Rachel Reeves could raise taxes in autumn budget — UK politics live

“We did have manifesto commitments in relation to tax and what taxes we wouldn’t raise — and we kept good to those promises,” the PM said. “Obviously, I’m not going to write future budgets. Every prime minister and chancellor, from every government, always takes that position.

“But if you look at the pattern, if you like, or the intent for both the budget and the spring statement, you’ll see that when it comes to the decisions we’ve had to make, we have not taken the decision to increase tax, and I think that indicates the mindset that we bring to this.”

The Labour chairman of the Commons’ business and trade committee has urged the government to strike a deal with the United States to “shield our carmakers”.

Liam Byrne said the UK was not the main target of the tariffs, as there was balanced trade and shared interests between the UK and the US.

“We are in a different position to Europe. I think the Germans, in particular, were probably the real focus of the president’s ire,” he told BBC Radio 4’s The World at One.

He said that while a deal should be struck with the Trump administration, it could fail because of a lack of “reason” in Washington. “Then and only then do we weigh our response and potentially a reprisal,” he said.

British car manufacturer Ineos Automotive has blamed European leaders for President Trump’s decision to put 20 per cent tariffs on imported cars.

“We are outraged that the tariff situation with the US has been neglected by the EU,” a spokesman said. “President Trump has been very clear on his intention to implement tariffs on the auto industry. He has been asking for fairness and reciprocity and yet European leaders have not come to the table to negotiate a better solution.”

Ineos, which makes off-road vehicles, said no one in EU should be surprised by the tariffs and that higher prices will be pushed onto consumers. “This is what happens when politicians sit on their hands,” Lynn Calder, the chief executive of Ineos Automotive, said.

“As a growing EU-based automobile brand, we are vulnerable to tariffs, and we need our politicians to support our business, our jobs and our economies. We need urgent and direct political intervention on tariffs.”

The Tories have accused Rachel Reeves of using the spring statement not to kickstart economic growth, but “move people from welfare into lower-paying welfare”.

Jesse Norman, the shadow leader of the Commons, said the welfare reforms were framed as trying to encourage people back into work, but in reality were an accounting exercise to try to repair the budget.

“It was the chancellor’s decision to choose these fiscal rules, and it was her decision then to take measures that undermined economic growth,” Norman said. “She staked her own credibility and that of a government on those decisions.

“The result is that we will now have endless uncertainty and avoidable speculation about the fiscal position every week.”

The front pages of the UK papers were almost universally negative about the chancellor’s spring statement and the extra cuts to welfare benefits.

The Labour government was hoping to show it was bringing the finances under control through strong economic growth, but the budget updates showed economic growth was being slashed and more cuts were needed, with the prospect of possible tax rises in the autumn.

The headlines ranged from “Reckless Reeves tanks economy by killing growth” in The Daily Express to “Reeves accused of balancing books at expense of poor” in The Guardian.

Downing Street has played down the prospect of the UK targeting Elon Musk’s Tesla in any retaliatory tariffs against the United States.

The Liberal Democrats called for tariffs on Teslas in the UK as a “tough” response to President Trump’s move to introduce 20 per cent tariffs on car imports from next week.

“We’re not singling out individual companies,” the prime minister’s official spokesman said. “We’re having a discussion with the United States about a wider economic deal. We will only act in the national interest.”

Downing Street has said it was “disappointed” by the US decision to impose tariffs on the UK car industry and that it would not hesitate to respond in the national interest.

However, No 10 said Britain was seeking a “pragmatic approach” with the ongoing discussions about a wider economic deal.

“We are obviously disappointed by the US decision … we’ll keep all options on the table and we’ll always take a position that protects the national interest,” the PM’s official spokesman said.

“We’re taking a pragmatic approach to our discussions with the United States. We continue to have productive discussions on securing a wider economic deal.”

The spokesman said “all options are on the table” regarding a possible response to the US tariffs.

Jonathan Reynolds, the business secretary, said that the British Steel situation was “very challenging”, and that a bail-out would only happen if there were job guarantees.

