deep unease and a nightmare. cabinet sources tell newsnight of anxiety over budget spending cuts.

and this woman lost 11 stone using weight loss drugs like ozempic. we will talk to her and the oxford economist who thinks such drugs could help save the nhs. welcome to newsnight, live each weeknight with interviews and insight. your panellists tonight are labour mp rosena allin khan who is also a doctor, and former conservative mp and ex—minster steve baker. right, the budget is two weeks today. last night nick reported that the chancellor rachel reeves is looking to make tax rises and spending cuts to the value of £40bn. tonight, nick, you've been picking up a darkening mood

in the cabinet over spending cuts. alongside nick is ben chu bbc verify�*s policy correspondent. the old band is back together! nick, what are people saying to you? it is clearly a very grim mood around the cabinet table two weeks away from that budget. the sort of language i am hearing from cabinet sources are things like it is an effing nightmare. iam sources are things like it is an effing nightmare. i am also hearing language about how some cabinet ministers as it was put to me are being a little bit antsy. this all kicked off this afternoon when bloomberg reported that some cabinet ministers who have real concerns about what might be going on and what sort of because they might be facing wrote to the prime minister to raise their concerns. it looks like we have one united theme round the cabinet table which is, this is absolutely awful. then ministers split roughly into two groups. there

are those who are saying it is a terrible challenge but we understand the pressure that the chancellor is under. then there are other ministers who are really concerned. it is not so difficult to work out who they are. they are in the so—called unprotected apartments, their budgets are not protected. not rocket science to work out who we are talking about. angela rayner, housing and local government. justice and transport. i am not saying they wrote letters but they are the ministers who would be worried. it all came to a head in the last few hours when the treasury agreed the final spending settlements for departments from next april for another year. so for 2025 to 2026 and 27. that was agreed in the last few hours. the reason why it has to be done then is tomorrow is the deadline for it to go to the office for budget responsibility. that is called the

major settlement two process. then the day before the budget the office for budget responsibility will come back to the chancellor with their fiscal forecast and that will identify, ben will know all about this, fiscal headroom, how much spare money there is. how could you maybe not raise taxes quite so much and not cut spending quite so much. to get an idea of the atmosphere, this is the view of people who were on the rachel reeves and keir starmer side of the table, talking about how some cabinet ministers are being antsy, but they basically understand it all, they have done their settlements. and then they are going to have to suck it up. ben. going to have to suck it up. ben, can ou going to have to suck it up. ben, can you explain _ going to have to suck it up. ben, can you explain to _ going to have to suck it up. ben, can you explain to our— going to have to suck it up. ben, can you explain to our audience where there is a a0 billion figure has come from? we where there is a 40 billion figure has come from?— where there is a 40 billion figure has come from? we have had quite a lot of confusing _ has come from? we have had quite a lot of confusing numbers _ has come from? we have had quite a lot of confusing numbers thrown - lot of confusing numbers thrown about _ lot of confusing numbers thrown about. rememberthe £22 lot of confusing numbers thrown about. remember the £22 billion black_ about. remember the £22 billion black hole and now we have got a £40 billion _ black hole and now we have got a £40 billion tax and spending cuts. the easy way— billion tax and spending cuts. the easy way to think about it is to think_ easy way to think about it is to think about the spending pressures on the _ think about the spending pressures on the government and the institute for fiscal_ on the government and the institute for fiscal studies lay this out quite — for fiscal studies lay this out quite recently showing what they were~ £9 — quite recently showing what they were. £9 billion is the public

