Chancellor Rachel Reeves has been slammed by the Tories (Image: Getty)
Rachel Reeves came under fire from the Tories over claims families will be ￡3,500 worse off because of Labour's national insurance tax raid. The Chancellor hiked national insurance contributions for employers in her autumn budget.
Working families will be ￡3,536 worse off over the course of this Parliament due to the cost being passed on in lower wages, according to analysis by the Conservatives. Tory leader Kemi Badenoch said: "Rachel Reeves has gambled with the economy leaving us dangerously vulnerable to American tariffs. Labour’s unprecedented borrowing spree and record levels of tax means she has pulled the handbrake on economic growth.
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“The Prime Minister might think this is all just pocket money, but Britain’s working families will certainly notice the ￡3,500 Labour ministers have cost them. Labour didn’t have a plan and now they have snatched winter fuel payments from pensioners, introduced emergency welfare cuts, and from this weekend will be hiking taxes on work through their jobs tax.”
Labour has insisted tax hikes were needed due to the state of the economy left by the Tories.
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18 hours ago14:25 Jonathan Walker
How Trump tariffs could force Rachel Reeves to increase taxes further
Tariffs will hit the UK economy, reduce taxes coming in to the Treasury and wipe out the Chancellor's "headroom" of ￡9.9 billion, watchdog the Office for Budget Responsibility has warned.
This would probably mean Ms Reeves was forced to increase taxes or cut spending.
The OBR said in a report: "If global trade disputes escalate to include 20 percentage point rises in tariffs between the USA and the rest of the world, this could reduce UK GDP by a peak of 1 per cent and reduce the current surplus in the target year to almost zero."
The UK could make some money back by imposing its own tariffs on US goods. But the OBR said: "This would almost entirely eliminate the headroom against the fiscal mandate, as additional tariff revenue is more than offset by lower receipts from income, corporation, and consumption taxes."
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18 hours ago14:24 Jonathan Walker
UK doesn't know what Donald Trump will announce
It is unclear what Mr Trump will announce on Wednesday, but his administration views the application of VAT rate as discriminating against US goods and could respond with a 20% tariff on imports from the UK.
Mr Trump has already announced a 25% import tax will be introduced on all cars imported to the US, a measure which will be a blow to the UK’s automotive industry.
Some 16.9% of UK car exports were to the US last year, representing a total of more than 101,000 units worth ￡7.6 billion.
Tariffs on steel and aluminium imports, including from British firms, are already in place.
18 hours ago14:22 Jonathan Walker
Starmer banking on a US trade deal to save UK from Trump tariffs
Downing Street hopes to sign a trade deal with the US to ensure the UK is protected from tariffs, but is refusing to speculate on when a deal could be put into effect. For the time being, it seems we will be affected when Mr Trump announces details of his plans tomorrow.
Sir Keir said talks on a UK-US economic deal would normally take “months or years” but “in a matter of weeks we have got well advanced in those discussions” when he spoke to his Cabinet today.
The Prime Minister updated the Cabinet with “further details of ‘reciprocal’ global tariffs expected this week”, on top of the measures already set out by Mr Trump, which will hit US imports of steel, aluminium and cars from the UK, Downing Street said.
18 hours ago14:21 Jonathan Walker
Trump tariffs will make economy worse warns Rachel Reeves
Donald Trump’s tariffs will have an impact on the UK economy, Chancellor Rachel Reeves told Cabinet ministers, as the world braced for the US president’s import tax plan.
Prime Minister Sir Keir Starmer acknowledged the UK was unlikely to be spared, despite the close transatlantic relationship and efforts to strike a limited trade deal.
Ms Reeves told Tuesday’s Cabinet meeting the effect of the import taxes would be felt in the UK because it is an “open trading economy”.
Mr Trump will unveil sweeping tariffs on goods from around the world on Wednesday, an event he has dubbed “liberation day”.
The Prime Minister told Sky News “the likelihood is there will be tariffs” on exports from the UK and “nobody welcomes that”.
The UK appears unlikely to respond with immediate retaliatory measures, unlike other targets of Mr Trump’s sanctions, such as the European Union.
