s Commercial Crime Bureau claimed that the individuals often used bank accounts from their friends and family to launder the stolen funds.

Hong Kong reported a 12% year-on-year increase in fraud reports in 2024, with authorities making more than 10,000 fraud-related arrests. Of those arrests, around 73% involved individuals who held stooge bank accounts.

The crackdown comes as Hong Kong continues to roll out its crypto regulatory framework to support local innovation, protect consumers and establish itself as a crypto hub.

Hong Kong’s Securities and Futures Commission introduced new rules for crypto exchanges offering staking services in April. Two months earlier, the securities regulator rolled out a roadmap to improve market access, optimize compliance, expand product offerings, strengthen crypto infrastructure and foster relationships with industry players.

Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight

Politics

Keir Starmer says closer EU ties will be good for UK jobs, bills and borders ahead of key talks

Published

11 hours ago

May 17, 2025

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Keir Starmer says closer EU ties will be good for UK jobs, bills and borders ahead of key talks

Sir Keir Starmer has said closer ties with the EU will be good for the UK’s jobs, bills and borders ahead of a summit where he could announce a deal with the bloc.

The government is set to host EU leaders in London on Monday as part of its efforts to “reset” relations post-Brexit.

A deal granting the UK access to a major EU defence fund could be on the table, according to reports – but disagreements over a youth mobility scheme and fishing rights could prove to be a stumbling block.

The prime minister has appeared to signal a youth mobility deal could be possible, telling The Times that while freedom of movement is a “red line”, youth mobility does not come under this.

His comment comes after Kaja Kallas, the EU’s high representative for foreign affairs, said on Friday work on a defence deal was progressing but “we’re not there yet”.

Sir Keir met European Commission president Ursula von der Leyen later that day while at a summit in Albania.

If agreed, the deal will be the third in two weeks, following trade agreements with India and the US.

Sir Keir said: “First India, then the United States – in the last two weeks alone that’s jobs saved, faster growth and wages rising.

“More money in the pockets of British working people, achieved through striking deals not striking poses.

“Tomorrow, we take another step forward, with yet more benefits for the United Kingdom as the result of a strengthened partnership with the European Union.”

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Conservative leader Kemi Badenoch has said she is “worried” about what the PM might have negotiated.

Ms Badenoch – who has promised to rip up the deal with the EU if it breaches her red lines on Brexit – said: “Labour should have used this review of our EU trade deal to secure new wins for Britain, such as an EU-wide agreement on Brits using e-gates on the continent.

“Instead, it sounds like we’re giving away our fishing quotas, becoming a rule-taker from Brussels once again and getting free movement by the back door. This isn’t a reset, it’s a surrender.”