UK Politics

Any significant tax increases proposed by Rachel Reeves must be “temporary” and paired with reforms to aid businesses “bruised” by the last Budget, Sir Tony Blair’s think tank has warned. A report from the Tony Blair Institute (TBI) has called on the Chancellor to “bring businesses back onside” by moving beyond “the caution of the government’s first year in office” in her upcoming November 26 Budget.Ms Reeves has already fuelled expectations of higher taxes by refusing to commit to maintaining Labour’s manifesto promises not to hike income tax, national insurance, or VAT. The TBI insists that any such measures must be accompanied by bold, growth-boosting, pro-business reforms. These, it argues, are essential to “break Britain’s tax-and-spend doom loop” and allow the government to roll back the tax rises as the economy improves.It rejected the government’s proposal of giving workers “day one” protection against unfair dismissal, recommending instead a six-month qualifying period.In its paper, the TBI backed “decisive” action such as hiking a major revenue-raising levy instead of more incrementalism that “creates pain but rarely momentum”.Chancellor Rachel Reeves has already fuelled expectations of higher taxes More

Gordon Brown is set to issue a stark warning that child poverty represents both the UK’s most significant social division and its greatest long-term economic threat. The former Labour leader is also expected to intensify calls for Chancellor Rachel Reeves to increase taxes on gambling companies to find the lifting of the two-child benefit cap.Mr Brown, who has repeatedly spoken out on the issue of child poverty, will brand the issue a “shameful epidemic” in a speech on Thursday to mark the 60th anniversary of the Child Poverty Action Group (Cpag).Speaking at an event in London, he is expected to say: “What has become a UK-wide child poverty emergency is not only the biggest cause of social division in our country but – because of the failure to equip young people for future work – it is also the biggest threat to our long-term economic future.”The most recent official statistics showed there were 4.45 million children estimated to be in UK households in relative low income, after housing costs, in the year to March 2024 – the highest number since comparable records for the UK began in 2002/03.A previously published report by the Institute for Public Policy Research (IPPR), backed by Mr Brown, suggested reforms to gambling levies could generate the £3.2 billion needed to scrap both the two-child limit and benefit cap.The IPPR said axing the policies could lift half a million children out of poverty and “reverse years of rising hardship for low-income families”.Brown will say that UK-wide child poverty emergency is the biggest cause of social division Britain More

Rachel Reeves has been warned that she must slash taxes again before the next election if she breaks her key manifesto pledge and hikes them in the Budget. Sir Tony Blair’s think tank also said that any tax hikes such as raising VAT or income tax must be done in tandem with pro-business policies to break Britain’s “tax-and-spend doom loop”. The warning comes after the chancellor put the country on notice that manifesto-busting sweeping tax rises are coming later this month, saying during an unprecedented pre-Budget address that “we will all have to contribute”. The Tony Blair Institute has now called for any major tax rises to be temporary, warning Labour should move to “targeted tax cuts” before the next election “once growth strengthens and public service reforms deliver results”. The group also called for the chancellor to bring businesses who had been “bruised” by last year’s Budget “back onside” with measures that move beyond “the caution of the government’s first year in office”.Rachel Reeves has said ‘each of us must do our bit’ and warned there are ‘hard choices’ ahead More

