West Lothian-based business stole £8.8 million of VAT in employment agency scam
The stolen money funded lavish lifestyles, with cash splashed on gold bullion, diamonds, fast cars and expensive properties.
One director is already serving a six-year sentence for a separate sophisticated VAT fraud
The bosses of a corrupt payroll company that stole millions of pounds of VAT have been jailed for more than 22 years.
West Lothian-based Linear Services handled payroll for 27 employment agencies but didn’t hand over VAT they owed to HM Revenue and Customs (HMRC) during a two-year fraud.
Graeme Cullen, Leslie Thompson, Graham Newall and Martin Lang ran the firm that charged VAT on invoices totalling £8.8 million between 2015 and 2017. The court heard the gang lived extravagant lifestyles with huge amounts of money spent on expensive homes, holidays, diamonds and even gold bullion.
Thompson is already serving a six-year sentence for his role in an elaborate multi-million-pound tax fraud that led to convictions for a network of 20 corrupt company directors.
The 63-year-old, from Bathgate, West Lothian, was jailed in October, while his wife Beverley was handed a two-year suspended sentence for her role in the elaborate scam.
The gang were caught following a lengthy investigation by HMRC’s Fraud Investigation Service, who worked alongside partners from Police Scotland’s Specialist Crime Division.
Lang, 68, pleaded guilty on 30 January. Cullen, 54, Thompson, 63, and Newall, 49, were sentenced on 21 April after an eight-week trial at Glasgow High Court.
HMRC urges all businesses to carry out meaningful due diligence on any supply of services and anyone with any information about any type of tax fraud can report it to HMRC on GOV.UK.
TODAY (Tuesday 4 November), the Chancellor, Rachel Reeves, will ‘vow to take the fair choices to deliver strong foundations for our economy and secure our country’s future’.
In a speech delivered in Downing Street this morning, the Chancellor will address the country as she lays out the economic choices she will take at the Budget later this month to cut hospital waiting lists, cut the national debt and cut the cost of living.
The Chancellor is expected to say: “Later this month, I will deliver my second Budget as Chancellor.
“At that Budget, I will make the choices necessary to deliver strong foundations for our economy – for this year, and years to come.
“It will be a budget led by this government’s values, of fairness and opportunity and focused squarely on the priorities of the British people:
“Protecting our NHS, reducing our national debt and improving the cost of living.
“You will all have heard a lot of speculation about the choices I will make.
“I understand that – these are important choices that will shape our economy for years to come.
“But it is important that people understand the circumstances we are facing, the principles guiding my choices – and why I believe they will be the right choices for the country.“
Chancellor’s ‘Scene Setter’ speech ahead of Budget 2025
Later this month, I will deliver my second Budget as Chancellor of the Exchequer.
At that Budget, I will make the choices necessary to deliver strong foundations for our economy.
My Budget led by this government’s values of fairness and opportunity…
…and focused entirely on the priorities of the British people:
Protecting our NHS,
reducing our national debt,
and improving the cost of living.
There is a lot of speculation about the choices that I will make.
I understand that – these are the important choices that will shape the future of our country for years to come
I want people to understand the circumstances we are facing,
the principles guiding my choices,
and why I believe they will be the right choices for our country.
We are a country with considerable economic strengths:
An open, trading economy,
A global hub for cutting-edge industries from AI to Biotech,
With world-leading universities and scientific institutions,
and a talented and a committed workforce.
[political redaction]
At the Budget last year, I fixed the foundations:
[political redaction]
I put the public finances back on a firm footing,
Provided an urgent cash injection into our faltering public services,
And began rebuilding our economy.
But since that Budget,
The world has thrown even more challenges our way.
The continual threat of tariffs has dragged on global confidence –
Deterring business investment, and dampening growth.
Inflation has been too slow to come down as supply chains continue to be volatile –
Meaning that the cost of everyday essentials remains too high.
And the cost of government borrowing has increased around the world –
A shift that Britain – [political redaction] – has been particularly exposed to.
And in an uncertain world, we also face pressure to increase our defence spending – and it is right that we do that…
…protecting ourselves from hostile actors and supporting our allies.
And there are other pressures on the public finances.
The Prime Minister, the Secretary of Work and Pensions and this whole government are committed to reforming our welfare state…
…so that it is not a system that counts the cost of failure…
…but one that invests in success and protects those who need it most.
There is nothing progressive about refusing to reform a system that is leaving one in eight young people out of education or employment.
So, we have begun the job of creating a system that protects people who cannot work and empowers those who can.
And there are longer-term challenges too:
That feeling, shared by millions of people across the country that the economy isn’t working as it should.
Alongside the Budget this month,
The Office for Budget Responsibility – the UK’s public finance watchdog – will set out the conclusions of their review of the supply side of the UK economy.
I will not pre-empt those conclusions…
…but it is already clear that the productivity performance [political redaction] is weaker than previously thought.
A less productive economy is one that produces less output per hour worked.
That has consequences for working people – for their jobs and for their wages…
…and it has consequences for the public finances too, in lower tax receipts.
It’s not a question of how hard people work –
Poor productivity means we are putting in more and getting less out.
It means too many businesses and workers don’t have the tools they need:
Trains that run on time,
Broadband that’s fast and reliable,
Access to new technologies,
Or proper training so people have the right skills for the job.
For a long time, commentators have talked about Britain’s ‘productivity puzzle’.
But it’s not a puzzle.
The causes of our economic underperformance are well understood.
The chronic stop-go cycle of public investment has left us with roads full of potholes, high energy prices and unstable conditions for vital business investment in skills and technology…
…and long-term failure to invest in our regions has built growth on a narrow base – with some parts of the country forging ahead while others fall behind.
[political redaction]
All this meant that when the pandemic arrived our country was under-prepared…
…our public services weakened and our economy fragile.
And we finished the pandemic with higher death rates and higher debt than our peers.
This isn’t about relitigating old choices.
It’s about being honest with people about the consequences those choices have had.
It is my job to deal with the world as we find it…
…not the world as I would wish it to be.
Not to commentate or speculate,
But to act.
In my Mais lecture last year, I set out our plan for solving our productivity problem through a programme of stability, investment and reform,
And when I became Chancellor, I began to put that plan into action.
Stabilising our public finances –
Making the tax and spending decisions to get debt down and to fund our public services sustainably.
Changing the fiscal rules to increase public investment by £120bn over the course of this Parliament…
…and crowding in private investment too…
For road and for rail, for housing and nuclear power.
And reforming our economy:
Ripping up the planning rules so we can build housing and infrastructure across the country…
Bringing the brightest and best to our shores with a new visa regime…
And signing trade deals with the EU, the US and India to help our businesses export around the world.
We have begun to see the results of those plans…
…in falling interest rates and falling NHS waiting lists…
…in rising wages and rising investment.
But I know that real progress takes time.
Our growth was the fastest in the G7 in the first half of this year – but I don’t expect anyone to be satisfied with growth of 1%.