Sir Keir said businesses want a “calm and collected response to this, not a knee-jerk” and “nobody wants to see a trade war”.
But he said that “all options remain on the table” in response.
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20 hours ago12:19 Steph Spyro
Keir Starmer urged to channel Donald Trump in EU fishing talks
Fishermen are also fearing for the coming months.
Keir Starmer has been urged to channel Donald Trump in his negotiations over EU access to Britain’s waters.
Countries, including France, are said to want to tie a new post-Brexit security deal to more beneficial access to the UK’s seas.
Read the full story here.
20 hours ago12:14 Martyn Brown
Kemi Badenoch says she hasn't sought Republican help on tariffs
Mrs Badenoch said she had not spoken to Republicans in the US to ask for the UK to be spared from tariffs.
The Conservative leader said she was “not cutting across” the Government to speak to Republicans like JD Vance.
She urged against any retaliatory tariffs, saying they would raise costs for UK consumers.
“Making life more expensive for British consumers so that we can thumb our nose at Donald Trump is not the right way. We need to make sure that we keep the cost of living as low as possible for the British public,” she said.
20 hours ago12:12 David Williamson
Labour under fire from the Left
The Greens have turned their guns on the Government. The party's "co-leader", Carla Denyer, said: "These spiralling costs come on the back of axing winter fuel payments for pensioners, refusing to remove the two-child benefit cap and cutting benefits for the sick and disabled.
"These are political choices. Rather than making the poorest and most vulnerable in society bear the brunt of the cost of living crisis, Labour could have chosen instead to tax a tiny percentage of the wealth of multi-millionaires and billionaires. They’ve made a choice, to take money off the old, ill and disabled."
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20 hours ago11:50 David Williamson
Call to save steelmaking
The Government is under intensifying pressure to save steelmaking in the UK and prevent the closure of the blast furnaces at Scunthorpe.
Liam Byrne – the former Chief Secretary to the Treasury who now chairs the Business and Trade select committee – said the “next few days may matter more than the next three decades”.
He said: “Steel is not just a commodity — it’s the spine of our national strength, a cornerstone of industrial communities and a sovereign capability we cannot afford to lose in this new and uncertain world. A decade ago, we paid the price of doing nothing: furnaces went cold, jobs were lost, communities were hollowed. Now, the pressures on our steel makers are multiplying once more — global overcapacity, protectionist shocks, and the high cost of decarbonisation all threaten to tip the balance again...
“Steel makers don’t want sympathy; they need certainty, decisiveness and speed. We want the Steel Council to develop and deliver a 25–30 year vision — but the crisis at British Steel warns us the next few days may matter more than the next three decades... The blast furnaces at Scunthorpe are not symbols of the past — they are pillars of the future.
“Keeping them online is not only an industrial decision, it’s a national imperative and so if needed, we will call British Steel’s Chief Executive Mr Zengwei An to personally explain to Parliament what more is needed to keep the furnaces blazing and the steel rolling.”
21 hours ago11:28 Jonathan Walker
Labour civil war grows as Andy Burnham slams benefit cuts
Labour mayor of Greater Manchester Andy Burnham has called for an end to the “punitive” approach to benefit cuts which he insisted would not get people into work.
Mr Burnham told a Commons inquiry: “You can’t order people’s recovery from the top down, you can’t batter them with sanctions towards work.
“It’s unsurprising why we’re having an inquiry because it doesn’t particularly work."
21 hours ago11:27 Martyn Brown
Kemi Badenoch takes a swipe at Keir Starmer
The Tory leader warns Labour's national insurance rise will punish firms, businesses and families.
Kemi Badenoch press conference (Image: DX)
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21 hours ago11:07 Jonathan Walker
UK economy falling behind according to new data
UK factory production slumped to a one-and-a-half year low last month with manufacturers “hunkering down” as they brace for rising costs and global trade disruption, a new survey shows.
The S&P Global UK manufacturing PMI survey, watched closely by economists, showed a reading of 44.9 in March, down from 46.9 in February.
Any reading above 50 indicates that activity is growing while any score below means it is contracting.
March’s score was the lowest since October 2023 with the downturn reaching all corners of the industry, although smaller manufacturers were the hardest hit.
