Rachel Reeves has not offered her resignation and is “going nowhere”, Downing Street has said, following her tearful appearance in the House of Commons.
A Number 10 spokesperson said the chancellor had the “full backing” of Sir Keir Starmer, despite Ms Reeves looking visibly upset during Prime Minister’s Questions.
A spokesperson for the chancellor later clarified that Ms Reeves had been affected by a “personal matter” and would be working out of Downing Street this afternoon.
UK government bond prices fell by the most since October 2022, and the pound tumbled after Ms Reeves’s Commons appearance, while the yield on the 10-year government bond, or gilt, rose as much as 22 basis points at one point to around 4.68%.
Tory leader Kemi Badenoch branded the chancellor the “human shield” for the prime minister’s “incompetence” just hours after he was forced to perform a humiliating U-turn over his controversial welfare bill.
Emotional Reeves a painful watch – and reminder of tough decisions ahead
It is hard to think of a PMQs like it – it was a painful watch.
The prime minister battled on, his tone assured, even if his actual words were not always convincing.
But it was the chancellor next to him that attracted the most attention.
Rachel Reeves looked visibly upset.
It is hard to know for sure right now what was going on behind the scenes, the reasons – predictable or otherwise – why she appeared to be emotional, but it was noticeable and it was difficult to watch.
Speaking at Prime Minister’s Questions, Ms Badenoch said: “This man has forgotten that his welfare bill was there to plug a black hole created by the chancellor. Instead they’re creating new ones.”
Turning to the chancellor, the Tory leader added: “[She] is pointing at me – she looks absolutely miserable.
“Labour MPs are going on the record saying that the chancellor is toast, and the reality is that she is a human shield for his incompetence. In January, he said that she would be in post until the next election. Will she really?”
Not fully answering the question, the prime minister replied: “[Ms Badenoch] certainly won’t.
Please use Chrome browser for a more accessible video player
2:58
Welfare vote ‘a blow to the prime minister’
“I have to say, I’m always cheered up when she asks me questions or responds to a statement because she always makes a complete mess of it and shows just how unserious and irrelevant they are.”
Mrs Badenoch interjected: “How awful for the chancellor that he couldn’t confirm that she would stay in place.”
A total of 49 Labour MPs voted against the bill – the largest rebellion in a prime minister’s first year in office since 47 MPs voted against Tony Blair’s Lone Parent benefit in 1997, according to Professor Phil Cowley from Queen Mary University.
After multiple concessions made due to threats of a Labour rebellion, many MPs questioned what they were voting for as the bill had been severely stripped down.
They ended up voting for only one part of the plan: a cut to Universal Credit (UC) sickness benefits for new claimants from £97 a week to £50 from 2026/7.
Ms Badenoch said the climbdown was proof that Sir Keir was “too weak to get anything done”.
Ms Reeves has also borne a lot of the criticism over the handling of the vote, with some MPs believing that her strict approach to fiscal rules has meant she has approached the ballooning welfare bill from the standpoint of trying to make savings, rather than getting people into work.
Experts have now warned that the welfare U-turn, on top of reversing the cut to winter fuel, means that tax rises in the autumn are more likely – with Ms Reeves now needing to find £5bn to make up for the policy U-turns.
Asked by Ms Badenoch whether he could rule out further tax rises – something Labour promised it would not do on working people in its manifesto – Sir Keir said: “She knows that no prime minister or chancellor ever stands at the despatch box and writes budgets in the future.
“But she talks about growth, for 14 years we had stagnation, and that is what caused the problem.”
Mayors will be able to introduce tourist taxes across England, the government has announced.
A day before the budget, communities secretary Steve Reed said mayors will be given the power to impose a “modest” charge on visitors staying overnight in hotels, bed and breakfasts, guest houses and holiday lets.
The money raised is intended to be invested in local transport, infrastructure and the visitor economy to potentially attract more tourists.
Regional Labour leaders such as London Mayor Sir Sadiq Khan and Greater Manchester’s Andy Burnham have been calling for the measure.
However, the hospitality industry condemned the move as “damaging”.
The visitor levy will bring England in line with Scotland and Wales, which are already introducing tourist taxes.
More on Budget 2025
Related Topics:
Officials said it would bring English cities into line with other tourist destinations around the world, including New York, Paris and Milan, which already charge a tourist tax.
They said research showed “reasonable” fees had a “minimal” impact on visitor numbers.
Please use Chrome browser for a more accessible video player
11:05
The budget vs your wallet: How the chancellor could raise billions
Sir Sadiq said it is “great news for London” and said the tax will “directly support London’s economy and help cement our reputation as a global tourism and business destination”.
The Greater London Authority previously estimated a £1 a day levy could raise £91m, and a 5% levy could raise £240m.
Mr Burnham said the tax will allow Greater Manchester to “invest in the infrastructure these visitors need, like keeping our streets clean and enhancing our public transport system through later running buses and trams, making sure every experience is a positive and memorable one”.
Please use Chrome browser for a more accessible video player
3:35
Sky News goes inside the room where the budget happens
However, Lord Houchen, the Conservative Tees Valley mayor, said he will not introduce a tourist tax, adding: “Thanks, but no thanks.”
