The chancellor cannot rule out more tax rises in the next five years, despite raising the burden to its highest level since comparable records began.
Speaking to Sky News following Labour’s first fiscal event since 2010, Rachel Reeves said it would be “irresponsible” to promise there will not be further tax rises.
However, she suggested that the scale of today’s tax hike – £40bn – was a “once in a parliament” event.
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10:58
Watch the full interview
Speaking to Sky News political editor Beth Rigby, Ms Reeves said: “I’m not going to make a commitment to never change taxes again.
“That would be irresponsible.
“But this is a once-in-a-parliament budget to wipe the slate clean after the mess that the Conservatives have left us.”
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The chancellor was asked if she accepted that by raising taxes in such a drastic fashion, she had broken Labour’s manifesto – the document in which a government lays out its policy position before an election.
“I accept that this is a big and a substantial budget,” the chancellor answered.
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Budget 2024: Key takeaways
“It wasn’t the budget that I was expecting to deliver.
“When I became chancellor on 5 July, I didn’t think that any government would be so reckless to have £22bn of unfunded commitments.”
An analysis provided by the OBR did not confirm Ms Reeves assertion of a £22bn “black hole” – saying it was impossible to calculate exactly how much money the Treasury had not told the watchdog about.
But it did say the March forecast would have had to be redone if they had been told about spending pressures not mentioned to them at the time.
Government documents released today broke down the pressures – including £7.3bn for health and social care, £3,1bn for education, £7.1bn for the Home Office and £4.4bn for defence.
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‘This budget raises taxes by £40bn’
Speaking to Sky News, Ms Reeves defended pay rises awarded to the public sector since Labour took power.
She said the last government set the remit for the pay review bodies but “hadn’t set an affordability criteria”.
And the chancellor said the huge injection of cash into the NHS – more than £20bn – was needed because otherwise appointments would have to be reduced.
‘No one’s ever compared me to Jeremy Corbyn before’
All of these measures were in the spirit of the “first step in our manifesto”, according to Ms Reeves, which was “to return stability to our economy”.
“That is the most important thing that I had to do as chancellor, and we do have a mandate to bring that stability back to the economy.”
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Asked if her increase in tax and spending was comparable to Jeremy Corbyn’s manifesto promises in 2017 and 2019, the chancellor said: “No one’s ever compared me to Jeremy Corbyn before. I stood down from his shadow cabinet because I disagreed with everything that he was doing.
“But if you’re faced with a situation where there’s a £22bn black hole in the public finances, you can either sweep that under the carpet or you can be open and transparent and honest with people about the situation you find yourself in.”
Large parts of the UK will be under a three-day snow warning from this weekend as forecasters warn that people living in rural communities could become cut off.
The yellow warning is due to come into force at midday on Saturday and will last until 9am on Monday.
It covers all regions of England apart from the South West, most of Wales and some of southern Scotland.
The warning comes as a major incident was declared in Greater Manchester by police after flooding forced homes to be evacuated and closed train lines and roads following heavy rain.
Meanwhile, temperatures are expected to fall with some northern parts seeing the mercury fall as low as -10C (14F).
About 5cm of snow is expected widely across the Midlands, Wales and northern England, with as much as 20-30cm (8-12ins) over high ground in Wales and/or the Pennines, according to the Met Office.
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People trapped in flat by floodwaters
It said: “Heavy snow may cause some disruption over the weekend”, adding: “There is a small chance that power cuts will occur and other services, such as mobile phone coverage, may be affected.”
The weather agency went on: “There is a slight chance that some rural communities could become cut off. There is a chance of travel delays on roads with some stranded vehicles and passengers, along with delayed or cancelled rail and air travel.”
Advice for motorists
The Met Office said snowy, wintry weather can cause delays and make driving conditions dangerous, so to keep yourself and others safe, plan your route, checking for delays and road closures, amending your travel plans if necessary.
Leave more time to prepare and check your car before setting off. Also, make sure you have essentials packed in your car in the event of any delays – warm clothing, food, water, a blanket, a torch, ice scraper/de-icer, a warning triangle, high visibility vest and an in-car phone charger.
