Rachel Reeves will face MPs for the first time since Downing Street guaranteed she would remain chancellor for this entire parliament. It’s also her first Commons appearance since returning from a controversial trade trip to China.
Tuesday 14 January 2025 12:00, UK
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Priti Patel, the shadow foreign secretary, turns the questioning to the chancellor’s trip to China over the weekend.
She asks the foreign secretary to explain “how this new love-in with one of the biggest threats to our national security and freedom helps our national interest”.
What message does this send to Jimmy Lai, she asks, referring to the British citizen and media tycoon jailed in Hong Kong.
Foreign Secretary David Lammy condemns the “brass neck” with which Ms Patel “comes to the despatch box… after a period where we had about seven different China policies from the last government”.
He refers again to a £22bn “black hole” Labour claims was left by the Conservatives.
“I might remind her too, that President Trump has invited the Chinese president to the inauguration. Trade with the US and China has grown, but it is also the case that we can protect our national security just as the United States [can].
“That’s why we will compete with China when we need to, we challenge China where we must, but we must co-operate.”
Mr Lammy adds there are “important areas of trade” with China because the UK “wants to see growth in our economy”.
The conversation now turns to the Chagos deal with Mauritius.
Andrew Rosindell, the shadow foreign minister, asks the Foreign Office to give a straight answer on whether it will wait until “after president Trump is in office” to finalise the agreement with Mauritius.
This would give them sovereignty of the Chagos Islands in return for a 99-year lease on a key US-UK military base.
It has been reported that the deal could be signed this week, before the inauguration of Donald Trump.
In response, foreign minister Stephen Doughty doesn’t directly answer the question.
He says: “Our deal secures the future of the base on Diego Garcia, it has support across the US administration and across the US security apparatus.
“We’ll come forward with details in due course.”
Over in the Commons now for Foreign Office Questions.
Bradley Thomas, the Conservative MP for Bromsgrove, asks about warnings from security experts against relying on China for Britain’s energy infrastructure.
What assessment has the government made about the involvement of Chinese supply chains in the UK’s solar plans?
Responding, Anneliese Dodds says Labour is determined to have a “consistent and clear-eyed” approach to China.
She says the government is conducting a “China audit” that will “look thoroughly at all of our relationships with China”.
Rachel Reeves is not having the easiest time reining in the economy.
Last week saw markets turn against Labour’s economic strategy – with the cost of government borrowing surging and the pound dropping to its lowest value against the dollar since November 2023.
On today’s Sky News Daily, Niall Paterson is joined by our economics and data editor Ed Conway to understand what is causing the UK’s growth to flatline.
And as the global economic landscape continues to respond to world events – including the imminent return of Donald Trump term – what can the beleaguered chancellor do to ensure the economy bounces back?
Early decisions by Sir Keir Starmer and Rachel Reeves “tied our hands unnecessarily” and the “strictures we placed upon ourselves need to be re-examined,” former Labour shadow chancellor John McDonnell said.
Mr McDonnell said that imposing cuts to get out of the financial turmoil would be “politically suicidal” and undermine the support on which Labour got elected, saying the government just has to “see through” the market turbulence.
The MP, who had the Labour whip withdrawn last year after voting to scrap the two-child benefit cap, also suggested the government should “look to the Bank of England to intervene if necessary”.
‘Reform would be a disaster’
Speaking to the BBC, he said: “I think the scene was set to a certain extent before the election, when we didn’t really have a thorough and open debate about the state of the economy and the options that we had available to us.
“I wouldn’t have ruled out the increases in income tax and wealth taxes on the wealthiest in society the way it was, and I wouldn’t have ruled out increasing corporation tax, so we sort of boxed ourselves in to a certain extent.”
He warned that the electorate “have to be protected, otherwise I’m afraid we’re looking at a level of disillusionment which then turns people towards, unfortunately, Reform, and I think that would be a disaster for the country.”
