Newslinks for Friday 1st November 2024 | Conservative Home

The Budget 1) Reeves told she will have to raise further £9 billion to avoid UK public service cuts

“Rachel Reeves has been warned an extra £9bn of tax rises may be required to avoid a fresh austerity drive in key public services as her record tax-raising budget sent tremors through the financial markets. Threatening to undermine the chancellor’s claim that her budget would restore economic stability to Britain, government borrowing costs rose sharply in the City on Thursday as traders turned on Reeves’s tax and spending measures. On a day of wider losses in global markets, the negative reaction came despite the International Monetary Fund lending its backing to the first Labour budget in 14 years as the government sought to defend its plans. The yield – in effect the interest rate – on benchmark 10-year government bonds jumped to the highest level this year…” – The Guardian

• Seven things from the Budget you might have missed – The Times
• How Reeves is launching a raid on private sector workers – while shielding the state – The Daily Telegraph
• Majority think economy will worsen after Budget, poll shows – The Times
• Housing, social care, and universities: who lost out in the UK budget? – The Guardian
• Which Budget changes are coming now – and which you’ll have to wait for – The I
• Reeves has pre-election briefings from Treasury despite claiming no knowledge of £22 billion ‘black hole’ – The Daily Telegraph
• Poorest families will be hurt by Budget, economists claim – The I
• Barclays’ chief defends Reeves as business criticises Budget tax rises – The Financial Times
• Tax rises mean wages will have grown by only £13 a week in two decades – The Times
• ‘Nobody chooses the bus’: Labour voter fury at ‘disgraceful’ fare cap rise – The I
• Watch: Hairdresser close to tears on live TV over Budget’s National Insurance rise – The Daily Telegraph
• 700,000 middle-income families face losing child benefit – The Times
• Parents to be hit by ‘nanny tax’ after national insurance changes – The Financial Times
• Gold-plated public sector pensions spared from Labour’s inheritance tax raid – The Daily Telegraph
• Half of benefits claims will be for sickness by 2029 – The Times
• Value for money tsar to get equivalent of £250,000 annual salary – The Daily Telegraph
• Pensioners losing winter fuel allowance not helped in Budget, ministers warned – The I
• Labour’s home insulation pledge in doubt, say consumer rights group – The Financial Times
• Budget threat to saving sewage-hit rivers amid warning watchdog needs more funds – The Guardian
• Lewis blasts Reeves for not coming on his ITV Money Show as he ‘tears apart’ the Budget in a ‘brutal rant’ – The Daily Mail

Editorial and Comment:

• As the rising UK tax burden moves closer to the European model, the Chancellor must do more to fulfill Labour’s promises on productivity and growth – Editorial, The Times
• Labour’s terrible plan for Britain – Editorial, The Daily Telegraph
• Reeves’s Budget is backfiring already – Editorial, The Daily Mail
• We have plenty of criticisms of the Budget but the fuel duty freeze was on the money – Editorial, The Sun
• This old-school Budget was Labour to the core – Patrick Maguire, The Times
• This dishonest and vindictive Budget has finally killed the aspiration of Thatcherism – Daniel Hannan, The Daily Mail
• The unintended consequences of Reeves’s Budget are about to play out – Kitty Donaldson, The I
• Peering inside a fiscal black hole – Louis Ashworth, The Financial Times
• Reeves has united the Labour Party – Ayesha Hazarika, The I
• We witnessed the beatification of St Rachel – the woman who’s made our hairdresses cry – Quentin Letts, The Daily Mail
• Reeves’s disastrous socialist Budget will see people squeezed to breaking point – Esther Krakue, Daily Express

>Today:

The Budget 2) Borrowing costs surge as markets turn on Reeves

“Financial markets turned on Rachel Reeves on Thursday, sending borrowing costs higher over fears her tax-and-spend Budget will fail to boost growth. Bonds, shares and the value of the pound fell as traders dumped UK assets in a swift rebuke of Ms Reeves’s debt-fuelled spending plans. It came as data showed how the Chancellor has raided the private sector to fund a surge in pay rises for NHS staff, civil servants and other state employees. Meanwhile, economists at the Institute for Fiscal Studies (IFS) said that Ms Reeves would be forced to raise taxes by another £9bn later in this parliament, despite her record-breaking £40bn raid in Wednesday’s Budget. UK 10-year borrowing costs hit their highest levels in a year…” – The Daily Telegraph

