The health secretary has said that the cabinet is aware of the “pressure” on Chancellor Rachel Reeves amid volatile markets and a challenging broader economic picture – but appealed for the public to “give her time”.
Wes Streeting argued that the public “underestimates” the “amount of heavy-lifting” Ms Reeves has had to do and will have to continue to do, as he declared “total confidence” in her leadership in a staunch defence of her handling of the economy.
Separately, international development minister Anneliese Dodds, who attends cabinet, told Sky News that Ms Reeves has been “very clear about the long-term plan for our country” and she herself is “confident in that long-term plan”.
The comments from the two key ministers come after the past week saw a drop in the pound and an increase in government borrowing costs, which has fuelled speculation of more spending cuts or tax rises.
Streeting has ‘total confidence in chancellor’s leadership’
Speaking at the Jewish Labour Movement’s annual conference in north London, the health secretary acknowledged the fierce competition among all government departments for any available public funding from the Treasury, and told party members that all ministers “have to make choices and trade-offs” in where funding goes.
Mr Streeting went on to say that the chancellor and her deputy, Darren Jones, have “the hardest job of all because they have to make those choices across every bit of government spending, and they have to think about what’s in the interests of our overall economy and how we get businesses growing”.
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Chancellor’s ‘pragmatic’ approach to China
He said: “I think people continue to underestimate both the amount of heavy lifting she has had to do in her first six months, and the amount of heavy lifting she will have to do in her next six months.
“And the cabinet doesn’t underestimate that – we understand the choices she has to make, the pressure she is under.”
As a result, cabinet ministers all “have a responsibility” to both “make tough choices and drive reform and value for money” within their departments, and also be “drivers of economic growth”.
“Nothing in the last six months has shaken my conviction that economic growth is the number one priority,” he said.
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Continuing his defence of the chancellor’s handling of the economy so far, Mr Streeting said she is “trying to break us out of what has been the status quo and the economic orthodoxy of more than a decade”.
“People need to give her time, and they need to not forget that, without [Sir Keir Starmer’s] leadership, certainly we wouldn’t have won the last general election.
“Without Rachel’s leadership, we wouldn’t have won the last general election either. She built Labour’s economic credibility out of the ashes they were left in after the Corbyn leadership. And she has built that trust, built up that plan, and now she’s following through.”
He declared that he has “total confidence in the leadership that Rachel’s providing, and the leadership that the cabinet is following and driving with her, because all of us have to deliver economic growth for our country”.
Minister ‘confident in chancellor’s long-term plan’
Speaking in a separate session at the conference, Ms Dodds noted “speculation” about the fiscal headroom (the amount of money the chancellor will have available to spend), but said: “We have to focus on actually the evidence.
“And when we look at the evidence, we can see that the UK government has a chancellor who is very clear about the long-term plan for our country. She’s been delivering on it.”
Ms Dodds, who also attends cabinet, pointed to a “new fiscal system”, the chancellor’s new Industrial Strategy Council, as well as “record levels of investment under Rachel Reeves’s leadership”.
“I think it’s really important for us to focus on those fundamentals, on what has been achieved in a very short space of time. And I’m confident in that long-term plan that Rachel has been setting out.
“And we can already see the benefit of that, frankly, in terms of the UK’s reputation when it comes to public finances, but economic management more generally. Certainly that’s what I’ve heard internationally and keep hearing just now.”
Chancellor accused of having ‘fled to China’
Image: Chancellor Rachel Reeves with Chinese vice premier He Lifeng in Beijing. Pic: Reuters
The pair were speaking as the chancellor holds meetings in China in a bid to drum up investment for the UK economy, having ignored calls to cancel the long-planned trip because of economic turmoil at home.
Opposition parties have accused the chancellor of having “fled to China” rather than explain how she will fix the UK’s flatlining economy, and former prime minister Boris Johnson said Ms Reeves had “been rumbled” and said she should “make her way to HR and collect her P45 – or stay in China”.