sector— were. £9 billion is the public sector pay deal that they did. £5 biiiion— sector pay deal that they did. £5 billion was in the labour manifesto. that is— billion was in the labour manifesto. that is things like free school breakfast clubs. rachel reeves said she didn't _ breakfast clubs. rachel reeves said she didn't want austerity to come back to _ she didn't want austerity to come back to the — she didn't want austerity to come back to the public sector. on those unprotected apartments nick was talking _ unprotected apartments nick was talking about, if they wanted to keep— talking about, if they wanted to keep those budgets flat in inflation adjusted _ keep those budgets flat in inflation adjusted terms, it would cost £16 biiiion— adjusted terms, it would cost £16 billion a _ adjusted terms, it would cost £16 billion a year. but if they wanted to keep — billion a year. but if they wanted to keep those budgets flat as a share _ to keep those budgets flat as a share of— to keep those budgets flat as a share of gdp which is probably more reatistic— share of gdp which is probably more realistic definition, that would cost _ realistic definition, that would cost about £17 billion a year. that all adds_ cost about £17 billion a year. that all adds up— cost about £17 billion a year. that all adds up to £47 billion. that is almost _ all adds up to £47 billion. that is almost in — all adds up to £47 billion. that is almost in line with the £40 billion figure _ almost in line with the £40 billion figure that we are hearing. all that does not _ figure that we are hearing. all that does not have to be raised through tax necessarily. there could be spending — tax necessarily. there could be spending cuts as well. it looks like they are _ spending cuts as well. it looks like they are trying to find some spending cuts from certain departments. that may be because they are _ departments. that may be because they are spending more money on the nhs which _ they are spending more money on the nhs which is so big that it crowds out everything else. that

nhs which is so big that it crowds out everything else.— out everything else. that is a protected _ out everything else. that is a protected apartment. - out everything else. that is a protected apartment. there l out everything else. that is a . protected apartment. there may out everything else. that is a - protected apartment. there may still be a squeeze — protected apartment. there may still be a squeeze on _ protected apartment. there may still be a squeeze on those _ protected apartment. there may still be a squeeze on those unprotected l be a squeeze on those unprotected apartments. we be a squeeze on those unprotected apartments-— be a squeeze on those unprotected apartments. we were warned about this durin: apartments. we were warned about this during the _ apartments. we were warned about this during the election _ apartments. we were warned about this during the election campaign. i this during the election campaign. as you say, rishi sunak stood up in front of the british people, as our former conservative candidate and our labour candidate will remember, and he said labour will raise taxes beyond what they are claiming. labour say, we made a very specific commitment and here it is. labour will not increase taxes on working people, which is why we will not increase national insurance, the basic higher or additional rate of income tax or vat. as we find out this week, as downing street refused to deny that they may raise a national insurance on employers, not employees, there was quite a lot of wriggle room in what obviously the labour party said in its manifesto. so what we have is the conservatives are saying told you so and what we have labour saying is we were very

specific that those three main taxes would not go up on working people. if you are complaining about other things, like capital gains tax going up, we were silent on that. why do we get a flavour of what we heard during the election campaign? keir starmer is going to raise taxes, but that is just the start because there is a long list of other things that he needs to find the money for, so it is notjust going to start and stop there. there are £2000 worth of tax rises coming for every working family in this country and, as i said, he is saying he's going to raise taxes... that is not what i am saying. we will raise specific taxes and we have been really clear what they are. we have already dealt with the tax break on private schools. we want to end the non—dom status completely, i think the super—rich should be paying their tax. i want to get rid of the equity loopholes that are there, again for the super—rich. and the oil and gas companies should be paying theirfair share towards our energy.

we will raise those but we will not raise _ we will raise those but we will not raise the _ we will raise those but we will not raise the others. rishi sunak would say i told you taxes would be going up, but labour to this day absolutely rejects that. we were also warned by various eminent public finance experts. fiscal studies, resolution foundation, many others, and you chaiiehqed — foundation, many others, and you challenged ministers on this programme about the fact there was a conspiracy— programme about the fact there was a conspiracy of silence because what they are _ conspiracy of silence because what they are pencilled in for public service — they are pencilled in for public service spending settlements was totally _ service spending settlements was totally unrealistic, given the state of those _ totally unrealistic, given the state of those public services. that is why what — of those public services. that is why what we are all talking about and really — why what we are all talking about and really matters to people, people who use _ and really matters to people, people who use the health service, education, local government, environment, these matter for people's— environment, these matter for people's lives and the services are not people's lives and the services are hot in _ people's lives and the services are hot in a _ people's lives and the services are not in a good state. this may seem very abstract — not in a good state. this may seem very abstract but it matters for people's — very abstract but it matters for people's lives, the decisions being made _ people's lives, the decisions being made right now. let people's lives, the decisions being made right now.—