How to prepare for possible power cuts
The Met Office said people cope better with power cuts when they have prepared for them in advance – so those who may be affected should consider gathering torches and batteries, a mobile phone power pack and other essential items.
The agency has also said there is a yellow warning in place for snow and ice covering northern Scotland from 4am on Wednesday until 10am on Thursday, which could lead to some travel disruption and difficult driving conditions.
And a yellow ice warning has been issued from 4pm on Wednesday until 10am on Thursday, covering Northern Ireland, parts of North Wales, northern England and all of Scotland, which could also lead to difficult travel conditions.
It comes as strong winds and heavy rain have been battering the UK, with some flooding.
‘Major incident’ declared
Amid the floods, Greater Manchester Police said a major incident was declared as mountain rescue teams have been deployed to help the fire and rescue service deal with damaged properties and stranded vehicles.
Some residents have been asked to evacuate where flood warnings have been issued, Manchester City Council said.
Flooding has been reported in areas across Greater Manchester including Bolton, Didsbury, Harpurhey, Stalybridge, Stockport and Wigan, police have said.
The North West and Wales experienced heavy rain for much of the morning on Wednesday, which comes after the Met Office said some parts of the North West saw almost a month’s worth of rain within 48 hours.
Honister Pass in Cumbria had nearly 150mm (6ins) of rain, while Rochdale in Greater Manchester had 77mm (3ins).
More than 50 flood warnings, meaning flooding was expected, were in place for England, eight for Wales and 15 for Scotland.
Looking ahead, Sky’s weather producer Dr Chris England said: “A northerly flow will make it much colder over the next few days, with extensive overnight frosts and daytime temperatures in the low single figures Celsius.
“Some northern parts can expect temperatures down to -10C (14F), perhaps less, and will stay freezing all day. The UK Health Security Agency has issued yellow cold weather alerts to prepare responders to risk from the wintry spells. There’ll be some dense freezing fog around too.”
He added: “The weekend will bring the risk of extensive and significant snow over England, Wales and perhaps southern Scotland, as rain expected to move up from the South West later on Saturday and Sunday turns to snow on its leading edge, before turning to rain and clearing on Monday.”
The start of London’s New Year’s Day Parade was delayed by 30 minutes due to high winds being forecast, and inflatable cartoon characters were no longer going to be used, event spokesman Dan Kirkby said.
We already know who sport’s biggest winners will be in 2025 – the lawyers as disputes rage over financial rules, the future of competitions and safety.
And a seventh consecutive year begins with the most complex and protracted legal saga in English football history rumbling on – but with the expectation of a verdict in the Premier League versus Manchester City.
There is anticipation it could be delivered by February.
Private hearings into alleged misdemeanours to comply with financial regulations were concluded by a commission in early December after spreading over 12 weeks.
The club will be hoping their expensively assembled squad of lawyers was more effective than their expensively assembled squad of players over the same period as Pep Guardiola’s reigning champions experienced an uncharacteristic fall from grace on the pitch.
The verdicts on 130 charges could determine if City even play in the Premier League next season if a points deduction sees them relegated.
But we have already seen a taste of what is to come – when even findings set out in a lengthy legal document can be contested, especially if all the charges are not proven.
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Both sides were left claiming victory at the outcome of a smaller challenge brought by City against the league last year into the rules determining how much clubs can earn from companies linked to their ownership.
And it is who owns City that means any hefty punishment could create ripples beyond the pitch with the club controlled by United Arab Emirates (UAE) vice president Sheikh Mansour bin Zayed al Nahyan.
Just before Christmas, Prime Minister Sir Keir Starmer was in Abu Dhabi searching for investment into Britain.
That required glad-handing Sheikh Mansour and Khaldoon al Mubarak, the chief executive of state-run investment fund Mubadala who is also chairman of City.
We already know from internal government correspondence the City case, sparked by leaks published in 2018, is being discussed within the Foreign Office.
How will the UAE react to any punishment seen as humiliating? Although City, as they deny wrongdoing, insist they are not an Abu Dhabi-run operation.
But at the heart of this case are sponsorships linked to Emirati entities and whether income was artificially inflated.
