UK politics live: Reeves refuses to rule out new tax rises and rail nationalisation plan unveiled

Chancellor of the Exchequer Rachel Reeves has refused to rule out the possibility of further tax rises (Stefan Rousseau/PA) (PA Wire)

Rachel Reeves has refused to rule out the possibility of further tax rises or borrowing in future Budgets – but insisted she would not have to top up her spending plans either.

Appearing at the Great Northern Conference in Hull on Tuesday, the chancellor faced pressure to assure the public that there would be no repeat of the £40 billion tax hikes she announced in her first October Budget.

She stressed public services would have to “live within their means” and that Labour would “never have to repeat a Budget like that”. However, she acknowledged Labour’s current spending plans would mean “difficult decisions” for public services in the spring of 2025.

Meanwhile, the transport secretary would not commit to cheaper rail fares as a result of South Western Railway, c2c and Greater Anglia being brought into public ownership next year but signalled that she expected the move to reduce cancellations and late trains.

The government has announced South Western Railway’s services will be the first to transfer into public ownership next year, with ministers saying the move paved the way for a “major shake-up” of Britain’s railways.

Growth in UK services sector slows to lowest rate

Growth in the UK’s services sector slowed to its lowest rate in more than a year in November as firms digested business tax rises in the autumn budget.

The closely watched S&P Global UK services PMI survey scored 50.8 in November, slowing from 52.0 in October.

It was slightly above the 50.0 reading forecast by a consensus of economists.

Any reading above 50 means a sector is in growth, while a score below this means it is shrinking.

Holly Evans4 December 2024 09:41

‘Growth is our number one priority,’ Reeves responds to OECD report

Responding to the OECD Economic Outlook report, chancellor Rachel Reeves said: “Growth is our number one priority, and the OECD upgrade will mean the UK is the fastest growing European economy in the G7 over the next three years.

“That is only the start. Growth only matters if it’s matched by more money in people’s pockets.

“That is why we protected people’s payslips from higher taxes at the Budget and are determined to deliver growth that benefits households and improves living standards.

“This government will get our economy growing, with our National Wealth Fund, reforming the remits of our regulators and pension mega funds to attract better investment, as well as reforming our planning laws – all so that we can rebuild Britain for good.”

Chancellor of the Exchequer Rachel Reeves announced a raft of spending measures in October’s Budget (Isabel Infantes/PA) (PA Wire)

Holly Evans4 December 2024 09:28

UK interest rates to fall more slowly than expected after Budget – OECD

UK interest rates will fall by less than expected over the next two years after the autumn Budget’s significant spending and borrowing plans, according to an influential report.

In its annual economic survey, the Organisation for Economic Co-operation and Development (OECD) said UK inflation will also surpass previous forecasts next year, and upgraded growth projections for the economy, because of a budget boost.

The OECD said the global economy would “remain resilient” over the coming years but that “risks and uncertainties are high”.

The global economy is predicted to grow by 3.2 per cent this year and 3.3 per cent next year, the organisation said.

It reflects a slight improvement from its predictions of 3.1 per cent and 3.2 per cent respectively, from its September interim report.

Holly Evans4 December 2024 09:21

Reeves refuses to rule out further business tax rises

The chancellor was pressed on the issue in the Commons by shadow chancellor Mel Stride, and again at a conference in the north of England, over her promise last week to the CBI conference.

With her next major fiscal statement expected in the spring, there is confusion over Labour’s economic policy amid a rumoured shift from delivering growth to raising living standards.

Sir Keir Starmer is set to outline the new focus in a speech on Thursday resetting the government’s agenda after just five months in office.

Read the full story from our political editor David Maddox here:

Holly Evans4 December 2024 09:13