Prime Minister Sir Keir Starmer has distanced himself from Rachel Reeves’ commitment to businesses regarding no further borrowing or tax increases. The Chancellor’s Budget, which included £40bn in tax rises, has faced backlash from major UK businesses, with critics like the McVitie’s boss expressing concerns over the viability of investing in the UK. Starmer accused Tory leader Kemi Badenoch of wanting the benefits of the budget without the costs, highlighting her unfunded commitments. Reeves later echoed Starmer’s sentiment, stating: “I’m not going to write five years’ worth of budgets in the first few months as Chancellor of the Exchequer.”

Concerns are mounting over the proposed increase in taxes on North Sea oil and gas, with MPs warning it could jeopardise investment and the transition to net zero. SNP MP Dave Doogan stated: “They’re hiking taxes, eroding allowances and driving investment from the North Sea,” highlighting the risk of losing local energy production to jurisdictions with worse human rights. Treasury minister Tulip Siddiq acknowledged the ongoing role of oil and gas in the energy mix, but said public and private investment needed to be driven towards cleaner energy. The Finance Bill, which proposes raising the energy profits levy from 35% to 38%, is currently under scrutiny.

According to a new report by the Institute for Public Policy Research (IPPR), the UK’s tax system is increasingly unfair as wealth grows faster than earnings. Tom Clark, the report’s author, stated: “Wealth begets wealth,” highlighting the advantages that affluent families provide their children, such as elite education and social connections. The report suggests that the Government should consider increasing taxes on wealth, including inheritance tax, to address the disparity between the wealthiest and the less affluent. The top 10% of wealthiest individuals own 57% of the UK’s wealth, while the bottom 30% possess just over £1 in every £100. The IPPR warns that without intervention, the gap between the “have-a-lots” and “have-nots” will continue to widen, limiting opportunities for millions.

The UK Government is set to enhance sanctions against employers who violate employment rights, particularly concerning minimum wage and visa regulations. Migration minister Seema Malhotra stated: “No longer will employers be able to flout the rules with little consequence or exploit international workers.” The proposed changes, part of the Employment Rights Bill, aim to double the sanction period to two years for serious breaches and extend enforceable action plans from three months to a year. The Home Office has noted that overseas workers, especially in the care sector, are particularly vulnerable to exploitation, with 450 sponsor licences revoked since July 2022.

A Government-backed review has been initiated to assist millions of small UK businesses in enhancing their profitability through sustainable practices. Spearheaded by the campaign group Small Business Britain, the review aims to uncover the financial advantages of adopting green initiatives. Jointly chaired by small business minister Gareth Thomas, Barclays’ Nick Stace, and Small Business Britain founder Michelle Ovens, the initiative addresses the limited uptake of sustainability among the UK’s 5.5m small businesses, which contribute to 50% of business-driven emissions. Thomas said that “sustainability isn’t just good for the planet — it’s great for business too.” The review will include research and consultations, with a final report expected in May 2025, providing actionable recommendations for supporting small businesses in their sustainability journey.

The shadow business secretary has warned that financial services regulators are devoting too much time to net zero and diversity agendas when they should be focussed on growing the economy. Andrew Griffith told peers that politicians and regulators have overseen an tremendous shift in the City away from risk-taking, severely harming the economy, and instead directing energies towards net zero and diversity. The former City minister said major reforms were needed to “get us back the important mojo that our financial and professional services require.” He told the Lords financial services regulation committee: “If you want to change the culture of an organisation, you have to change the incentives, often change the scope of what it does, and change the people.”

The Financial Conduct Authority (FCA) is set to announce a new proposal that grants companies under investigation an additional 48 hours to review the contents of enforcement announcements before they are made public. This change comes after significant backlash from the City and politicians. The FCA will now provide ten days’ notice of an investigation, followed by the extra review period. FCA chair Ashley Alder and chief executive Nikhil Rathi have acknowledged the flaws in the original ‘name and shame’ plan, stating that “the principle of naming and shaming will act as an effective regulatory deterrent.” This revised approach aims to balance regulatory oversight with a pro-growth strategy as urged by the Treasury and Sir Keir Starmer.

British airports are urging Chancellor Rachel Reeves to address the “catastrophic” impact of a new £1bn business rates bill, which they claim will increase average rates by over 450%. A draft letter from Airports UK, representing more than 50 airports, warns that some airports could see rates rise by up to 12 times. The letter states: “These increases in rates… would destroy any chance of this and cause huge damage to the economy.” The group argues that the proposed tax changes threaten the Government’s growth agenda, stating that without the aviation sector, the ambition to secure the highest growth rate in the G7 will be “materially damaged.”

Recent data indicates that households are increasingly anxious about the state of the economy, particularly following Rachel Reeves’s Budget, which has raised concerns about a potential UK recession. The BRC-Opinium tracker shows a decline in consumer confidence, with only 19% of respondents feeling optimistic about the economy in the next three months, down from 21%. Helen Dickinson, chief executive of the British Retail Consortium, remarked that “many are worried about the economy in the lead up to Christmas.”

Chris Wright, Donald Trump’s nominee for US energy secretary, has condemned the UK’s net-zero strategy, claiming it has made the nation poorer. In a report from Liberty Energy, he stated: “The UK has continued aggressive climate policies that have driven up energy prices for its citizens and industry.” Mr Wright said the UK had achieved its cuts in greenhouse gas emissions mainly by importing more. He said: “Things made at energy intensive manufacturing [plants] powered by natural gas in the Midlands of England, which are now shut down, are now built at a coal powered plant in China or Vietnam or Indonesia. That’s not a climate policy, right? You get more greenhouse gas emissions, more air pollutants from burning coal than you burn from natural gas. They just moved it out of their country and those blue collar jobs went with them.”