justin rowlatt, bbc news. we can speak now to our correspondent bethany bell, who's in valencia for us now. terrible scenes, what is the situation where you are now? this has been described as one of the worst natural disasters in spain's history. i am standing not farfrom spain's history. i am standing not far from the river in valencia and the water must have rushed down the street with such force that it lifted cars off the ground, and there is destruction in areas across this region. in one village not too farfrom here, a0 people are known to have died including a number of people at a nursing home, and in the meantime the painstaking search for the missing goes on. spain's prime

minister has sent his condolences to those who have lost their loved ones and he said that spain weeps with you. and the country has declared three days of national mourning and the clean—up is likely to take weeks and months. an 18—year—old accused of murdering three girls at a dance class in southport appeared at westminster magistrates court today charged with two more offences.

treasury who is on newsnight tonight. good not sure if that worked but you have to try these things. welcome to newsnight live each weeknight and tonight it's all about the massive budget. chancellor rachel reeves announced £a0 billion in tax rises. that's a tax take at its highest since the war, with more than half of that falling on employers. significantly more borrowing. and a £22 billion increase in the "day—to—day health budget" for the nhs. tory leader rishi sunak calls it "an enormous borrowing spree". ms reeves referenced growth more than two dozen times in her speech.

but forecasts suggest all the measures in the budget do not boost the economy in the next 3—5 years. we've got the gang back together — ben chu and of course, nick watt. nick — you've spent the day in the corridors of power in parliament. take us behind the scenes. you know what i am like on a day like this, i spend hours walking around the parliamentary estate and it's very difficult to avoid bumping into rachel reeves. she looked really happy and her team looked really happy and her team looked really happy and her team looked really happy because her budget had the most enthusiastic response from labour mps for a labour budget since the heyday of gordon brown. they stood up and waved their audit papers. they were really happy, because it was a labour budget. rachel reeves did to really significant things. she said no more austerity and i am going to balance the books. in recent years of those two have been mutually exclusive and

rachel reeves said no, i am going to do the two. interestingly talking to one of the chancellor's really close cabinet colleagues they said the chancellor made a really big call to borrow and invest. this person was saying she could have been really but she said no because if she had been cautious it would be managed decline under this government as opposed to unmanaged decline under the tories and basically said, we are not in the four decline. after the election it became clear to them that public finances were much worse than they thought with public services in a bad place and they thought, we havejust got services in a bad place and they thought, we have just got to go for it. ben — the chancellor is calling this a �*budget for growth' — is it? that is their mission, to get gross to the _ that is their mission, to get gross to the highest sustained level for the g7~ _ to the highest sustained level for the g7. the key question is what impact _ the g7. the key question is what impact that this budget have on the growth _ impact that this budget have on the growth prospects of the uk economy? what did _ growth prospects of the uk economy? what did the obr growth prospects of the uk economy? what did the 0br say? rachel reeves

itii-i'it what did the 0br say? rachel reeves might have been very happy about this picture is not a particularly happy— this picture is not a particularly happy one _ this picture is not a particularly happy one in terms of what the 0br thinks _ happy one in terms of what the 0br thinks witi— happy one in terms of what the 0br thinks will happen. this is the impact — thinks will happen. this is the impact on _ thinks will happen. this is the impact on growth from the budget. there _ impact on growth from the budget. there is— impact on growth from the budget. there is a _ impact on growth from the budget. there is a short—term boost in the next _ there is a short—term boost in the next couple — there is a short—term boost in the next couple of years but by the final— next couple of years but by the final year— next couple of years but by the final year of the forecast there is a negative — final year of the forecast there is a negative impact. this doesn't mean we are _ a negative impact. this doesn't mean we are in— a negative impact. this doesn't mean we are in recession, it means growth is lower— we are in recession, it means growth is tower than — we are in recession, it means growth is lower than it otherwise would have _ is lower than it otherwise would have treen— is lower than it otherwise would have been as a result of those measures— have been as a result of those measures in the budget. why is it happening? according to the office for budget responsibility because of the big _ for budget responsibility because of the big heights and employers national— the big heights and employers national insurance which they think will deter— national insurance which they think will deter companies from hiring. there _ will deter companies from hiring. there is— will deter companies from hiring. there is a — will deter companies from hiring. there is a caveat which is that these — there is a caveat which is that these are _ there is a caveat which is that these are only forecasts and also that the — these are only forecasts and also that the obr these are only forecasts and also that the 0br thinks that in the next parliament her borrowing to invest will increase the uk's potential growth — will increase the uk's potential growth rate, so it should be positive _ growth rate, so it should be positive. quite a long time between now and _ positive. quite a long time between now and then. for the rest of this

