Chancellor Rachel Reeves promises she will not raise taxes again
There will be no more tax rises or borrowing for the duration of this government’s term, Chancellor Rachel Reeves has said.
She told business leaders there will not be another budget like her maiden announcement, which included a rise in employers’ national insurance contributions and the national minimum wage.
“I’m not coming back with more borrowing or more taxes. And that is why at this budget, we did wipe the slate clean to put public finances and public services on a firm footing,” she told attendees at the Confederation of British Industry (CBI) conference.
“As a result, we won’t have to do a budget like this ever again.”
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Ms Reeves’ budget has faced sharp criticism from major UK businesses who have said the policy measures will cost them millions, forcing them to raise prices and cut jobs.
Analysis from independent forecasters the Office for Budget Responsibility said the budget would cause inflation to be higher than originally predicted, adding to the disquiet.
But Ms Reeves has insisted there is no alternative to her policies.
“I’ve heard a lot of feedback but what I haven’t heard is a lot of alternatives,” she said on Monday afternoon.
The £22bn “black hole” in public finances needed to be plugged, which necessitated “difficult decisions”, Ms Reeves reiterated.
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CBI chief’s approach to budget tax shock
Full consultation on the employer taxes could not take place with firms, she added, because budgets are supposed to be made to MPs in the Commons and not leaked to industry or the media.
“It is the nature of budgets that you can’t announce or consult in the way over tax rates that you can with other policies,” she said.
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Earlier on Monday, the head of the CBI, one of the UK’s most prominent business groups, said the budget business tax rises will hit firms rather than encourage growth.
A key goal of the Labour government is to grow the economy.
Kingfisher, the owner of Screwfix and B&Q, also said on Monday that the national insurance changes alone would force up its costs by £31m in the next financial year.
Meanwhile, the boss of McVitie’s, Jacob’s and Carr’s said the UK was losing its appeal for his business.
“We would like to continue to be a major investor going forward,” said Salman Amin, chief executive of snack food company Pladis.
But, he warned: “It’s becoming harder to understand what the case for investment is.”
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Emmanuel Macron has said France will recognise Palestine as a state later this year.
The French president announced the major change of policy in a letter to the president of the Palestinian Authority, Mahmoud Abbas, which Mr Macron also published online on Thursday evening.
The French leader said he will make the formal announcement at the UN General Assembly, being held in September.
France will become the first G7 member to recognise a Palestinian state.
In his post explaining the decision, Mr Macron called for an immediate ceasefire in Gaza, the release of the hostages and for much more humanitarian aid to reach those in the territory.
But Israel’s defence minister has called the French decision “a disgrace and a surrender to terrorism”.
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Sky’s international correspondent John Sparks, reports on the children in Gaza who are experiencing malnutrition, one child wishes for ‘life to go back to how it was.’
The move heaps pressure on France’s allies such as the UK, and Sir Keir Starmer insisted tonight that he is “clear that statehood is the inalienable right of the Palestinian people”.
But the prime minister has resisted calls from within his own party to recognise Palestine immediately, as he views this as part of the peace process in Gaza.
Currently, half of the G20 recognise Palestine as a state, while nations including the UK, US, Germany and others do not.
But pressure has been growing on Sir Keir to change course, with senior Labour figures including the Mayor of London Sir Sadiq Khan publicly calling for a change in government policy.
Starmer: ‘We are witnessing a humanitarian catastrophe’
Just hours before Mr Macron’s announcement, Sir Keir said he would be holding an “emergency call” with the leaders of France and Germany over what he termed the “humanitarian catastrophe” happening in Gaza.
In some of the firmest language from the government yet, Sir Keir said that “the suffering and starvation unfolding in Gaza is unspeakable and indefensible”.
He went on to say that it has been “grave for some time”, but that it has now “reached new depths and continues to worsen”.
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The PM says that
Sir Keir said: “I will hold an emergency call with E3 partners tomorrow, where we will discuss what we can do urgently to stop the killing and get people the food they desperately need while pulling together all the steps necessary to build a lasting peace.”
The PM added that “we all agree” on the need for Israel to “change course and allow aid that is desperately needed to enter Gaza without delay”.
He wrote: “It is hard to see a hopeful future in such dark times. But I must reiterate my call for all sides to engage in good faith, and at pace, to bring about an immediate ceasefire and for Hamas to unconditionally release all hostages.”
Across the globe, more than 140 countries recognise Palestine as a state.
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