“I’ve got to make sure there’s a right deal for the taxpayer. Obviously I need to know there’s a viable business being created at the end of that. I need guarantees on jobs if I’m putting public money in,” he said.

Reynolds added that the future of the UK steel industry had been the “hardest” issue the Labour government had inherited.

• British Steel puts 2,700 jobs at risk at Scunthorpe steelworks

Sarah Jones, the business minister, said the government “very much hopes” a deal can be reached with British Steel over the potential closure of Scunthorpe steelworks.

“In the short-term, the DWP [Department for Work and Pensions] and the Department for Education will be there on the ground making sure that people get the support they need,” Jones told the Commons.

“If the consultation continues and there is a closure … we’re already working on all manner of contingencies to make sure we support people in the same way that we’re doing in Port Talbot. But our aim is not to get to that point.”

President Trump has increased tariffs on car imports to raise revenue to offset his promised tax cuts and to revive what he claims is a declining US industrial base.

The US president described the tariffs as “permanent” and said he was not interested in offering any carve-outs. But what will the impact be on Britain and its carmakers?

Read in full here: What do Trump’s car tariffs mean for UK manufacturers?

Jonathan Reynolds, the trade secretary, has declined to rule out changing or scrapping the digital services tax in exchange for exemptions from US tariffs, saying the tax was not something that “can never change”.

Asked whether he would rule out scrapping the tax on tech firms, Reynolds said, “Tech companies paying a fair amount of tax in the UK is something that is incredibly important to us, and I think the British people.”

He said the tax was introduced as a “temporary measure” in lieu of an international agreement. “This has to be something ideally agreed on an international basis,” he added.

Silvia Galandini, Oxfam’s domestic poverty lead, said government figures that showed almost one in three children were living in poverty in the UK were “as damning as they are heartbreaking”.

“This is before yesterday’s brutal cuts, where the chancellor chose to remove vital security and safety from those who need it the most instead of taxing the super-rich,” she said.

“By the government’s own admission, at least a quarter of a million more people, 50,000 of them children, will be pushed into poverty because of these political choices.

“We live in the sixth richest country in the world where billionaires alone saw their wealth soar by £11 billion last year. It is morally repugnant that children, disabled people and carers are the ones who are taking the hit.”

Unions are calling on the government to help secure the future of British Steel after the company announced it was consulting on closing blast furnaces, raising fears of heavy job losses.

The Community, GMB and Unite unions said it was “devastating” news that British Steel’s Chinese owner, Jingye, was launching a consultation on shutting the blast furnaces at Scunthorpe steelworks this June, or at a later date if an agreement with the government can be reached.

Scunthorpe steelworks employs thousands of workers directly and through supply chains throughout the UK. But British Steel said the furnaces were no longer financially viable due to difficult market conditions, tariffs and higher environmental costs.

“We understand this is an extremely difficult day for our staff, their families, and everyone associated with British Steel,” Zengwei An, the chief executive, said. “But we believe this is a necessary decision given the hugely challenging circumstances the business faces.”

Rachel Reeves will have no choice but to raise taxes in the autumn budget if the economy and public finances deteriorate, according to the Institute for Fiscal Studies.

Paul Johnson, the institute’s director, said the chancellor had left herself with with very little fiscal headroom.

“There’s a good chance that economic and fiscal forecasts will deteriorate significantly between now and an autumn budget. If so, she will need to come back for more, which will likely mean raising taxes even further,” he told the BBC.

He added that the spring statement had not provided the stability Sir Keir Starmer’s government was seeking, and predicted there would be months of speculation about tax rises ahead of the budget.

“With no sense of a tax strategy, we have no idea which way the chancellor might turn,” he said.

US tariffs could wipe out the chancellor’s £9.9 billion fiscal buffer, according to the independent budget forecaster.

Richard Hughes, the chairman of the Office for Budget Responsibility, said that if the US chose to impose 20 per cent in tariffs on trade partners around the world and the UK retaliated it would reduce UK economic growth by 1 per cent.

The UK’s economic growth has already been downgraded to 1.9 per cent next year, so a further 1 per cent would be a big hit, Hughes said.