• Gilt yields hit one-year high as investors take fright at the Budget – The Times
• Bond markets unnerved by scale of extra borrowing in the Chancellor’s Budget – The Financial Times
• Homeowners face £13,000 mortgage shock after Reeves’s Budget – The Daily Telegraph
• What is happening in the gilt markets – and should we be worried? – The Times
• Budget reaction wrap: a day of fallout after Reeves’s speech – The Financial Times
• Reeves thought she was being clever: the punishment has been swift – Ambrose Evans-Pritchard, The Daily Telegraph

The Budget 3) The Treasury plots a new tax on Coca-Cola and Frappucinos

“It has been a tough few months for Rishi Sunak. First he lost the election, now the government has announced plans to hike taxes on Coca-Cola, his favourite drink. Ministers have published proposals for a revamped sugar tax that would see a new “Coke tax” threshold introduced for the sugariest of soft drinks. The plans would also mean the sugar tax also applies to milkshakes, frappucinos and sugary coffees for the first time. The soft drinks industry levy was introduced by George Osborne in the 2016 budget and came into force from April 2018 to tackle child obesity. It adds 18p per litre to the price of soft drinks with between 5g and 8g of sugar per 100ml, and 24p per litre to soft drinks with even higher sugar levels.” – The Times

The Budget 4) Fraser Nelson: The OBR’s damaging Budget verdict gives the Tories ammunition for years

“Seldom has a budget come apart so quickly. It’s not that Rachel Reeves will be forced to take farms out of her new inheritance tax scheme, although that may well come. Nor will Labour rebels force her to abandon any tax rises: a government with a majority as large as Keir Starmer’s can do anything it wants. But her main claims – to be boosting growth, repairing the public finances and getting Britain working again – have been methodically…shredded. The markets…have noticed. The Chancellor’s adversary is…Richard Hughes, a softly spoken American who runs the Office for Budget Responsibility (OBR). By the end of the 200-page report on her Budget, not much remains of the arguments with which Starmer and Reeves fought the last election.” – The Daily Telegraph

The Budget 5) ‘More work to do’ to help farmers hit by inheritance tax on land, Labour MPs admit

“Ministers have “more work to do” to help farmers, Labour MPs have privately admitted amid a backlash over the decision to charge more inheritance tax on agricultural land. The Conservatives have accused the Government of a “betrayal” of farmers and the Liberal Democrats say ministers have shown “a lack of understanding of rural communities”. Rachel Reeves announced in Wednesday’s Budget that agricultural property relief from inheritance tax would become much less generous. Farmland was previously exempt from the levy entirely, to enable families to hand down their farms through the generations, but from 2026 only properties worth £1m or less will be excluded with a tax of 20 per cent – half the normal inheritance tax rate – applied to anything above that threshold.” – The I

• Labour accused of ‘disgusting land grab’ – The Daily Mail
• Rule changes risk bleak future for family-run farms – The Times
• Farmers suggest Reeves has given them a ‘kick in the bullocks’ – The Sun
• Why Labour’s Budget is a ‘closure of the mines’ moment for British farming – The Daily Telegraph
• The Budget’s changes to agricultural property relief threaten Britain’s family farms – Editorial, The Times
• Clobbering farmers like me is proof that Labour doesn’t understand the countryside – Jamie Blackett, The Daily Mail
• Labour’s cruel and callous farm tax is a death sentence to family-run businesses – Steve Barclay, Daily Express

The Budget 6) More than 1,000 private schools to sue the Government over VAT raid

“More than 1,000 private schools will sue the Government en masse over its VAT raid on fees. The Independent Schools Council (ISC) announced its members had voted in favour of launching a High Court action against Labour’s policy in a snap poll on Thursday afternoon. The plans were first revealed by The Telegraph earlier this month, with the ISC saying it was awaiting the Office for Budget Responsibility’s assessment of the VAT plans to be unveiled alongside the Budget. The group, which represents more than 1,400 private schools, said it had hired Lord Pannick KC, the leading human rights barrister, to spearhead the legal challenge…It said legal proceedings would “begin shortly”, ahead of the VAT raid coming into force from Jan 1.” – The Daily Telegraph

