The chancellor has said the budget is “non-negotiable” on a visit to China in the face of volatile markets back in the UK.
Rachel Reeves flew out on Friday after ignoring calls from opposition parties to cancel the long-planned trip because of economic turmoil at home.
The past week has seen a drop in the pound and an increase in government borrowing costs, which has fuelled speculation of more spending cuts or tax rises.
The Tories have accused the chancellor of having “fled to China” rather than explain how she will fix the UK’s flatlining economy, while the Liberal Democrats say she should stay in Britain and announce a “plan B” to address market volatility.
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”.
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1:14
Chancellor’s ‘pragmatic’ approach to China
Image: The chancellor visits a Brompton bike shop in Beijing. Pic: AP
However, during a visit to Beijing’s flagship store of UK bike maker Brompton, Ms Reeves said she would not alter her economic plans, with the October budget designed to return the UK to economic stability.
“Growth is the number one mission of this government,” she said.
“The fiscal rules laid out in the budget are non-negotiable. Economic stability is the bedrock for economic growth and prosperity.”
The treasury added that making Britain better off will be at the “forefront of the chancellor’s mind” during her visit.
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.
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The UK has laid out a new economic relationship with China, and to use one of China’s favourite phrases, both countries are selling it as a “win-win” situation.
It’s a significant development in restoring ties between the countries. The relationship has been beset by years of tension and suspicion. Both sides want to get it back on track.
China delivered a warm welcome for the chancellor.
Rachel Reeves was shuttled from a Beijing Brompton bike shop, to the Great Hall of the People and on to a state guest house.
China’s vice premier He Lifeng said: “The outcomes we have agreed today represent pragmatic co-operation in action.”
Pragmatic. There is that word again. Chancellor Reeves uttered it four times in her closing statement.
Despite the bonhomie, China is still likely to view these British overtures with caution.
She met her counterpart, Vice Premier He Lifeng, in Beijing on Saturday to discuss financial services, trade and investment, before heading to Shanghai for talks with representatives across British and Chinese businesses.
Image: Britain’s Foreign Secretary David Lammy and Chinese Foreign Minister Wang Yi in Beijing. Pic: AP
On Friday, Culture Secretary Lisa Nandy defended the trip, telling Sky News that the climbing cost of government borrowing was a “global trend” that had affected many countries, “most notably the United States”.
“We are still on track to be the fastest growing economy, according to the OECD [Organisation for Economic Co-operation and Development] in Europe,” she told Anna Jones on Sky News Breakfast.
“China is the second-largest economy, and what China does has the biggest impact on people from Stockton to Sunderland, right across the UK, and it’s absolutely essential that we have a relationship with them.”
Rachel Reeves’s trip to China – the first by a British chancellor since 2019 – was always going to be controversial.
In recent years Conservative governments have been keeping Beijing at arm’s length – amid concern about espionage, the situation in Hong Kong, and the treatment of the Uyghurs.
David Cameron’s so-called “Golden Era” of engagement in the pursuit of economic investment, notoriously capped by a visit to an Oxfordshire pub for a pint with President Xi Jinping – has been widely written off as a naive mistake.
There are many – not least the incoming US President Donald Trump – who believe we should maintain our distance.
But in another era of economic turmoil, the pursuit of growth is the government’s number one priority.
This week’s difficult market news – with the cost of government borrowing surging, and the value of the pound falling – has thoroughly raised the stakes.
It is the first UK-China Economic and Financial Dialogue (EFD) since 2019, building on the Labour government’s plan for a “pragmatic” policy with the world’s second-largest economy.
Sir Keir Starmer was the first British prime minister to meet with China’s President Xi Jinping in six years at the G20 summit in Brazil last autumn.
Relations between the UK and China have become strained over the last decade as the Conservative government spoke out against human rights abuses and concerns grew over national security risks.
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2:45
How much do we trade with China?
Navigating this has proved tricky given China is the UK’s fourth largest single trading partner, with a trade relationship worth almost £113bn and exports to China supporting over 455,000 jobs in the UK in 2020, according to the government.
During the Tories’ 14 years in office, the approach varied dramatically from the “golden era” under David Cameron to hawkish aggression under Liz Truss, while Rishi Sunak vowed to be “robust” but resisted pressure from his own party to brand China a threat.
The Treasury said a stable relationship with China would support economic growth and that “making working people across Britain secure and better off is at the forefront of the chancellor’s mind”.
Ahead of her visit, Ms Reeves said: “By finding common ground on trade and investment, while being candid about our differences and upholding national security as the first duty of this government, we can build a long-term economic relationship with China that works in the national interest.”
Diane Gall’s husband, Martyn, had been out on a morning bike ride with his friends on their usual route one winter morning in November 2020 – when he was killed by a reckless driver.
Diane and her daughters had to wait almost three years for her husband’s case to be heard in court.
