Chancellor Rachel Reeves refuses to rule out manifesto-breaking tax hikes
Rachel Reeves has refused to rule out breaking her manifesto pledge not to raise certain taxes, as she lays the groundwork ahead of the budget later this month.
Asked directly by our political editor Beth Rigby if she stands by her promises not to raise income tax, national insurance or VAT, the chancellor declined to do so.
She told Rigby: “Your viewers can see the challenges that we face, the challenges that are on [sic] a global nature. And they can also see the challenges in the long-term performance of our economy.”
Follow live updates from Westminster
She went on: “As chancellor, I have to face the world as it is, not the world as I want it to be. And when challenges come our way, the only question is how to respond to them, not whether to respond or not.
“As I respond at the budget on 26 November, my focus will be on getting NHS waiting lists down, getting the cost of living down and also getting the national debt down.”
‘Each of us must do our bit’
Ms Reeves’s comments to Rigby came after a highly unusual pre-budget speech in Downing Street in which she set out the scale of the international and domestic “challenges” facing the government.
She also hinted at tax rises, saying: “If we are to build the future of Britain together, each of us must do our bit for the security of our country and the brightness of its future.”
Despite her promise that last year’s budget – which was the biggest tax-raising fiscal event since 1993 – was a “once in a parliament event,” the chancellor said that in the past year, “the world has thrown even more challenges our way,” pointing to “the continual threat of tariffs” from the United States, inflation that has been “too slow to come down,” “volatile” supply chains leading to higher prices, and the high cost of government borrowing.
She also put the blame squarely on previous Tory governments, accusing them of “years of economic mismanagement” that has “limited our country’s potential,” and said past administrations prioritised “political convenience” over “economic imperative”.
Please use Chrome browser for a more accessible video player
Sky’s Beth Rigby said there will be ‘almighty backlash’ after budget, as chancellor failed to rule out breaking tax pledges.
Ms Reeves painted a picture of devastation following the years of austerity in the wake of the financial crisis, “instability and indecision” after that, and then the consequences of what she called “a rushed and ill-conceived Brexit”.
“This isn’t about re-litigating old choices – it’s about being honest with the people, about the consequences that those choices have had,” she said.
‘I don’t expect anyone to be satisfied with growth so far’
The chancellor defended her personal record in office so far, saying interest rates and NHS waiting lists have fallen, while investment in the UK is rising, and added: “Our growth was the fastest in the G7 in the first half of this year. I don’t expect anyone to be satisfied with growth of 1%. I am not, and I know that there is more to do.”
Amid that backdrop, Ms Reeves set out her three priorities for the budget: “Protecting our NHS, reducing our national debt, and improving the cost of living.”
Cutting inflation will also be a key aim in her announcements later this month, and “creating the conditions that [see] interest rate cuts to support economic growth and improve the cost of living”.
She rejected calls from some Labour MPs to relax her fiscal rules, reiterating that they are “ironclad,” and arguing that the national debt – which stands at £2.6trn, or 94% of GDP – must come down in order to reduce the cost of government borrowing and spend less public money on interest payments to invest in “the public services essential to both a decent society and a strong economy”.
She also put them on notice that cuts to welfare remain on the government’s agenda, despite its humiliating U-turn on cuts to personal independence payments for disabled people earlier this year, saying: “There is nothing progressive about refusing to reform a system that is leaving one in eight young people out of education or employment.”
Chancellor Rachel Reeves delivered a highly unusual pre-budget speech from Downing Street. Pic: PA
And the chancellor had a few words for her political opponents, saying the Tories’ plan for £47bn in cuts would have “devastating consequences for our public services,” and mocked the Reform UK leadership of Kent County Council for exploring local tax rises instead of cuts, as promised.
Concluding her speech, Ms Reeves vowed not to “repeat those mistakes” of the past by backtracking on investments, and said: “We were elected to break with the cycle of decline, and this government is determined to see that through.”
‘Reeves made all the wrong choices’
In response to her speech, Conservative shadow chancellor Sir Mel Stride wrote on X that “all she’s done is confirm the fears of households and businesses – that tax rises are coming”.
