Reeves' five choices to turn government finances around

2 hours ago Share Save Dearbail Jordan Business reporter, BBC News Share Save

Reuters Chancellor Rachel Reeves

Chancellor Rachel Reeves' plan to cut billions of pounds in welfare costs through reforms has essentially gone up in smoke. Following major government concessions on the benefits bill, a forecast £5bn in savings by 2029-30 has been severely dented. Coming so closely after the U-turn on the Winter Fuel Allowance, the government has almost eliminated its £10bn buffer which it wanted to keep the public finances on track. So what are Reeves' choices now? As the Autumn Budget approaches, she has five options to change the financial situation.

1. Wait and see

The government could decide to wait and see if the UK economy grows by more than expected and debt interest costs fall. That is a risky move. Part of the reason why Reeves announced the welfare reforms in March's Spring Statement was because higher debt interest payments and weaker tax receipts had more than wiped out her existing £10bn buffer. Meanwhile, the Office for Budget Responsibility, an independent body which assesses the government's spending plans and performance, halved its forecast for UK economic growth this year to 1%. At that point, there was still great uncertainty over the impact of Donald Trump's US tariffs. Since then, the UK became the first country to strike a deal with Trump. It has significantly reduced tariffs on areas such as cars, though a 10% tax still applies in some areas and a final agreement on UK steel shipments to the States has yet to be reached.

2. Find new savings

Reeves has literally just announced a Spending Review. The big winners were the NHS, getting an extra £30bn a year, as well as defence. Other departments fared less well or saw cuts. Going back in and asking ministers to find more savings after just being handed their budgets would not only be disruptive but would make the government look like it is scrambling to regain credibility. There is also a big question mark now over whether the government can afford to remove the two-child benefit cap. Sir Keir Starmer said last month he would "look at" scrapping it, at a cost of £3.5bn.

3. Change the financial rules

This is a big no-no for Reeves. When she became chancellor, Reeves set out two financial rules. The first was that day-to-day spending would be paid for with government revenue, which is mainly taxes. Borrowing is only for investment. The second is that debt must be falling as a share of national income by the end of a five-year period. Reeves has repeatedly said these rules are "non-negotiable". They are aimed at showing that the UK is financially stable after the country's credibility was shaken by former Prime Minister Liz Truss's mini-budget in 2022. Theoretically, Reeves could alter the rules - they are self-imposed - but that risks rattling markets and if that happens, debt interest payments could rise.

4. Less frequent financial checks

The OBR produces two assessments of the UK's economic and financial outlook a year, coinciding with the Autumn Budget and the Spring Statement. The International Monetary Fund (IMF) has suggested that the OBR report should be limited to just once, at the Budget. The IMF reckons one assessment would "promote further policy stability" and potentially reduce the pressure on the government's buffer figure, which is often referred to as "headroom". It said that even "small revisions to the economic outlook can erode the headroom within the rules, which is the subject of intense market and media scrutiny". Prior to the mini-Budget, Truss and her Chancellor Kwasi Kwarteng shunned the OBR when they announced £45bn in unfunded tax cuts, which unnerved financial markets. Since then, Reeves has introduced a new law which means that any government announcement that makes major changes to taxes or spending is subject to an assessment by the OBR. To limit a report to once a year, she could choose to limit what she sets out in the Spring Statement to just providing an update on the state of the economy.

5. Increase taxes or extend threshold freeze

Citroen owners left stranded over airbag safety risk

2 hours ago Share Save Theo Leggett and James Kelly BBC News Share Save

BBC Lisa Shackleton says her DS3 will not be fixed until the end of July

An estimated 120,000 motorists in the UK have been left unable to drive their cars after a safety alert over a potentially lethal fault with airbags. The car giant Stellantis recently said people should stop using versions of the popular Citroen C3 and the related DS3 altogether until they were fixed. The "stop-drive" instruction came amid growing concerns about the safety of airbags fitted to these models, following a fatal accident in France last month. A number of owners have since told the BBC they face long waits to get their cars fixed. Stellantis said it was "inevitable" that customers would be inconvenienced.

