Treasury minister denies Budget tax rises on savers and landlords break manifesto

GB News broadcast an interview with Emma Reynolds, the Chief Secretary to the Treasury, in which she denied that the Budget broke Labour's manifesto. The host, Camilla Tominey, put it to her that raising income tax on rents and interest meant landlords and savers, whom Tominey described as working people, had been targeted.

GB News reported that Reynolds rejected that charge. She said the manifesto committed to not increasing the income tax rate, VAT or national insurance on employees. She said the additional 2% charge on property and savings was not the same as income tax. She also said employers are not working people because they are companies, drawing a distinction between employers and employees.

Tominey cited Paul Bowen, a pie shop owner who had gone viral, as an employer who is also a worker. She said Bowen had warned he would need to bake 30,000 extra pies a week to make up for the additional costs. GB News reported that Reynolds said she would like to speak to Bowen and did not know which tax he was referring to. Reynolds defended targeted tax increases, including a rise in corporation tax on banks to pay for a £100 energy support package for families in council tax bands A to D, VAT removed from electricity for a further three months and an extension of the fuel duty cut. She said 70,000 small high street businesses had been taken out of paying business rates and that rates had been frozen for many others.

GB News reported that, on welfare, Tominey said the bill was rising by £30 billion by the end of the Parliament rather than falling. Reynolds said the government would legislate next year to bring the welfare bill down in a fair and sustainable way. She said it would respond to the Milburn Youth Employment Review in November and to a PIP panel review, with proposals in the new year. She said half of the welfare bill is pension costs and that Labour would keep the triple lock this Parliament, then amend it so pensions rise by inflation or 2.5% in the next Parliament. She said other parties such as the Conservatives and Reform claim they can make crude cuts to welfare.

GB News reported that Tominey also challenged Reynolds over defence spending. Tominey said defence spending was 2.7% of GDP and was not on course for 3% by 2030, the target she said John Healey had resigned over. She said the Ministry of Defence budget would be £1 billion a year less than Rachel Reeves had accounted for in the next two financial years. Reynolds denied that defence spending was being cut. She said it had seen the biggest boost since the Cold War and that £300 billion would be spent on defence over four years. She said the spending review next year would set out how to reach 3% of GDP by 2030 and NATO's 3.5% commitment, and that Mark Rutte had welcomed the plans. Tominey said the review had been delayed from spring to autumn, and Reynolds said she could not give a precise date but that it would take place next year.