Raising taxes will kill off growth, Reeves warned as she pledges to rip up business red tape
The Chancellor insists that firms up and down the country can't be strangled with red tape by regulators with red tape if the UK wants prosperity.
1
She will deliver the warning shot in the annual Mansion House speech as she attempts to turnaround the sluggish UK economy.
It's the Chancellor's first major interventio n since she was seen in tears in the House of Commons as she attempts to win over City grandees following the national insurance hike in April.
She will say: 'As I look ahead, it is clear that we must do more.
"In too many areas, regulation still acts as a boot on the neck of businesses choking off the enterprise and innovation that is the lifeblood of growth.
'Regulators in other sectors must take up the call I make this evening not to bend to the temptation of excessive caution but to boldly regulate for growth in the service of prosperity across our country.'
Earlier, Richard Hughes, boss of the independent watchdog, insisted that tax hikes may not be sufficient to get a grip of the debt crisis as it could lead to further sluggish growth.
He told the Treasury select committee that there are 'reasons to worry' as they UK has been heavily exposed to shocks such as Covid, the financial crisis and the energy shock.
He also rejected suggestions that the Office of Budget Responsibility was driving government policy insisting the Chancellor could have met her fiscal rules without planning £5 billion of welfare cuts.
It comes after eight major regulators including the Financial Conduct Authority, Natural England and Environment Agency held talks with the Chancellor to spur growth.
She will also use the speech to convince the City she will rip up red tape to make the UK the best place for financial services in the world.
She will say: "We have been bold in regulating for growth in financial services and I have been clear on the benefits that that will drive with a ripple effect across all sectors of our economy putting pounds in the pockets of working people.
'Through better deals on their mortgages, better returns on their savings, more jobs paying good wages across our country.'
Proposals also include loosening the rules to allow more first-time-buyers onto the property ladder by allowing wannabe homeowners to borrow more than 4 and a half times their salary.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
20 minutes ago
- The Sun
McVitie's launches brand new ice cream flavours based on best-selling biscuits – exact shops to buy
MCVITIE'S has launched two new biscuit-inspired ice creams that has shoppers racing to try them. The ice cream tubs are based on the household favourite Hobnobs and Chocolate Digestives and they come in two different delicious-sounding flavours. 1 There's the McVitie's Hobnobs The Oaty One Ice Cream and the McVitie's Milk Chocolate Digestives Ice Cream. Both are being sold at Iceland and The Food Warehouse in 500ml tubs. They usually cost £4.50 but they're currently on offer for £4. The Oaty One is described as an "oat biscuit flavour ice cream with oaty biscuit pieces, golden syrup sauce and shortcake biscuit pieces". Meanwhile the Milk Chocolate Digestives flavour is a "biscuit flavour ice cream with chocolate sauce, milk chocolate coated digestives biscuit pieces and milk chocolate shavings". Social media users have been sharing the news and getting excited. One post about the new snacks had thousands of likes and comment. Some shoppers said they needed to head to the shops immediately, while one person wrote: "Omgggg stop!!" Others said they looked "delicious" and "yummy". One shopper who had already tried out the new sweet treats said they were "absolutely lovely". Biscuit lovers are only just finding out the little-known reason behind how Hobnobs got its name 40 years ago The ice creams are the latest exciting new products to be launched by McVitie's. The biscuit maker recently unveiled two new Hobnobs biscuits: Oaty Cookies with either a milk or dark chocolate flavour. It recreates the classic Hobnob in cookie form, with the addition of chocolate chips. You can get them in Morrisons for £1.75. Plus, McVitie's also launched a new flavour of its popular digestive biscuit. The limited edition Pink Digestives Raspberry & Cream Flavour has a baby pink shade and comes in distinctive pink packaging. You can get them for £1.85 in Morrisons and Iceland or on Ocado, and for £2.25 at Sainsbury's. Another new ice cream flavour Big-name brands often bring out lots of new treats for the summer. Morrisons brought out Angel Delight ice cream sticks in the flavours Butterscotch & Chocolate and Strawberry & Vanilla. The packs of four ice creams are selling for £2.75. They're based on the popular childhood dessert.