I’m not – and I know there is more to do.
The first part of our planning reforms will add an additional £6.8bn to the size of our economy in the next five years,
But the next part – our planning bill – must complete its passage through Parliament before it can make a difference.
Interest rates, which rose from 0.1% to 5.25% in the last Parliament, have now been cut five times…
…but at 4% they are still a constraint on business borrowing and a burden on family finances.
[political redaction]
…and the choices I make in the Budget this month will be focused on getting inflation falling…
…and creating the conditions for interest rate cuts to support economic growth and improve the cost of living.
I understand the urge for easy answers.
[political redaction]
The UK’s national debt now stands at £2.9trillion:
Equivalent to 95% of GDP.
[political redaction] our borrowing costs were in the middle of the pack compared to other advanced economies…
…but now, we have the highest borrowing costs of any G7 country.
Today, 1 in every £10 of taxpayer’s money is spent on debt interest.
Not on paying that debt down…
…but just paying the interest to our creditors.
At the Budget last year, I changed the fiscal rules to strike a careful balance:
To invest more in capital alongside a credible plan to grow our economy and bring debt down within this Parliament.
That was the right decision to break the cycle of low productivity and low growth.
But that additional investment can only be delivered because markets know that my commitment to the fiscal rules is ironclad.
Some people say we should just sidestep those rules…
…that we can borrow more without consequences by simply reclassifying areas like defence or education.
But no accounting trick can change the basic fact that government debt is sold on financial markets.
There are limits on the price that banks, hedge funds and pension funds are willing to pay for our debt…
…and we are competing constantly with other countries also selling debt .
The more we try and sell, the more it will cost us.
It is important that everyone – the public and politicians – understands that reality.
The less we spend on debt interest, the more we can spend on the priorities of working people…
…our NHS, our schools, our national security…
…the public services essential to a decent society and a strong economy.
At the Budget last year, I provided our public services with a vital cash injection…
…and I’m proud of that choice:
Proud that it [political redaction] that is providing record investment in our NHS getting waiting lists down by over 200,000 since the election,
Proud that it [political redaction] that is investing in our children through the rollout of free breakfast clubs and free school meals,
And proud that it [political redaction] that is funding our armed forces and remains resolute in our NATO commitments.
The alternative is to row back on those investments:
[political redaction]
Stifling our economic growth,
And weakening Britain’s foundations in an unstable world.
I will not repeat those mistakes.
But if we want strong public services in the decades to come, then we must recognise that productivity and efficiency are not only a challenge for business, but they are a challenge for our public sector too.
At the Spending Review I announced £14bn of efficiencies per year to be delivered by 2029:
Cutting government spend on consultancies,
Getting rid of bureaucratic quangos and regulators,
And driving efficiency through AI and digital technologies.
But I know that there is more to do,
In the Budget and beyond, I will continue to drive for more productive and more efficient public services, right across government…
…making savings and rooting out waste wherever I find it.
[political redaction]
When I was appointed Chancellor, people put their faith in me to take our country forward…
…not to be swayed by political convenience…
…not to always do what is popular, but to do what is right.
At the Budget, I will continue to deliver on the priorities of the British people:
Cutting NHS waiting lists, cutting the national debt and cutting the cost of living.
And in the context of the long-term challenges on our productivity and heightened global uncertainty…
…any Chancellor of any party would be standing here today, facing the choices that I face.
The difference is in the priorities – and the values – that will guide those choices:
Mine will be a Budget for growth with fairness at its heart…
…and a Budget that supports businesses – to create jobs and to innovate.
As I take my decisions on both tax and spend…
…I will do what is necessary to protect families from high inflation and interest rates…
…to protect our public services from a return to austerity…
…and to ensure that the economy that we hand down to future generations is secure, with debt under control.
If we are to build the future of Britain together, we will all have to contribute to that effort…
…each of us must do our bit for the security of our country and the brightness of its future.
There is a reward for getting these decisions right,
To build more resilient public finances – with the headroom to withstand global turbulence…
…giving business the confidence to invest and leaving government freer to act when the situation calls for it,
To continue to invest in our infrastructure and our industry to build a stronger economy,
And to get the cost of borrowing down – spending less on debt interest, and more on schools and our health service.
The Office for Budget Responsibility will make their forecasts at the end of this month…
…but let’s be clear about what forecasts are:
They are not visions of the future…
…they are a look in the rear-view mirror.
The OBR rightly make their predictions based on the data that has gone before…
…but I do not believe that our past has to determine our future…
…or that a stuttering economy, poor productivity and falling living standards is somehow Britain’s destiny.
A brighter future is within our grasp.
We were elected to break with the cycle of decline…
…and this government is determined to see that through.
So we will go further and faster, on planning, on the industrial strategy, on reforming to regulation…
…all to deliver growth throughout our economy, in all parts of our country.
We will bear down on waiting lists, on the cost of living, and on the national debt which compound these challenges…
…and when that requires hard choices, we will act – guided by the interests of working people.
We were elected on a commitment to put country before party; the national interest before political calculation…
…and, whatever challenges come our way – whatever challenges come my way – we will not be swayed from that.
At the Budget this year, I will continue to build the strong foundations to secure Britain’s future.
For a fairer Britain
A more prosperous Britain
A Britain with an economy that works for everyone.
NEW polling shows significant support for package of wealth taxes and taxes on financial institutions right across political spectrum
Public welcome wealth taxes as a vital means to fund public services and build a fairer Britain
Implementing wealth taxes improves government’s standing with public and key voters
TUC general secretary says voters want a “grown up” conversation about reforming tax system
New analysis from the union body reveals tens of billions can be raised through a windfall tax on banks
The TUC has today published new polling which shows the public overwhelmingly back a package of taxes on wealth, bank and gambling companies to fund our public services and rebuild Britain.
There is significant support for implementing a package of higher taxes on wealth, gambling and banks to:
Deliver real growth in school budgets so every school has enough money for textbooks, basic repairs and equipment: 78% support these changes, funded by a wealth tax package, while just 13% oppose
Reduce NHS waiting lists so that by 2029 we meet the target of more than 90% of people who need care for a non-urgent condition receiving it within 18 weeks: 82% support these changes, funded by a wealth tax package, while just 12% oppose.
Deliver a major cash boost for local services to improve bin collections, leisure centres and libraries: 77% support these changes, funded by a wealth tax package, while just 15% oppose.
Ensure more investment in community policing, to tackle anti-social behaviour and improve community cohesion: 79% support these changes, funded by a wealth tax package, while just 13% oppose.
Voters across the political spectrum, including Reform-leaning voters, back several different options for raising taxes on the wealthiest and financial institutions:
Raise capital gains tax to the same level as tax on wages from employment: 51% support and 34% oppose. This rises to 68% support among Conservative to Labour switchers in the 2024 general election and 57% support among Labour voters from the 2024 election now leaning to Reform.
