Chancellor’s difficult decisions in spring statement could just be the start
It might not have been a budget, but the spring statement felt like one.
There was red pen all over the chancellor’s economic plans as Rachel Reeves sought to repair deteriorating public finances by cuts that will hit the poorest in society.
Faced with a deteriorating economic outlook and rising debt repayment costs, the chancellor was in a tight spot having made her big call back in October when she executed a – her words – “once in a generation” £70bn tax and spend budget to improve public services and drive economic growth.
Five months in, the budget is not living up to what was billed.
She confirmed on Wednesday that the £9.9bn surplus forecast in 2029/30 had been wiped out, leaving the public finances in the red.
Cue a £14bn repair job to restore her fiscal cushion as Reeves told the House of Commons her fiscal rule to fund day-to-day government spending from tax receipts not borrowing by the end of the decade was “non-negotiable”.
No more borrowing and no more tax hikes (for now).
The chancellor instead announced billions of spending cuts to make her sums add up and the cuts were hard to stomach for the Labour movement as they watched a Labour chancellor cut the welfare bill by £4.8bn.
The government’s own assessments estimate that 3.2m families on universal credit will be on average £1,720 worse off a year by 2029/30 while 250,000 adults and 50,000 more children are set to be pushed into relative poverty, according to the government’s own impact assessment.
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I don’t need to tell you how uncomfortable this is for many Labour MPs and the clamour against cuts was plain to see, not only in the Commons as MPs stood up to rail against “cruel cuts” and urge the chancellor to think again, but outside Downing Street too as protesters gathered.
For now, MPs, and government insiders, tell me they don’t scent a full-blown rebellion. One seasoned MP told me that while MPs are very concerned about how these cuts will be implemented and reaction from constituents, they also “generally still recognise the tough circumstances” with “no one in doubt Rachel Reeves is serious about turning around public finances”.
Government figures argue they do not think the fall-out from the cuts will be as bad as their own assessment, pointing out that the calculations don’t take into account the rise in national living wage, the government’s poverty plan for around 700,000 vulnerable families and changes to employment support as part of the welfare reform that should help people back into work.
But that does not mean the difficulties are not piling up for this chancellor even if on Wednesday she managed to buy a bit of political space as she repaired her black hole, avoided an emergency budget and could at least point to upgrades to the growth forecasts after 2026.
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There was also a rabbit of sorts – the chancellor looks very happy about this – as she announced that the government’s planning reforms would add nearly £7bn to the economy over the next five years.
This is something to grasp on to for a politician groping around for a bit of good news and something to sell to her MPs: Stick with me the growth plan is going to work.
But what is plain to see is that this is a repair job rather than a fix.
Rachel Reeves. Pic: PA
As the Office of Budget Responsibility itself noted, the £9.9bn headroom Reeves has re-built to stick to her fiscal rules is flimsy and fragile and could easily be wiped out by trade wars, an interest rate shock or market volatility in these deeply uncertain times.
So, the question on everyone’s lips is will she have to come back for more in a few months? When I asked her at this afternoon’s press conference, she said only that the government was, as demonstrated on Wednesday, “determined to live within its means”.
But it’s obvious that further tax rises or spending cuts could soon be on the cards if she remains determined to stick to her fiscal rules and not borrow more.
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What is clear too is that the appetite for further spending cuts from her own party is pretty much exhausted.
Labour MPs were vocal about that in the chamber, demanding taxes on the rich rather than benefits cuts on the poor, while those who are sticking with the chancellor now also know all too well that pressure will build to raise revenue elsewhere.
The chancellor may have managed to navigate a difficult day, but the months ahead look set to become harder still. The difficult decisions now could be just the start.
The flying of St George’s flags across the country are creating “no-go” zones for NHS staff, with some facing frequent abuse, health bosses have warned.
Several NHS trust chief executives and leaders have said staff feel intimidated by the national symbols, including when they make home visits.
The findings follow a survey conducted among senior managers, 45% of whom were extremely concerned about discrimination towards staff.
A leader of a trust said anonymously that there were safety issues around how they work in the community, with nurses regularly visiting patients in their homes alone.
He said: “You’re going in on your own, you’re locking the door behind you.
“I have been into homes with people who have been convicted of sex offences, and we go in and provide care to them.