Among those affected is Lisa Shackleton from Hull who contacted the BBC via Your Voice, Your BBC News. The 69-year-old owns a 2014 Citroen DS3. She needs it to take her elderly husband to specialist medical appointments. She has also booked a summer holiday in a cottage a three-hour drive away, to be close to her daughter, who is undergoing chemotherapy. But now she is unsure of how to get there. "I've tried to get the car fixed, but as I didn't get to know about the recall soon enough, the earliest it can be done is the end of July," she says. "It's booked in at a dealership in York, and that's an hour's drive away." Another motorist told the BBC she had not been able to book her car in for the repair until January next year. Stellantis, the multi-national firm which owns the Citroen brand, said it was "working to maximise" the number of vehicles it could repair each day, and that priority needed to be given to those with the most urgent needs.

Airbag scandal

Stop-drive recalls, where owners are told not to use their cars at all due to safety risks, are rare. This one affects all C3 and DS3 models built from 2009-2016, as well as a handful of DS3s produced from 2016-2019. Stellantis said they should not be driven until airbags produced by the now defunct Japanese supplier Takata have been replaced. It is the latest development in a long-running saga which has led to the recall of an estimated 100 million cars worldwide over the past decade. The issue was brought back into focus last month by the death of a motorist in northern France. A 37-year-old woman driving a Citroen C3 was killed after a minor collision in Reims when she was struck by flying metal from a faulty airbag. Takata was once one of the world's biggest suppliers of airbags, safety devices which are meant to protect people from impacts when accidents occur. But in 2013 reports began to emerge of people being killed or injured by their products. Explosive chemicals, used to inflate the bags quickly in the event of an accident, were becoming more volatile over time, especially in warm and humid conditions. This could cause them to explode with too much force, fracturing their metal container, and sending shrapnel into the cabin of the vehicle. A large number of car makers were affected and rapidly responded with a swathe of recalls. However Stellantis, then known as PSA Group prior to a merger with FiatChrysler, said it had been told by Takata that airbags made in its European factories were not affected, and they continued to be fitted in new vehicles as a result. Takata filed for bankruptcy in 2017, its reputation destroyed by the affair.

'Poor communication'

Stellantis said it had only become aware of incidents involving European-made airbags in 2019, and initially believed only cars in hot and humid regions were affected. It began a recall campaign in those areas. In April last year the recall was extended across the whole of Europe, but people were still allowed to drive their vehicles while they awaited a repair. The C3 and DS3 were already covered by this recall, but following the incident in northern France, Stellantis went further, announcing a stop-drive action across the continent, including in the UK. This took effect on 20 June. Since then, however, dozens of car owners have complained to the BBC of poor communication from Stellantis and mixed, sometimes contradictory, messages from Citroen and DS dealerships. Despite the sometimes serious disruption caused to car owners' daily lives, Stellantis said it had no plans to provide compensation while adding that it had "mobilised the whole company" to source the number of replacement airbags required. A spokesperson said: "It is inevitable, with such a large number of vehicles affected, that customers will be inconvenienced in the short term." What is not clear is how customers should get their cars to dealerships for the repair work, as they cannot be driven. Industry experts say drivers should check with their insurers before getting behind the wheel. The company said it was "investigating options of airbag replacement at other sites, in addition to our Citroen network, including at [the owner's] home".

Ozzy bows out: Rock's wildest frontman prepares for one last show

52 minutes ago Share Save Ian Youngs Culture reporter Share Save

Getty Images Ozzy Osbourne

Ozzy Osbourne has somehow made it through decades of drink, drugs and debauchery - not to mention jail, life-threatening accidents and Parkinson's disease - but is now preparing to perform for devoted fans one last time. Black Sabbath made an indelible mark on music by forging the sound that became known as heavy metal - and on top of that, Ozzy practically invented the image of the wild rock star. Swigging, snorting and shagging his way around the globe in a semi-conscious daze in the 1970s, 80s and 90s, he ensured his place in the rock 'n' roll hall of infamy by biting the heads off some poor unsuspecting creatures along the way. Then in the 2000s, he and his family were catapulted to a new form of fame when they unwittingly pioneered reality TV as cameras captured the foul-mouthed (but affectionate) dysfunction of their home life. Ozzy has threatened to retire several times before - but with health problems taking an increasing toll, Saturday's farewell gig really does look like his swansong.