A windfall tax on the profits of banks and other financial institutions 66% support and 21% oppose. This rises to 83% among Conservative to Labour switchers in the 2024 general election and 73% among Labour voters from the 2024 election now leaning to Reform.
Higher taxes on online casinos, gambling machines and sports betting 71% support and 19% oppose. This rises to 84% among Conservative to Labour switchers in the 2024 general election and 74% among Labour voters from the 2024 now leaning to Reform.
A 2% annual wealth tax paid by people with assets worth more than £10 million 68% support and 22% oppose. This rises to 79% among Conservative to Labour switchers in the 2024 general election and 75% among Labour voters from 2024 now leaning to Reform.
And as a package of measures, these wealth, gambling and bank taxes have huge popular and cross-party support:
More than 2 in 3 (68%) support this package of measures as a whole – while just 23% oppose
This rises to 84% supporting and 14% oppose among Conservative to Labour switchers from the 2024 general election.
It rises to 74% – with just 22% opposing – among 2024 Labour voters who are now leaning to Reform.
Separate new polling from the union body also shows the government’s standing with the public would improve if they implemented taxes on wealth to fund public services.
The polling shows taxing wealth to deliver better public services:
Boosts the perception that the government is “trying to improve things” from 19% to 34%
Boosts the perception that the government is “delivering change” from 19% to 34%
The TUC says voters will reward the government if they invest in public services and fund it through wealth taxes.
Grown up conversation
The TUC says the public wants a “grown up conversation” about tax – and they fundamentally want a fair system which invests in vital public services to fix broken Britain.
The union body says the findings demonstrate that the public know that tax rises are needed to pay for vital services – and in this context they are overwhelmingly supportive of getting those with the broadest shoulders to pay their fair share.
The public also wants a fairer system. While cutting NHS waiting lists was the top reason for the public being on board with tax rises (chosen by 64%), closing tax loopholes came second (49%).
There is also widespread support for a modernised and simplified system – three in four support (73%) such reforms, including 83% Labour to Reform switchers.
The union body says the government must continue to build on the vital investment in public services and infrastructure announced in the Budget.
The country is “crying out for sustained investment” after years of Tory neglect – and faces real risks with growing global uncertainty, decimated public services and living standards hammered.
Windfall tax on banks
New TUC analysis shows that an increase in the bank surcharge – a tax on bank profits – could raise significant funds over the coming years.
In recent years, banks have made significant unexpected profits because of increased interest rates. This has led to higher returns both from net interest (the difference on interest charged to borrowers and paid to savers) and interest paid to banks on reserves they hold at the Bank of England.
As a result, bank profits are now higher than they were in the period before the financial crisis. But under the Conservatives, taxes on banks were slashed. An increase in the bank surcharge could raise between £20-50bn over the next four years:
A 16% surcharge, which is doubling what it originally was before the Conservatives cut it, would deliver £20bn
A 35% surcharge, which would be the same level as the windfall tax the Conservatives imposed on energy companies, would deliver £50bn
Even just reversing the Tory cuts and setting it at 8% – which the TUC says is the “bare minimum” – would raise £8bn over four years.
Profits have risen significantly from pre-pandemic levels and OBR forecasts show that profits will remain high over coming years.
Banks made £37bn of profit in 2023-24, up by 41% from £26.3bn in 2019-20. More recent figures from Positive Money show the big four banks made £45.9bn profits in 2024 and £24.1bn in just the first half of 2025.
TUC General Secretary Paul Nowak said: “After more than a decade of Tory neglect, this country is crying out for investment – in our schools, NHS and local services.
“The public overwhelmingly want investment to deliver better services right across the country – whether it’s cutting NHS waiting lists so patients can get the prompt treatment they need or funding schools so our kids have the right books and resources.
“And they want fair taxes too. People have had it with a system where those with the broadest shoulders don’t pull their weight.
“The public are behind tax reform so that the wealthy, banks and gambling companies pay more – they know this will deliver better services and a fairer society.
“It’s time for a grown-up conversation about tax – that’s what voters want, and it’s what they deserve.”
New rules will help unmask anyone evading tax due on their crypto profits
UK crypto holders must provide personal details to crypto service providers from January 2026 or face penalties of up to £300
Aligns with government’s Plan for Change to ensure everyone pays their fair share of tax to fund vital public services
Public coffers are set for a boost as HM Revenue and Customs (HMRC) goes after crypto owners that aren’t paying their fair share of tax.
From January 2026, people who own crypto – like Bitcoin, Ethereum or Dogecoin – must give personal details to every crypto service provider they use to make sure they are paying the right tax.
Those who don’t comply risk a £300 fine from HMRC.
Once data is received from service providers, HMRC will be able to identify those who haven’t been correctly paying tax on their crypto profits – bringing in money that will help pay for frontline nurses, police, and teachers.
This is estimated to raise up to £315 million by April 2030 in tax revenue – the same amount needed to fund more than 10,000 newly-qualified nurses for a year.
It’s part of a major drive by HMRC to tackle non-compliance including the small minority who are deliberately evading tax due on their profits from crypto.
Service providers will begin collecting data on users’ activities from January 2026. Any service provider that fails to report this information, or submits inaccurate or incomplete reports, could also be charged a penalty of up to £300 per user by HMRC.
The new rules mean crypto service providers must collect and report:
Your name, address, and date of birth
Your tax residence
Your National Insurance number or tax reference
A summary of your crypto transactions
James Murray MP, Exchequer Secretary to the Treasury, said:“We’re going further and faster to crack down on tax dodgers as we close the tax gap and deliver on our Plan for Change.
“By ensuring everyone pays their fair share, the new crypto reporting rules will make sure tax dodgers have nowhere to hide, helping raise the revenue needed to fund our nurses, police and other vital public services.”
Jonathan Athow, HMRC’s Director General for Customer Strategy and Tax Design, said:“Importantly, this isn’t a new tax – if you make a profit when you sell, swap or transfer your crypto, tax may already be due.
“These new reporting requirements will give us the information to help people get their tax affairs right.
“I urge all cryptoasset users to check the details you will need to give your provider. Taking action now and having this information to hand will help you avoid penalties in the future.”
The new rules – known as the Cryptoasset Reporting Framework – will help HMRC identify those who need to pay tax on their crypto transactions.
They will also bring the UK into line with the international standard developed by the Organisation for Economic Co-operation and Development (OECD), enabling tax authorities to share information across participating countries.
Crypto users should already include any crypto gains or income in their Self Assessment tax returns. HMRC has introduced new dedicated sections to the capital gain pages to be completed from the 2024 to 2025 tax year.
Capital Gains Tax may be due when selling or exchanging crypto, while Income Tax and National Insurance could apply to crypto received from employment, mining, staking or lending activities.
Anyone unsure about their tax obligations can check if they need to pay tax when they receive or sell crypto on gov.uk.