He wrote: “The chancellor claims she fixed the public finances last year. If that was true, she would not be rolling the pitch for more tax rises and broken promises. The reality is, she fiddled the fiscal rules so she could borrow hundreds of billions more.
“Every time the numbers don’t add up, Reeves blames someone else. But this is about choices – and she made all the wrong ones. If Rachel Reeves had the backbone to get control of government spending – including the welfare bill – she wouldn’t need to raise taxes.”
He called for her to resign if she raises taxes.
Nvidia boss Jensen Huang has told Sky News the AI sector is a “long, long way” from a Big Short-style collapse.
Speaking outside Downing Street following a roundtable with government and other industry figures, the head of the world’s first $5tn company defended his sector from criticism by investor Michael Burry.
Mr Burry and his firm, Scion Capital, gained notoriety for “shorting” – betting against – the US housing market ahead of the 2008 financial crash.
Politics latest: Lammy to take deputy PMQs
He was portrayed by Christian Bale in the 2015 film The Big Short, which also starred Steve Carell, Brad Pitt and Ryan Gosling.
Earlier this week, filings revealed Mr Burry has now bet against Nvidia and on social media, he has suggested there is a bubble in the sector.
Some $500bn was wiped off technology stocks overnight Tuesday into Wednesday, Bloomberg reported.
Speaking to Sky News, Mr Huang said: “I would say that we’re in the beginning of a very long build out of artificial intelligence.”
Christian Bale portrayed Michael Burry in the 2015 hit film. Pic: Reuters
Defending his company and investment, Mr Huang said AI is the first technology that requires “infrastructure to be built” and that Nvidia has seen “great returns” from AI, and that is why it is expanding.
Mr Huang said better training of AI has led to much “better” and “useful” answers, and that means “the AIs have become profitable”.
“When something is profitable, the suppliers want to make more of it, and that’s the reason the infrastructure build out is accelerating,” he added.
Pushed on whether he was worried about a situation like the Big Short, Mr Huang said: “We are long, long away from that.”
The UK government is betting big on AI in the hopes that it can save money by using it and generate growth by building the infrastructure to back it up.
Asked if she was worried about the market, Technology Secretary Liz Kendall told Sky News: “I have no doubts that AI is going to transfer all parts of our economy and our public services.”
Mr Burry and his firm, Scion Capital’s bets against Nvidia and other companies were revealed by regulatory filings earlier this week.
The investor also posted on social media for the first time in more than two years, warning of a bubble.
👉Listen to Politics at Sam and Anne’s on your podcast app👈
Concerns have been raised about the market surrounding AI, and the growth many companies are experiencing.
Nvidia is the largest producer of the specialist computer chips that are used to train and use AI models.
Politics
‘Hope won’: London mayor Sadiq Khan compares newly-elected New York mayor to his leadership
New York has followed London by choosing hope over fear in electing Democrat Zohran Mamdani as its new mayor, Sir Sadiq Khan said.
Mr Mamdani, 34, defeated former New York governor Andrew Cuomo and Republican Curtis Sliwa to become the city’s first Muslim mayor and the first of South Asian heritage.
London mayor Sir Sadiq drew comparisons to his own 2016 victory as he congratulated Mr Mamdani, who will become New York’s youngest mayor in more than a century when he takes office on 1 January.
Sir Sadiq Khan. Pic: PA
US latest: Trump downplays Democrats’ wins
Sir Sadiq called it a “historic campaign”, adding on X: “New Yorkers faced a clear choice – between hope and fear – and just like we’ve seen in London – hope won.”
Education Secretary Bridget Phillipson also congratulated Mr Mamdani, telling Sky News: “I wish him well.
“It’s a wonderful job to have secured.”
Green Party leader Zack Polanski said Mr Mamdani’s success “will resonate throughout the world” as he called it a “story where no one is left behind”.
“It’s time to write that story across England and Wales too,” he added.
Zohran Mamdani with his wife, Rama Duwaji. Pic Reuters
Mr Mamdani’s victory was a setback for Donald Trump, who had thrown his weight behind Andrew Cuomo, a former Democrat running as an independent.
The mayor-elect described himself as “Trump’s worst nightmare” and said New York had shown “a nation betrayed by Donald Trump how to defeat him”.
Read more:
From rapper to New York mayor – Who is Zohran Mamdani?
