Badenoch says growth being held up because ‘the state is too big’ and claims she is getting better at being Tory leader – UK politics live

1.00pm GMT

Keir Starmer had a brief meeting with Li Qiang, the Chinese premier, at the G20 summit in South Africa, it has emerged.
The meeting was not disclosed when Starmer was at the summit. It is understood that it was just a brief meeting, not a formal bilateral, and that Starmer and Li did not discuss anything of substance.

12.55pm GMT
No 10 says Britain 'steadfast with Ukraine to keep it in the fight'

Downing Street has said that the UK remains “steadfast” alongside Ukraine and determined to “keep it in the fight”.
Asked about the latest talks on a peace settlement in Ukraine, the PM’s spokesperson told the lobby briefing this morning:

The prime minister obviously welcomes the significant progress made at yesterday’s meetings between the US and Ukraine in Geneva. As the US, Ukraine, joint statement makes clear, yesterday’s talks were a major step towards a just and lasting peace for Ukraine.
Of course, there are some outstanding issues, but as both countries have set out, intensive work on the peace plan will continue in the coming days and weeks, you can expect the prime minister to continue his engagement with world leaders this week.
While diplomatic efforts continue, we will stand steadfast with Ukraine to keep it in the fight, and ensure the Ukrainian people can defend themselves during ongoing barbaric attacks like we saw last night, and in the long term.

Starmer is expected to host a virtual meeting tomorrow of leaders for “Coalition of the Willing” countries to discuss the Ukraine plan.

12.46pm GMT
Two peers suspended from House of Lords for breaking lobbying rules

Two long-serving peers are to be suspended from the House of Lords after a parliamentary watchdog ruled that they had broken lobbying rules.
Richard Dannatt, the former head of the British army, and David Evans (Lord Evans of Watford), were filmed breaking the rules in undercover footage recorded by the Guardian.
Henry Dyer and Rob Evans have the story.

Related: Two peers suspended from House of Lords for breaking lobbying rules

The Lord conduct committee’s report into Dannatt is here, and its report into Evans is here.

12.38pm GMT
Are Tories right to say Reeves using budget tax rises to fund 'welfare splurge'?

The Conservatives are attacking the budget by saying that taxes are having to go up to pay for extra welfare spending. Or, as Mel Stride, the shadow chancellor, puts it in an article for the Daily Telegraph:

That is exactly what Labour looks set to deliver at this week’s budget: a multi-billion-pound welfare splurge, funded by stealth tax rises on the very people who are already struggling.

This is one of those claims – very common in Westminster politics – that is technically true and wholly misleading at the same time. It is technically true because, if the government were spending less on welfare, it would need to raise less money from tax. But it is wholly misleading because welfare spending is not the main reason for taxes having to rise in the budget. (The downgrade in the productivity growth forecasts is the key factor.) And “splurge” is not an accurate description either.
In his Telegraph article, Stride says taxes are having to go up because Rachel Reeves is getting rid of the two-child benefit cap, which he says will cost £3.5bn, and because the government abandoned its planned cut to Pip disability payments in the summer, which will eventually cost £5bn a year.
But the Telegraph editors clearly thought £8.5bn sounded a bit low. Their splash story this morning says Reeves will increase benefit spending by £15bn. They have arrived at this figure by including the £1.25bn cost of the winter fuel payments U-turn, but also by including the £6bn cost of uprating working-age benefits in line with inflation. Citing this last number as evidence of a welfare “splurge” is unfair. By law, the government is obliged to uprate benefits every year, and even the Tories are not proposing to freeze universal credit payments.

12.04pm GMT

Q: Would more tax-free shopping for tourists help the high street?
Badenoch says, after Brexit, she thought tax-free shopping for foreign tourists would help British business. But she says she lost the argument internally, because other people in government were against the idea. She claims this was because they did not model the behavioural impact. (She is referring to the theory that, although the Treasury might lose from individual tourists getting a tax exemption, the overall boost to shopping would more than compensate for that.)
She claims Labour is also refusing to model the behavioural impact of tax policies. She says the government is not getting as much money as it expected from VAT on private schools because schools are closing and pupils are going to state schools.
(In fact, the early evidence suggests this has not happened.)
That was the last question.
Rupert Soames ends by again praising Badenoch for her stance on the employment rights bill. He says he has been employing people for 40 years, and has been trying to think what impact it will have on employment decisions. The effect will be “really bad”, he says. He says the bill will need “a lot of rethinking”.