As Valentine’s Day approaches, anyone who has turned the love for their hobby into a side hustle is being encouraged to ‘put a ring on it’ and make it official.
Whether it’s making extra income from activities such as online content creation, dog walking, or making handcrafted items to sell, HMRC has launched a new Help for Hustles campaign to assist people in understanding if they need to declare their earnings.
Anyone generating more than £1,000 from their side hustle should check their tax obligations using HMRC’s new easy-to-use guide at taxhelpforhustles.campaign.gov.uk.
Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive Officer, said:“We know many people are turning their hobbies and interests into successful businesses and we’re here to help them understand their tax obligations.
“Nobody wants an unexpected tax bill, so anyone with a side hustle should check HMRC’s straightforward guide and make sure they’re getting their tax right.”
The new guide covers five key areas to help people understand any tax obligations:
This only applies to people who are trading or selling services. If someone is simply clearing out their unwanted items and putting them up for sale, they will not need to pay tax.
Undeclared income of more than £1,000 from side hustles form part of the hidden economy. HMRC is committed to reducing the tax gap, of which the hidden economy accounted for about £2.2 billion in 2022/23.
11.5 million file Self Assessment by 31 January deadline
More than 11.5 million taxpayers filed their Self Assessment tax return by midnight on 31 January.
97.36% of tax returns were filed online.
90.53% of expected filers filed their Self Assessment.
More than 11.5 million taxpayers beat the Self Assessment deadline to file their tax return for the 2023 to 2024 tax year by 31 January and avoid a £100 late filing penalty, HM Revenue and Customs (HMRC) can reveal.
The number of people who filed their return on deadline day was 732,498, with the most common time being 16:00 to 16:59 when 58,517 people filed. Thousands left submitting their return until the very last minute when 31,442 filed between 23:00 and 23:59.
HMRC is urging anyone who has missed the deadline to file their tax return now and pay any tax owed. One of the quickest ways to pay is via the free and secure HMRC app. Time to Pay arrangements are available for those who cannot pay their tax bill in full. Late filing and late payment penalties are charged for failure to meet the deadline.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said:“Thank you to the millions of people and agents who filed their Self Assessment tax return and paid any tax owed by 31 January.
“I’m urging anyone who missed the deadline, to submit their return as soon as possible to avoid any further penalties. Search ‘Self Assessment’ on GOV.UK to find out more.”
The penalties for filing a tax return late are:
an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time
after 3 months, additional daily penalties of £10 per day, up to a maximum of £900
after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater
after 12 months, another 5% or £300 charge, whichever is greater
There are also additional penalties for paying late – 5% of the tax unpaid at 30 days, 6 months and 12 months. Interest will also be charged on any tax paid late.
If someone regularly sells goods or provides services through an online platform, they may need to pay tax on their income.
Scottish Government left with “no choice” following funding cut
Plans to means-test Winter Fuel Payment in England and Wales will see the Scottish Government’s funding cut by up to £160 million.
Social Justice Secretary Shirley-Anne Somerville has confirmed the Scottish Government therefore has ‘no alternative’ but to replicate the decision in Scotland and restrict payments to pensioners who receive eligible benefits.
Social Justice Secretary Shirley-Anne Somerville said: “Despite all efforts to review our financial position we have been left with no choice but to follow the UK Government and restrict payments to older people who receive relevant eligible benefits.
“This is a necessary decision when faced with such a deep cut to our funding and in the most challenging financial circumstances since devolution. The reduction we are facing amounts to as much as 90% of the cost of Scotland’s replacement benefit, the Pension Age Winter Heating Payment.
“Given the UK Government’s decision to restrict payments to those in receipt of means-tested benefits, such as Pension Credit, and the implications for the Scottish Government detailed above, I have urged the Secretary of State for Work and Pensions to undertake a benefits take-up campaign for Pension Credit and to move forward with plans for a social energy tariff.
“Both of these measures will provide some further protection to energy customers in greatest need.”
Deputy First Minister Kate Forbes commented:
The UK Government’s decision to means-test the Winter Fuel Payment in England and Wales will see our funding cut by up to £160 million.
The Scottish Government has been left with no choice but to replicate the decision in Scotland.
Age Scotland: Winter Fuel Payment decision ‘brutal’ for Scottish pensioners
Age Scotland is continuing to urge the UK government to reconsider plans to scrap the winter fuel payment for pensioners who do not receive pension credit.
The charity has responded to news that, following the UK Government’s plans to means-test the Winter Fuel Payment, the Scottish Government will have no alternative but to replicate the decision in Scotland.
Age Scotland’s Policy Director, Adam Stachura, said: “It’s infuriating that huge numbers of older people will miss out on the vital Winter Fuel Payment when it is devolved to Scotland.
“We recognise the financial challenge the Scottish Government would face to make up the shortfall to keep the payment universal, but we desperately hoped there could be a more effective delivery of this payment and that it could have looked more generous than the UK Government’s new, and meagre, approach.
“At minimum, a quarter of a million pensioners in Scotland on the lowest incomes or living in fuel poverty will no longer receive this vital financial support over the winter months, while hundreds of thousands more on modest incomes are going to struggle with their energy bills even more than normal as a result.
“This brutal decision by the UK Government was made too fast, cuts too deep and its impact will be severe. It’s important that they rethink this move, as it has a huge impact on the devolution of social security and the needs of Scottish pensioners who live in some of the coldest homes in the UK.”
Visit www.age.scot/SaveWFP to sign Age Scotland’s petition to save the Winter Fuel Payment.
The UK Government has set out the next steps for tax measures from the manifesto on which the Government was elected, including policies to close tax loopholes and tackling tax avoidance.
This is to provide taxpayers with certainty ahead of their final confirmation at the Budget on 30 October 2024.
Further details on all policies including costings will be published at the Budget, and will be certified by the Office for Budget Responsibility.
Ending tax breaks for private schools and raising revenue to fund state education priorities
The Government is publishing a technical note setting out its plan to introduce 20% VAT on education and boarding services provided by UK private schools from 1 January 2025.
o 20% VAT will also apply to pre-payments of fees for terms starting on or after 1 January 2025 made on or after 29 July 2024.
Over 94% of school children in the UK attend state schools and ending the tax breaks on VAT and business rates for private schools will secure additional funding to help recruit 6,500 new teachers and roll out breakfast clubs to all primary schools.
These changes will not impact pupils with the most acute special educational needs, where their needs can only be met in private schools. Where pupils’ places in private schools are being funded by local authorities (LAs) because their needs can only be met in private school (e.g. in England, where attendance at that private school is required by a child’s Education, Health and Care Plan (EHCP), LAs will be able to reclaim the VAT so it does not apply to those fees.
This change will only apply to tuition fees and boarding fees charged by private schools. The VAT treatment of other services or goods provided by private schools – such as nursery care, wrap-around childcare, school meals and holiday clubs, and part time classes operated by third parties within schools – such as music and drama clubs and Sunday schools – will not change. The VAT treatment of state boarding fees will also continue to be exempt from VAT.