Conservative shadow local government secretary Sir James Cleverly branded it “yet another Labour tax on British holidays, pushing up costs for hard-pressed families, and yet another kick to British hospitality”.
Kate Nicholls, chair of UKHospitality, warned the “damaging holiday tax” could cost the public up to £518 million, adding: “Make no mistake – this cost will be passed directly on to consumers, drive inflation and undermine the government’s aim to reduce the cost of living.”
The plans will be subject to a consultation running until 18 February, which will include considering whether there should be a cap on the amount.
A man has been arrested in connection with the large-scale illegal tipping of waste in Oxfordshire, police have said.
The 39-year-old, from the Guildford area, was arrested on Tuesday following co-operation between the Environment Agency (EA) and the South East Regional Organised Crime Unit.
Image: The illegal site is on the edge of Kidlington in Oxfordshire
Anna Burns, the Environment Agency’s area director for the Thames, said that the “appalling illegal waste dump… has rightly provoked outrage over the potential consequences for the community and environment”.
“We have been working round the clock with the South East Regional Organised Crime Unit to bring the perpetrators to justice and make them pay for this offence,” she added.
“Our investigative efforts have secured an arrest today, which will be the first step in delivering justice for residents and punishing those responsible.”
Image: Pic: PA
Phil Davies, head of the Joint Unit for Waste Crime, added that the EA “is working closely with other law enforcement partners to identify and hold those responsible for the horrendous illegal dumping of waste”.
More on Environment
Related Topics:
He then said: “A number of active lines of investigation are being pursued by specialist officers.”
Sky News drone footage captured the sheer scale of the rubbish pile, which is thought to weigh hundreds of tonnes and comprise multiple lorry loads of waste.
The EA said that officers attended the site on 2 July after the first report of waste tipping, and that a cease-and-desist letter was issued to prevent illegal activity.
After continued activity, the agency added that a court order was granted on 23 October. No further tipping has taken place at the site since.
Father Ted creator Graham Linehan has been cleared of harassment against a trans activist but guilty of criminal damage to their phone.
The 57-year-old comedy writer, who had faced trial at Westminster Magistrates’ Court, denied both charges linked to posts made on social media and a confrontation at a conference in London in October 2024.
Summarising her judgment, District Judge Briony Clarke started by saying it was not for the court to pick sides in the debate about sex and gender identity.
She said she found Linehan was a “generally credible witness” and appeared to be “genuinely frank and honest”, and that she was not satisfied his conduct amounted to the criminal standard of harassment.
Image: Pic: Ben Whitley/ PA
The judge said she accepted some of complainant Sophia Brooks’s evidence, but found they were not “entirely truthful” and not “as alarmed or distressed” as they had portrayed themself to be following tweets posted by the comedy writer.
While Linehan’s comments were “deeply unpleasant, insulting and even unnecessary”, they were not “oppressive or unacceptable beyond merely unattractive, annoying or irritating”, the judge said, and did not “cross the boundary from the regrettable to the unacceptable”.
However, she did find him guilty of criminal damage, for throwing Brooks’s phone. Having seen footage of the incident, the judge said she found he took the phone because he was “angry and fed up”, and that she was “satisfied he was not using reasonable force”.
The judge said she was “not sure to the criminal standard” that Linehan had demonstrated hostility based on the complainant being transgender, and therefore this did not aggravate his offence.
He was ordered to pay a fine of £500, court costs of £650 and a statutory surcharge of £200. The prosecution had asked the judge to consider a restraining order, but she said she did not feel this was necessary.
What happened during the trial?
The writer, known for shows including Father Ted, The IT Crowd and Black Books, had flown to the UK from Arizona, where he now lives, to appear in court in person.
He denied harassing Brooks on social media between 11 and 27 October last year, as well as a charge of criminal damage of their mobile phone on 19 October outside the Battle of Ideas conference in Westminster.
The trial heard Brooks, who was 17 at the time, had begun taking photographs of delegates at the event during a speech by Fiona McAnena, director of campaigns at Sex Matters.
Giving evidence during the case, Linehan claimed his “life was made hell” by trans activists and accused Brooks, a trans woman, of being a “young soldier in the trans activist army”.
He told the court he was “angry” and “threw the phone” after being filmed outside the venue by the complainant, who had asked: “Why do you think it is acceptable to call teenagers domestic terrorists?”
Brooks told the court Linehan had called them a “sissy porn-watching scumbag”, a “groomer” and a “disgusting incel”, to which the complainant had responded: “You’re the incel, you’re divorced.”
The prosecution claimed Linehan’s social media posts were “repeated, abusive, unreasonable” while his lawyer accused the complainant of following “a course of conduct designed both to provoke and to harass Mr Linehan”.
Following the judgment but ahead of sentencing, Linehan’s lawyer Sarah Vine KC said the court “would do well to take a conservative approach towards the reading of hostility towards the victim”.
She said the offence of criminal damage involved a “momentary lapse of control”, and was part of the “debate about gender identity, what it means”.
Vine said it was important “that those who are involved in the debate are allowed to use language that properly expresses their views without fear of excessive state interference for the expression of those views”.
She also said the cost of the case to Linehan had been “enormous”, telling the court: “The damage was minor; the process itself has been highly impactful on Mr Linehan.”
She requested he be given 28 days to pay the full amount.