The case was postponed three times, often without warning.
“You just honestly lose faith in the system,” she says.
“You feel there’s a system there that should be there to help and protect victims, to be victims’ voices, but the constant delays really take their toll on individuals and us as a family.”
Image: Diane Gall
The first trial date in April 2022 was cancelled on the day and pushed four months later.
The day before the new date, the family were told it wasn’t going ahead due to the barristers’ strike.
It was moved to November 2022, then postponed again, before eventually being heard in June the following year.
“You’re building yourself up for all these dates, preparing yourself for what you’re going to hear, reliving everything that has happened, and it’s retraumatising,” says Diane.
Image: Diane Gall’s husband, Martyn
‘Radical’ reform needed
Diane’s wait for justice gives us an insight into what thousands of victims and their families are battling every day in a court system cracking under the weight of a record-high backlog.
There are 76,957 cases waiting to be heard in Crown Courts across England and Wales, as of the end of March 2025.
To relieve pressure on the system, an independent review by Sir Brian Leveson last month made a number of recommendations – including creating a new division of the Crown Court known as an intermediate court, made up of a judge and two magistrates, and allowing defendants to choose to be tried by judge alone.
He said only “radical” reform would have an impact.
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4:32
Will court reforms tackle backlog?
But according to exclusive data collected for Sky News by the Law Society, there is strong scepticism among the industry about some proposed plans.
Before the review was published, we asked 545 criminal lawyers about the idea of a new tier to the Crown Court – 60% of them told us a type of Intermediate Court was unlikely to reduce the backlog.
“It’s moving a problem from one place to another, like moving the deck chairs on the Titanic. It’s not going to do anything,” says Stuart Nolan, chair of the Law Society’s criminal law committee.
“I think the problem with it is lack of resources or lack of will to give the proper resources.
“You can say we need more staff, but they’re not just any staff, they are people with experience and training, and that doesn’t come quickly or cheap.”
Instead, the lawyers told us creating an additional court would harm the quality of justice.
Chloe Jay, senior partner at Shentons Solicitors, agrees the quality of justice will be impacted by a new court division that could sit without a jury for some offences.
She says: “The beauty of the Crown Court is that you have two separate bodies, one deciding the facts and one deciding law.
Image: Casey Jenkins, president of London Criminal Court Solicitors’ Association
“So the jury doesn’t hear the legal arguments about what evidence should be excluded, whether something should be considered as part of the trial, and that’s what really gives you that really good, sound quality of justice, because you haven’t got one person making all the decisions together.
“Potentially in an intermediate court, that is what will happen. The same three people will hear those legal arguments and make the finding of guilt or innocence.”
The most striking finding from the survey is that 73% of criminal lawyers surveyed are worried about offences no longer sitting in front of a jury.
Casey Jenkins, president of London Criminal Court Solicitors’ Association, says this could create unconscious bias.
“There’s a real risk that people from minority backgrounds are negatively impacted by having a trial by a judge and not a jury of their peers who may have the same or similar social background to them,” she says.
“A jury trial is protection against professional judicial decisions by the state. It’s a fundamental right that can be invoked.”
Instead of moving some offences to a new Crown Court tier, our survey suggests criminal lawyers would be more in favour of moving cases to the magistrates instead.
Under the Leveson proposals, trials for offences such as dangerous driving, possessing an offensive weapon and theft could be moved out of the Crown Courts.
‘Catastrophic consequences’
Richard Atkinson, president of the Law Society, says fixing the system will only work with fair funding.
“It’s as important as the NHS, it’s as important as the education system,” he says. “If it crumbles, there will be catastrophic consequences.”
Ms Jenkins agrees that for too long the system has been allowed to fail.
“Everyone deserves justice, this is just not the answer,” she says.
“It’s just the wrong solution to a problem that was caused by chronic, long-term under-investment in the criminal justice system, which is a vital public service.
“The only way to ensure that there’s timely and fair justice for everybody is to invest in all parts of the system from the bottom up: local services, probation, restorative justice, more funding for lawyers so we can give early advice, more funding for the police so that cases are better prepared.”
Government vows ‘bold and ambitious reform’
In response to Sky News’ findings, the minister for courts and legal services, Sarah Sackman KC MP, told Sky News: “We inherited a record and rising court backlog, leaving many victims facing unacceptable delays to see justice done.
“We’ve already boosted funding in our courts system, but the only way out of this crisis is bold and ambitious reform. That is why we are carefully considering Sir Brian’s bold recommendations for long-term change.
“I won’t hesitate to do whatever needs to be done for the benefit of victims.”
The driver that killed Diane’s husband was eventually convicted. She wants those making decisions about the court system to remember those impacted the most in every case.
Every victim and every family.
“You do just feel like a cog in a big wheel that’s out of your control,” she says. “Because you know justice delayed is justice denied.”