Ross Halfin The original Black Sabbath members will perform together for the first time in 20 years

The 76-year-old will reunite with his original Sabbath bandmates to headline an all-day stadium show featuring groups they have influenced over the years - including Metallica, Slayer and members of Guns N' Roses and Rage Against the Machine. It has, not unjustly, been described as the greatest heavy metal show ever. Titled Back to the Beginning, the show at Villa Park in Birmingham will really take the band back to their roots. The football ground is a stone's throw from Ozzy's childhood terraced home in the suburb of Aston. On match days, the young Ozzy and his friends would charge match-goers half a shilling to "mind" their cars. He has joked that his first job in the music industry was as a car horn tuner in a factory in the area, before getting a job in a slaughterhouse, which allowed him to play practical jokes in pubs by putting cows' eyeballs in peoples' pints. But he wanted to escape the drudgery of a day job so put an advert for a band in a record shop. That eventually led him to form Black Sabbath with schoolfriend and guitarist Tony Iommi, bassist and lyricist Geezer Butler, and drummer Bill Ward. Other groups had summoned up a sound similar to heavy metal, but Sabbath really set the template with their combination of pounding rhythms, deep rock riffs and imagery of fantasy and horror.

Black Sabbath murals have been painted in Birmingham in the build-up to the gig

"They started from absolutely nothing to be global superstars," says fan Joe Porter, 47, from Birmingham, while admiring murals of the band that have been painted in the city in advance of the gig. "If you watch their early concerts, they've got basic [equipment] - one PA, one small drum set, a bass and a guitar and that's it. The sound they could make from those four instruments was like there's 20 people on stage. "And Ozzy's like a madman on stage, but really he's just a normal bloke." Their appeal crosses generations, judging by the crowd at Ozzy Osbourne: Working Class Hero, a new exhibition in Birmingham Museum and Art Gallery. "They started the year my mum was born, in '68," says 21-year-old Byron Howard-Maarij. "I'm a massive metal fan, so the fact that the originators are coming back to where it all started, it's really exciting." Another fan, Riley Beresford, 25, from Nottingham, has inherited a copy of Sabbath's 1970 single Paranoid as a family heirloom from his grandmother. "She got Paranoid on seven inch and it got passed down to my mum, and now it's passed down to me. It's going through the family." He adds: "They made heavy metal, didn't they? Obviously the music's great, but him being wild, it just adds to it even more. There's no-one else like him, really, is there?"

Fan Byron Howard-Maarij is among those who have visited the new exhibition dedicated to Ozzy

"I think the reason people love Ozzy is he's still very genuine," says Toby Watley, director of collections at Birmingham Museums. "He sees himself as a working class lad from Aston. He hasn't really changed. What you see is what you get. It's not going through a Hollywood lens and being glamorised in any way. People really love that and respect it. And it's something that Birmingham can be really proud of." The exhibition features artefacts loaned by Ozzy and wife Sharon, including gold discs and awards such as his three Grammys and two Rock 'n' Roll Hall of Fame trophies (one for being inducted with Sabbath, the other as a solo artist). They reflect his musical success, while pictures and videos of him on stage give a small glimpse of that wilder side. "You never quite know what's going to happen next, and I think people like that," Mr Watley adds. "He's not someone who attempts to stick to the rules. He will do it his own way, in his own style. I think that's a big part of the appeal."

Getty Images

Some of his antics have become legendary. The most notorious was biting the head off a live bat while on stage in Iowa in 1982. He had been catapulting raw meat into the audience on tour, which prompted fans to throw things on stage in return. He claims he thought the bat was fake before he took a bite. He has not attempted to use the same excuse about the two doves whose heads he bit off during a record label meeting the previous year. His other exploits included being arrested for urinating on Texas war monument the Alamo while wearing one of Sharon's dresses; getting thrown out of the Dachau concentration camp for being drunk and disorderly while on a visit during a German tour; pulling a gun on Black Sabbath's drummer while on a bad acid trip; blacking out and waking up in the central reservation of a 12-lane freeway; and massacring the inhabitants of his chicken coop with a gun, sword and petrol while wearing a dressing gown and pair of wellies.

Getty Images Black Sabbath suggested their 2016 tour would be The End

Trump calls for US central bank head to quit immediately

25 minutes ago Share Save Peter Hoskins Business reporter, BBC News Reporting from Singapore Share Save

Getty Images

US President Donald Trump has called for the chair of the Federal Reserve to quit "immediately", in an escalation of his attacks on Jerome Powell. "'Too Late' should resign immediately!!!", Trump said in a post on his Truth Social platform. He also included a link to a news article about a US federal housing regulator calling for Mr Powell to be investigated over his testimony about renovations to the central bank's Washington headquarters. Trump nominated Mr Powell to be the Fed chair during his his first term. Since then, he has repeatedly criticised him for not cutting interest rates but it's unclear whether the president has the authority to remove him from the post.

