Badenoch claims she wants to prioritise tax cuts for businesses, not individuals, because those would boost growth
Q: [From Ryan Sabey from the Sun] Would you prioritise unfreezing income tax thresholds?
Badenoch replied:
I do want taxpayers to get more of their money back, but we have to start off with those people paying the taxes that are actually halting economic growth. That’s why the tax cuts which we prioritise are for business, because we know that they’re the ones who will create jobs.
(In her Tory conference speech Badenoch prioritised cutting inheritance tax on homes, which would be a tax cut for individuals, not businesses.)
Key events
Q’: [From Daniel Martin from the Telegraph] What is your reaction to reports the Treasury is planning a report on the potential benefits of a closer relationship with the EU?
Badenoch replied:
They can commission all the reports that they like, but it’s not going to change the situation, which is that Britain is out of the EU and rejoining the EU would be a massive distraction.
The country doesn’t want us to have those debates again. The government needs to focus on today’s problems and not try to go back 10 years. It is not 2016 any more.
Badenoch says Reform UK councillors not welcome back in Tory party, because she wants it to ‘regenerate’ with new people
Q: [From Sophie Church from the Mail] Would you take back Reform UK MPs or councillors if they wanted to come back to the Conservative party?
Badenoch said she wanted Reform UK voters to return to the Tories.
She went on:
Right now I am saying that we’re not taking back, certainly not the MPs who who left.
I don’t have any plans for the councillors either. They went to Reform for a reason.
And it’s easier for us to regenerate and have a new Conservative party if we get brand new people coming in who can stand for office.
Badenoch claims she wants to prioritise tax cuts for businesses, not individuals, because those would boost growth
Q: [From Ryan Sabey from the Sun] Would you prioritise unfreezing income tax thresholds?
Badenoch replied:
I do want taxpayers to get more of their money back, but we have to start off with those people paying the taxes that are actually halting economic growth. That’s why the tax cuts which we prioritise are for business, because we know that they’re the ones who will create jobs.
(In her Tory conference speech Badenoch prioritised cutting inheritance tax on homes, which would be a tax cut for individuals, not businesses.)
Q: [From Serena Barker-Singh from Sky News] Your party’s poll ratings are still lower than they were at the time of the last election. Your higher personal approval ratings have not helped the party. Are you worried the party is seen as toxic?
Badenoch said that, when Barker-Singh started interviewing her, she was saying the Tory party might not exist in a few months’ time. “So forgive me if I take the analysis that you’ve just given today with a pinch of salt,” she added.
Q: [From Chris Mason from the BBC] How quickly could you implement the welfare cuts you propose? Within your first year in office?
Badenoch replied:
There will be many things that we can do on day one. We won’t be able to do everything on day one.
Things like restoring the two child benefit cap, for instance – those are some things that we can start doing sooner rather than later.
But what we are working on right now is an implementation plan. We’re not just talking about announcements. We’re looking at what we can do when and how, because we have to think of the impact on people’s lives.
Q: [From Christopher Hope from GB News] Why should people trust you when taxes went up under the last Conservative government?
Badenoch said she did not approve of many of the tax rises implemented by the last government. She said Andrew Griffith, the shadow chancellor, opposed those rises too; she said she recalled discussing them with him at the time. The party is now “under new management”, she said.
Badenoch is now taking questions.
Q: [From ITV’s Carl Dinnen] You want to cut welfare spending, but you also want tax cuts for the rich. Do you think that is fair?
Badenoch claimed her plans would help everyone. Young people would benefit from the cut in national insurance for young workers, she said.
Badenoch tells Burnham getting people to stop playing loud music on trains ‘job for ticket inspectors, not PM’
Badenoch ended her speech with a jibe about Andy Burnham’s announcement yesterday about measures to stop people playing loud music on public transport. She said:
It’s very easy to announce that you don’t like people making noise on trains. That is a job for ticket inspectors, not the prime minister.
If Labour’s plan is to kick tough decisions into the long grass, come out with tiny bits of micro policy, put up a few taxes, spend a bit more on welfare and hope nobody notices before the next election, they are kidding themselves.
Badenoch claims tax burden too high
Badenoch says Britain needs tax cuts.
We need to get out of the way of job creators who make our country richer. We need to encourage risk taking, wealth creation, enterprise.
Britain’s tax burden has never been higher. You are taxed on the heating in your home. You’re taxed at the petrol pump filling up your car. You’re taxed when you insure that car. You’re taxed if you take the family away on holiday. You’re taxed if you stay in the UK thanks to Andy Burnham’s tourist tax. You’re taxed to buy a home, taxed to live in a home, taxed to pass on your home. This is clearly not working. Britain does not feel better off.
Referring to Andy Burnham’s article published yesterday, Badenoch said:
Andy Burnham wrote in The Times yesterday about the moral outrage of the current benefit system. But as far as I could work out, his answer is to spend even more on benefits.
