UK Politics

A key member of Rachel Reeves’ Treasury team championed proposals to slash the threshold for businesses to pay VAT to £30,000, it has emerged, fuelling speculation the measure could be implemented as the chancellor seeks to raise billions to fill the Budget black hole.Pensions minister Torsten Bell backed plans to introduce a “sharp cut” to the rate at which small businesses begin to pay VAT in his previous role as chief executive of the Resolution Foundation think tank.The Resolution Foundation’s Economy 2030 report, co-authored by Mr Bell in September 2023, recommends “reducing the UK’s unusually high and distortionary VAT registration threshold.”An earlier piece of research published as part of the same Resolution series also describes the current threshold as a “disincentive to growth and the formation of multi-employee firms.”It adds: “The UK’s VAT registration threshold is the highest in the world. This means that the Treasury is missing out on VAT revenue; moreover, the prospect of crossing the threshold deters small firms from growing.”Pensions minister and Treasury secretary Torsten Bell previously backed a slash to the VAT threshold (Jordan Pettitt/PA) More

Sir Keir Starmer has found himself in a heated row with Nigel Farage, after branding the Reform leader “spineless” and calling on him to explain himself over claims of racist behaviour during his days at a top public school.The prime minister said Mr Farage did not have a “good track record” because he failed to take action against Reform MP Sarah Pochin’s “racist” remarks about the number of ethnic minorities appearing in television adverts.Hitting back at Sir Keir, the Reform leader – who denies the claims about his behaviour while at Dulwich College as a teenager – said it is “utterly ludicrous” for the “weakest prime minister in living memory to call me spineless”. The prime minister’s comments came as he was asked about a Guardian report based on allegations from more than a dozen school contemporaries of Mr Farage, 61, who recounted incidents of deeply offensive behaviour throughout his teenage years.The Labour leader told reporters travelling with him to the G20 summit in South Africa: “He needs to explain the comments, or alleged comments that were made, and he needs to do that as soon as possible.“He hasn’t got a good track record in relation to this because Sarah Pochin, his MP, made some clearly racist comments and Nigel Farage has done absolutely nothing about it.Starmer says of Farage ‘He needs to explain the comments, or alleged comments that were made, and he needs to do that as soon as possible’ More

Sir Keir Starmer has revealed the profound personal toll of his brother’s death, saying that the loss “hit me like a bus”. The prime minister shared the reflections in an interview for The Only Way Is Essex star Pete Wicks’s Man Made podcast. Recorded at 10 Downing Street to mark Men’s Mental Health Month, Sir Keir described processing the loss as “intensely difficult”. His brother, Nick Starmer, lived with learning difficulties due to complications at birth.He died on Boxing Day 2024, aged 60, after being diagnosed with lung cancer about 18 months prior.“Because he’s very vulnerable, I didn’t want him to learn about the diagnosis on his own, and because I didn’t know that he would properly understand and I didn’t know how he would react, I insisted on going to the hospital with him and basically watched his face as he was told he had terminal cancer,” Sir Keir said.Nick Starmer died on Boxing Day 2024 More

Rachel Reeves has said she is “sick of people mansplaining how to be chancellor” to her, days before she unveils her make-or-break Budget. Hitting back at critics amid growing concern over sweeping tax rises that are expected next week, the chancellor said she is “not going to let them bring me down by undermining my character or my confidence”. Ms Reeves also admitted the government has “made a couple of unforced errors” but insisted it is “fighting to win”. But the chancellor failed to give any detail on what she will unveil in the Budget or how she will improve Britain’s ailing public finances, nor did she address the leaks and briefings that have dominated the media landscape in the lead-up to next week’s fiscal event. It comes as the chancellor scrambles to fill a £20bn black hole in the public finances after weeks of speculation about her tax rise plans and growing criticism of the Treasury for what the Commons speaker dubbed a “hokey-cokey Budget”, after the department briefed out plans to raise income tax and then appeared to row back on it. The chancellor is now widely expected to look at other ways to raise cash to tackle the shortfall and ensure she remains on track to meet her fiscal rules.The chancellor will lay out her make-or-break Budget next week More