Despite the president's continued criticism of Mr Powell, he said earlier this year that had "no intention of firing him". Trump wants the Federal Reserve to lower interest rates to help boost economic growth. Mr Powell said on Tuesday that the Fed would have cut rates already had it not been for the impact of the Trump's tariff policies. When asked during a meeting of central bankers in Portugal whether US rates would have been cut this again this year if the administration had not announced its plan to sharply increase tariffs on countries around the world Mr Powell responded, "I think that's right." The US Federal Reserve declined to comment about Trump's remarks when contacted by the BBC. Ahead of Trump's return to the White House at the start of this year, Mr Powell said he would not step down if the president asked him to and that it is "not permitted under law" for the White House to force him out. Board members of independent federal agencies like the Federal Reserve can only be forced out before their terms expire "for cause," according to a landmark US Supreme Court ruling in 1935. However, Trump has often challenged political norms, including firing some independent regulators, actions that have been contested in court.

On Wednesday, Federal Housing Finance Agency director Bill Pulte, who has previously strongly criticised Mr Powell, called for him to be investigated. "I am asking Congress to investigate Chairman Jerome Powell, his political bias, and his deceptive Senate testimony, which is enough to be removed 'for cause,'" he posted on X. Last week, Mr Powell told the Senate that reports about soaring costs and expensive features at the Fed's headquarters were "misleading and inaccurate in many, many respects."

Redacted evidence 'delayed police grooming cases'

Manchester City Council said "complex" rules about sharing personal data meant that prosecutions could have been jeopardised if some information had been included in the evidence.

The watchdog said this "made it impossible to assess the evidential value of the information" but said a new process had since been agreed to share evidence.

His Majesty's Inspectorate of Constabulary and Fire & Rescue Services (HMICFRS) found some material provided by Manchester City Council contained pages with only a few words visible on them.

Investigations into historical child grooming cases were significantly delayed because a city council heavily redacted pages of evidence, a report has found.

The information came to light as part of an inspection into Greater Manchester Police's (GMP) historical handling of child sexual exploitation cases, which found the force had made significant improvements after a series of damning reports into its handling of allegations.

'Particularly affected'

The review by the HMICFRS was commissioned by Andy Burnham, the mayor of Greater Manchester, in 2024 to look at the "current and ongoing provision".

The report noted how each of the 10 local authorities in Greater Manchester had its own agreement about what information would be shared with police.

"Some are willing to share all available information and do so promptly and without redactions," the review found.

"Others will only do so in accordance with strict rules on what can be included.

"This has led to significant delays in investigations and in the preparation of evidence for court."

It noted how Operations Green Jacket and Bernese had been "particularly affected by these delays".

Only one person has been convicted as part of Operation Green Jacket, which was launched six years ago to investigate child sexual exploitation in south Manchester in the early 2000s.

Operation Bernese was set up to investigate child sexual abuse following the death of 15-year-old Victoria Agoglia in 2003.

Victoria, who was in care, died of a drugs overdose two months after reporting she had been raped and injected with heroin by an older man.

"Material provided by Manchester City Council took many months to arrive and was so heavily redacted that some pages contained only a few words," the report found.

"This made it impossible to assess the evidential value of the information."

A Manchester City Council spokesman said the authority had been "committed from the outset" to bringing offenders to justice.

The spokesman added: "The sharing of personal data is a complex legal area. Failure to follow the relevant guidelines correctly would risk such information being ruled inadmissible in court, serving to jeopardise prosecutions rather than to advance them.

"As this work has progressed, we've been able to develop information-sharing protocols with the police which have enhanced processes and been so successful that they have been adopted elsewhere."

HMICFRS said GMP, the council and Crown Prosecution Service had since agreed a new way of working together.

"Investigators can view and assess unredacted documents remotely," HMICFRS said.

It said while this was "far more efficient and effective", it had meant the process had had to be started again.

HMICFRS highlighted how GMP had made significant improvements in how it investigated child grooming cases.

The watchdog found the force had a "strong multi-agency approach to investigating child sexual exploitation" and had "significant resources committed to support these investigations".

It now has a specialist Child Sexual Exploitation Major Investigation Team with 98 dedicated staff, working with statutory and non-statutory agencies to support victims.