Badenoch says it would be ‘unconscionable’ to delay plan to raise defence spending to 3% of GDP until spending review next autumn
Badenoch restates her call for benefit cuts to fund higher defence spending.
I have said it before and I will say it again and again until I’m blue in the face: Britain’s national security is under threat.
We need to cut welfare to fund defence. Cutting welfare to fund defence is our next challenge …
John Healey resigned as defence secretary because he could not in good conscience preside over a funding settlement of less than 3% of GDP. I remember him writing that not meeting that commitment would put our troops at risk. If at this budget, he does not find the money to get to 3%, John Healey has an awful lot of explaining to do.
But we are hearing that the decision has been kicked into the spending review, and the spending review itself has been kicked into next autumn. If this is true, it is unconscionable.
Britain is at risk, John Healey said so himself, and no amount of political difficulty should prevent us from responding to that risk.
Let me spell out what that means. What we are asking for to get to 3% of GDP costs less than a third of the increase in welfare since Labour came to office.
Kemi Badenoch is giving her pre-budget speech now.
So far, she has mostly stuck to the arguments briefed overnight. (See 8.47am and 9.29am.)
Rayner rejects claims of split with Shabana Mahmood over migrant residency rules, claiming media ‘love saying those girls all falling out’
Angela Rayner has also rejected claims that cabinet ministers are split over Shabana Mahmood’s plans to make migrant workers wait much longer until they can apply for permanent residency in the UK (indefinite leave to remain).
Rayner herself has criticised the plans Mahmood announced last year, and yesterday it was revealed that Miatta Fahnbulleh, the energy secretary, recently published a statement on her constituency website saying the plans would make it harder for migrants to integrate.
Asked about this on LBC, Rayner said the media “love saying those girls are all falling out, don’t they?”
When it was put to her that in the past Rayner had publicly criticised the decision, Rayner said she was replying to a consultation. When it was put to her that she had called the plans “un-British”, Rayner replied:
If you refer back to what Shabana said a couple of weeks ago, which I absolutely agree with her, people in this country want to see a fair process.
Rayner was referring to Mahmood’s speech to the Labour conference, where she signalled that the proposals announced last year will be watered down when the final version gets published later this year.
Rayner says she’s ‘cheering them on’, when asked if she backs Milburn/McFadden likely benefit cuts as part of welfare reform
Angela Rayner, the housing secretary, was the government voice in the broadcasting studios this morning.
Asked on the Today programme if she favoured the plans the Alan Milburn youth unemployment review is expected to recommend, cutting some benefits for young people in return for more focus on employment support, Rayner replied:
What we’re not doing is arbitrary cuts.
Referring to Milburn and Pat McFadden, the work and pensions secretary, she went on:
I am cheering them on because I don’t believe that having over a million children without any prospects of being in training or in employment is something that this country should accept.
Asked what she would say if Milburn said certain levels of certain benefits should be cut, Rayner replied:
Well, again, what I’m saying is that what Alan Milburn is saying himself, is that we have to create opportunities for young people to get into employment, and it’s too difficult for some of these young people.
Ministers change law to stop serious offenders detained in hospital getting benefits
Criminals including killers and sex offenders detained in hospital will no longer receive benefits under proposals called for by victims’ families, the Press Association reports. PA says:
The government confirmed the move to end so-called “double provision” which enables offenders to claim hundreds of pounds a month for living costs while receiving NHS psychiatric treatment.
Regulations laid in parliament today seek to close the loophole and prevent serious criminals receiving up to £800 a month in universal credit over several years, saving an estimated tens of millions of pounds annually.
The government said the confirmation follows engagement with victims’ families and experts as part of its plan to “put fairness back of the heart of the welfare system”.
The new regulations are expected to come into force early next year following parliamentary approval.
Parents of Barnaby Webber and Grace O’Malley Kumar, who were killed by Valdo Calocane in Nottingham in 2023, welcomed the announcement.
Calocane was convicted of manslaughter on the basis of diminished responsibility.
Emma Webber, Barnaby’s mother, said: “This is long overdue, and simply the right thing to do. It was a disgrace that Calocane and offenders like him have ever received taxpayers’ money.”
The proposed regulations apply to individuals subject to a section 37 order under the Mental Health Act 1983 and a section 57A order under the Criminal Procedure (Scotland) Act 1995.
The offences covered include manslaughter, attempted murder, wounding with intent to cause grievous bodily harm, rape, assault by penetration and rape of a child under 13.
Murder is not included as a hospital order is not applicable because the offence attracts a mandatory life sentence.
The change in regulation is expected to affect about 2,500 offenders already in hospital and approximately 200 a year in future, the government said.
The full financial impacts of the approach will be published as part of the 2026 budget on October 28.
Commenting on the move, Pat McFadden, the work and pensions secretary, said:
We said we’d act to tackle this gross unfairness and we’re delivering on that promise.
For too long these violent criminals have had their living costs paid by the taxpayer twice over, while their victims and families paid the price.
That ends today because victims and taxpayers deserve a system that is fair and supports only those who genuinely need it.