He added that the knock-on effect of economic growth effectively being halved would be lower tax revenue, which would hit government spending plans and lead to inflation if prices rose.

Billions of euros have been wiped off the value of European carmakers’ shares after President Trump imposed 25 per cent tariffs on imports of cars and parts, escalating a global trade war.

Shares in the German manufacturers Mercedes-Benz, BMW, Porsche and Volkswagen fell by between 3 per cent and 5 per cent.

Stellantis, the Vauxhall owner, which also makes Fiat, Citroen, Peugeot and Chrysler cars, fell 6 per cent in Paris. In London, the struggling British luxury car maker Aston Martin dropped 4.47 per cent.

Read in full: Trump tariffs wipe billions off European carmakers

Britain exports about £7 billion of cars to the US, Rachel Reeves said, underscoring the pain likely to be felt by automotive manufacturers after President Trump’s tariffs announcement overnight.

The chancellor admitted it was a “delicate moment” as trade talks continued ahead of April 2, which Trump has dubbed “liberation day”.

Reeves told Bloomberg TV that as part of the talks Britain was looking at the zero-emission vehicle mandate, which is designed to accelerate the manufacture of electric vehicle batteries.

She did not rule out scrapping the digital services tax given the pressure being exerted by major US tech firms, saying only: “Tax policy is one for national governments to decide.”

The UK is not planning “at the moment” to introduce retaliatory tariffs on the US, Rachel Reeves has said after President Trump imposed a new trade tax on car imports.

“We’re not at the moment at a position where we want to do anything to escalate these trade wars,” she told Sky News.

“Trade wars are no good for anyone. It will end up with higher prices for consumers, pushing up inflation after we’ve worked so hard to get a grip [on it], and at the same time it will make it harder for British companies to export.”

Reeves said the UK was looking to secure a “better trading relationship with the United States”.

“I recognise that the week ahead is important,” she added.

The chancellor has rebuked a senior Treasury minister for a “clumsy” claim that cutting benefits was like reducing children’s pocket money.

Darren Jones, the chief secretary to the Treasury, took issue on Wednesday with the Office for Budget Responsibility’s calculation of the impact of reducing welfare.

After he compared the move to a parent reducing a child’s pocket money, Reeves told BBC Radio 4’s Today programme: “He was clumsy in his analogy and he’s apologised, and rightly so.”

She added: “Of course it’s not pocket money.”

Reeves has vowed to stop accepting complimentary tickets to music concerts after a new freebies row.

The chancellor took hospitality to use a corporate box to watch the singer Sabrina Carpenter perform at the O2 last month.

She said she did so with a family member, after an offer by the venue owners, because security arrangements meant she could not be in the main seating areas.

Reeves confirmed to ITV: “I’m not intending to take concert tickets in the future.” She did not apologise for accepting the tickets or say whether she would foot their cost herself.

Sir Keir Starmer will face “the mother of all rebellions” over cuts to disability benefits, a Labour MP has warned.

Richard Burgon, who had the whip suspended for six months for rebelling to vote against the two-child benefit cap, said anger on the issue was not confined to those on the left of the party.

“It’s a right or wrong issue. Plenty of people right across the board are really concerned,” he told Times Radio after plans were announced by the government to cut the welfare bill.

Burgon said he raised his concerns publicly but “many more MPs than people think” were angry. He added: “If the government doesn’t rethink this policy in relation to disability benefits, I think it would be the mother of all rebellions.”

It would be “grossly irresponsible” to rule out future tax rises, Reeves said, as she avoided being drawn on what moves she might make in her next budget.

The chancellor declined to say during a series of interviews this morning whether she would hike taxes or cut spending further in the autumn, given that she has less than £10 billion of headroom under plans announced at Wednesday’s spring statement.

“I think it would be grossly irresponsible to do that,” she told Good Morning Britain.

Reeves said that “people can see my instincts”, and added: “My instinct is to have lower taxes on working people.”

Rachel Reeves said the UK government was attempting to get exemptions from the US over the new 25 per cent tariffs on imported cars, which start next week.