It also marks the fifth month in a row that activity has declined.
21 hours ago10:58 Jonathan Walker
Keir Starmer and Rachel Reeves dodge April 1 bill hikes
Sir Keir Starmer and Rachel Reeves are escaping “awful April” bill increases because they live in taxpayer-subsided accommodation.
Households across the country face higher energy, water and council tax bills which will leave them ￡1,000 worse off according to Conservatives - coming on top of ￡3,536 in lost income due to Labour increasing employer National Insurance contributions.
But the Prime Minister and his Chancellor pay a set amount for their grace and favour flats in Downing Street, which has a fixed limit.
Read the full story here
21 hours ago10:34 Jonathan Walker
Energy companies 'making huge profits' while bills rise
Energy giants have pocketed over ￡500 billion in profits since the energy crisis started, the National Pensioners Convention says.
Researchers working for the End Fuel Poverty Coalition, which the NPC is a part of, examined the declared profits of firms ranging from energy producers (such as Equinor and Shell) through to the firms that control our energy grid (such as National Grid and UK Power Networks) as well as suppliers (such as British Gas).
As energy prices increase by 6.4% this week for households across the country, the analysis shows that almost half of the total profits since 2020 (￡207bn) are generated by firms with extensive involvement in the gas industry.
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22 hours ago10:29 Martyn Brown
The stage is set for Tory leader Kemi Badenoch
Mrs Badenoch is expected to use a press conference to ram home her point that Labour's national insurance increase, announced in last Autumn's budget.
Kemi Badenoch press conference (Image: DX)
22 hours ago10:10 Jonathan Walker
Labour urged to scrap winter fuel cut
Liberal Democrat leader Sir Ed Davey urged the Government to reverse its decision to cut the winter fuel payment for all but the poorest pensioners as part of Ms Reeves’ efforts to balance the books.
He said: “Families are facing spiralling energy and water bills while company bosses rake in millions of pounds in bonuses. It’s no wonder so many feel they’re being ripped off.
“The Government must get a grip on energy bills, and fast. That means reversing their callous decision to cut winter fuel payments and protecting families in fuel poverty from being hammered once again by unfair bill rises.”
22 hours ago09:47 Jonathan Walker
Young people hit hardest says Kemi Badenoch
The Conservative leader says Labour's job tax is making it harder for firms to employ young people. She says changes to National Insurance have particularly increased the cost of employing people on lower wages.
She told LBC there was a "￡1,000 rise in household bills for average household families."
She added: "But worse than that, when the jobs tax comes in on Sunday, we have calculated that will be about ￡2,5000 over the course of this Parliament which is quite a shocking figure."
She added: "It is going to be really difficult for those sectors that hire the lowest-paid workers ... people who didn’t cost as much to hire now do.
"Hair salons for instance have been one of the businesses that have screamed the most. They just cannot afford to take on new staff.
"Any business that takes on young people is going to be severely impacted."
She said hospitality businesses such as pubs and restaurants will also be hit.
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23 hours ago09:14 Jonathan Walker
You're actually better off, insists Labour
The Business Secretary insisted that living standards are improving but acknowledged that rising bills mean people will not immediately feel a change.
“For the first time in a long time, living standards are increasing and wages are rising faster than inflation. That doesn’t mean people immediately feel that because of some of these pressures. I accept that,” Jonathan Reynolds told BBC Radio 4’s Today programme.
23 hours ago09:13 Steph Spyro
Campaigners launch legal action on day water bills rise by an average of ￡123
Campaigners have accused the water regulator Ofwat of unlawfully forcing customers to foot the bill for "decades of neglect" by the water industry.
River Action has launched a legal challenge against the watchdog on the day that customers' bills rise by an average of ￡123 a year.
Read the full story here.
23 hours ago09:12 Steph Spyro
Rachel Reeves tax blunder as UK farmers strike for 'first time ever'
Consumers may suffer a further blow this month...
A group of British farmers will refuse to supply milling wheat from Tuesday in what is being called the UK’s first-ever farming strike.
The action is in protest against Rachel Reeves's inheritance tax raid.