The government will also end business rates relief for private schools. This change means private schools in England will no longer be eligible for charitable rates relief and will pay their full business rates liability. This is intended to take effect from April 2025, subject to Parliamentary passage.
The VAT changes will be legislated for in the Finance Bill introduced following the Budget. The business rates changes will be legislated for through a Local Government Finance Bill led by the Ministry for Housing, Communities, and Local Government (MHCLG).
Non-Doms: Removing domicile status from the tax system and implementing a new internationally competitive residence-based regime
The Government is committed to addressing unfairness in the tax system, so that everyone who makes their home in the UK pays their taxes here.
That is why the Government will remove the outdated concept of domicile status from the tax system and replace it with a new internationally competitive residence-based regime, focused on attracting the best talent and investment to the UK.
A policy note has been published to set out the government’s plan to end the use of offshore trusts to avoid inheritance tax and scrapping the 50% tax reduction on foreign income in the first year of the new regime.
From April 2025, anyone who has been tax resident in the UK for more than four years will pay UK tax on their foreign income and gains (FIG), as is the case for other UK residents. This is a simpler and clearer test, with less scope for ambiguity than the current regime.
New arrivals to the UK will benefit from 100% UK tax relief on their FIG for their first four years of tax residence, provided they have been non-resident for the last 10 years. This is more attractive than the current approach, as they will be able to bring FIG into the UK without attracting an additional tax charge, encouraging them to spend and invest these funds in the UK.
To support transition and provide time for adjustment, a Temporary Repatriation Facility (TRF) will be available for individuals to bring pre-6 April 2025 FIG held offshore into the UK at a reduced rate of tax, to encourage these funds to be spent and invested in the UK.
Behavioural impacts and costings will be published at the Budget.
Energy Profits Levy
The Government is publishing a policy document that confirms its intention to increase the rate of the Energy Profits Levy (EPL) by three percentage points to 38% from 1 November 2024.
The levy will also be extended from 31 March 2029 to 31 March 2030.
The Government will remove unjustifiably generous investment allowances from the EPL, starting by abolishing the levy’s core investment allowance from 1 November. The decarbonisation allowance will be retained.
The Government will reduce the generosity of capital allowances (including First Year Allowances) when calculating EPL profits – providing further details on these changes at Budget.
The Energy Security Investment Mechanism will remain, helping to provide operators and their investors with confidence the levy will no longer apply if prices fall to, or below, historically normal levels for a sustained period.
Further details on the Government’s approach to all allowances in the EPL, and costings, will be set out at the Budget.
The Government recognises the importance of providing the oil and gas industry with long-term certainty on taxation after a period of change. The government will work with the industry and others to develop and implement a successor regime for responding to price shocks after the EPL ceases.
The UK Government is also:
Publishing a call for evidence confirming its intention to take action against the carried interest loophole, and to form the basis for detailed engagement with expert stakeholders.
o Carried interest is a form of performance-related reward received by fund managers, primarily within the private equity industry.
o Reforms will ensure fairness, whilst also recognising the vital role that our world-leading asset management industry plays in channelling investment across the UK.
Tackling the tax gap. Reforming the tax system by making policy changes to simplify tax, close loopholes and reduce non-compliance, designing out non-compliance before it happens. At the Budget, the government will provide an update on the implementation and development of measures that form its plan to close the tax gap.
The government will invest in HMRC’s compliance work, hiring around 5,000 additional staff to recover more tax revenues. HMRC has already started the process of recruiting additional staff into compliance roles.
The government will also invest in HMRC’s technology infrastructure, helping to make HMRC more efficient and improve taxpayers’ experience of interacting with HMRC.
Chancellor reveals £22 billion of unfunded pressures inherited from the previous Government
Findings of a Treasury spending audit reveal £22 billion of unfunded pledges inherited from the previous Government this year.
Chancellor takes “difficult decisions” to find £5.5 billion of savings this year and £8.1 billion next year.
A set of non-negotiable fiscal rules will be confirmed at Budget on 30th October, alongside further difficult decisions on tax and spending.
Finalised departmental budgets for this financial year and the next will be confirmed in October and a multi-year Spending Review will conclude in Spring 2025 to embed mission-led government and transform public services.
Addressing the House of Commons today (Monday 29th July) the Chancellor pledged to ‘restore economic stability’ after revealing £22 billion of unfunded pressures inherited from the previous Government.
Findings from a Treasury audit commissioned by the Chancellor expose billions of pounds of unfunded commitments from the previous Government, including the Rwanda scheme, the Advanced British Standard and the New Hospital Programme.
The previous Government also failed to increase Departmental budgets to cover public sector pay settlements, which were £11-12 billion higher than accounted for at the last Spending review. All of which were made on top of pressures resulting from higher inflation, increased asylum costs and funding for Ukraine.
Taking immediate action, the Chancellor announced £5.5 billion of savings this year and £8.1 billion next year to tackle the overspend. She also commits to set out full fiscal plans, alongside a Spending Review, at the Budget on 30th October.
Chancellor of the Exchequer, Rachel Reeves said: “This is not the statement I wanted to give today, and these are not the decisions I wanted to make. But they are the right decisions in difficult circumstances.”
The difficult decisions taken by the Chancellor have secured savings including over £1 billion next year, rising to over £4 billion by 29/30 by not proceeding with the previous government’s unfunded adult social care charging reforms.
Around £1.5 billion will be saved per year by targeting Winter Fuel Payments meaning households with someone aged over State Pension age receiving Pension Credit, Universal Credit, Income Support, income-based Jobseeker’s Allowance and income-related Employment and Support Allowance will continue to receive Winter Fuel Payments. This will better target support for heating costs at those who need it.
Immediate savings include £800 million this year and £1.4 billion next year from scrapping the Rwanda migration partnership and scrapping retrospection of the Illegal Migration Act, £70 million this year by cancelling the Investment Opportunity Fund and other small projects, £185 million next year from cancelling the Advanced British Standard and £785 million next year from stopping unaffordable road and railway schemes.
The Chancellor also announced a review of the underdelivering New Hospital Programme.
To provide certainty for public sector workers and help put an end to devastating strikes costing billions of pounds, the Chancellor accepted the independent Pay Review Body recommendations and confirm pay uplifts averaging 5.5% for public sector workers.
To ensure that no Government is faced with a spending cliff-edge like this again the Chancellor set out plans to ensure Spending Reviews are set every two years to cover a three-year period, with a one year overlap with the previous Spending Review, helping build in greater certainty and stability over public finances.
Transparency over in year spending pressures will also be enhanced, with more information being provided to the OBR. In the House the Chancellor also re-committed to a single major fiscal event a year.
The Chancellor also outlined long-term plans to tackle unacceptably high levels of welfare fraud and error as well as addressing falling public sector productivity and a new Office of Value for Money.