The Government should introduce a tax on large companies which use artificial intelligence to replace workers, an MP has said, over fears about the impact on employment and tax revenues.Neil Duncan-Jordan (Poole) said the proposed measure would help replace income tax and national insurance sums that would be lost from the Treasury under the increased use of AI in the workplace.The Independent MP added it would also potentially disincentivise the large-scale replacement of people with machines.Analysts at jobs website Indeed have said UK university graduates are facing the toughest job market since 2018, with increased use of AI further narrowing down opportunities, in a report earlier this year.Meanwhile, adverts for an AI company were seen on the London Underground this summer, urging commuters to “stop hiring humans, the era of AI employees is here”.He told the PA news agency: “This is not about somebody who uses AI to produce an itinerary for a meeting they’re having. This is about large scale use of AI which reduces employment prospects for workers in the long term.“It’s about companies who used to employ 100 people to do a particular job don’t employ anybody any more. We would lose the national insurance from the employee and the employer, obviously, we would also lose the income tax from the employee.“The company would be massively gaining from that, so it was an idea of how do you try to balance the loss of income that AI could bring, with the company’s desire to lay off workers.“It shouldn’t be seen as a zero-sum option that they have, to think ‘we can just do this and make loads of profit off the backs of people we’ve made unemployed’.”Mr Duncan-Jordan had the Labour whip withdrawn earlier this year, along with three colleagues, after he rebelled against the Government’s welfare reforms.On Tuesday the Treasury dismissed his proposal to introduce a national insurance equivalent for each “AI agent” that performs tasks previously done by a person.Treasury minister Dan Tomlinson had said: “Employer National Insurance Contributions (NICs) are charged based on employee earnings. As AI agents do not receive earnings, it is not clear on what basis employer NICs would be levied.”However, the MP said any tax should be seen as a levy rather than a direct mirror of national insurance, which was first established in 1911 to act as a social security system for workers.Mr Duncan-Jordan said his former job as a Unison regional officer had made him concerned for AI’s impact on jobs.He said: “I’m very very conscious of needing to have that proper balance in the workplace between the use of widespread automation, AI, and protecting jobs and careers. AI’s not just a blue collar threat, it’s a white collar threat too. It’s across the piece, and everyone should be concerned about that.”Polling published by the Trades Union Congress (TUC) in August found more than half of UK adults are worried about the impact of AI on their job.The chief executive of BT warned earlier this year that AI could lead to more job cuts at the telecoms firm.Internationally Microsoft and Amazon have laid off thousands of workers as the tech companies shift towards spending on AI.Mr Duncan-Jordan said: “This idea is not anti-business, it’s not anti-technology.“It’s about recognising that we have to be the masters of the technological revolution, not the other way round.“We have to be in control of that revolution, otherwise it will take us over, and then we will see lots of people being laid off, and then wondering why our revenues have gone down as a state and lots of people aren’t working.”He continued: “I’m really keen that [AI’s] impact on society is positive rather than negative, and that’s why things like AI levies, employment levies, whatever we call them, are considered, yeah, as a way of mitigating against wholesale introduction, without any protections.“I’m not saying, don’t bring it in. Let’s have a serious, grown up debate about the impact that that’s going to have on our society, on our workforce, on our income.” More

David Lammy was unable to say whether any other asylum seekers had been accidentally freed from prison since Hadush Kebatu’s bungled release – just minutes before it was revealed that another prisoner is on the run after mistakenly being freed in London.Asked five times during Prime Minister’s Questions whether any foreign national offenders had been accidentally released from prison in the last few weeks, the rattled deputy prime minister – standing in for Sir Keir Starmer – repeatedly dodged the question. As the heated back and forth came to a close, it emerged that a 24-year-old Algerian national was released in error on 29 October, just days after sex offender migrant Hadush Kebatu was wrongly freed from HMP Chelmsford instead of being sent to an immigration detention centre.Shadow defence secretary James Cartlidge, standing in for Kemi Badenoch, asked Mr Lammy to “reassure the House that since Kebatu was released that no other asylum-seeking offender has been accidentally let out of prison”.David Lammy became increasingly rattled as he was pressed on accidental prison releases More

David Lammy put on a poppy midway through Prime Minister’s Questions on Wednesday (5 November).As he filled in for Sir Keir Starmer at the despatch box, the deputy prime minister attached a poppy to his jacket after being handed one by Education Secretary Bridget Phillipson, who was sitting next to him.He explained: “I bought a new suit this morning because my Godmother said she would be watching… I am very grateful to the honourable member for Sunderland South for ensuring that, despite wearing a new suit, I have managed to put my poppy on.” More

George Osborne has warned Rachel Reeves that it is “difficult to break a manifesto promise”, after she laid the groundwork for sweeping tax rises at the Budget. The former chancellor described the government as “constrained by its promise” after Labour’s general election manifesto pledged to not increase VAT, national insurance or income tax. On Monday, Ms Reeves signalled she would be ready to break the party’s promises, as she committed to putting the national interest above “political expediency”. Mr Osborne told the Treasury committee on Tuesday that he thinks “tax rises are inevitable” but praised Ms Reeves for laying out the rules under which she would make her fiscal decisions. In the session centred around the Budget on November 26, he told the cross-party group of MPs that he believes there should be a mix of tax rises and spending cuts becuase “it will be very one sided and a mistaken budget, if it’s all on tax rises”. ( More

Watch live as David Lammy, Britain’s deputy prime minister, faces Prime Minister’s Questions on Wednesday (5 November).The justice secretary will face off against the Tories at the despatch box, standing in for Sir Keir Starmer who is travelling to Brazil for the COP30 climate summit. It is his first time filling in for Sir Keir since becoming deputy prime minister.Mr Lammy will be up against Shadow defence secretary James Cartlidge, who will stand in for Kemi Badenoch during the weekly grilling.It comes after Rachel Reeves refused to rule out manifesto-breaking tax rises at the Budget on 26 November.During the speech in Downing Street on Tuesday (4 November), Ms Reeves hinted she will take painful decisions later this month as she said “easy answers” to fix economic issues would be “irresponsible”.Mr Lammy is likely to be grilled by the Tories on the tax hikes alluded to by the Chancellor in her speech, which the Tory leader slammed as a “laundry list of excuses”. More