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Rachel Reeves has defended raising taxes by the highest amount since 1993 as she said “everything has to be paid for”.

The chancellor announced £40bn worth of tax rises in Wednesday’s budget, with the lion’s share coming from a £25bn increase in employers’ National Insurance contributions.

She told Sky News’ Breakfast With Kay Burley that, unlike the previous Conservative government, she has included everything ministers will spend in their forecast, including £11.8bn compensation for victims of the infected blood scandal and £1.8bn for victims of the Post Office accounting scandal.

Politics latest: Hunt to step down from shadow cabinet

Ms Reeves insisted the tax rises would “fix the foundations and wipe the slate clean” and that this would be a one-off budget.

She added: “As a result of what we’ve done, we’re not going to have to come back and ever do a budget like this again, because we’ve brought everything out into the open.”

The chancellor also admitted growth “is largely unchanged” in the next five years, as revealed by the Office for Budget Responsibility’s (OBR) report on the budget.

But she said that is because she is looking at the economy in the long-term.

She said: “For the first time, the OBR are now looking at economic growth over a longer time frame.

“And that’s really important because often politicians make short-term decisions rather than things that are in the long term interests of the country.”

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‘Raising taxes was not an easy decision’

Ms Reeves said she had to make the tax rises she did, despite promising not to raise taxes beyond Labour’s manifesto, because of “the circumstances that I inherited” from the Conservatives as she repeated they left a £22bn black hole.

“I could have swept that under the carpet and pretended it didn’t exist, or try and raise a bit of money this year and a bit more next year,” she said.

“I didn’t want to do that.

“I wanted to be open and honest, to wipe the slate clean, to put our public finances on a stable trajectory, to make sure that our NHS is properly funded so we can bring down those huge waiting lists.”

Read more:
Reeves promised to be the iron chancellor – but her first budget brings dramatic change

Chancellor’s hefty tax and spending plans are a huge gamble

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UK’s economic growth forecast

Ms Reeves’ predecessor, the Conservative Party’s Jeremy Hunt, said Wednesday was a “bad day for trust in British politics” and said it will mean “lower pay, lower living standards, higher inflation, higher mortgages” for ordinary families.

He told Sky News: “Because 30 times this year before the election, the chancellor said she had no plans to increase tax outside of what was explicitly written in the Labour manifesto.

“And we had the biggest tax raising budget in British history.”

The shadow chancellor said a Conservative budget would have taken “the harder path” by cutting the number of people on benefits to 2019 levels to fund public services, which he said would release £34bn a year.

He added he does not think “anyone actually believes this £22bn number… but she didn’t increase taxes by £22bn, she increased them by £40bn”.

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“This was not about her legacy. This was a choice,” he added.

“This was the budget that she wanted to do all along. And it’s a legitimate choice. It’s one I disagree with. But if she’d wanted to do that, she should have told us before the election we could have had the debate.”

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PM faces threat of major rebellion during key vote today

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PM faces threat of major rebellion during key vote today

Sir Keir Starmer continues to face the threat of a major rebellion during a key vote on welfare reforms later – despite making last-minute concessions to disgruntled Labour MPs.

Work and Pensions Secretary Liz Kendall has confirmed that all existing claimants of the personal independence payment (PIP), the main disability benefit, will be protected from changes to eligibility.

The combined value of the standard Universal Credit allowance and the health top-up will rise “at least in line with inflation” every year of this parliament.

And an additional £300m for employment support for sick and disabled people in 2026 has been announced, which will rise every year after.

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Welfare cuts ‘needed to be made’

Ms Kendall has also promised that a consultation into PIP – “co-produced” with disabled people – will be published next autumn.

She said the U-turn on welfare cuts will cost taxpayers about £2.5bn by 2030 – less than half the £4.8bn the government had expected to save with its initial proposals.

Modelling by Ms Kendall’s own department, released yesterday, suggested the proposals would push 150,000 more people into poverty by 2030, down from the 250,000 estimated under the original plan.

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But after announcing the U-turns, Labour MPs were still publicly saying they could not back the plans as they do not go far enough to allay their concerns.

Disabilities minister Stephen Timms would not say he was “confident” the proposals would pass the Commons when asked on Sky News’ Politics Hub with Sophy Ridge.

“We’ve got a very strong package, I certainly hope it passes,” he replied.

Read more: What are the concessions to the welfare reform bill?

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‘Disabled people thrown under the bus’

A total of 86 charities united yesterday to call on MPs to reject the reforms, saying they will harm disabled people and calling it “a political choice”.

The likes of Oxfam, Child Action Poverty Group, Mind and Shelter said the bill has been brought to a vote without consulting disabled people and without any assessment “of its impact on health and employment outcomes”.

When asked to name “a single” disability organisation in favour of the reforms, Ms Kendall declined to do so.

Several Labour MPs indicated they would still vote against the changes, leaving the government in the dark over how big a rebellion it still may face.

Ms Kendall tried to allay their fears, telling MPs: “I believe we have a fair package, a package that protects existing claimants because they’ve come to rely on that support.”

Richard Burgon presented a petition to parliament yesterday evening against the cuts, signed by more than 77,000 people.

Several Labour MPs questioned why the vote was going ahead before the review into PIP is published – including Rachael Maskell, who said she could not “countenance sick and disabled people being denied support” and added: “It is a matter of conscience.”

Connor Naismith said the concessions “undoubtedly improve efforts to secure welfare reform which is fair”, but added: “Unfortunately, I do not believe these concessions yet go far enough.”

Nadia Whittome
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Labour rebel Nadia Whittome said the government was ‘ignoring’ disabled people

Nadia Whittome accused the government of “ignoring” disabled people and urged ministers to go “back to the drawing board”.

Ian Byrne told the Commons he will vote against the “cruel cuts” to disability benefits because the “so-called concessions go nowhere near far enough”.

The vote will take place this evening, with coverage on Sky News’ Politics Hub live blog and on TV.

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Circle applies for US trust bank charter to manage its USDC reserve

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Circle applies for US trust bank charter to manage its USDC reserve

Circle applies for US trust bank charter to manage its USDC reserve

Other crypto firms are also reportedly considering applying for a national bank charter, following in the footsteps of Anchorage Digital Bank, which received a license in 2021.

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US Supreme Court will not review IRS case involving Coinbase user data

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US Supreme Court will not review IRS case involving Coinbase user data

US Supreme Court will not review IRS case involving Coinbase user data

A lower court ruling will stand in a case involving a Coinbase user who filed a lawsuit against the IRS after the crypto exchange turned over transaction data.

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