Starmer warns workload will rise despite more cash for NHS

“Sir Keir Starmer has warned NHS staff they will have to work harder, as health chiefs expressed fear that some of the £22.6 billion budget boost is in danger of being swallowed by higher pay. The prime minister sought to sell the budget as the first step to fix the NHS, but has been told that a failure to deal with social care could destabilise it and hamper productivity plans. Wes Streeting…insisted he had not “gone native” by handing over more cash and would press the NHS to improve efficiency. He has promised to set out detailed plans on how the money should be spent, with NHS bosses yet to make any promises on cutting waiting times. But after some NHS chiefs suggested the sum was not enough, Streeting told them to “read the room”, saying he would challenge them to use it better.” – The Times

Ministers should have known ‘within hours’ about ricin found in Southport suspect’s home

“Ministers should have been told “within hours” that the deadly toxin ricin had been recovered from the home of the suspect in the Southport killings, counter terrorism and biological weapons experts have said. They said confirmation of the toxin would have been passed to ministers because of its close association with groups al Qaeda as a potential weapon of mass terror. Police revealed on Tuesday that the Southport triple murder suspect Axel Rudakubana, 18, had been charged with two further offences of producing the biological toxin ricin and possession of al Qaeda training materials. The disclosure prompted demands from Conservative leadership contenders Robert Jenrick and Kemi Badenoch for the Government to explain why facts may have been withheld…” – The Daily Telegraph

Rayner declares £3, 550 worth of free clothes from Lord Alli

“The deputy prime minister declared the gift in July, but only as a “donation-in-kind for undertaking parliamentary duties”. She updated parliament’s official register of interest on Thursday to specify that the £3,550 sum was to pay for “work clothes”. The revelation threatens to reignite criticism of Labour ministers for accepting freebies, which Sir Keir Starmer, and Rachel Reeves have also previously been drawn into. The trio decided in September to stop accepting donations to pay for clothes, after weeks of criticism that overshadowed Labour’s first months in office and its party conference. Rayner is understood to have asked for advice from officials in parliament about whether she should declare more information about what the £3,550 was for.” – The Times

MPs who are also medics ‘urge colleagues to support’ assisted dying bill

“A cross-party group of MPs who are practising medics and former NHS staff have written to MPs urging them to back the assisted dying bill, after the health secretary expressed doubt that the health service was fit to enact such a big change. The six Labour and Conservative MPs, including two GPs and two surgeons, said they had extensive experience of working in and around palliative care and stressed that a tightly defined bill would give dying patients genuine choice. Most of the medic MPs are from the new intake – where there is fierce lobbying on both sides to win over more than 100 MPs who are said to be undecided. Both sides say they expect the vote to be incredibly tight, despite an initial belief that there would be majority support for the law change.” – The Guardian

Badenoch gets ‘flurry of last-minute endorsements’ in sign of support from senior Tories

“Kemi Badenoch has received a flurry of late endorsements for the Tory leadership, in a sign that some Conservative MPs believe she is set to win the race on Saturday. The shadow communities secretary has been backed by five new Tories in the past fortnight, including two members of the shadow cabinet. Robert Jenrick, the former immigration minister who is Mrs Badenoch’s rival in the two-horse race, has picked up two new Tory MP endorsements. It means Mrs Badenoch is now backed by 13 other members of the Tory shadow cabinet, while Mr Jenrick has the backing of three. The endorsements have echoes of how Liz Truss picked up late supporters, including switchers from her then-rival Rishi Sunak, in the weeks before winning the September 2022 Tory leadership race.” – The Daily Telegraph

>Today:

‘Splits in Reform UK’ as senior figures defend Robinson supporters

“Reform UK is facing a schism over its approach to Tommy Robinson’s supporters, after two high-profile party figures said it was wrong to disavow those who went to a…rally backing the far-right leader. Richard Tice, the deputy leader of Reform, said earlier this week the party “want nothing to do with” Robinson and “all of that lot”. Nigel Farage, the Reform leader, also said after the summer riots that he had never had anything to do with “the Tommy Robinsons and those who genuinely do stir up hatred”. But…Howard Cox and Ben Habib… took a different position, saying those attending Saturday’s rally were some of Reform’s own people. Thousands of supporters of Robinson…protested in central London on Saturday after he was remanded into custody…” – The Guardian

News in Brief:

• Labour’s farm tax makes no sense – Jamie Blackett, The Spectator 
• Jenrick could be the Tories’ right-wing rebel leader – Patrick O’Flynn, UnHerd 
• Labour’s timebomb – Tim Congdon, The Critic
• Labour are making us reliant on foreign fossil fuels – Ross Clark, CapX
• Buying time – Sam Freedman, Comment is Freed