Rival fans – as well as their clubs – will be as keen to see a verdict showing everyone has to abide by rules or face consequences.
It is a defining moment in the history of the Premier League.
And with questions over the ability of the league to govern its clubs, 2025 is set to be the year parliament approves an independent regulator for men’s football that the Premier League has resisted.
Club World Cup
It does seem unlikely the Premier League campaign will end in an unprecedented fifth successive title for Guardiola’s side, with or without being docked points.
What is certain is City’s season will end in the United States in the competition causing ruptures across football.
City will join Chelsea as England’s representatives – as recent Champions League winners – at a newly inflated Club World Cup.
Summers will no longer just be about national team competitions with FIFA launching a Super League in a different guise to give Gianni Infantino a bigger involvement in the club game’s wealth and status.
This is so closely associated with the FIFA president that he put his name on the trophy. Twice.
But with 32 clubs involved for more than a month in the US, the players’ unions are unhappy about the additional workload on athletes.
And the Premier League is among the domestic competitions in a complaint to the European Commission over the expanded international calendar, claiming FIFA is abusing a dominant position.
The plans for legal action were first revealed by Sky News at the turn of 2024 and set the tone for the year, putting fixture congestion and welfare at the top of the agenda.
A sign of how bitter the divide is between the stars and those running the game is that we understand global players’ union FIFPRO was not invited to the FIFA Best awards in December. And FIFA cut ties with them over producing a team of the year.
There is no timeframe for a verdict in the competition law complaint.
Stars hint at striking, although boycotting some FIFA promotional work around the Club World Cup seems more likely.
FIFA had to sign a £1bn global streaming deal with DAZN after TV channels in major markets were unwilling to spend heavily on rights to the event without clear wide appeal yet.
Trump and sport
The Club World Cup across June and July will be a major platform not just for FIFA and the US but particularly for newly re-elected Donald Trump.
Mr Infantino has dished out the sycophancy craved by the incoming 47th president who returned the favour by lavishing praise on the football boss via a video message at the tournament draw recently.
But Mr Trump’s sporting focus is far wider.
Shortly after being re-elected there was a trip to see mixed martial arts – a sport whose fans and competitors were mobilised by the MAGA movement – and the focus was on him attending with WWE boss Dana White.
There, too, was Yasir Al-Rumayyan, known in England as chairman of Newcastle United. His overarching role is that of governor of Saudi Arabia’s Public Investment Fund.
Through that he also chairs the LIV Golf rebel series bankrolled by Saudi’s sovereign wealth fund to entice talent from the established tours.
It has been 18 months since a peace pact framework was agreed with LIV along with the PGA and European tours, but talks have dragged on.
Mr Trump has promised to solve the men’s golf split by striking a deal in 15 minutes on his return to power – with his courses staging events.
LIV golfers have been cleared to compete at the Ryder Cup being staged in Bethpage State Park in September.
Athletics overhaul
The US will also stage three of the four events in the new Grand Slam Track series being launched in athletics by Olympic legend Michael Johnson.
But this is not akin to golf’s rebel breakaway with World Athletics President Seb Coe embracing them as collaborators rather than competitors to add lustre to the sport between Olympics and world championships, as football dominates the sporting landscape.
Around £10m in prize money is on offer, although men’s 100m Olympic champion Noah Lyles has resisted signing up while it lacks notable broadcasting agreements.
The start-up series will have legs in Jamaica, Florida, Pennsylvania and California from April to June.
Olympic election
Athletics could be in need of a new leader if Lord Coe is elected president of the International Olympic Committee (IOC) in March.
There are seven candidates and the former British Olympic champion is the best known globally although not in favour with the current Olympic establishment having broken rank by awarding prize money for Olympic medals.
He has also adopted a firmer position than the IOC on banning transgender women from women’s events.
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Lord Coe on Olympics transgender policy
As well as being an IOC election battleground, gender eligibility issues are set to challenge sport’s leaders throughout 2025 while trying to balance fairness, safety and inclusivity.
The return of Russia to the Olympic fold – and their teams to international football competitions – will be on the agenda if Mr Trump delivers on another peace pledge by ending Vladimir Putin’s war on Ukraine.