11.54am GMT

Q: The last government was suspicious of industrial strategy. Do you think a national industrial strategy is a good idea?
Badenoch says the problem was that the strategy used to change often under the last government. That created uncertainty. That is why she favours simplicity.
She says the biggest thing the Tories would do to help business is their cheap power plan.
She says distributing grants from small pots of money does not amount to an industrial strategy.

11.51am GMT
Badenoch says she is getting better at being Tory leader

Badenoch is now taking questions. The session is being chaired by Rupert Soames, the CBI chair (and brother of a Tory peer). The first thing he said was “wow” as she finished her speech. He said the CBI has been attacking the employment rights bill almost as much as she was.
He starts with a question of his own.
Q: Do you think you are getting better at being opposition leader?
Badenoch accepts this. With any job you are doing for the first time, you get better, she says. She goes on:

I didn’t know anyone who was at their best on their first day. And in fact, you should be worried at anybody who’s at their best on their first day.

Updated at 12.10pm GMT

11.46am GMT

Badenoch says the government should be cutting regulation.
And she claims she can do this because, when she was business secretary, she was able to cut regulation. As an example, she says she ruled about mandatory ethnicity pay reporting.
She ends by saying if she wins the election she will repeal the main elements of the employment rights bill.

11.44am GMT
Badenoch says growth being held up because 'the state is too big'

Badenoch says the problem with growth in this country is not that workers don’t have enough right. It’s that “the state is too big”, she says.

Fewer and fewer people are working to support more and more people out of work and living on welfare. The rider is getting heavier than the horse.

11.41am GMT
Badenoch tells CBI employment rights bill not pro-worker, just pro-union

Kemi Badenoch starts her speech with an attack on the employment rights bill, as briefed by CCHQ overnight. (See 10.04am.)
She says provisions in the bill will allow unions to try to organise in any business with more than 20 staff. This is “industrial intimidation”, she says.
And she criticises the plan to remove the turnout threshold for strike ballots. Currently unions need to get a 50% turnout. But that will go under the bill, she says. She claims, in a firm with a workforce of 1,000, this could theoretically lead to a strike vote being valid if only two people voted in favour.
She accepts that is an extreme example, but she says it highlights the “absurdity” of the law.
She says the bill is not about giving workers’ new rights. It is not a pro-workers bill, she says; it is a pro-union bill.

11.33am GMT

Kemi Badenoch is addressing the CBI conference now.
There is a live feed here.

10.51am GMT
CBI chief Rain Newton-Smith urges Reeves not to impose 'death by thousand taxes' on business in budget

Rain Newton-Smith, director general of the CBI, opened its conference this morning by urging the government not to inflict “death by a thousand taxes” on British business in the budget.
She said the chancellor, Rachel Reeves, said she was committed to growth. Newton-Smith went on:

Prove it – against opposition, against short-term politics, be it on welfare, be it pension increases, show the markets you mean business,” she said
Short-term politics leads to a long-term decline, and this country cannot afford another decade of stagnation.
That means making hard choices for growth now before they get harder, having the courage to take two tough decisions rather than 20 easier ones.
Raising the headroom to make promises stick, it means one or two broad tax rises, rather than death by a thousand taxes.

Newton-Smith was referring to the debate about whether it would be better to raise money in the budget by raising a very large sum by increasing one of the main taxes (income tax, national insurance or VAT), or by much smaller increases across a wider range of options. Recently this has frequently been described as the “smorgasbord” approach.
With all the key budget decisions now firmed up (because of the necessity to get them assessed by the Office for Budget Responsibility), Netwton-Smith’s appeal has come too late. It is understood that Reeves has chosen a smorgasbord budget.
But ministers do want to assure business that there will be some good news for them in the budget. This is from the Financial Times’s pre-budget analysis at the weekend.

Although business will still be hit on November 26 — including through a crackdown on pension payments made through salary sacrifice schemes — ministers say things could have been worse, as the chancellor delivers a package of tax rises and spending cuts worth up to £30bn.
“There were things in there that we took out,” said one person close to the budget preparations. Plans to increase taxes on partnerships, affecting lawyers and accountants, were dropped, along with a mooted “exit tax” on people selling assets and moving abroad. Banks are expected to be spared from a mooted increase in taxes on their profits.

Updated at 10.52am GMT

10.36am GMT
Kyle tells CBI that growth remains government's key priority, and that there are 'reasons for optimism'

Peter Kyle, the business secretary, used his speech to the CBI to insist that promoting growth remains the government’s “number one priority”.
He also told business leaders in his audience that there were “reasons for optimism”.
At the election Labour said growth would be its key priority, but there has been less emphasis on this recently after business reacted badly to the employer national insurance increase in last year’s budget.
Kyle said growth remained the key goal, and he said that he wanted to show that he understood business thinking on this issue. He said:

My priority in this job is to break down the barriers to business growth, to create the right conditions for you to do what you do best. Creating wealth and opportunity.
I want us to turn the corner on the low, slow, uneven growth Britain has experienced for almost two decades.