made right now. let me bring in steve baker. _ made right now. let me bring in steve baker. labour— made right now. let me bring in steve baker. labour promised i made right now. let me bring in | steve baker. labour promised no return to austerity and it sounds like it could be the opposite in a couple of weeks' time. obviously we can sit here — couple of weeks' time. obviously we can sit here and _ couple of weeks' time. obviously we can sit here and speculate _ couple of weeks' time. obviously we can sit here and speculate all- couple of weeks' time. obviously we can sit here and speculate all we - can sit here and speculate all we like but quite frankly no one has seen details of the budget and it would be impossible to have a critical ball and look at it. what we do know is that under the conservatives we had 1a years of, quite frankly, financial vandalism and we had mismanagement of spending. if you look at the home office, the budget for asylum and border control was supposed to be 110 million and we ended up with 7.6 million coming out of the public purse. labour have inherited this huge, huge black hole, larger than they thought they were actually going to, and now we have to make a very unenviable decisions. but ultimately sir keir starmer and rachel reeves said they were not going to raise taxes on working people and i believe them. tibia

going to raise taxes on working people and i believe them. ok, it will be interesting _ people and i believe them. ok, it will be interesting to get - people and i believe them. ok, it will be interesting to get you - people and i believe them. ok, it| will be interesting to get you back in two weeks from a time to see if they do raise national insurance on employers. they do raise national insurance on employem-— they do raise national insurance on emlo ers.�* ., ., employers. always glad to come back on. peole employers. always glad to come back on- peeple are _ employers. always glad to come back on. people are saying _ employers. always glad to come back on. people are saying there _ employers. always glad to come back on. people are saying there is - employers. always glad to come back on. people are saying there is an - on. people are saying there is an attack on jobs. steve _ on. people are saying there is an attack on jobs. steve baker, - on. people are saying there is an attack onjobs. steve baker, it i on. people are saying there is an l attack onjobs. steve baker, it was your conservative government that created this problem, wasn't it? not only the national insurance cuts which were unsustainable, but also because of poor budgeting over things like asylum and the home office. �* , ,, . ., office. broadly speaking. we have had a huge — office. broadly speaking. we have had a huge problem _ office. broadly speaking. we have had a huge problem with - office. broadly speaking. we have had a huge problem with illegal i had a huge problem with illegal miqratioh— had a huge problem with illegal migration across _ had a huge problem with illegal migration across the _ had a huge problem with illegal migration across the channel. l had a huge problem with illegal. migration across the channel. find migration across the channel. and ou didn't migration across the channel. you didn't budget properly migration across the channel. aim} you didn't budget properly for migration across the channel. you didn't budget properly for it over the last number of years. there is a reasonable _ over the last number of years. there is a reasonable point _ over the last number of years. there is a reasonable point to make - over the last number of years. there is a reasonable point to make but i don't _ is a reasonable point to make but i don't thihk— is a reasonable point to make but i don't think we _ is a reasonable point to make but i don't think we could _ is a reasonable point to make but i don't think we could reasonably . don't think we could reasonably forecast the _ don't think we could reasonably forecast the number of - don't think we could reasonably . forecast the number of boats that came _ forecast the number of boats that came across — forecast the number of boats that came across the _ forecast the number of boats that came across the channel. - forecast the number of boats that came across the channel. what i forecast the number of boats thati came across the channel. what we have _ came across the channel. what we have been— came across the channel. what we have been putting _ came across the channel. what we have been putting in _ came across the channel. what we have been putting in place - came across the channel. what we have been putting in place has - came across the channel. what we. have been putting in place has been repeated _ have been putting in place has been repeated by— have been putting in place has been repeated by the _ have been putting in place has been repealed by the labour— have been putting in place has been repealed by the labour party. - have been putting in place has been repealed by the labour party. sure,j repealed by the labour party. sure, but ou repealed by the labour party. sure, but you gave _ repealed by the labour party. sure, but you gave 20 _ repealed by the labour party. sure, but you gave 20 billion _ repealed by the labour party. sure, but you gave 20 billion tax - repealed by the labour party. sure, but you gave 20 billion tax cuts - repealed by the labour partym but you gave 20 billion tax cuts and national insurance went from 12% to 8%. that was unsustainable. that is