South Wales Argus
22 minutes ago
- South Wales Argus
Reeves' Nics hike stunting growth and pushing up food prices, Bank says
The Chancellor put up employers' contributions in her first budget, with the increases coming into effect in April this year. Increased national insurance contributions (Nics) and uncertainty caused by the tax rise have 'weighed on growth', according to businesses, the bank's latest monetary policy report said. Chancellor of the Exchequer Rachel Reeves responded to the Bank's decision during a visit to South Wales (Matthew Horwood/PA) The report also noted that higher labour costs are contributing to food price inflation, partly because of increases in minimum wages and the impact of the increase in Nics. A 'relatively high proportion of staff' in food manufacturing and retail are paid at or close to the national living wage, which increased by 6.7% in April. 'Furthermore, overall labour costs of supermarkets are likely to have been disproportionately affected by the lower threshold at which employers start paying Nics, in part because a relatively high proportion of supermarket staff is employed part-time,' the report said. Most of the wage costs, but only part of the Nics increase so far, have been passed on to consumers, putting up prices by about 1% to 2%, with consumers facing further increases in the second half of 2025. Food prices in shops are forecast to be 5% higher in the autumn than they were a year ago. Helen Dickinson, chief executive at the British Retail Consortium, said: 'Government policy will add £7 billion to retailer costs this year, from higher employment costs to the introduction of a new packaging tax. 'Food prices have already been climbing steadily, and the BRC has warned this is only the beginning. 'If the autumn budget once again lands on the shoulders of retailers, then it will only serve to fan the flames of food inflation, with poorer families being hit the hardest by the Treasury's decisions.' BUT the @OBR_UK's forecast for growth in 2026 and 2027 remains significantly above the @bankofengland. This will be uncomfortable for the OBR and suggests markdowns are coming, increasing the extent to which @RachelReevesMP will need to tighten policy to keep to her fiscal rules. — JamesSmithRF (@JamesSmithRF) August 7, 2025 A summary of economic intelligence from the Bank's agents, who have confidential conversations with business chiefs around the country, suggested other government policies were also causing concerns. Firms indicated investment was being withheld or delayed because of uncertainty related to weak demand, tax, regulation and wider government policy, including Deputy Prime Minister Angela Rayner's Employment Rights Bill. A combination of Nics and the legislation to increase workers' rights are hitting the labour market, the report said. Higher costs related to Nics have already had an impact and 'new employment rights legislation may dampen labour demand further'. The Bank reduced interest rates to 4% from 4.25% and raised its economic growth forecast for this year, predicting that GDP (gross domestic product) will grow by 1.25% in 2025, up from its previous estimate of 1%. The Chancellor said the rate cut was partly down to Labour's stewardship of the economy. Interest rates have now been cut five times in a row since Labour came into power. Labour is returning stability to the UK economy. — The Labour Party (@UKLabour) August 7, 2025 It was 'good news for homeowners, good news for businesses', she said. 'Interest rates have now come down five times since Labour came into office, in part because of the stability that we've managed to return to the economy after the chopping and changing, the mini-budget under the Conservatives and (former prime minister) Liz Truss.' But she faces another difficult set of choices in her budget this autumn, with the Bank's growth forecasts well below those from the Office for Budget Responsibility. James Smith, research director at the Resolution Foundation economic think tank, said: 'There was bad news for the Chancellor from the Bank of England today as its forecasts remain more pessimistic on growth than the Office for Budget Responsibility, suggesting bad news is coming at the autumn budget. 'Bank rate is now 4% – its lowest level since March 2023. While this will be broadly welcomed by mortgagors, around 700,000 families will still see repayments rise as they come off five-year fixed-rate deals. 'There was also bad news from the Bank of England for families struggling with the cost of living: inflation is set to be higher than previously expected, with food inflation rising further in the coming months, and real wage growth set to hit a brick wall this year.'
ITV News
22 minutes ago
- ITV News
Chancellor defends UK Government funding for Wales
Chancellor of the Exchequer Rachel Reeves has defended the level of the UK Government's spending in Wales during a visit to a coal tip remediation site near Port Talbot. Meeting Welsh Finance Secretary Mark Drakeford MS, she pointed to £118m allocated in the recent Spending Review over three years to improve disused coal tips across Wales. "The whole of the United Kingdom has benefited from coal in Wales and therefore it's right that the UK make sure that these communities are now safe" she said. The visit comes just one day after Eluned Morgan completed one year as First Minister, during which time she insisted she would "call out" Labour MPs in Westminster if they "get it wrong for Wales". Reeves said she continues to work closely with the First Minister and said the partnership has provided money for rail improvements in North and South Wales, "the biggest settlement since devolution", and a fall in NHS waiting lists in England and Wales. She also defended the UK Government's controversial rise in employers' National Insurance contributions. Previously Mark Drakeford called out the decision and said it was "wrong" that Wales' public services faces a shortfall of up to £65m due to the increases. Reeves justified the move, saying it was necessary to improve public services in Wales and England. She said: "We have now delivered millions more appointments in England and Wales over the last year in our NHS but that was only possible because we raised the money..." "I do recognise the challenges raises in National Insurance creates but without that money we would not be able to secure our public finances."