The Government has announced plans to create thousands of new jobs through artificial intelligence-linked investment.Areas including Wales, Bristol and London will benefit, with ministers promising new opportunities for AI firms to grow.The initiative includes a new AI growth zone in South Wales, backed by companies including Vantage Data Centers and Microsoft, which will create more than 5,000 new jobs over the next decade, including at the former Ford engine plant in Bridgend.Scientists will be backed to use AI, with up to £137 million aimed at driving breakthroughs and develop new drugs, cures and treatments, the Government said.Liz Kendall, Secretary of State for Science, Innovation, and Technology, said: “We’re announcing a package of measures that ensure we seize the opportunities to get jobs and growth in every part of the country.“The backing by international investors today is a vote of confidence in the UK and we’re determined to do even more to ensure we are backing British businesses, workers and researchers to benefit from the opportunities AI brings.“This is about bringing jobs, opportunities and hope to the people and places that need it most, delivering on our promise of change.”Chancellor Rachel Reeves said: “This Government promised to unlock growth and that is exactly what we are doing.“Today’s confirmation of our fourth AI growth zone is our plan for change in action – creating thousands of jobs and unlocking new investment for local communities in the industries of the future, cementing our position as Europe’s leading tech sector.”Secretary of State for Wales Jo Stevens said: “Wales will now have two brand-new AI growth zones bringing thousands of jobs to both North and South Wales, and driving economic growth across the country.“South Wales is already the home of a growing tech industry and this major investment in the region will help cement the UK’s place as a global leader in AI.” More

Chaos at the heart of Boris Johnson’s government and his failure to take Covid seriously led to 23,000 deaths, a damning report into pandemic decision-making has found.The UK Covid-19 Inquiry also found the then prime minister and his chief adviser, Dominic Cummings, presided over a “toxic and chaotic culture” at the heart of No 10, which saw the views of women ignored.The report found that more than 20,000 lives could have been saved in England if the lockdown had been implemented just a week earlier, in March 2020.Westminster and the three devolved nations were all found to have done “too little, too late” as the virus spread.Children were ordered home from school, and families missed out on the chance to say a final goodbye to dying relatives, when measures were finally introduced.From 16 March 2020, self-isolation and social distancing came into effect, with schools and pubs closed later that week, before ministers took the unprecedented step of ordering the first full lockdown on 23 March.“Had more stringent restrictions short of a ‘stay at home’ lockdown been introduced earlier than 16 March […] the mandatory lockdown that was imposed might have been shorter or conceivably might not have been necessary at all,” the report said. Boris Johnson pictured with Professor Chris Whitty, the chief medical officer, at one of the daily coronavirus briefings More

Former Labour MP Lloyd Russell-Moyle has defected to the Greens – the party’s biggest defection to date. Mr Russell-Moyle represented the Brighton Kemptown and Peacehaven constituency from 2017 to 2024, which neighbours the longstanding Green seat of Brighton Pavilion. In a statement, he took aim at the direction of his old party, saying it had “left behind millions of people who want hope and want to see change in their lives”. Lloyd Russell-Moyle More

This story has been updated as the Covid Inquiry is set to reveal its findings into the government’s handling of the pandemic.Boris Johnson and his senior advisers are set to discover the conclusions of an inquiry into the government’s decision-making before and during the pandemic. Key players, including the former prime minister and his then health secretary Matt Hancock, gave evidence to the inquiry into what they were thinking in 2020, including before the first lockdown was announced in March.During a series of hearings, they were questioned over government measures introduced during the pandemic, such as Covid testing, social distancing and the Eat Out to Help Out scheme designed to support businesses.Mr Johnson was also heavily criticised over the lockdown rule-breaking in Downing Street, which saw multiple gatherings take place in breach of Covid guidelines. Here is a look at the events that took place and what Mr Johnson told the Commons about them while he was prime minister:15 May 2020: Cheese and wine in the Downing Street gardenMr Johnson was photographed sitting with his wife Carrie and staff at a table with wine and cheese in the No 10 garden.At the time, people could not legally leave their home without a reasonable excuse and could only meet one person from another household.20 May 2020: Bring your own booze partyThe same restrictions applied when No 10 staff gathered for a “bring your own booze” event in the Downing Street garden.The couple have dismissed any suggestions they broke Covid rules as “totally false” More