UK Politics

Rachel Reeves could be facing a larger-than-expected black hole in the nation’s finances as she prepares for next month’s Budget amid reports that the fiscal watchdog could be about to downgrade the UK’s productivity performance.The BBC reported on Tuesday that the Office for Budget Responsibility (OBR) is expected to downgrade the UK’s performance on productivity, with fears that it could represent a further £20bn gap in the pubic finances. This followed revelations by The Independent in September that the chancellor was bracing herself for bad news on productivity which in turns hits economic growth.It comes less than a month before the chancellor’s Budget, due on 26 November, with the OBR set to deliver their final draft forecast in the coming days. But Ms Reeves has doubled down on blaming Brexit for the country’s economic woes as she was pushed on the latest news this morning on a trip to Saudi Arabia.Fresh data compounds the dilemma facing Rachel Reeves as she prepares for a challenging November Budget More

Labour has fallen to its lowest rating in a YouGov poll, with Sir Keir Starmer’s party almost level with the Conservatives, Greens and Liberal Democrats. The new poll, commissioned by The Times, found that just 17 per cent of voters back Labour, the same number that would vote for Kemi Badenoch’s Tories, while Reform UK continue to surge ahead on 27 per cent. The Greens sit at 16 per cent, the party’s highest level of support, closely followed by the Liberal Democrats on 15 per cent.It comes as Sir Keir has been warned that he could struggle to turn the party’s fortunes around following last week’s defeat in a Welsh by-election. Labour faces threats from the left and the right, with concerns about voters being lost to Reform or the surging Greens. Tuesday’s figures represent the lowest rating that Labour have recorded in YouGov figures, and show support for the Greens is surging among younger voters. The data suggests that 40 per cent of people aged 18-24 currently intend to vote for Zack Polanski’s party, with Labour lagging in second at 21 per cent, and the Liberal Democrats in third on 13 per cent. Labour’s popularity has dropped significantly since Keir Starmer was elected last year More

Rachel Reeves has been warned that cutting cash ISA limits will cost the Treasury billions and will not encourage people to start investing.The Building Society Association (BSA) say the damage inflicted by cutting cash ISA rates would result in up to 60,000 fewer mortgages being offered across the property market, as well as hamper the government’s own target of 1.5 million new homes across the term of parliament.As a result, BSA estimate that damaging economic growth and reducing tax revenues could hit the Treasury by £2.5bn.Over the summer, building societies including Nationwide and Skipton wrote to the chancellor pleading with her to leave cash ISAs untouched.Building societies are among those who offer cash ISA products and use those deposits to support their ability to fund residential mortgages. Cutting the amounts saved into them could hit building society mortgage supply by 5 per cent, says BSA research. They tend to be particularly active in the first-time buyer market.The Treasury select committee chairman Dame Meg Hillier said that it was “not the right time to cut the cash Isa limit”.Currently, rules allow each person to save £20,000 per tax year into ISAs across the available range, which includes Lifetime ISAs as well as cash and investing versions. Speculation has suggested Ms Reeves may cut that by half with regards to how much can be saved as cash, with the remainder of the allowance then able to be diverted towards investing.The chancellor earlier this year highlighted the vast difference in potential returns that saving or investing £2,000 could make, and though eyebrows were raised at the rates used in each case, the essential point remains valid: over prolonged periods of time, investing tends to yield better results than saving.Meanwhile, the results of a new poll show more people would rather potentially pay tax on cash savings than start investing.Get a free fractional share worth up to £100.Capital at risk.Terms and conditions apply.Go to websiteADVERTISEMENTGet a free fractional share worth up to £100.Capital at risk.Terms and conditions apply.Go to websiteADVERTISEMENTThe government have been clear that they want to create a culture of investing across the UK, which has lower numbers of retail investors – the general public, in other words – than other nations such as Germany, Sweden or the US.But the chancellor’s reported plan to effectively herd people into stocks and funds by cutting their tax-free savings allowance has been widely criticised, with most industry experts agreeing it is entirely unlikely to have the desired effect.( More

An independent investigation into how a sex offender was wrongly set free instead of being deported will be launched and report its findings within weeks, justice secretary David Lammy has announced.Dame Lynne Owens, a former deputy commissioner of the Metropolitan Police and ex-director general of the National Crime Agency, will look into what went wrong and make recommendations to stop similar cases, Mr Lammy told MPs.Police had to urgently hunt for Hadush Kebatu over the weekend after he was set free from HMP Chelmsford in a blunder that sparked widespread anger.Lynne Owens, ex-Met Police deputy chief, will chair the investigation More

The refusal of the government to describe China as an active threat to national security in its evidencewas a “total roadblock” to the progression of the case against two alleged spies, the prosecution’s lead barrister has said.Tom Little KC told MPs and peers on the Joint Committee on National Security Strategy (JCNSS) that the question of whether or not China was a threat to national security was “the million-dollar question in the case” and the failure to describe it as one “brought this case effectively to a crashing halt”. Meanwhile, director of public prosecutions (DPP) Stephen Parkinson suggested that deputy national security adviser Matt Collins, who gave evidence on behalf of the government, knew the case would collapse if he did not offer evidence that China was a threat.Tom Little KC speaking to MPs on Monday More

Rachel Reeves has been warned that her reported plans for a mansion tax would not fill the £50bn Budget black hole – and that UK property taxes need a much wider overhaul.The chancellor is said to be considering a levy on owners of properties worth at least £2m, who would face an annual charge of 1 per cent of the amount over that threshold – meaning a £10,000-a-year fee for homes worth £3m.But Ms Reeves is now facing calls to go even further, with economists and MPs calling for a comprehensive reform of property taxes in Britain. It comes as housing secretary Steve Reed repeatedly refused to rule out a mansion tax ahead of the Budget. Rachel Reeves is leading a UK delegation to Saudi Arabia as she searches for economic growth More

Britain has agreed to sell 20 Typhoon jets to Turkey in a deal worth up to £8 billion. Sir Keir Starmer signed the agreement in Ankara on Monday, calling it “a win for British workers, a win for our defence industry, and a win for Nato security”. It is the largest fighter jet deal in almost 20 years and the first new UK Typhoon order since 2017, supporting thousands of British jobs.Sir Keir said the deal also represented a boost for Nato security, telling broadcasters in Turkey: “Having that capability locked in with the United Kingdom is really important for Nato.”The first delivery of the new jets is expected to take place in 2030 More

David Lammy has accused Robert Jenrick of having a “brass neck” over comments made about a mistakenly released migrant sex offender.Speaking in the House of Commons on Monday (27 October), the shadow justice secretary said the release of Hadush Kebatu – an asylum seeker from Ethiopia – was a “national embarrassment”.He accused the deputy prime minister of “feigning anger at what has happened”, whilst slamming the government’s Sentencing Bill, under which convicts who demonstrate good behaviour could be released earlyMr Lammy fired back, telling Mr Jenrick he should “hang his head in shame”. He said that 14 years of Conservative governments resulted in “crumbling courts and crumbling prisons”.“He comes here and has the brass neck to give the impression that this started just 14 months ago,” Mr Lammy said. More