Treasury calls for ‘ruthless spending cuts’ as Reeves contends with fresh economy blow: Politics live

The Chancellor has “bruised” the confidence and trust of business by expecting it to fill the hole in Government finances, the chairman of the Confederation of British Industry (CBI) has said.

Rupert Soames said business leaders were less likely to employ in the current climate.

He told BBC Radio 4’s Today programme: “The Chancellor told us at the time of the budget that there was an unexpected hole of about £22 billion pounds in the Government finances, and business was going to have to fill it.

“In filling in one hole, it’s created another, and that hole is a hole in the confidence and trust that business has in the Government.

“I think sometimes it’s not understood, the extent of the impact, particularly on companies that employ lots of people.

“We think the national insurance increases are going to feed through into inflation, we’re going to have a lower growth rate, but also, because of things like the Employment Rights Bill coming along, you’re going to find people laying people off and less likely to employ.”

The Prime Minister must show leadership following the allegations around his anti-corruption minister Tulip Siddiq, the Tories said.

Asked about reports that Ms Siddiq lived at properties in London linked to allies of her aunt, the former Bangladeshi prime minister, shadow business secretary Andrew Griffith said he was more interested in the “tone at the top” of Government.

He told LBC News: “It is not about any individual minister, it is about the tone that the Prime Minister… remember he called himself ‘Mr Rules’, ‘Mr Integrity’, and it immediately transpired he had been having other people, donors, pay for his wife’s clothes and accepting hospitality to Taylor Swift concerts?

“It is not about any one individual to me. It is about the tone at the top, what sort of Prime Minister leadership we are going to see in this space.”

A senior Government figure said he has full confidence in Tulip Siddiq, the anti-corruption minister under investigation over allegations about properties linked to her aunt’s political movement in Bangladesh.

Pat McFadden, a Cabinet Office minister, was asked by Times Radio if he had full confidence in his colleague.

Mr McFadden, the Chancellor of the Duchy of Lancaster, replied: “Yes.”

He added: “She (Ms Siddiq) has done the right thing. All these allegations have been made, and she has referred all of them to the independent adviser on ministerial interests.

“When we won the election six months ago, we boosted the powers of the independent adviser in the new ministerial code that was issued, to make sure that he had the power to initiate and carry out investigations into allegations like this.

“That is what he is doing, and that is the right way to deal with this.”

1430 Home Office questions

1530 A statement on the Defence Committee report titled “Developing AI capacity and expertise in UK Defence”

Backbench business debates on (i) Hospice and palliative care (ii) Impact of food and diet on obesity

An adjournment debate on the impact of sixth form college strikes in Sussex on students

1630 E-petition 661407 relating to children’s social media accounts

1430 Oral questions1520 Great British Energy Bill – committee stage (day three)

Rachel Reeves’ trip to China amid UK market turmoil was in the “national interest”, a senior Cabinet minister has said.

Asked by BBC Breakfast if the Chancellor was right to make the journey, Cabinet Office minister Pat McFadden said: “Definitely.”

He added: “I think the people saying she shouldn’t have gone are wrong and making a bad mistake.

“It is absolutely right for the Chancellor of the Exchequer, for the chief economic voice in the United Kingdom, to go and to beat the drum for British business and for investment in the United Kingdom.

“It was in the national interest that the Chancellor went to China, and that is why it is absolutely right that she went.”

The pound was under further pressure on Monday as Government borrowing costs continued to push to multi-decade highs.

Sterling fell 0.4% to 1.215 US dollars, having last week hit its lowest level against the dollar since November 2023 amid the sell-off in Government bonds.

UK Government bonds – also known as gilts – continued to see yields rise, with 10-year gilts remaining at the highest level since 2008, up four basis points at 4.89%.

The yield on 30-year gilts also hit fresh 27-year highs, up five basis points at 5.5%.