During her statement the Chancellor outlined next steps in delivering tax commitments from the manifesto, to provide taxpayers with certainty ahead of their final confirmation at the Budget.
This includes ending the VAT tax breaks for private schools from 1 January 2025 to help recruit 6,500 new teachers, as well as replacing the outdated non-domicile regime with a new internationally competitive residence-based regime.
As also set out in the manifesto, the Chancellor confirmed plans for the Energy Profits Levy to be extended one year to 31 March 2030, have its investment allowances tightened and to increase the rate of the levy by three percentage points to 38% from 1 November 2024.
A call for evidence confirming the government’s intention to take action on the carried interest loophole has also been published, as well as a commitment to update on policies at the Budget to help close the tax gap further.
Further details for all tax policies, including costings certified by the Office for Budget Responsibility, will be published at the Budget.
Chancellor of the Exchequer Rachel Reeves statement to the House of Commons on 29/07/2024:
Mr Speaker, on my first day as Chancellor of the Exchequer, I asked Treasury officials to assess the state of public spending.
That work is now complete, and today I am presenting it to this House.
In this statement, I will do three things.
First, I will expose the scale – and the seriousness – of what has been uncovered.
Second, I will lay out the immediate action we are taking to deal with the inheritance.
And third, I will set out our longer-term plans to fix the foundations of our economy.
Let me take each of these in turn.
First, the inheritance.
Before the election, I said that we would face the worst inheritance since the Second World War.
Taxes at a seventy year high.
Debt through the roof.
An economy only just coming out of recession.
Mr Speaker, I knew all those things.
I was honest about them during the campaign.
And the difficult choices it meant.
The British people knew them too.
That is why they voted for change.
But upon my arrival at the Treasury three weeks ago, it became clear that there were things I did not know.
[Redacted political content]
That is why we are today publishing a detailed audit of the real spending situation, a copy of which will be laid in the House of Commons Library.
I want to take the opportunity to thank Treasury officials for all their work in producing this document.
Let me explain what it has uncovered.
Mr Speaker, the government published its plans for day to day departmental spending at the Spring Budget in March.
But when I arrived at the Treasury…
… on the very first day…
… I was alerted by officials that this was not how much the previous government expected to spend this year.
Not even close.
In fact, the total pressure on these budgets across a range of areas was an additional £35bn.
Once you account for the slippage in budgets you usually see over a year…
… and the reserve of £9bn to deal with genuinely unexpected events…
… it means, Mr Speaker, that I have inherited a projected overspend of £22bn.
A £22bn hole in the public finances now – not in the future.
[Redacted political content]
If left unaddressed it would have meant a 25% increase in the government’s financing needs this year, pushing gilt issuance further into record highs outside of the pandemic.
So I will today set out the urgent work I have already done to reduce that pressure on the public finances by £5.5bn this year and over £8bn next year.
And let me be clear: I am not talking about bills for future years they signed up to but did not include, like the compensation for infected blood.
I am not talking about the state of public services in the future, like the crisis in our prisons, which they have left for us to fix.
I am talking about the money they were spending this year and had no ability to pay for…
[Redacted political content]
Resulting in the position that we have now inherited:
The reserve, spent three times over only three months into the financial year.
[Redacted political content]
Mr Speaker, the scale of this overspend is not sustainable.
Not to act is simply not an option.
We have already seen official ONS figures this month showing borrowing is higher this year than the OBR expected. [Redacted political content]
[Redacted political content]
There are very clear instances of specific budgets that were overspent…
… and unfunded promises that were made…
…but that, crucially, the OBR were not aware of for their March forecast.
I will now take each of those instances in turn.
First, the asylum system.
The forecast for the number of asylum seekers has risen dramatically since the last Spending Review, and costs for asylum support have risen sevenfold in the last three years.
But instead of reflecting those costs in the Home Office budget for this year, the previous government covered up the true extent of the crisis and its spending implications.
The document I am publishing today reveals a projected overspend on the asylum system, including their failed Rwanda plan, for this year alone of more than £6.4bn.
That was unfunded and undisclosed.
Next, in the wake of the pandemic, demand for rail services fell.
But instead of developing a proper plan to adjust for this new reality, the government handed out cash to rail companies to make up for passenger shortfalls, but failed to budget for this adequately.
Because of that, and because of industrial action, there is now an overspend of £2.9bn in the transport budget.
That was unfunded and undisclosed.
Mr Speaker, since 2022, the government – with the support of this whole House – has rightly provided military assistance to Ukraine in response to the Russian invasion.
The spending audit has found that there was not enough money set aside in the reserve to fund all these costs.
We will continue to honour these commitments in full.
[Redacted political content]
On top of these new pressures, since 2021, inflation was above the Bank of England’s target for 33 months in a row – hitting 11% at its peak.
But the government has not held a Spending Review since 2021.
That means they never fully reflected the impact of inflation in departmental budgets.
This had a direct impact on budgets for public sector pay.
When the last Spending Review was conducted, it was assumed that pay awards would be 2% this year.
Ordinarily, the government is expected to give evidence to the Pay Review Bodies on affordability.
But extraordinarily, this year, the previous government provided no guidance on what could or could not be afforded to the Pay Review Bodies.
This is almost unheard of.
But that is exactly what they did.
[Redacted political content]
I will not repeat their mistakes.
Where the previous government provided no transparency to the public, and no certainty for public services…
… we will be open about the decisions which are needed…
… and the steps we are taking.
That begins with accepting in full the recommendations of the independent Pay Review Bodies, and the details of these awards are being published today.
That is the right decision for the people who work in and most importantly the people who use our public services…
… giving hardworking staff the pay rise they deserve…
… while ensuring we can recruit and retain the people we need.
It should not have taken this long to come to these decisions.
And I do not want us to be in this position again.
So, I will consider options to reform the timetable for responding to the Pay Review Bodies in the future.
This decision is in the best interests of our economy too.
The last government presided over the worst set of strikes in a generation.
This caused chaos and misery for the British public.
And it wreaked havoc on the public finances.
Industrial action in the NHS alone cost the taxpayer £1.7bn last year.
That is why I am pleased to announce today that the Government and the BMA have agreed an offer to the Junior Doctors, on which my RHF the Health Secretary will set out further details.
And let me pay tribute today to my RHF, whose leadership on this issue has paved the way to ending a dispute which has caused waiting lists to spiral, operations to be delayed and agony for patients to be prolonged.
Today marks the start of a new relationship between the government and staff working in our National Health Service – and the whole country will welcome that.
Mr Speaker, where the previous government ducked the difficult decisions, I am taking action.
Because knowing what they did about the state of the public finances, they continued to make unfunded commitment after commitment that they knew they could not afford.
[Reacted political content]
Leaving us with an overspend of £22bn this year.
Where they presided over recklessness, I will bring responsibility.
I will take immediate action.
Let me set this out in detail.
First, pay.
I have today set out our decision to meet the recommendation of the Pay Review Bodies.