“It can be a really precarious situation, and they [the nurses] handle that absolutely brilliantly.
“The autonomy and the clinical decisions that they make within that, I think, is fantastic.
“We saw during the time when the flags went up – our staff, who are a large minority of black and Asian staff, feeling deliberately intimidated.
“It felt like the flags were up creating no-go zones. That’s what it felt like to them.
“You add that on top of real autonomous working, that real bravery of working in people’s homes, with an environment… [where] it feels like it’s an area that’s designed to exclude them.
“Our staff continue to work in that environment, and I think they deserve our real praise and thanks as a nation, frankly, for doing that within those really difficult circumstances.”
He added his trust had also seen “individual instances of aggression towards staff”.
File pic: iStock
Another NHS trust leader said a member of staff, who is white and has children of mixed heritage, had asked some people putting up flags to move so she could park her car.
“The individuals filmed what was happening, and then followed her, and she continued to receive abuse over a series of several days, not because she objected to the flags, but because she disturbed them,” they said.
“There are lots of stories like that. There are lots of stories where people have tried to take flags down outside of their own homes and have been abused and threatened as a consequence of that.”
The leader said the “springing up of flags everywhere has created another form of intimidation and concern for many, many of our staff”.
Daniel Elkes, chief executive of NHS Providers, which represents trusts, said: “The NHS has relied on overseas recruitment for a long time to ensure we have the right workforce.
“We have a really diverse workforce and without that you can’t deliver the NHS.
“We are trying to recruit from the very places where we provide healthcare so the intake into the NHS is representative of British people from more diverse backgrounds.”
Professor Nicola Ranger, the Royal College of Nursing’s general secretary, said: “Following a summer of further racist disorder, it is little wonder a growing number of nursing staff report feeling unsafe, particularly when having to work on their own and often at night.
“The government and all politicians have to stop pandering to dangerous anti-migrant sentiments and employers must prioritise tackling racism and work with trade unions to develop stronger mechanisms to protect staff.”
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A Department of Health and Social Care spokesperson said there was “no place for intimidation, racism or abuse in our country or our NHS”, adding that threats and aggression should be reported to police.
They said the government valued the “diversity of our NHS”, and that workers “must be treated with dignity and respect”.
“Our flags represent our history, our heritage, and our values,” they said. “They are a symbol of our nation and belong to all of us – not just some of us.”
The survey findings come ahead of strike action by resident doctors over pay and jobs due to take place on Friday for five days.
A woman caught with £5bn in Bitcoin in the UK’s highest ever value money laundering investigation has been jailed for 11 years and eight months – after nearly five years on the run.
Zhimin Qian, 47, sat up in bed looking stunned when police kicked open the bedroom door of an Airbnb in a York suburb on 22 April last year.
She vanished and went on the run after officers seized more than 61,000 Bitcoin in the country’s biggest cryptocurrency seizure in a raid of her rented £5m home next to Hampstead Heath.
Qian – who fled China after carrying out a huge fraud and arrived in the UK in 2017 on a false St Kitts and Nevis passport in the name of Yadi Zhang – pleaded guilty to two money laundering offences at Southwark Crown Court.
Police said she styled herself the “Goddess of Wealth” and wore imperial robes as her sales teams offered 300% returns at conferences in luxury hotels in China promoting her “Britain Nice Life Insurance” scheme.
In a slick video played to targets, the narrator says “Britain is a nation of glories and dreams” over footage of the Houses of Parliament, Oxford University, Windsor Castle, Buckingham Palace and the City of London.
Qian was already wanted in China over two other scams when she orchestrated the gigantic investment fraud, conning more than 128,000 victims from every province out of 40bn Yuan (around £4.6bn) between 2014 and 2017.
More than 80 people have been convicted in China over the scam, but Qian converted some of the proceeds into more than 70,000 Bitcoin and fled, crossing the border into Myanmar on a moped before arriving at Heathrow Airport in September 2017.
Jian Wen. Pic: CPS
The women rented a £17,000-a-month house in Hampstead. Pic: CPS
She recruited Jian Wen, who left her job in a south London Chinese takeaway, and the women moved into a £17,000-a-month rented £5m house next to Hampstead Heath, posing as the bosses on an international jewellery business.
