Reeves promised to be the iron chancellor – but her first budget brings dramatic change
The 2024 Autumn Budget in one word? Big.
What we got from Rachel Reeves today was, in economic terms, a major departure from economic policy as we’ve known it in this country for the past decade-and-a-half.
We got the single biggest increase in taxes in any fiscal event since 1993. The tax burden itself is now heading up to the highest level in history. We got a significant departure from the policies and promises laid out in the Labour manifesto.
Only a few months ago, Labour pledged not to make dramatic changes to Britain’s economic policy – no significant tax rises, no dramatic changes to public spending. But today the chancellor delivered significant changes.
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The old fiscal rules are out and now this government plans to borrow many billions of pounds more. It plans to increase investment considerably.
It plans to raise taxes on those with investments, on those with assets who could previously pass them on to their children (including business owners and farmers). In the meantime, it plans to spend considerably more on the health service and on public investment than previously slated.
It’s worth saying: while the government inherited the public finances in a worse condition than they looked before the election, even the Treasury’s “black hole” of £22bn cannot explain the dramatic change in economic policy here.
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Reeves refuses to rule out future tax hikes
It does not explain the dramatic increase in borrowing, spending and taxes – these are policy decisions by the current government. And, many would say, quite right too. Surveys suggest the British public support higher taxes, especially if they are used to improve the National Health Service.
Many think the UK should be spending more on its public services, even if that means we all have to contribute more (though they are generally less enthusiastic if asked whether they would be happy to pay higher taxes themselves). And there is little dispute that this country’s investment levels have been too low for too long and could afford to be higher.
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Labour’s manifesto promised only slight economic changes and small tax increases
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However, that wasn’t the pitch Reeves and Keir Starmer made at the election. They promised, in their manifesto, only slight economic changes and only small increases in taxes. They promised to spend much of their time in office cleaning up the mess from the last government. Reeves promised to be the iron chancellor of fiscal discipline.
But this budget is considerably less disciplined with the public finances than expected. But what will worry the chancellor is that despite this extra largesse with both investment and current spending, the UK economy is not going gangbusters as a result.
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The Office for Budget Responsibility actually cut its forecasts for long term growth. That promise made by Starmer to achieve the highest economic growth in the G7 looks highly unlikely – even after the implementation of all these policies.
And in the hours after the speech, markets reacted in a way that will cause nerves in the Treasury. It’s nothing like the lurches in government debt yields we saw after Liz Truss’s mini budget in 2022. But the pound fell and the interest rates investors charge the UK government rose. That’s not something any chancellor would like to see after their first budget.
The next few days promise to be very interesting both in politics and in markets.
A man who died after being hit by a bus in Edinburgh has been named.
Michael Leneghen, 74, died after being struck at around 7.25pm on Saturday 2 November in the Cowgate area of the city.
On the day of the incident, police issued a warning for members of the public not to share distressing images and videos circulating online.
In a statement, Mr Leneghen’s family thanked members of the public and emergency services who were involved and asked for privacy.
A single-decker bus collided with Mr Leneghen, who was on foot, Police Scotland say.
Sergeant Paul Ewing of Edinburgh‘s road policing unit said the force’s thoughts were with Mr Leneghen’s family and friends “as well as everyone affected by this tragic incident”.
“Our enquiries remain ongoing. We have already spoken to a number of people who were in the area at the time and work is ongoing to check public and private CCTV footage,” he added.
“We are still keen to hear from anyone who has not yet spoken to police.”
Chief Inspector Trisha Clark, the local area commander, previously said police were “aware of videos and images circulating on social media which are causing distress to the deceased’s family”.
“We would ask members of the public not to share them out of respect for his family, and to report them to the relevant social media platform to prevent further circulation,” she added.
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Ms Clark added that while there had been a lot of speculation, it was an “isolated incident” and there was “no risk to the wider public”.
Officers have asked anyone with information which could help the police investigation to get in touch.
MP Mike Amesbury has been charged with common assault following an incident in Frodsham, Cheshire, last month.
The charge comes after a video emerged of him appearing to punch a man to the ground.
Cheshire Police said the 55-year-old will appear at a magistrates court at a later date to face the assault charge.
In a statement, police said the charge “relates to reports of an assault on a 45-year-old man on Main Street, Frodsham, which was reported to police at 2.48am on Saturday 26 October”.
Rosemary Ainslie, head of the Crown Prosecution Service’s special crime division, said: “Following a review of the evidence provided by Cheshire Police, we have authorised a charge of common assault against Mike Amesbury MP, 55.
“The charge follows an alleged assault in Frodsham, Cheshire, on Saturday, 26 October 2024.
“The Crown Prosecution Service reminds all concerned that criminal proceedings against the defendant are active and that he has the right to a fair trial.”
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In a statement, Mr Amesbury said: “I have today been summonsed to court to face a charge of common assault following an incident in Frodsham last month, which was deeply regrettable.
“I am continuing to cooperate with police and given this is an ongoing case I cannot comment further.”
Labour suspended Mr Amesbury from the party so he is now an independent MP for Runcorn and Helsby.
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