Because the previous government failed to prepare for these recommendations in departmental budgets, they come at an additional cost of £9bn this year.
So, the first difficult choice I am making is to ask all departments to find savings to absorb as much of this as possible…
… totalling at least £3bn.
To support departments as they do this, I will work with them to find savings ahead of the Autumn budget…
… including through measures to stop all non-essential spending, such as on consultancy and government communications.
And I am asking departments to find 2% savings in their back-office costs.
I will now deal with a series of commitments made by the previous government which they did not fund.
Because if we cannot afford it, we cannot do it.
First, [Redacted political content] the former Prime Minister announced the introduction of a new qualification: the “Advanced British Standard”.
That is a commitment costing nearly £200m next year, rising to billions in future years.
Mr Speaker, this was supposed to be the Prime Minister’s legacy.
But it turns out, he didn’t put aside a single penny to pay for it.
So we will not go ahead with that policy.
Because if we cannot afford it, we cannot do it.
Next, the Illegal Migration Act, passed by the previous government, made it impossible to process asylum applications or remove people who have no right to be here.
[Redacted political content]
We need a properly controlled and managed asylum system where rules are properly enforced so that those with no right to be here are swiftly removed.
So we have scrapped their failed Rwanda scheme, which placed huge pressure on the Home Office budget.
To bring down these costs as soon as possible, my RHF the Home Secretary has already laid legislation to remove the retrospective element of the Illegal Migration Act…
… which will significantly reduce the use of hotel accommodation.
These measures will save nearly £800m this year and avoid costs spiralling even further next year.
This was a bad use of taxpayers’ money and we will not do it.
Mr Speaker, the previous government claimed it was “levelling up” our country.
[Redacted political content]
At Autumn Statement last year, the former Chancellor announced nearly £150m for an “Investment Opportunity Fund”.
But not a single project has been supported from the Fund.
So, following discussions with my RHF the Deputy Prime Minister, I am cancelling it today.
The previous government also made a series of commitments on transport.
Promises that people expected to be delivered.
[Redacted political content]
We have seen from the National Audit Office the chaos that the previous government presided over.
Projects over budget and delayed again and again.
The spending audit has revealed nearly £800m of unfunded transport projects that have been committed next year.
So my RHF the Transport Secretary will undertake a thorough review of all these commitments.
As part of that work, she has agreed not to move forwards with projects that the previous government refused to publicly cancel, despite knowing full well they were unaffordable.
That includes proposed work on the A303 and the A27…
… and my RHF will also cancel projects in the “Restoring our Railways” programme which have not yet commenced.
If we cannot afford it, we cannot do it.
Mr Speaker, the previous government had plans for a retail sale of Natwest shares.
We intend to fully exit our shareholding in NatWest by 2025-26.
But having considered advice I have concluded that a retail share sale offer would involve significant incentives that could cost taxpayers hundreds of millions of pounds.
It would therefore not represent value for money, and it will not go ahead.
This is a bad use of taxpayers’ money and we will not do it.
Next, let me address the unfunded pressures in our NHS and our social care sector.
In October 2020, the government announced that 40 new hospitals would be built by 2030.
Since then, only 6 have started their main construction activity.
And less than half of the 40 hospitals have even started construction.
The National Audit were clear that delivery was wildly off track.
But since coming into office, it has become clear that the previous government continued to maintain its commitment to 40 hospitals…
… without anywhere close to the funding required to deliver them.
[Redacted political content]
We need to be straight with the British people about what is deliverable and what is affordable.
So we will conduct a complete reset of the New Hospitals Programme, with a thorough, realistic and costed timetable for delivery.
Mr Speaker, adult social care was also neglected by the previous government.
The sector needs reform to improve care and to support staff.
In the previous parliament, the government made costly commitments to introduce adult social care charging reforms.
But then, they pushed them back repeatedly…
… including just two years ago…
… because they knew that local authorities were not ready…
… and that their promises were not funded.
So it will not be possible to take forward these charging reforms. This will save over £1bn by the end of next year.
Mr Speaker, the previous government made commitment after commitment without knowing where the money was going to come from.
They did this repeatedly, knowingly and deliberately.
[Redacted political content]
And I am taking the first steps to clean up what they have left behind.
But the scale of the inheritance we have been left, means the decisions we have so far announced will not be enough. This level of overspend is not sustainable.
It therefore falls to us to take further difficult decisions on spending that generate in year savings.
Mr Speaker, the last Labour government lifted over one million pensioners out of poverty.
And I repeat today the commitment we gave that we will protect the Triple Lock.
But the scale of the situation we are dealing with means incredibly tough choices.
So that is why today, I am making the difficult decision that those not in receipt of Pension Credit will no longer receive the Winter Fuel Payment from this year onwards.
The Government will continue to provide Winter Fuel Payments worth £200 to households receiving Pension Credit…
… or £300 for households in receipt of Pension Credit with someone aged over 80.
Let me be clear: this is not a decision I wanted to make.
Nor is it one that I expected to make.
But it is a necessary and urgent decision I must make – It is the responsible thing to do to fix the foundations of our economy and bring back economic stability.
Alongside this change, I will work with my Right Honourable Friend the Work and Pensions Secretary to maximise the take up of Pension Credit by…
… bringing forward the adminstration of Housing Benefit and Pension Credit, pushed back by the previous government…
… and working with older peoples’ charities and local authorities to raise awareness of Pension Credit, and help identify households not claiming it.
Mr Speaker, this is the beginning of a process, not the end.
I am announcing today that I will hold a Budget on October 30th alongside a full economic and fiscal forecast from the Office for Budget Responsibility.
I have to tell the House that Budget will involve taking difficult decisions to meet our fiscal rules across spending, welfare and tax. [Redacted political content]
It will be a Budget to fix the foundations of our economy.
And it will be a Budget built on the principles that this new government was elected on.
First, we will treat taxpayers’ money with respect by ensuring that every pound spent is well spent…
… and we will interrogate every line of public spending to ensure it represents value for money.
Second, I can repeat – from the despatch box – our manifesto commitment that we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.
And today my Right Honourable Friend the Exchequer Secretary is publishing further detail on our manifesto commitments to close tax loopholes and clamp down on tax avoidance…
… to ensure we bring that money in as quickly as possible.
My third principle is that we will meet our fiscal rules.
We will move the current budget into balance…
… and we will get debt falling as a share of the economy by the end of the forecast.
These are the principles that will guide me at the Budget.
But let me be honest: challenging trade-offs will still remain.
So today I am also launching a multi-year Spending Review.
The review will set departmental budgets for at least three years, providing the long-term certainty that has been lacking for too long.
As part of that process, final budgets for this year and budgets for next year – 2025-26 – will be set alongside the Budget on 30th October.
I will look closely at our welfare system…
… because if you can work, you should work.
That is the principle of this government.
Yet under the previous government, welfare spending ballooned while inactivity has risen sharply in recent years.