The safety of anyone playing rugby will be in the legal spotlight as a High Court action brought by former players continues.
The case remains in its early stages as the shape of future hearings is determined. All while the players with long-term brain injuries struggle with the toll on their health potentially caused by the sport.
It comes while England’s Rugby Football Union enters the new year with a growing rebellion against chief executive Bill Sweeney over pay and performance with victories in only four of the 10 men’s tests in 2024.
England will host the Women’s World Cup across August and September with the Red Roses in a strong position to collect the trophy for the first time since 2014.
England football
The major football tournament in 2025 sees Sarina Wiegman’s England try to defend their European Championship title after winning on home soil in 2022 at a capacity Wembley.
Switzerland will be using much smaller stadiums this time, denying players the chance to appear in front of vast crowds that have been the hallmark of recent Euros and World Cups.
It is a challenging opening for the Lionesses with matches against France and the Netherlands, who Wiegman won the trophy with in 2017.
The group concludes against Wales, who hope to use the platform of a first major women’s tournament appearance to grow the women’s game domestically.
For England’s men, World Cup qualifying is first on the agenda for Thomas Tuchel in March.
As the first FA coaching import from Germany, there are doubters to win over. How will Gareth Southgate’s successor cope with fan and media scrutiny?
He starts with questions still over his rapid downfall and departure from Chelsea, a year after winning the 2021 Champions League, but with a trophy-winning pedigree craved by the Three Lions.
Cricket
It’s an Ashes year with the women’s team touring Australia in the coming weeks before the men head there in November.
But the financial future of the domestic game could be shaped by the conclusion of the sale of stakes in the eight Hundred franchises.
Global investment could be key to the sustainability of counties and provide cash for grassroots cricket.
Formula 1
It’s all change in motorsport with Lewis Hamilton beginning his new chapter at Ferrari.
While six of his seven F1 titles were won at Mercedes, the last came in 2020. And he will be turning 40 on Tuesday.
After frustrating times on the track, the hope is a move to the most glamorous team, historically at least, can finally deliver an eighth championship to claim the record outright that is currently shared with Michael Schumacher.
But the manufacturers will be juggling how much to focus on this year’s competitiveness or developing for 2026 when new regulations apply to cars’ power and aerodynamics.
As energy bills become more expensive from today, respected forecasters have said they are likely to rise further in spring instead of fall, as first anticipated.
The energy price cap rises from January, bringing the cost of a typical annual bill to £1,738 – £21 a year more than from October to December.
Bills had already become more expensive from October, up 10% a year – or £12 per month.
But now the forecast dip in April will not materialise, according to energy consultants Cornwall Insight.
Instead, the firm said the cost in April is expected to rise to £1,785 a year for a typical consumer, nearly a 3% increase on January’s cap, about an extra £4 a month on the average bill.
Compared to the three months from July, it will cost £217 a year more, according to the forecast.
Billpayers have seen energy costs rise every three months since July. Energy regulator Ofgem revises its price cap four times a year, setting out the maximum a provider can charge per unit of gas and electricity.
It’s assessed based on how much providers themselves are being charged to supply power and is intended to protect consumers and utilities.
Why are bills going up?
Continued volatility in international energy markets is behind the cost increases.
EU gas storage levels and uncertainty over the gas transit deal between Russia and Ukraine have contributed to “a level of volatility we haven’t seen for months”, according to Cornwall Insight’s principal consultant Dr Craig Lowrey.
The unknown impact of a Trump presidency on liquified natural gas (LNG) flows means the firm said its forecasts will “display a high degree of variability”.
These events resulted in higher wholesale prices which impact how much households are billed in the UK.
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2:35
Energy price cap rises again
These forecasts “could very well increase or decrease several times before the April cap is set”, Dr Lowrey said.
The official energy price cap announcement for the three months from April will come on 25 February.
Also influencing bills are possible changes to the standing charge, the fixed daily amount to receive gas and electricity.
Ofgem is consulting on introducing an option to include zero-standing charge options alongside existing tariffs, offering more consumer choice.
As of 31 December, Cornwall Insight anticipated a July price cap fall before an October rise.