Rachel Reeves said the UK doesn’t want to “escalate” trade wars with the US after Donald Trump threatened her plans with fresh tariffs on car imports. Meanwhile, a speech from the business secretary has been interrupted by protesters.
Thursday 27 March 2025 13:09, UK
Live reporting by Ben Bloch
On foreign and domestic issues, it’s a busy time for the business secretary – as evidenced by the raft of questions directed at him during a brief appearance at a central London trade summit.
On the prospect of some sort of deal to avoid tariffs from Donald Trump, Jonathan Reynolds spoke carefully.
He said we will know “pretty soon” what the outcome of “intensive” talks with Washington will be – but sounded somewhat optimistic, saying the trading relationship with the US was “fair and balanced”.
Tech tax ‘a temporary measure’
He did lean into the idea that the digital services tax – a levy on big tech revenues hated by the Trump White House – could be scrapped, though.
Describing it as a “temporary measure”, Reynolds said it wasn’t put in place as something that would never be changed.
Could that be put on the table as part of attempts to get a UK carve out from tariffs?
On the prospects for British Steel, the business secretary’s tone was more downbeat.
‘Challenging’ situation
After Sky News revealed the Chinese owner of the business had rejected a £500m offer from the government to aid the firm’s transition to greener production, Reynolds said the situation was “very, very challenging”.
Asked if he might up the offer, the cabinet minister said talks were carrying on, but he needed to make sure it was “the right deal for the taxpayer”.
He suggested he needed assurances over the viability of the business as well as a “guarantee on jobs”.
That won’t bring much comfort to the thousands facing potential redundancy if an agreement can’t be reached.
Kemi Badenoch has said while she agrees welfare needs to be cut, the Labour government is not going far enough.
Speaking to broadcasters, the Tory leader said the chancellor had to make additional cuts to welfare and government departments “because of mistakes that she made in October”.
To that end, the economic situation is “an error of her own making”.
Watch the chancellor defend her controversial cuts:
Badenoch said the Tories had plans to cut welfare, had they been re-elected, and would have gone “even further” than Labour.
“The number of people who are out of work is unsustainable,” Badenoch said. “The levels of economic activity since the pandemic really need to be dealt with. And that’s going to require tough decisions.”
Labour ‘not thought through’ welfare plans
She went on to say the Tories will support the government “where they’re making tough decisions, but actually they haven’t really started yet”.
“This is a government that has not thought through what it is doing and is just reacting to circumstances,” she said.
“We need a proper plan, and we need something that’s going to get business delivering growth.”
Kemi Badenoch is out and about today, and she has been taking questions from broadcasters in the wake of yesterday’s spring statement.
She was asked about the tariffs on car imports the Trump administration announced overnight, and she said: “This is one of the things we’ve been worried about for a very long time.
“And it’s why I’ve been urging the prime minister to hurry up with a UK-US trade deal. That would’ve protected us from these tariffs.”
Of course, two Conservative prime ministers – Theresa May and Boris Johnson – did not manage to secure a trade deal with the US during Donald Trump’s first four-year term. And Badenoch, who served as business and trade secretary from 2023 until the general election, did not secure a trade deal with the Biden administration.
The Tory leader continued by arguing that these tariffs “highlight” that the chancellor has left just £9bn of headroom, meaning “we don’t have the capacity to weather these sorts of difficulties”.
“There are serious, serious problems coming our way that the government needs to resolve,” she added.
We’ve been focusing on the fallout from yesterday’s spring statement this morning, including an interview with the chancellor herself.
Here are the main things you need to know:
That’s all for our lunchtime bulletin – we’ll have more updates and analysis through the afternoon.
The business secretary has been speaking at a conference at Chatham House, and he was asked about the latest set of tariffs Donald Trump has announced, due to come into effect next week.
Jonathan Reynolds said: “With the US, we’ve said that obviously we have a different set of views to where they’re coming from.
“You can understand and engage with that even if you don’t necessarily agree with it.”
He said decisions in the US come from a “belief on their side that it hasn’t got the right tools to deal with particularly overcapacity, and overproduction in some key sectors”.
“This is a time for cool heads and pragmatism, and this is how we’re approaching these things.”
