LONDON: Britain’s new Labour government on Wednesday announced major tax hikes and higher borrowing to meet Prime Minister Keir Starmer’s aim of investing for long-term growth.
In the highly-anticipated fiscal update — the first under the center-left government after 14 years of Conservative rule — finance minister Rachel Reeves said tax increases would raise an additional £40 billion ($52 million).
Addressing parliament in a speech lasting more than one hour, Reeves also confirmed changes to fiscal rules that will allow the government to invest billions more in public services.
“This government was given a mandate,” Reeves told MPs.
“To restore stability to our country and to begin a decade of national renewal. The only way to drive economic growth is to invest, invest, invest,” she insisted.
Labour won a landslide general election in July and had already announced a raft of economic measures, including improved workers’ rights and minimum wages, a vast green-energy plan and plans for mass building of homes.
Ahead of the budget, it also drew strong criticism for scrapping a winter-fuel benefit scheme for millions of pensioners, hurting Starmer’s approval rating in polls.
“I am restoring stability to our public finances and rebuilding our public services,” Reeves said Wednesday.
Reeves said £25 billion would come from hiking employers’ national insurance — a payrolls tax used to help pay for social care.
Changes to inheritance tax will raise more than £2 billion while the government is also hiking taxation on capital gains and property purchases as part of its plans to claw back money.
The pound won back ground as Reeves spoke, while London’s stock market was little changed.
“At this stage, massive tax rises have not spooked financial markets,” said Kathleen Brooks, research director at traders XTB.
The government kept its pledge not to raise income taxes, employee national insurance charges, or value added tax.
Outgoing Tory leader Rishi Sunak, Britain’s former prime minister, said the budget contains “broken promise after broken promise.”
Ahead of her tax and spend plans, Reeves made a technical change to the way UK debt is measured to allow her to borrow more, even though the country’s public sector borrowing is now at levels last seen in the 1960s.
To boost investment, the chancellor will use a wider measure of debt that takes into account the future returns on investment.
Reeves on Wednesday said the extra investment in capital infrastructure projects would start to “repair the fabric of our nation.”
The government will invest billions of pounds to rebuild schools, hire teachers and fund childcare.
In a surprise move, she extended the freeze on fuel duty until next year.
The cash-strapped National Health Service will receive a substantial boost, with the day-to-day health budget receiving an increase of nearly £23 billion.
Alongside the budget, Reeves said Britain’s economy was set to grow faster than forecast this year and next.
The nation’s gross domestic product will expand 1.1 percent in 2024 and by 2.0 percent next year — above estimates given in March by the Office for Budget Responsibility (OBR), Britain’s fiscal watchdog.
Britain is benefiting from its annual inflation rate dropping to under the Bank of England’s 2.0-percent target, easing a cost-of-living crisis.
The International Monetary Fund this month also estimated that Britain’s economy would grow 1.1 percent in 2024.
Looking beyond next year, the OBR on Wednesday downgraded Britain’s growth forecasts for the 2026-2028 period.
UK’s Labour government hikes taxes in first budget
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UK’s Labour government hikes taxes in first budget
- Reeves said £25 billion would come from hiking employers’ national insurance — a payrolls tax used to help pay for social care
- Changes to inheritance tax will raise more than £2 billion while the government is also hiking taxation on capital gains and property purchases
Migrant rescue NGO saves 25 people off Libyan coast
- Since the beginning of 2025, 247 people have disappeared or died in the Mediterranean Sea while trying to reach Europe, according to the latest figures from the International Organization for Migration (IOM)
MARSEILLE: French migrant rescue group SOS Mediterranee brought 25 people stranded off the Libyan coast aboard its Ocean Viking vessel on Sunday, the NGO said.
Those rescued, including three women and seven minors, are “currently being cared for by the Red Cross and SOS Mediterranee teams” aboard the Ocean Viking, the Marseille-based group said in a statement.
Five of the minors are unaccompanied while two of the children are aged under four, the statement added.
The boat in distress was spotted thanks to an alert issued by Alarm Phone, a number used by migrants who run into trouble while attempting the perilous Mediterranean crossing in hope of a better life in Europe.
Since the beginning of 2025, 247 people have disappeared or died in the Mediterranean Sea while trying to reach Europe, according to the latest figures from the International Organization for Migration (IOM).
That toll follows the 2,360 people who died across the whole of 2024. The vast majority of the victims died in the central Mediterranean, one of the world’s deadliest migration routes.
UK seeks to scale back reviews that delay new housing projects
- Planning delays are widely blamed by housebuilders and government for the inability of new construction to keep up with population growth
LONDON: Britain set out plans late on Sunday to scale back lengthy public reviews that can delay housing developments, as part of its goal to get 1.5 million homes built in the next five years.
The housing ministry said it would hold a consultation over reducing the number of public agencies and civic groups whose views must be sought over new housing, including groups which represent sporting organizations, theaters and historic gardens.
Planning delays are widely blamed by housebuilders and government for the inability of new construction to keep up with population growth and for contributing to broader economic weakness.
In 2023, 193,000 homes were built across the United Kingdom and the construction industry has not exceeded the 300,000-a-year pace needed to meet the new government’s target since 1977.