Read the full story here.
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23 hours ago09:11 Steph Spyro
Working families to be ￡3,536 poorer because of Reeves's job tax as 'Awful April' begins
Working families will be ￡3,536 worse off over this parliament because of Labour’s national insurance jobs tax, the Tories have warned.
They said the ￡25 billion tax hike, which takes effect on Sunday, will slash salaries, “punish” businesses for hiring part time workers and heap costs onto already struggling businesses.
Read the full story here.
23 hours ago09:06 Jonathan Walker
Conservatives say you are 'poorer under Labour'
Mel Stride MP, Shadow Chancellor of the Exchequer, said higher bills would wipe out the increase in the minimum wage cominginto effect today. He said: “We want to see higher salaries for working people, but these pay rises will be wiped out by Labour's skyrocketing bills and Rachel Reeves’ Jobs Tax.
"Labour snatched away winter fuel payments, whacked up taxes on farmers, and clobbered businesses with higher taxes. We tried several times to get the government to exempt hospices, charities and other essential services from the Jobs Tax, but they refused to listen.
“You’re always poorer under Labour."
23 hours ago09:05 Jonathan Walker
Keir Starmer admits people are feeling 'pressure'
Prime Minister Sir Keir Starmer acknowledged rising bills were putting pressure on household finances but insisted wage increases would leave people better off.
He told Sky News: “I think for most people, they would say the cost-of-living crisis is ongoing, and they feel the pressure financially.
“That’s why it’s so important we make good on our pledge that people would feel better off and the national living wage going up today by an average of ￡1,400 is going to affect millions of people, so in their pay packet this month, and obviously for months to come, they will now be getting more money.
“That’s alongside the other work we’ve done – interest rates have been cut three times since we’ve had a Labour government, so anybody with a mortgage knows that the rates are coming down, and of course, on average, wages going up now more quickly than prices.
“I acknowledge that with bills coming in, people see that rise and that is a pressure. That is why it’s so important we deliver on the national living wage, to make sure people are better off – ￡1,400, quite a significant amount of money for millions of workers.
“Making sure that interest rates are coming down not going up, that makes a big difference, wages going up higher than prices.”
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23 hours ago09:03 Jonathan Walker
Your phone and TV will also cost more
Broadband and phone bills are rising while the cost of a TV licence and the standard rate of car tax are both going up by ￡5, and electric vehicles will no longer be exempt.
With the average household already spending ￡2,062 on essentials each month, analysts believe the latest increases could add another ￡49.45 to this figure.
23 hours ago08:57 Jonathan Walker
Energy bills go up today
Energy regulator Ofgem increased its energy price cap and the new limit comes into force today.
The cap on gas and electricity charges is going up by ￡111 to ￡1,849 for a typical household.
23 hours ago08:53 Jonathan Walker
Council tax is also increasing
Most households in England will face the maximum increase of 4.99%, and this means the average council tax bill on a typical band D property is going up by ￡109 a year, to ￡2,280.
In addition, a survey of council leaders and chief executives by think tank the Local Government Information Unit found 88% of councils, almost nine out of ten, are planning to increase charges on services “from everyday expenses like car parking, planning and green waste collection, to more emotive areas such as social housing rent, school dinner charges, and burial and cremation charges.”
The think tank said: “Many respondents explicitly stated that these increases would be at above-inflation rates”.
But this hasn't stoppedcouncil bosses raking in massive salaries.
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23 hours ago08:50 Jonathan Walker
Some of the taxes rising today
Businesses face a series of tax increases today. Labour argues that putting up taxes on employers doesn't affect the rest of us, but critics including the Conservatives say that the price is ultimately paid by employees and customers.
The rate that employers pay in contributions will rise from 13.8% to 15% on a worker's earnings above ￡175 from April.
The threshold at which employers start paying the tax on each employee’s salary will be reduced from ￡9,100 per year to ￡5,000
Hospitality businesses now face an additional ￡1.9 billion in wage costs, ￡1 billion of employer National Insurance Contributions (NICs) and ￡500m in business rates as a result of business rate relief being lowered from 75% to 40%.
More details in this report by Steph Spyro.
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