So we will ensure the welfare system is focused on supporting people into employment…
… and we will assess the unacceptable levels of fraud and error in our welfare system, and take forward action to bring that down.
Mr Speaker, to fix the foundations of our economy, we must ensure that never again can a government keep from the public the true state of our public finances.
The fiscal framework which I have inherited had several flaws.
It allowed the government to run down the clock on departmental budgets…
… avoid difficult decisions
[Redacted political content]
So I am announcing the most significant set of changes to our framework since the inception of the Office for Budget Responsibility, which will come into effect this Autumn.
First, we have introduced legislation to ensure every significant and permanent tax or spending announcement must be accompanied by an OBR forecast through our “fiscal lock”, so we can never again see a repeat of the mini-budget.
Second, we will require the Treasury to share with the Office for Budget Responsibility its assessment of immediate public spending pressures, and enshrine that rule in the Charter for Budget Responsibility…
… so no government can ever again cover up the true state of the public finances.
And finally, we will ensure that never again do public service budgets get set at only a few months’ notice.
Instead, Spending Reviews will take place every two years, with a minimum planning horizon of three years, to avoid uncertainty for departments and to bring stability to the public finances.
I have already spoken to the Chair of the Office for Budget Responsibility to brief him on the findings of our audit and our reforms.
He has welcomed those, and will initiate his own review into the information provided to the OBR by the Treasury ahead of the Spring Budget. The Treasury stands ready to support this work.
Mr Speaker, by launching the Spending Review I am also today firing the starting gun on a new approach to public service reform to drive greater productivity in the public sector.
We will embed an approach to government that is…
… mission-led…
… that is reform driven, with a greater focus on prevention and integration of services, at both a national and a local level..
… and that is enabled by new technology, including through the work of my RHF the Secretary of State for Science, Innovation and Technology on the opportunities of AI to improve our public services.
And we will establish a new Office of Value for Money, with an immediate focus on identifying areas where we can reduce, stop or improve the value of spending….
… and we will appoint a Covid Corruption Commissioner, to bring back money owed to taxpayers after contracts worth billions of pounds were handed out by the previous government during the pandemic.
Ahead of the Spending Review, I will also review the cost of our political system, including restricting eligibility for ministerial severance payments based on time in office.
I expect all levels of government to be run efficiently and effectively and I will work with leaders across our country to deliver that.
That means effective local government …
… a civil service delivering good value for the British taxpayer…
… and reform of our political institutions, including the House of Lords, to keep costs as low as possible.
The Budget and Spending Review will also set out further progress on our number one mission: to grow our economy.
Because economic growth is the only way to sustainably improve our public services and sustainably improve our public finances.
So we will use the Spending Review to prioritise specific areas of capital investment that leverage in billions more in private investment.
It won’t happen overnight.
It will take time and it will take focus.
But we have already made significant progress.
Planning reforms to get Britain building.
A National Wealth Fund to catalyse private investment
A pensions investment review to unlock capital for our businesses.
Skills England to create a shared national ambition to boost skills across our country.
And work across government on a new industrial strategy…
… driven forward by a Growth Mission Board to ensure we deliver on our commitments.
We have fundamental strengths on which we can build.
And I look forward to welcoming business leaders to the International Investment Summit in Britain later this year.
Because I know that if we can create the stable conditions which investors need to thrive, we can build on the UK’s strengths and return confidence to our economy..
… so that entrepreneurs and businesses big and small know that this is a place to do business as that is the bedrock on which economic growth must be built.
Mr Speaker, the inheritance from the previous government is unforgiveable.
Chancellor to pledge to ‘fix the foundations of our economy’ as she unveils the spending inheritance left by the previous government.
Reeves to set out reforms to deliver economic stability and protect the public finances, as she announces date of Budget later this year.
Office of Value for Money formed to challenge government to deliver better value for money for taxpayers.
Chancellor of the Exchequer Rachel Reeves will this afternoon (Monday 29 July, after 3:30pm) vow to ‘fix the foundations of our economy’ as she publishes an audit of the spending inheritance left by the previous administration.
Accusing the previous government of ‘covering up the true state of the public finances,’ the Chancellor will announce immediate action to restore economic stability and deliver departmental savings this financial year.
The announcements will be a response to the findings of the Treasury’s spending audit, which shows that the previous government overspent this year’s budgets by billions of pounds after making a series of unfunded promises.
The Chancellor will confirm that she has commissioned an Office for Budget Responsibility forecast to coincide with a Budget and Spending Review to be held later this year.
The Budget will set out how the government’s robust fiscal rules will be met: balancing the current budget so that day-to-day costs are met by revenues and getting debt falling as a share of the economy by the fifth year of the forecast.
Speaking in the House of Commons later today, the Chancellor of the Exchequer Rachel Reeves is expected to say: “Before the election, I said we would face the worst inheritance since the Second World War.
“Taxes at a seventy year high. Debt through the roof. An economy only just coming out of recession. I knew all those things. I was honest about them during the election campaign. And the difficult choices it meant.
“But upon my arrival at the Treasury three weeks ago, it became clear that there were things I did not know. Things that the party opposite covered up from the country.”
She will add: “It is time to level with the public and tell them the truth.
“The previous government refused to take the difficult decisions. They covered up the true state of the public finances. And then they ran away. I will never do that.
“The British people voted for change and we will deliver that change. I will restore economic stability. I will never stand by and let this happen again.
“We will fix the foundations of our economy, so we can rebuild Britain and make every part of our country better off.”
The Chancellor will announce she is committing the government to one major fiscal event per year to put an end to ‘surprise budgets’ which have previously caused uncertainty for both the markets and family finances across the country.
A new Office of Value for Money will be established, using pre-existing civil service resource, to put an end to wasteful spending in government, providing targeted scrutiny of public spending so that value for money governs every decision government makes.
The Office will immediately begin work on identifying and recommending savings for the current financial year, while also establishing where targeted reforms of the system can ensure that poor value for money spending is cut off before it begins.
Reforms bearing down on waste in the public sector will also be announced today, driving efficiency through government departments and arms length bodies (ALBs). Immediate action will be taken to stop non-essential spending on consultants, alongside disposing of surplus estates and hastening delivering admin efficiencies in departments.
Earlier this month, the Government introduced the Budget Responsibility Bill at the King’s Speech to deliver economic stability by guaranteeing that never again can a government play fast and loose with the public finances.
The Bill ensures all significant fiscal announcements on tax or spending which are worth more than 1% of the UK’s GDP will be subject to scrutiny by the independent Office for Budget Responsibility. This will guard against large-scale unfunded commitments in the future.
FORMER Tory Chancellor Jeremy Hunt said the new Labour government is ‘peddling nonsense’. He added: “The books were wide open and what they show is a healthy, growing economy.”
The Conservatives claimed throughout the recent election campaign that Rachel Reeves secretly plans to raise taxes.