Badenoch claims Labour’s spending plans based on future ‘fictional cuts’ that won’t happen
According to extracts from her speech briefed overnight, Kemi Badenoch will argue later that John Healey needs to slash spending in the budget because UK government borrowing costs are too high. She will say:
Britain’s 30-year gilt yields are now above 6% – their highest level since 1998.
That means every pound we borrow is already costing us £2 in less than 12 years.
It is true the wars in Ukraine and Iran are pushing these rates up around the world.
But they are no more Labour’s fault than they were ours when the war in Ukraine started.
However, the UK is paying more to borrow than anyone else in the G7.
We are paying over a percent more than Greece and Spain.
We are paying nearly 2% more than Germany.
The whole argument on defence spending would go away if our interest rates reduced.
This is why we need to live within our means.
She will also argue that the spending reductions included in Labour’s plans for the final years of the decade are not credible.
Last week the IMF praised the government for the work they were doing on reducing Britain’s deficit.
They clearly don’t know the Labour party like we do.
Labour’s deficit reduction plans to meet their fiscal rules are predicated on making huge cuts to the public sector in the final year of the spending period.
I think there will be an election before then and they’ll never have to prove it.
We are not fooled by made-up spending cuts, and neither it would seem are the IFS – who say relying on these projections would be a “work of fiction”.
It would leave a £35bn black hole in departmental budgets.
Labour have increased spending by more than £100bn in just two-and-a-bit years.
They are not suddenly going to find some courage to cut spending in the final year of a parliament right before an election.
Fictional cuts are not going to cut it.
Investors simply aren’t buying it.
Healey to reject calls to raise capital gains tax in budget
Here is Jessica Elgot’s story on John Healey ruling out raising capital gains tax in the budget.
Badenoch says Healey’s budget will be worse than Reeves’s if he doesn’t slash spending
Good morning. John Healey, the chancellor, is delivering his first budget a week tomorrow, and this morning there are two news developments that will help to frame the way it is received.
The most important is on the front page of the Times, where Steven Swinford has a story firming up that has already been hinted that: that Healey has decided not to raise capital gains tax in the budget. This is significant because a capital gains tax hike was for a while seen as the government’s preferred money-raising ploy, not least because several senior figures in the cabinet were lobbying for one earlier this year. But now it is off the table, according to Swinford. He says:
Senior allies of Andy Burnham, including several cabinet ministers, have been pressing for a rise in capital gains tax on the sale of second homes, shares and other assets to help repair the public finances.
However, the chancellor has ruled this out after warnings that it could ultimately cost the government money if wealthy individuals left the UK or deferred selling assets …
It means that the biggest “revenue raiser” in the budget will be a tax raid on banks, which will be used to help fund a targeted and temporary package of support on the cost of living. Healey will also reduce the government’s fiscal headroom — a buffer against future events — from £23bn to around £15bn.
There is a Whitehall myth about how the Treasury never gives out detail about what’s coming in the budget before it is actually announced. In fact, on certain issues, the Treasury regularly ensures that the media gets an accurate picture of what is coming in a budget to minimise the risk of the markets getting an unwelcome surprise. This is done not through on-the-record statements, but via murky background nods, winks and hints. That has been happening overnight, with journalists being assured that the Times’ story is accurate.
The second intervention is coming from Kemi Badenoch, the Conservative leader. In a speech this morning, she will claim that Healey’s budget will be even worse than the two delivered by Rachel Reeves, which raised taxes by £40bn and £26bn respectively. That is because Healey is not cutting spending, Badenoch will say. She will argue:
John Healey is not Rachel Reeves.
Many people see that as an improvement.
How could it be worse than £70bn in new tax rises across just two budgets?
However, I’m worried that next week John Healey will deliver a budget that does more damage to our country than either of Rachel Reeves’ budgets did.
We are being told that next week’s budget is going to be “nothing to see here”.
That is code in Whitehall for a budget that tries to do as little as possible … in the hope that no one notices.
Picture the chancellor burying his head in the sand and hoping to deliver a budget so inconsequential that it “does no harm” – as some Labour MPs have been asking.
But the problem is that Britain cannot afford to do as little as possible.
Problems have caught up with us that we can no longer afford to run away from.
First and foremost, that means living within our means.
The Tories have announced plans to cut government spending by £70bn a year. Badenoch thinks Healey should follow suit.
Here is the agenda for the day.
Morning: Andy Burnham chairs cabinet.
10am: Kemi Badenoch gives a speech and holds a press conference.
11.30am: Yvette Cooper, the health secretary, takes questions in the Commons.
Noon: Heather Hallett publishes the latest report from the Covid inquiry, covering care homes.
Noon: Downing Street holds a lobby briefing.
After 12.30pm: MPs resume their debate on the Northern Ireland Troubles bill.
2pm: Nigel Farage, the Reform UK leader, speaks at a rally in Plymouth.
2.30pm: Jonathan Reynolds, the business secretary, gives evidence to the Commons business committee.
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