Kyle praised the contribution of the business community, saying their resilience was a national asset.
And he told them there were “reasons for optimism”. The trade agreements with the US and India would help exporters, he said, the new partnership with the EU would help firms trading with the UK’s biggest partner, and he said “the biggest shake-up in the planning system in an entire generation” would also benefit the sector.
Britain was “turning a corner, and unlocking economic momentum”, he said.
UPDATE: Kyle said:

What we need to double down more on, which is my job, is to express why the singular importance of economic growth.
We inherited a situation when we came into office where we stuck in this buy slight grip of high taxes and low growth, and we are not going to break out of this cycle unless we do some pretty profoundly different things.
I really think we have inherited growth emergency, and we are still in it, and we will be in it for as long as we are unable to get our way out of this situation without increased economic productivity.

Updated at 11.02am GMT

10.12am GMT
Budget expected to include £14.5m investment for job support in Grangemouth after refinery closure

Severin Carrell is the Guardian’s Scotland editor.
The chancellor, Rachel Reeves, is expected to release £14.5m in extra investment for the Grangemouth area on Wednesday to support faltering efforts to provide jobs after the closure of Scotland’s only oil refinery earlier this year.
The PetroIneos plant closed down with the loss of around 450 direct jobs, because it was aging, loss making and uneconomic to upgrade. For many, it has become symbolic of the failure by both the UK and Scottish governments to plan properly for the transition to a net zero economy.
Despite publishing a detailed blueprint for attracting green, low carbon chemicals, fuels and plastics businesses to Grangemouth, boosted by £200m in UK government financing and £25m in Scottish government development funding, few new jobs have so far been secured.
With Labour facing defeat again by the Scottish National party in next May’s Holyrood election, Reeves is under heavy pressure to deliver politically useful spending decisions in Wednesday’s budget.
Amongst other Scotland-specific policies, she is being lobbied heavily to freeze or cut spirits duty to help the ailing Scotch whisky industry; cut or freeze levies on North Sea oil and gas; avoid any decisions which cut Scotland’s grant from the Treasury.
The BBC quoted a Treasury source saying:

We said we would stand squarely behind communities like Grangemouth, and we meant it. And we’re building on what we have done already by putting millions in as a starter to help put the community on a firm footing and strengthening its places as part of the clean energy revolution.
These investments will help deliver a fair transition for Grangemouth, securing jobs for local people way into the future.

10.04am GMT
Kyle says Badenoch would return to era of 'fire and rehire' as she calls for repeal of key measures in employment rights bill

According to extracts from her speech released overnight, Kemi Badenoch is going to use her speech to the CBI this morning to sugges that the employment rights bill is more of a threat to business than tax rises. She will say:

When I visit business and ask them what most causes anxiety, yes, they do talk about the tax burden.
But the single most complained about measure in this government’s programme is not a tax rise. It is the employment rights bill …
Take day one tribunal rights.
Under this bill, a new hire can turn up at nine in the morning and lodge a claim with an employment tribunal, before they’ve even worked out where the toilets are …
Then there is the de facto ban on seasonal and flexible work.
If a university undergrad chooses to get a Christmas job and works 40 hours a week in the three weeks before December, they then have the right to those same hours in January, February and March.
Great.
Except there’s no demand then, and revenue falls off a cliff.
A measure designed to ensure employment in January will effectively mean firms don’t hire in December … and everyone loses.

Badenoch will say the Tories would repeal “every job destroying, anti-business, anti-growth measure in this bill”.
In a response issued overnight, Peter Kyle, the business secretary, said:

Nobody did more to hammer business and employees than Kemi Badenoch did as business secretary. Her Tory party crashed the economy – leaving firms and families saddled with sky-high interest rates, rocketing energy costs, and higher prices. Yet they still haven’t apologised.
The Conservatives are clear: they’ve declared war on workers. Badenoch already described maternity pay as ‘excessive’ and her cruel plans would mean a return of fire-and-rehire and quashed wages for workers, while she drowns business in red tape all over again.

Updated at 10.05am GMT

9.49am GMT

Joel Hills, business and economics editor at ITV News, was not impressed by Peter Kyle’s claim on the Today programme that the pre-budget uncertainty has not been much of a problem for the economy. (See 9.30am.) Hill posted this on social media.