Speaking during her trip, Ms Reeves said she would not alter her economic plans, with the October budget designed to return the UK to economic stability, and reiterated that “growth is the number one mission of this government”.
She said that “action” will be taken to meet the fiscal rules. That action is reported to include deeper spending cuts than the 5% efficiency savings already expected to be announced later this year, while cuts to the welfare bill are also said to be under consideration.
The private equity backer of Motor Fuel Group (MFG), one of Britain’s biggest petrol forecourt empires, is exploring the sale of a stake in a deal that could value it at about £7bn.
Sky News has learnt that Clayton Dubilier & Rice (CDR), which has built MFG from a mid-sized industry player over the course of more than a decade, is working with advisers to examine options for selling a large minority shareholding.
City sources said this weekend that CD&R was expected to run a process during the coming months, with a deal anticipated later this year.
A stake of roughly 25-30% is expected to change hands, although the final shape of any deal has yet to be determined.
A so-called continuation vehicle common in private equity transactions is understood to have been ruled out by CD&R.
MFG is now the largest independent forecourt operator in the UK, having grown from 360 sites at the point of CD&R’s acquisition of the company.
It trades under a number of brands, including Esso and Shell.
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Lazard, the investment bank, has been working with CD&R on the preparatory work for a minority sale.
CD&R, which also owns Morrisons, united MFG’s petrol forecourt businesses with that of the supermarket chain in a £2.5bn transaction which completed last year.
MFG now comprises roughly 1,200 sites across Britain, with pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) of about £700m expected in this financial year.
A previous attempt by CD&R to sell the company in 2022 was derailed in part by Vladimir Putin’s invasion of Ukraine and a deteriorating macroeconomic environment.
It is now focused on its role in the energy transition, with hundreds of electric vehicle charging points installed across its network, and growing its high-margin foodservice offering.
MFG has outlined plans to invest £400m in EV charging, and is now the second-largest Ultra Rapid player in the UK – which delivers 100 miles of range in 10 minutes – with close to 1,000 chargers.
It aims to grow that figure to 3,000 by 2030.
Insiders said that CD&R would retain a controlling stake in MFG after any stake sale, while Morrisons also holds a 20% interest in the company.
Bankers believe that a minority sale this year would be followed a couple of years later with an initial public offering on the London stock market.
CD&R invested in MFG in 2015, making its investment a long-term one by the standards of most private equity holding periods.
The sale of a 25% stake at a £7bn enterprise valuation would deliver a meaningful amount of liquidity to the US-based buyout firm.
CD&R and its investors have already been paid hundreds of millions of pounds in dividends from MFG, having seen its earnings grow 14-fold since the original purchase.
Morrisons’ rival, Asda, has undertaken a similar transaction, with EG Group acquiring the Leeds-based grocer’s forecourt network.
EG Group, which along with Asda is controlled by private equity firm TDR Capital, is now being prepared for a listing in the US.
Regulators have proposed sweeping changes for the baby formula industry, saying high prices and branding are leading to “poor outcomes” for parents.
The Competition and Markets Authority (CMA) found many brands cost more than the weekly value of people’s benefits, leading some parents to forgo food to buy formula.
The report was released nearly two years after Sky News revealed how a black market for baby formula had evolved as desperate families struggled to feed their children.
Parents openly described having no choice but to steal products, no longer able to afford formula as prices soared above inflation.
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From May 2023: Parents stealing formula
In its final report on surging prices in recent years, the CMA said parents could be saving £300 annually by switching to lower-priced brands that offered the same nutritional benefits.
The CMA said the NHS could have its own non-brand baby formula, in a bid to help drive prices down.
But the watchdog stopped short of recommending a price cap, which it had said it was looking into last year.
This is a moment of vindication for every parent who has struggled to afford baby formula.