The minister admitted there were “concerns and tensions”, but also said “the basis of a UK trade strategy has got to be in the UK’s national interest”, adding: “I can’t fight battles for other countries.”
The business and trade secretary is speaking at Chatham House this morning – but he has just been interrupted by pro-Palestine protesters.
As soon as Jonathan Reynolds started speaking, a protester was heard shouting: “This man and his government are complicit in genocide.
“The F35s [fighter jets] are massacring Palestinians, and they have not stopped the trade of F-35s.
“400 Palestinians killed last Tuesday, 200 children – one of the largest massacres of Palestinian children in history. And they’re selling F-35 parts.”
As he was being removed by security, the man shouted: “Suspend the sales, all of them, all the parts.”
In response, Reynolds said: “We have suspended arms exports to Israel. We haven’t suspended F-35s because they’re integral to our national security and particularly the defence of Ukraine.
“People will know the supply chain of F-35s means they cannot be isolated to one country, and that decision was laid out very clearly in parliament.”
After he gave that response, another protester holding a Palestinian flag jumped on stage with the same message, and repeatedly shouted: “Stop arming Israel, free Palestine.”
The chancellor has been under fire in recent days after it emerged she accepted two box seat tickets for a Sabrina Carpenter concert at London’s O2 Arena earlier this month.
Rachel Reeves has been defending the decision, telling a news conference yesterday that, given her security requirements as chancellor, she cannot just buy normal seats, and so in order for her and a family member to attend, the venue’s owner offered box seats.
But today, she’s said she will not accept free tickets again after the row.
‘I understand how people feel’
Reeves told ITV’s Good Morning Britain: “I don’t have any intention of doing this again.
“I thought it was the right decision for my family on that occasion. But I do understand how people feel.”
Asked if this meant she would rule out all freebies in future, the chancellor replied: “If it’s related to my job, and it’s something that I need to do in my job, like I’m going to a formal dinner or a formal event, of course you have to accept hospitality.
“But, look, I went with a family member. I’m not intending to take concert tickets in the future.
“But, you know, it is a balancing act in my job to try to be a good parent, and also do my job, with some of the security challenges that I face in the job now.”
The non-partisan Institute for Fiscal Studies is giving its verdict on the government’s spring statement.
The director, Paul Johnson, is giving a summary of the think tank’s view, before taking questions.
Watch live below…
By Mark Kleinman, city editor
Britain’s second-biggest steel producer is kicking off a consultation that could lead to the closure of its two blast furnaces and more than half of its workforce losing their jobs – a move that will pile pressure on the government to improve an offer of taxpayer aid to the company.
Sky News has learnt that British Steel was on Thursday morning in discussions with trade unions about a redundancy process that could result in between 2,000 and 2,500 employees being axed out of a workforce of 3,500.
One trade union source said that meetings were taking place with a public announcement about plans to accelerate the closure of Scunthorpe’s two blast furnaces likely later on Thursday.
The launch of the redundancy consultation comes amid an impasse between Jingye Group, British Steel’s Chinese owner, over a government subsidy package to aid the company’s transition to greener steel production.
Sky News revealed on Wednesday that Jingye had this week rejected a £500m offer from the government.
Sarah Jones, the industry minister, told MPs that talks were continuing, while an urgent question is expected to be answered in the House of Commons on Thursday.
The latest figures of the number of people living in poverty have been published this morning by the Department for Work and Pensions.
They reveal that the number of children living in poverty across the UK has reached a new record high.
Some 4.45 million children were estimated to be in households in relative low income, after housing costs, in the year to March 2024.
This is up from the previous record of 4.33 million in the 12 months to March 2023, and is the highest figure since comparable records for the UK began in 2002/03.
A household is considered to be in relative poverty if it is below 60% of the median income after housing costs.
Simultaneously, the 2020s are on course to be a “disaster” for living standards, the Resolution Foundation has said.
James Smith, the think tank’s research director, said the current parliament, from 2024-29, was forecast to be the third-worst on record for household disposable incomes.
“We’re basically in a position where the 2020s is now looking like a disaster of a decade, even relative to the two preceding it, in terms of living standards,” he said.
He went on to say that “things really get worse” if you focus on the poorest half of the income distribution, who are “basically at recession levels”.
“We project incomes for this group falling about 3% or £500 on average.”
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