What we got from Rachel Reeves today was, in economic terms, a major departure from economic policy as we’ve known it in this country for the past decade-and-a-half.
We got the single biggest increase in taxes in any fiscal event since 1993. The tax burden itself is now heading up to the highest level in history. We got a significant departure from the policies and promises laid out in the Labour manifesto.
Only a few months ago, Labour pledged not to make dramatic changes to Britain’s economic policy – no significant tax rises, no dramatic changes to public spending. But today the chancellor delivered significant changes.
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The old fiscal rules are out and now this government plans to borrow many billions of pounds more. It plans to increase investment considerably.
It plans to raise taxes on those with investments, on those with assets who could previously pass them on to their children (including business owners and farmers). In the meantime, it plans to spend considerably more on the health service and on public investment than previously slated.
It’s worth saying: while the government inherited the public finances in a worse condition than they looked before the election, even the Treasury’s “black hole” of £22bn cannot explain the dramatic change in economic policy here.
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0:23
Reeves refuses to rule out future tax hikes
It does not explain the dramatic increase in borrowing, spending and taxes – these are policy decisions by the current government. And, many would say, quite right too. Surveys suggest the British public support higher taxes, especially if they are used to improve the National Health Service.
Many think the UK should be spending more on its public services, even if that means we all have to contribute more (though they are generally less enthusiastic if asked whether they would be happy to pay higher taxes themselves). And there is little dispute that this country’s investment levels have been too low for too long and could afford to be higher.
However, that wasn’t the pitch Reeves and Keir Starmer made at the election. They promised, in their manifesto, only slight economic changes and only small increases in taxes. They promised to spend much of their time in office cleaning up the mess from the last government. Reeves promised to be the iron chancellor of fiscal discipline.
But this budget is considerably less disciplined with the public finances than expected. But what will worry the chancellor is that despite this extra largesse with both investment and current spending, the UK economy is not going gangbusters as a result.
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The Office for Budget Responsibility actually cut its forecasts for long term growth. That promise made by Starmer to achieve the highest economic growth in the G7 looks highly unlikely – even after the implementation of all these policies.
And in the hours after the speech, markets reacted in a way that will cause nerves in the Treasury. It’s nothing like the lurches in government debt yields we saw after Liz Truss’s mini budget in 2022. But the pound fell and the interest rates investors charge the UK government rose. That’s not something any chancellor would like to see after their first budget.
The next few days promise to be very interesting both in politics and in markets.
A nationwide police operation to track down those in grooming gangs has been announced by the Home Office.
The National Crime Agency (NCA) will target those who have sexually exploited children as part of a grooming gang, and will investigate cases that were not previously progressed.
Home Secretary Yvette Cooper said in a statement: “The vulnerable young girls who suffered unimaginable abuse at the hands of groups of adult men have now grown into brave women who are rightly demanding justice for what they went through when they were just children.
“Not enough people listened to them then. That was wrong and unforgivable. We are changing that now.
“More than 800 grooming gang cases have already been identified by police after I asked them to look again at cases which had closed too early.
“Now we are asking the National Crime Agency to lead a major nationwide operation to track down more perpetrators and bring them to justice.”
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1:40
Starmer to launch new grooming gang inquiry
The NCA will work in partnership with police forces around the country and specialist officers from the Child Sexual Exploitation Taskforce, Operation Hydrant – which supports police forces to address all complex and high-profile cases of child sexual abuse – and the Tackling Organised Exploitation Programme.
It comes after Sir Keir Starmer announced a national inquiry into child sex abuse on Saturday, ahead of the release of a government-requested audit into the scale of grooming gangs across the country, which concluded a nationwide probe was necessary.
The prime minister previously argued a national inquiry was not necessary, but changed his view following an audit into group-based child sexual abuse led by Baroness Casey, set to be published next week.
Ms Cooper is set to address parliament on Monday about the findings of the near 200-page report, which is expected to warn that white British girls were “institutionally ignored for fear of racism”.
One person familiar with the report said it details the institutional failures in treating young girls and cites a decade of lost action from the Independent Inquiry into Child Sexual Abuse (IICSA), set up in 2014 to investigate grooming gangs in Rotherham.
The report is also expected to link illegal immigration with the exploitation of young girls.
Career spy Blaise Metreweli will become the first woman to head MI6 in a “historic appointment”, the prime minister has announced.
She will take over from Sir Richard Moore as the 18th Chief, also known as “C”, when he steps down in the autumn.
“The historic appointment of Blaise Metreweli comes at a time when the work of our intelligence services has never been more vital,” Sir Keir Starmer said in a statement released on Sunday night.
“The United Kingdom is facing threats on an unprecedented scale – be it aggressors who send their spy ships to our waters or hackers whose sophisticated cyber plots seek to disrupt our public services.”
Of the other main spy agencies, GCHQis also under female command for the first time.
Anne Keast-Butler took on the role in 2023, while MI5 has previously twice been led by a woman.
Until now, a female spy chief had only headed MI6– also known as the Secret Intelligence Service (SIS) – in the James Bond movies.
Image: Blaise Metreweli is the first woman to be named head of MI6. Pic: Reuters
Dame Judi Dench held the fictional role – called “M” in the films instead of “C” – between 1995 and 2015.
Ms Metreweli currently serves as “Q”, one of four director generals inside MI6.
The position – also made famous by the James Bond films, with the fictional “Q” producing an array of spy gadgets – means she is responsible for technology and innovation.
Ms Metreweli, a Cambridge graduate, joined MI6 in 1999.
Unlike the outgoing chief, who spent some of his service as a regular diplomat in the foreign office, including as ambassador to Turkey, she has spent her entire career as an intelligence officer.
Much of that time was dedicated to operational roles in the Middle East and Europe.
Ms Metreweli, who is highly regarded by colleagues, also worked as a director at MI5.
In a statement, she said she was “proud and honoured to be asked to lead my service”.
“MI6 plays a vital role – with MI5 and GCHQ – in keeping the British people safe and promoting UK interests overseas,” she said.
“I look forward to continuing that work alongside the brave officers and agents of MI6 and our many international partners.”
Sir Richard said: “Blaise is a highly accomplished intelligence officer and leader, and one of our foremost thinkers on technology. I am excited to welcome her as the first female head of MI6.”
A woman has died after falling into the water at a popular beauty spot in the Scottish Highlands.
The 23-year-old had fallen into the water in the Rogie Falls area of Wester Ross.
Police Scotland confirmed emergency services attended the scene after being called at 1.45pm on Saturday.
“However, [she] was pronounced dead at the scene,” a spokesperson said.
“There are no suspicious circumstances and a report will be submitted to the Procurator Fiscal.”
Rogie Falls are a series of waterfalls on the Black Water, a river in Ross-shire in the Highlands of Scotland. They are a popular attraction for tourists on Scotland’s North Coast 500 road trip.