They travelled extensively across Europe, buying jewellery and spending tens of thousands of pounds on designer clothes and shoes in Harrods, while Wen bought a £25,000 E-Class Mercedes and sent her son to the £6,000-a-term Heathside preparatory school.
Qian made extensive notes about her “grandiose” plans to increase her social standing.
She wanted to meet a royal duke, hoped the Dalai Lama would anoint her as a reincarnated Goddess, and dreamed of ruling Liberland – an unrecognised micronation on the Croation side of the Danube – as Queen.
The women travelled extensively. Pic: Met Police
Wen tried to buy Hampstead property. Pic: Met Police
But the women came to the attention of police when they tried to buy a £24m seven-bedroom Hampstead mansion with a swimming pool, using more than £800,000 converted from Bitcoin.
Officers raided their home in October 2018 and seized £300,000 in cash and cheques, along with phones and laptops, and found a hand drawn “treasure map” leading from Harrods to a safety deposit box containing more devices.
When investigators finally accessed the cryptocurrency wallets stored on them, they thought someone had put the decimal point in the wrong place.
The 61,279 Bitcoin was then worth £1.4bn and has now soared to more than £5bn, making it the biggest ever cryptocurrency seizure in Britain and, until recently, the world.
Read more: How Chinese takeaway worker led police to biggest ever Bitcoin seizure
Police believed Qian had left the country, but shortly before Wen was found guilty of money laundering offences in March last year, Detective Constable Joe Ryan detected activity on a cryptocurrency exchange from a wallet linked to Qian, which hadn’t been used since 2019.
The exchange provided details of the account holder – Seng Hok Ling, a Malaysian national with a previous conviction for fraud in Hong Kong in 2015, who was living in Matlock, Derbyshire.
Seng Hok Ling arrives at a rented property. Pic: Met Police
Qian disguises her appearance while on the run. Pic: Met Police
Working on the theory he may be in contact with Qian, detectives stepped up the manhunt, which took them all over the UK, before they identified her at a detached house in a York suburb.
When police kicked open the upstairs bedroom door, there was Qian, lying under a bright red duvet and struggling to put on her top as she stared wide eyed at officers from behind her thick glasses.
Detective Constable Chris Woods told colleagues: “It’s her.”
A ledger and passwords found sewn inside a purpose-made concealed pocket in the jogging bottoms she was wearing, led investigators to Bitcoin and other cryptocurrency worth around £67m.
Ling had helped her stay on the run, providing false documents and money laundering services, and renting Airbnb properties, including a house in Glasgow and a remote farmhouse near Loch Tay in the Scottish Highlands.
The court heard he tried to get one passport in the name of dead Hong Kong actress Dianxia Shen.
Staff made to sign confidentiality agreements. Pic: Met Police
A rotating entourage of cooks, drivers and security guards were employed on lucrative contracts to look after Qian, who they assumed was a rich recluse.
They were made to sign strict confidentiality agreements, which barred them from using Chinese devices or apps and photographing, recording or videoing “anyone or anything indoors or outdoors” – with breaches resulting in dismissal and fines of up to $30,000.
Metropolitan Police officers travelled to Beijing and Tianjin to speak to victims of the fraud, some of whom had lost their life savings, seen their family collapse or been left unable to pay for medical care.
Chinese police officers were lined up to become the first in history to give evidence in a UK court, but Qian pleaded guilty on the first day of the trial, while Ling also admitted a money laundering charge.
The court heard that since being in prison Qian has had poetry published and her artwork displayed at an exhibition.
Wen was jailed for six years and eight months last year, and the sentencing of Qian and Ling marks the end of what the Met’s head of economic and cyber crime called “one of the longest running and most complex economic crime investigations” in the force’s history.
“She lived, while she was on the run in the UK, a relatively reclusive lifestyle. She had that entourage of people around her, but she didn’t venture out much,” he said of Qian.
“And we have some understanding from some of her musings and some of thoughts around what she may do with the rest of her money and her wealth and her life ultimately.
“But thankfully, we were able to catch her and bring her to justice before some of those dreams were realised.”
The fortune is now at the centre of a High Court battle between the UK government and thousands of Chinese victims.
Prosecutors have set up a compensation scheme but lawyers representing those who want to recover their investments say it should reflect the huge rise in the value of Bitcoin and not just what they put in.
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