Mr McDonnell was shadow chancellor from 2015 to 2020. He was replaced by Anneliese Dodds, before Ms Reeves got the job in 2021.
Tech billionaire Elon Musk unexpectedly waded into British politics this year, launching attacks at both Sir Keir Starmer and safeguarding minister Jess Phillips over Labour’s reluctance to launch a national grooming gangs inquiry.
And he has continued his tirade this week, claiming Sir Keir was snubbed by president-elect Donald Trump by not being invited to his inauguration.
Mr Musk suggested this was because the prime minister had “undermined” the US election in November, referring to the 100 Labour staff who campaigned on behalf of Kamala Harris.
But is it the case that the prime minister was snubbed?
To put it simply, no.
Foreign leaders aren’t typically invited to American inaugurations, like the one being held on 20 January, so Sir Keir’s lack of attendance will be nothing out of the ordinary.
It is the case, however, that Mr Trump has broken from tradition by inviting some foreign allies.
Notably, it is understood that the president-to-be sent a personal invitation to Chinese President Xi Jinping, though it is unclear if he will attend.
Others thought to have been invited by Mr Trump include Argentinian President Javier Milei, Italian Prime Minister Giorgia Meloni and Hungarian Prime Minister Viktor Orban.
Again, it is unclear if any of those invited will attend.
However, we do understand that Reform UK leader Nigel Farage – an ally of Mr Trump – will be at the inauguration next week.
Later today, we expect Chancellor Rachel Reeves to deliver a statement on her trip to China, which took place over the weekend.
Ms Reeves flew out on Friday after ignoring calls from opposition parties to cancel the long-planned trip because of economic turmoil at home.
The last week saw a drop in the pound and an increase in government borrowing costs, which has fuelled speculation of more spending cuts or tax rises.
The Tories accused the chancellor of having “fled to China” rather than explain how she will fix the UK’s flatlining economy, while the Liberal Democrats said she should have stayed in Britain and announce a “plan B” to address market volatility.
Ms Reeves visited both Beijing and Shanghai, where she held talks with representatives across British and Chinese businesses.
You may have noticed an odd sight on the River Thames near to the Houses of Parliament this morning.
A number of MPs, climate campaigners and ex-Olympians took to row boats to paddle past the buildings – to call on ministers to back the Climate and Nature Bill.
The legislation would require the UK to achieve its climate and nature targets.
Sir Keir Starmer will host the Iraqi prime minister later today for talks on migrant returns and to unveil an export deal.
Iraqi Prime Minister Mohammed Shia’ al Sudani and Sir Keir will announce a £12.3bn export package during the visit to Downing Street.
The export package is worth around 10 times last year’s trade between the UK and Iraq and will offer “huge opportunities” for British businesses, Sir Keir said.
He said he would also start talks with his counterpart on a “bespoke returns agreement” between the UK and Iraq.
Sir Keir said: “Secure borders are a vital foundation of our Plan for Change, so I am also very pleased to get started on talks for a bespoke returns agreement between our countries.
“The deal will help dismantle the people smugglers’ business model by sending the clear message that if you come here illegally, you cannot expect to stay.”
The home secretary agreed a joint plan to tackle smuggling gangs when she visited Iraq in November.
The two countries agreed to co-operate to return people who have no right to be in the UK and work together to counter “smuggler gang propaganda and misinformation” with the aim of preventing migrants from making dangerous journeys to the UK.
By Alix Culbertson, political reporter
Anti-corruption minister Tulip Siddiq has found herself in the spotlight as she faces claims of breaking Westminster’s ethics rules.
Six months after Labour won the election – and nine years after becoming an MP – Ms Siddiq is facing calls to step down from her Treasury post over links to her aunt, the ousted former Bangladesh prime minister Sheikh Hasina.
Ms Siddiq has referred herself to Sir Keir Starmer’s independent ethics watchdog and ministers have said they will wait for the outcome to decide on her fate.
The MP has insisted she has done nothing wrong.
Below, Sky News takes a look at the accusations…
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