It’s the same for every charity that has picked up the pieces of a family in crisis because they can’t safely feed their baby. Their long-held suspicions that parents were getting a poor deal from the baby formula market were right.
The CMA has scrutinised the industry and recommended the biggest shake-up in decades. The changes they propose are far-reaching and could help end the stigma and shame that many families feel because of the difficulties of feeding their babies.
Better information, clearer labelling and greater efforts to empower parents are all long overdue.
Nobody should have to feel like their only option is to steal baby milk but that is exactly what Sky News found when our investigation started two years ago. It was described to us then as a “national scandal” that was putting the health and development of babies at risk.
Baby banks still report a never-ending demand from families needing help even though prices have started to come down and new budget formula milk brands are entering the market.
The measures recommended to ministers today represent a huge opportunity for change – it is down to governments and the industry itself to make it happen.
The CMA has previously reported a 25% increase in prices over the past two years, with just three companies – Nestle, Kendamil and Danone – controlling 90% of the market.
The watchdog had determined that the lack of manufacturers meant there was no incentive to compete on prices, which meant additional factory costs had been passed on “quickly” and in full to shoppers.
The CMA, which has no powers to bolster competition by increasing the number of formula producers, said its four main recommendations were aimed at delivering better outcomes for parents on both choice and price.
It said formula provided in hospitals should come in plain packaging to reduce brand influence while parents are in a “vulnerable” setting.
Formula sold in shops should display nutritional information and not carry any claims that cannot easily be checked by parents, it said.
It also recommended extending the ban on advertising to include follow-on formula, and allowing parents to use vouchers and loyalty points to buy infant formula.
Sarah Cardell, chief executive of the CMA, said many parents “pick a brand at a vulnerable moment, based on incomplete information, often believing that higher prices must mean better quality”.
“This is despite NHS advice stating that all brands will meet your baby’s nutritional needs, regardless of brand or price.”
Public health minister Ashley Dalton responded: “I welcome this report and would like to thank the Competition and Markets Authority for their thorough investigation.
“There are many benefits of breastfeeding but for those families that cannot or choose not to breastfeed, it is vital that they can access formula that is affordable and high quality. Families should not be paying over the odds to feed their babies because of outdated regulation.
“As part of our Plan for Change, we’re determined to ensure every child has the best start to life. We will carefully consider these recommendations and respond fully in due course.”
The number of first-time buyers rose by almost a fifth last year, according to data from Halifax.
The bank said 2024 saw 341,068 people buy their first properties, up by 19% from 2023.
While the figures are a rebound from 2023’s 22% drop, they are not as high as they were in 2022.
That year saw 367,870 first-time buyers recorded.
Amanda Bryden, head of mortgages at the bank, said the rise “likely reflects an improvement in mortgage affordability as interest rates eased and stabilised, providing more certainty for those stepping on to the ladder”.
Earlier this month, the Bank of England cut interest rates to 4.5% – a drop of another quarter percentage point for the third period in a row.
Halifax said that on average, first-time buyers are 33 years old – two years older than they were a decade ago – and that the average deposit paid was £61,090 for a home typically valued at £311,034.
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The bank also said that people stepping on to the property ladder accounted for more than half of all home purchases made with a mortgage last year, at 54%.
Ms Bryden added that “many are still teaming up to make the numbers work, with most buying homes jointly”, which “makes sense” given the average deposit and house price.
She said these prices “can be a stretch for those with a single income”, and that: “It’s not surprising the average first-time buyer is now 33 years old, the oldest in the last two decades.”
However, while Halifax expects “modest house price growth” this year, Ms Bryden said: “Upcoming stamp duty threshold reductions won’t make things any easier in the short term for first-time buyers.”
Chancellor Rachel Reeves announced in her budget last year that the “nil rate” stamp duty band for first-time buyers will reduce from £425,000 to £300,000 from 1 April.
Halifax’s research was based on data from its own housing statistics database, as well as figures from trade association UK Finance and official earnings data.