The US president had threatened to cut federal funding to New York if Mr Mamdani won.
In his victory speech, Mr Mamdani said: “New York will remain a city of immigrants, a city built by immigrants, powered by immigrants and as of tonight, led by an immigrant.
“If anyone can show a nation betrayed by Donald Trump how to defeat him, it is the city that gave rise to him.”
Kemi Badenoch is calling for the government to “get Britain drilling again” – as Sir Keir Starmer heads to COP30.
The Tory leader has launched a joint campaign with the Scottish Conservatives to demand the moratorium on new oil and gas licences is lifted.
They are also calling on the chancellor to scrap the energy profits levy – an extra 38% tax on North Sea oil and gas profits – at the upcoming budget on 26 November.
Politics latest: Reeves refuses to rule out tax rises
The Conservatives want the government to recognise that it believes gas will be a key part of the future energy mix to secure energy and lower bills to “deliver a stronger economy”.
They have launched the call to “get Britain drilling again” as the prime minister flies to Brazil for the COP30 summit after he reiterated the government’s dedication to clean energy goals and the UK’s role as a global climate leader on Tuesday.
He admitted COP30 would present a “challenge” due to slow global progress in cutting emissions, but said: “I’ve thought climate change has been our biggest challenge as a species for a very long number of years now.”
Please use Chrome browser for a more accessible video player
Trump’s ambassador tells UK to drill for oil
Speaking on a visit to Aberdeen, Ms Badenoch said the UK, in particular northeast Scotland, is facing an oil and gas “emergency due to the anti-growth policies of the Labour government in Westminster and the SNP in Holyrood”.
She warned the offshore oil and gas sector “risks disappearing altogether”, which she said would mean job losses in Scotland and the rest of the UK, and leave the country more reliant on overseas energy imports.
Ms Badenoch said: “Scotland, and the whole United Kingdom, faces a growing oil and gas emergency thanks to Labour’s inability to put our national interest first.
“By the end of Labour’s first term in office, it’s not inconceivable that Scotland’s oil and gas sector will be at serious risk, with domestic production currently set to half by 2030.
“That would be a shocking indictment of Labour’s energy policy, and a dangerous act of economic self-sabotage.
“Enough is enough. Keir Starmer must find the backbone to ditch Ed Miliband’s Net Zero fanaticism, which is forcing up bills and driving away industry.
“Instead, the prime minister should do what our economy needs, scrap the energy profits levy and end the moratorium on new licences in the North Sea.
“If the Labour government fails to act, we could be witness to the end of our domestic energy security as we know it.”
North Sea oil exploration platforms lie in the Cromerty Firth in northern Scotland in 2003. Pic: AP
A Labour Party spokesperson accused Ms Badenoch of “doubling down on the same failed Tory energy policy that caused the worst cost-of-living crisis in a generation”.
“The Conservatives’ anti-growth, anti-jobs, anti-investment position on clean energy would cost hundreds of thousands of jobs, leave Britain reliant on insecure expensive fossil fuels and lock families into higher bills for generations to come,” she added.
“It’s the same old Tories, with the same old policies. It didn’t work then and it won’t work now.”
There have been a series of oil and gas closures this year.
Grangemouth, Scotland’s only oil refinery, stopped processing crude oil after a century of operations in April, with 430 job losses.
The union Unite said political leaders had “utterly failed” the workers and would face “electoral wrath”, while the area’s Labour MP, Brian Leishman, said he was “disgusted” by the broken promises.
Harbour Energy, the UK’s largest oil and gas producer, cut 250 jobs in Aberdeen in May, blaming the government’s fiscal rules and regulations.
The Prax Lindsey Oil Refinery in Lincolnshire ended production in August, with 125 job losses, after the group went into administration and the government was unable to find a buyer.
In October, oil and gas contractor Petrofac, which employs about 2,000 people in Scotland, filed for administration, but its core operating subsidiaries and North Sea business have continued to trade as normal while it looks at restructuring or selling.
-
Sports2 years agoStory injured on diving stop, exits Red Sox game
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports3 years agoButton battles heat exhaustion in NASCAR debut
-
Sports3 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment1 year agoHere are the best electric bikes you can buy at every price level in October 2024