why, you could argue, labour are having to put taxes up. i why, you could argue, labour are having to put taxes up.— having to put taxes up. i would like to be clear — having to put taxes up. i would like to be clear about this, _ having to put taxes up. i would like to be clear about this, as long - to be clear about this, as long as we all live, — to be clear about this, as long as we all live, the _ to be clear about this, as long as we all live, the fiscal _ to be clear about this, as long as we all live, the fiscal situation i we all live, the fiscal situation will be extremely _ we all live, the fiscal situation - will be extremely difficult. anyone who has— will be extremely difficult. anyone who has looked _ will be extremely difficult. anyone who has looked at _ will be extremely difficult. anyone who has looked at the _ will be extremely difficult. anyone who has looked at the report - will be extremely difficult. anyone who has looked at the report will i who has looked at the report will have seen— who has looked at the report will have seen this _ who has looked at the report will have seen this chart _ who has looked at the report will have seen this chart that - who has looked at the report will have seen this chart that shows i have seen this chart that shows sbehdihg — have seen this chart that shows spending soarihg _ have seen this chart that shows spending soaring away- have seen this chart that shows spending soaring away because j spending soaring away because of related _ spending soaring away because of related spending, _ spending soaring away because of related spending, with _ spending soaring away because of related spending, with revenues. related spending, with revenues stagnatihg _ related spending, with revenues stauanatin. ~ , related spending, with revenues stagnating. related spending, with revenues stauanatin. ~ , i. :: stagnating. why were you giving £20 billion worth of _ stagnating. why were you giving £20 billion worth of tax _ stagnating. why were you giving £20 billion worth of tax cuts _ stagnating. why were you giving £20 billion worth of tax cuts before - billion worth of tax cuts before the election? it billion worth of tax cuts before the election? , ., . , ., election? it is not the decision i took. election? it is not the decision i took- but _ election? it is not the decision i took- but if— election? it is not the decision i took. but if you _ election? it is not the decision i took. but if you want _ election? it is not the decision i took. but if you want growth . election? it is not the decision i | took. but if you want growth you need _ took. but if you want growth you need to — took. but if you want growth you need to reduce _ took. but if you want growth you need to reduce taxes _ took. but if you want growth you need to reduce taxes on - took. but if you want growth you need to reduce taxes on capital. | need to reduce taxes on capital. growth — need to reduce taxes on capital. growth has _ need to reduce taxes on capital. growth has got _ need to reduce taxes on capital. growth has got to _ need to reduce taxes on capital. growth has got to come - need to reduce taxes on capital. growth has got to come from i need to reduce taxes on capital. i growth has got to come from the private _ growth has got to come from the private sector— growth has got to come from the private sector and _ growth has got to come from the private sector and that _ growth has got to come from the private sector and that means . private sector and that means capital — private sector and that means capital investment, _ private sector and that means capital investment, it - private sector and that means capital investment, it meansi private sector and that means - capital investment, it means making the uk _ capital investment, it means making the uk the _ capital investment, it means making the uk the best— capital investment, it means making the uk the best place _ capital investment, it means making the uk the best place in— capital investment, it means making the uk the best place in the - capital investment, it means making the uk the best place in the world i the uk the best place in the world to invest — the uk the best place in the world to invest for — the uk the best place in the world to invest for a _ the uk the best place in the world to invest for a return. _ the uk the best place in the world to invest for a return. sorry, - to invest for a return. sorry, fihish — to invest for a return. sorry, finish the _ to invest for a return. sorry, finish the sentence. - to invest for a return. sorry, finish the sentence. taxing i to invest for a return. sorry, - finish the sentence. taxing returns is prejudicial— finish the sentence. taxing returns is prejudicial to growth _ finish the sentence. taxing returns is prejudicial to growth and - finish the sentence. taxing returnsi is prejudicial to growth and we need the 1415 00:11:53