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The pound is under further pressure as Government borrowing costs continued to push to multi-decade highs
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The Treasury has ordered government departments to be “ruthless” in identifying public spending cuts as Labour faces mounting questions over its economic plans.
An internal letter from Chief Secretary Darren Jones, sent to cabinet colleagues on 12 December, revealed that “difficult” budget decisions will be required in the upcoming spending review in June.
The letter, seen by The Telegraph, read: “Growth is the only way that we can deliver better outcomes in public services, without raising taxes on working people and is our primary mission for this Parliament.
“Spending Review 2025 cannot be a business-as-usual spending review. Building on our missions, the Plan for Change set out ambitious milestones that must be delivered within the challenging fiscal context we inherited. Success will require ruthless prioritisation.”
It comes as the pound was under further pressure on Monday as Government borrowing costs continued to push to multi-decade highs.
Chancellor Rachel Reeves is also under further pressure from businesses, with the chairman of the Confederation of British Industry (CBI) telling the BBC the Chancellor has “bruised” the confidence and trust of business by expecting it to fill the hole in Government finances.
Our Political Correspondent Millie Cooke reports:
Cabinet Office minister Pat McFadden insisted he has full confidence in Tulip Siddiq – and she denies any wrong doing
The UK cannot “press a pause button” on artificial intelligence (AI), Pat McFadden has warned.
Speaking to LBC radio, the Cabinet Office minister acknowledged there were risks with the adoption of the new technology, as the Government sets out its AI plan.
He added: “There are going to be mistakes made, there are going to be things that go wrong, but we must not allow all of that to encourage us to press a pause button on one of the most exciting technological innovations to happen for many years.
“Of course, you’ve got to build safety into it, you’ve got to be aware of the risks.
“But the point of the action plan being published by the Government today is to make sure that the United Kingdom is a welcome home for the investment so it doesn’t just go elsewhere, and that we are relentlessly curious and enthusiastic about the applications to increase productivity in both the public and the private sectors. That is the prize that awaits us.”
Mr McFadden compared AI to the advent of electricity in people’s homes, adding: “There was scepticism sometimes because people said ‘what would we use it for?’
“Imagine that question today when you look around your own home, and that is the way that we’ve got to think about this.”
Speaking about the impact of the Employment Rights Bill on businesses, CBI chairman Rupert Soames said: “I think not only will they not employ, I think they will let people go.
“I think there could be quite an ugly rush before some of these things come into force.
“Nobody wants this, but the things like the probation periods in the Employment Rights Bill, we don’t want that to become an adventure playground for employment rights lawyers.”
My colleague Andy Gregory reports:
Prime minister has vowed to use AI to ‘drive incredible change in our country’
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.”
House of Commons:
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
Westminster Hall:
1630 E-petition 661407 relating to children’s social media accounts
House of Lords:
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.”
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