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).
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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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2:19
Beth Rigby asks: ‘Is it time for you to level with people?’
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.
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.
Image: 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.
No criminal charges will be brought over the death of an ice hockey player who died during a match in Sheffield, prosecutors have announced.
Nottingham Panthers’ Adam Johnson died in October 2023 after his neck was cut by an opposition player’s skate during a match at Sheffield’s Utilita Arena.
The Sheffield Steelers player, Matthew Petgrave, was arrested on suspicion of manslaughter and later bailed – but the Crown Prosecution Service (CPS) has now said it will not bring criminal charges against the Canadian.
Michael Quinn, deputy chief crown prosecutor, said: “This was a shocking and deeply upsetting incident. The CPS and South Yorkshire Police have worked closely together to determine whether any criminal charges should be brought against the other ice hockey player involved.
“Following a thorough police investigation and a comprehensive review of all the evidence by the CPS, we have concluded that there is not a realistic prospect of conviction for any criminal offence and so there will not be a prosecution.
“Our thoughts remain with the family and friends of Adam Johnson.”
Image: Tributes were left outside the Motorpoint Arena in Nottingham following the ice hockey player’s death. Pic PA
Before joining Nottingham Panthers, the Minnesota-born Johnson played in Pennsylvania for the Pittsburgh Penguins, and Sweden for the Malmo Redhawks.
He also played in California for Ontario Reign and in Germany for Augsburger Panther.
A post-mortem examination confirmed the 29-year-old died as a result of the fatal neck injury.
The crowd of 8,000 spectators watched in horror as desperate attempts were made to save his life as he lay on the ice, shielded by fellow players.
The game was abandoned and spectators were asked to leave in the aftermath.
Image: Pic PA
Kari Johnson, Johnson’s aunt, was watching the match via a livestream with his father and grandmother when he was fatally injured.
Speaking to Sky News at the time, Ms Johnson said: “It was a mess, it was a nightmare, it was like it wasn’t real. We were in shock, we couldn’t believe this was happening.”
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1:21
Kari Johnson said her nephew was ‘a kind soul’
Ms Johnson described her nephew as a “kind soul” and a “private kid” who “never would have wanted to be in the limelight like this”.
He simply wanted to be “good at hockey and have fun”, she said, adding he was “having the time of his life in the UK” and was planning to get engaged to his girlfriend.
In January 2024, Sheffield’s senior coroner, Tanyka Rawden, suspended her investigation while the police inquiry took its course.
It later emerged that Ms Rawden had issued a Prevention of Future Deaths Report to Ice Hockey UK and the English Ice Hockey Association (EIHA) about the use of neck guards in the sport.
In the report, Ms Rawden said she was “sufficiently concerned that deaths may occur in the future if neck guards or protectors are not worn”, with the bodies given 56 days to say what action had been taken – or why action had not been taken.
Neck guards have been mandatory in the Elite League (EIHL), in which the Nottingham Panthers and Sheffield Steelers compete, since January 2024.
This followed the International Ice Hockey Federation’s decision in December to mandate the use of neck laceration protectors for its competitions.
Court decisions where people were granted asylum after arguing they had a “right to family life” will be reviewed as the government plans to ban migrants convicted of sex offences, the home secretary has said.
Foreign nationals who are added to the sex offenders register will forfeit their rights to protection under the Refugee Convention, the Home Office announced.
As part of the 1951 UN treaty, countries are allowed to refuse asylum to terrorists, war criminals and individuals convicted of a “particularly serious crime” – which is currently defined in UK law as an offence carrying a sentence of 12 months or more.
The government now plans to extend that definition to include all individuals added to the Sex Offenders’ Register, regardless of the length of sentence, in an amendment to the Border Security, Asylum and Immigration Bill, which is currently going through parliament.
Home Secretary Yvette Cooper told Sky News the new definition would also “take into account” sexual offence convictions in another country.
However, she was less clear if those affected will still be able to appeal against their removal from the UK under the European Convention on Human Rights (ECHR).
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Image: More than 10,000 people have now been detected crossing the Channel. Pic: PA
She said: “We continue to comply with international law, but the whole point is that our laws and our frameworks are about how we interpret international law… and how we make sure that the courts are then making their decisions based on the UK law that parliament has passed.”
She added the government is “reviewing” a “series of decisions” made in the courts where criminals have been allowed to stay in the UK under Article 8 of the Human Rights Act, which protects the right to respect “your private life, your family life, your home and your correspondence”.
“We are reviewing that because we do believe that the way in which it’s being interpreted in the courts is an issue and actually, there is greater clarification we can provide through our law to address that,” she said.
It is unclear how many asylum seekers will be affected by the change in law, as the government has been unable to provide any projections or past data on the number of asylum seekers added to the Sex Offenders’ Register.
Ms Cooper earlier said: “Sex offenders who pose a risk to the community should not be allowed to benefit from refugee protections in the UK. We are strengthening the law to ensure these appalling crimes are taken seriously.”
Safeguarding and Violence Against Women and Girls Minister Jess Philips said: “We are determined to achieve our mission of halving violence against women and girls in a decade.
“That’s exactly why we are taking action to ensure there are robust safeguards across the system, including by clamping down on foreign criminals who commit heinous crimes like sex offences.”
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2:18
Has Labour tackled migration?
The Home Office would like voters to see this as a substantial change. But that’s hard to demonstrate without providing any indication of the scale of the problem it seeks to solve.
Clearly, the government does not want to fan the flames of resentment towards asylum seekers by implying large numbers have been committing sex crimes.
But amid rising voter frustration about the government’s grip on the issue, and under pressure from Reform – this measure is about signalling it is prepared to take tough action.
Conservatives: ‘Too little, too late’
The Conservatives claim Labour are engaged in “pre-election posturing”.
Chris Philp, the shadow home secretary, said: “This is too little, too late from a Labour government that has scrapped our deterrent and overseen the worst year ever for small boat crossings – with a record 10,000 people crossing this year already.
“Foreign criminals pose a danger to British citizens and must be removed, but so often this is frustrated by spurious legal claims based on human rights claims, not asylum claims.”
The Home Office has also announced plans to introduce a 24-week target for appeal hearings (known as “first-tier tribunals”) to be held for rejected asylum seekers living in taxpayer-supported accommodation, or for foreign national offenders.
The current average wait is 50 weeks.
The idea is to cut the asylum backlog and save taxpayers money – Labour have committed to end the use of asylum hotels by the end of this parliament.
It’s unclear how exactly this will be achieved, although a number of additional court days have already been announced.
The government also plans to crack down on fake immigration lawyers who advise migrants on how to lodge fraudulent asylum claims, with the Immigration Advice Authority given new powers to issue fines of up to £15,000.