The business secretary, Peter Kyle, has just told Today that he “refutes” the assertion that three months of endless leaks, briefings and speculation about which taxes will rise in the Budget has harmed the economy. The governor of the Bank of England is clear that it has.

9.30am GMT
Business secretary Peter Kyle dismisses claim 'shambolic' pre-budget uncertainty has caused significant hit to growth

Good morning. We are two days away from the budget and, although we have a good idea of some of the main measures in it, the real debate about whether they are wise or not will not kick off until Wednesday afternoon. But Rachel Reeves, the chancellor, is already facing criticism about the handling of the process ahead of Wednesday, and this morning, with the CBI holding its annual conference, those comments are getting fresh prominence.
Put bluntly, expectation management is widely seen as having been shambolic. Two decisions in particular have backfired. First, this time last year, at the CBI conference, Reeves said explicitly that the 2025 budget would not involve tax rises on the scale of the 2024 one, but now it is clear that they will. Then, three weeks ago, Reeves gave a speech in Downing Street signalling very clearly to the markets, and to her party, that she was going to have to raise income tax in the budget, in breach of the manifesto. (Some of her allies now claim she was only floating an option, but that is not how her government colleagues understood it, or presented it, at the time; she was pitch rolling, not kite flying.) But then she changed her mind.
Economists are saying that that this lack of certainty has been bad for growth. This is what Andy Haldane, the former chief economist at the Bank of England, told the BBC yesterday.

We’ve had month upon month of speculation – fiscal fandango, basically. And that’s been costly for the economy. It’s caused paralysis among business and consumers. It’s the single biggest reason why growth has flatlined, it’s been grounded in the second half of the year.

In an interview this morning on the Today programme, Mohamed El-Erian, former chief economic adviser to Allianz, the German finance company, said the economic data suggested Haldane was right. He explained:

There are a number of data points that suggest that the prolonged speculation has flatlined growth. You see this in the latest retail sales numbers, which were the first to decline since May.
You see this in the decline of business confidence and consumer sentiment.
And there’s a general agreement that the economy has paid a price for a process that has been delayed, that has been full of speculation, and that has seen the government send conflicting signals.

And Rupert Soames, chair of the CBI, made the same argument on Times Radio this morning. Soames, a former chief executive of Serco (and brother of the Tory peer Nicholas Soames), said:

This whole run into the budget has been really difficult and I think that in any future budgets lessons will be learned not to indulge in the constant technically pitch rolling – all these different ideas being inflated and then withdrawn and then tried again. It’s been really confusing to businesses and it’s unnecessary … This frankly pretty shambolic process in the run into [the budget] has been unhelpful.

Peter Kyle, the business secretary, is the government speaker at the CBI conference. In an interview on the Today programme, when he was asked about Andy Haldane’s claim that pre-budget uncertainty was the biggest constraint on growth, Kyle rejected that. He said:

The biggest single challenge to growth in this country is the inheritance this government had. The Brexit deal alone has taken 4% of GDP off the whole economy. That is a fact. It far outweighs anything that speculation could and did cause.

He also defended what pre-budget briefing there has been in public, saying he and other ministers wanted to explain “the direction of travels”, while not pre-announcing budget measures. And he said some pre-budget speculation in the media was “wildly out of line”.
Here is the agenda for the day. Over the last few months the Monday agenda has often included a Nigel Farage press conference. But this morning he’s gone quiet, and is not facing the journalists. It’s not hard to guess why.
10am: Peter Kyle, the business secretary, speaks at the CBI conference.
11.20am: Kemi Badenoch speaks at the CBI conference.
11.30am: Downing Street holds a lobby briefing.
Afternoon: Keir Starmer is visiting a school in Cambridgeshire with Bridget Phillipson, the education secretary.
2pm: More in Commons releases new polling about public expectations ahead of the budget.
2.30pm: Steve Reed, the housing secretary, takes questions in the Commons.
3.30pm: Michael Prescott, the BBC adviser who wrote the memo critical of the Trump speech edit and other instances of alleged bias that ultimately led to the resignation of the director general, gives evidence to the Commons culture committee. At 4.30pm Samir Shah, the BBC chair, and Sir Robbie Gibb, the former Tory spin doctor who is on the BBC board and who has led attempts to fight supposed leftwing bias at the corporation, give evidence. We will be covering the hearing on a separate live blog.
4pm: Zia Yusuf, Reform UK’s head of policy, take part in a Q&A at the CBI conference.
4.40pm: Nigel Farage, the Reform UK leader, speaks at a rally in Llandudno.
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Updated at 10.07am GMT