“That’s what we’re working on. We’ve got a few more days left of those negotiations before these tariffs are due to come in,” she told BBC Radio 4’s Today programme.

Reeves said the “intense negotiations” with the US also included other tariffs, including on steel.

The US was rightly concerned about countries that ran persistent, large trade surpluses with it, the chancellor said, but she insisted that the UK was not one of those countries.

Rachel Reeves presented her spring statement to the House of Commons on Wednesday as she attempted to fill a £15 billion fiscal black hole.

She painted a grim picture of the economy and largely used public spending cuts to balance the books, but there was plenty that will affect household finances in the coming years. We take a closer look at the measures in the chancellor’s speech.

• What the spring statement means for cash Isas, tax and mortgages

Shares in the carmaker Aston Martin dropped sharply when stock markets opened on Thursday morning, following President Trump’s decision to put 25 per cent tariffs on imported vehicles.

The firm, which is listed on the London Stock Exchange, saw its share price fall about 6 per cent shortly after opening.

On Wednesday, US-listed car giants including General Motors and Stellantis saw their shares fall after the announcement.

Lower-income households are forecast to become £500 a year poorer during the next five years as a result of the chancellor’s spring statement, according to the Resolution Foundation think tank.

Rachel Reeves has defended the welfare reforms, which are expected to hit more than three million families on incapacity benefits, while 800,000 claimants will have reduced personal independence payments.

The Resolution Foundation has estimated that 250,000 more people, including 50,000 children, will be left in relative poverty by the end of the decade as a result of the welfare cuts. “The outlook for living standards remains bleak,” Ruth Curtice, the foundation’s chief executive, said.

The Liberal Democrats have called for the UK government to “toughen up” and slap a 25 per cent retaliatory tariff on Elon Musk’s Teslas after the US announced that 25 per cent tariffs on all car imports will begin next week.

“I think there’s only one language that Donald Trump understands, and that is the language of strength,” the party’s deputy leader, Daisy Cooper, told BBC Radio 4’s Today programme.

“What we Liberal Democrats are very concerned about is that the government strategy so far seems to be cower in the corner and just ask Donald Trump to be nice to us … that is not a strategy.

“Clearly Elon Musk is a huge backer of Donald Trump, and that’s where we would start.”

Cooper also urged the chancellor to rule out tax breaks for US tech barons such as Musk, and not scrapping or reducing the digital services tax.

Rachel Reeves said the government was in discussions with the US about what the new 25 per cent tariffs on imported cars will mean for the automotive sector.

“The prime minister went to Washington just a couple of weeks ago and met the US president, and we are now having extensive talks with our counterparts in the US to protect trade between our countries. Those conversations will continue,” Reeves told Times Radio.

“A million British people work for American firms. A million Americans work for British firms. Our two economies are so closely intertwined,” Reeves said. Some 80 per cent of cars made in the UK are exported.

“I believe — and we make this case to the United States — that free trade, fair trade, is good for both of our countries, but let’s see where we get to in the next few days,” Reeves added.

The Tories have accused Rachel Reeves of using the spring statement not to kickstart economic growth, but “move people from welfare into lower-paying welfare”.

Jesse Norman, the shadow leader of the Commons, said the welfare reforms were framed as trying to encourage people back into work, but in reality were an accounting exercise to try to repair the budget.

“It was the chancellor’s decision to choose these fiscal rules, and it was her decision then to take measures that undermined economic growth,” Norman said. “She staked her own credibility and that of a government on those decisions.

“The result is that we will now have endless uncertainty and avoidable speculation about the fiscal position every week.”

The Labour chairman of the Commons’ business and trade committee has urged the government to strike a deal with the United States to “shield our carmakers”.

Liam Byrne said the UK was not the main target of the tariffs, as there was balanced trade and shared interests between the UK and the US.

“We are in a different position to Europe. I think the Germans, in particular, were probably the real focus of the [US] president’s ire,” he told BBC Radio 4’s The World at One.

Byrne said that while a deal should be struck with the Trump administration, it could fail because of a lack of “reason” in Washington. “Then, and only then, do we weigh our response and potentially a reprisal,” he said.