“We need to reform the system to ensure it is sensible and balanced, and does not create unintended delays,” Deputy Prime Minister Angela Rayner said.
Further legislation on planning reforms is due later in the week.
Britain’s housing and local government ministry, which Rayner heads, said more than 25 agencies now had a legal right to be consulted on housing developments, some of which often objected by default or insisted on expensive modifications.
The ministry cited the example of how the conversion of an office block into 140 apartments was delayed after a sports body judged insufficient expert advice had been sought over whether a 3-meter-high (10 ft) fence was enough to protect residents from cricket balls struck from an adjacent sports ground.
Around 100 such disputes a year had to be resolved by ministers, the government said.
Under the new proposals, local planning authorities would also be instructed to narrow the basis on which other bodies could object and stick more closely to standard rules and deadlines.
Japan’s worst wildfire in 50 years brought under control
- The fire engulfed about 2,900 hectares (7,170 acres) — around half the size of Manhattan — making it Japan’s largest in more than 50 years
TOKYO: Japan’s worst wildfire in more than half a century, which killed at least one person, has been brought under control, the mayor of the northern city of Ofunato said on Sunday.
The fire had raged in the mountains around the rural region since February 26, killing at least one person, damaging at least 210 buildings and forcing more than 4,200 residents to flee their homes, local officials said.
“Following an aerial survey, we assessed that the fire no longer posed the risk of further spread. I declare that the fire is now under control,” Ofunato Mayor Kiyoshi Fuchigami told a news conference.
The fire engulfed about 2,900 hectares (7,170 acres) — around half the size of Manhattan — making it Japan’s largest in more than 50 years.
It surpassed the 2,700 hectares burnt by a 1975 fire on Hokkaido island.
Wet weather that began on Wednesday following a record dry period helped firefighting efforts.
Japan endured its hottest summer on record last year as climate change pushes up temperatures worldwide.
Ofunato received just 2.5 millimeters (0.1 inch) of rainfall in February, breaking the previous record low for the month of 4.4 millimeters in 1967 and far below the average of 41 millimeters.
The number of wildfires in Japan has declined since a peak in the 1970s.
Wildfires in Japan tend to occur between February and May, when the air dries out and winds pick up. There have been around 1,300 a year in recent years.
UN humanitarian agency reports rise in attacks in Congo
- Security in Goma is threatened by “a resurgence of criminal acts including burgling of homes, thefts and attacks,” it said, adding that hospitals and schools had also been forced to close in other areas
KINSHASA: Escalating attacks have struck hospitals and other civilian infrastructure in eastern Democratic Republic of Congo during the ongoing anti-government assault by the armed group M23, the UN’s humanitarian agency said.
M23 fighters backed by Rwandan troops have made major advances in the region since January, seizing the key cities of Goma and Bukavu and displacing hundreds of thousands of people, according to the UN.
“Between March 1 and 3, several hospitals were targeted by armed actors in an escalation of violence against medical centers and health personnel, the UN Office for the Coordination of Human Affairs, or OCHA, said in a report.
Security in Goma is threatened by “a resurgence of criminal acts including burgling of homes, thefts and attacks,” it said, adding that hospitals and schools had also been forced to close in other areas.
It said at least four civilians were killed in fighting between M23 and rival groups in the Masisi district between Feb. 18 and 25, and more than 100,000 people were newly displaced in Lubero to the north.
DR Congo’s government accuses Rwanda of backing M23 to seize mineral-rich territory.
Rwanda has denied involvement in the conflict and says it faces a threat from ethnic Hutu fighters in DR Congo.
US pulls non-emergency staff from South Sudan after clashes
- South Sudan, the world’s youngest country, ended its five-year civil war in 2018 with the power-sharing agreement between bitter rivals Kiir and Machar
NAIRIBI: The US has ordered all non-emergency staff in South Sudan to leave, the State Department said on Sunday, as rising tensions provoke international concern.
A fragile power-sharing agreement between President Salva Kiir and First Vice President Riek Machar has been threatened by recent clashes between their allied forces in the northeastern Upper Nile State.
On Friday, a UN helicopter came under attack during a rescue mission, which killed a crew member. An army general also died during the operation, the UN said.
BACKGROUND
President Salva Kiir urged calm and told citizens there would be no return to war, but international observers sounded the alarm.
“Due to the risks in the country, on March 8, 2025, the Department of State ordered the departure of non-emergency US government employees from South Sudan,” the State Department said on Sunday.
“Armed conflict is ongoing and includes fighting between various political and ethnic groups. Weapons are readily available to the population.”
South Sudan, the world’s youngest country, ended its five-year civil war in 2018 with the power-sharing agreement between bitter rivals Kiir and Machar.
But the president’s allies have accused Machar’s forces of fomenting unrest in Nasir County, in Upper Nile State, in league with the so-called White Army, a loose band of armed youths in the region from the same ethnic Nuer community as the vice president.
Kiir urged calm late on Friday and told citizens there would be no return to war, but international observers sounded the alarm.
The UN human rights commission for South Sudan warned on Saturday that the country was seeing an “alarming regression” that threatened to undo years of progress to peace.
The International Crisis Group, a think tank, meanwhile, said: “South Sudan is slipping rapidly toward full-blown war.”
It warned the country risked “large scale ethnic massacres if the situation is not soon contained.”