partiament— now and then. for the rest of this parliament the big fear is that dampening effect and they need businesses to invest and hire on newsnight has spoken to the boss of one of— newsnight has spoken to the boss of one of the _ newsnight has spoken to the boss of one of the uk's largest recruitment firms— one of the uk's largest recruitment firms tonight and he told us about his fears _ firms tonight and he told us about his fears that there will be a dampening effect of that tax rise on companies — dampening effect of that tax rise on companies willingness to hire. the effect on business is huge, so the increase _ effect on business is huge, so the increase in— effect on business is huge, so the increase in employers _ effect on business is huge, so the increase in employers national- increase in employers national insurance. _ increase in employers national insurance. 25— increase in employers national insurance, 25 billion _ increase in employers national insurance, 25 billion that - increase in employers national- insurance, 25 billion that business will have — insurance, 25 billion that business will have to — insurance, 25 billion that business will have to find, _ insurance, 25 billion that business will have to find, is _ insurance, 25 billion that business will have to find, is a _ insurance, 25 billion that business will have to find, is a very- will have to find, is a very significant. _ will have to find, is a very significant. when- will have to find, is a very significant. when you - will have to find, is a very significant. when you add will have to find, is a very- significant. when you add that to the increase. _ significant. when you add that to the increase, which— significant. when you add that to the increase, which i— significant. when you add that to the increase, which i actually- the increase, which i actually wetcome, _ the increase, which i actually wetcome, of— the increase, which i actually welcome, of the _ the increase, which i actually welcome, of the national- the increase, which i actually- welcome, of the national minimum wage _ welcome, of the national minimum wage my— welcome, of the national minimum wage my concern _ welcome, of the national minimum wage my concern is _ welcome, of the national minimum wage. my concern is that _ welcome, of the national minimum wage. my concern is that this - welcome, of the national minimum wage. my concern is that this mayl wage. my concern is that this may result— wage. my concern is that this may result in— wage. my concern is that this may result in employers _ wage. my concern is that this may result in employers creating - wage. my concern is that this mayj result in employers creating fewer rather _ result in employers creating fewer rather than — result in employers creating fewer rather than more _ result in employers creating fewer rather than more jobs, _ result in employers creating fewer rather than more jobs, and - result in employers creating fewer rather than more jobs, and maybe result in employers creating fewer. rather than more jobs, and maybe a brake _ rather than more jobs, and maybe a brake on _ rather than more jobs, and maybe a brake on business _ rather than more jobs, and maybe a brake on business confidence and l rather than more jobs, and maybe a| brake on business confidence and on economic— brake on business confidence and on economic growth _ brake on business confidence and on economic growth. 50 _ brake on business confidence and on economic growth.— economic growth. so how are the markets are _ economic growth. so how are the markets are reacting? _ economic growth. so how are the markets are reacting? this - economic growth. so how are the markets are reacting? this was i economic growth. so how are the markets are reacting? this was a | economic growth. so how are the i markets are reacting? this was a big buduet markets are reacting? this was a big bud . et with markets are reacting? this was a big budget with big _ markets are reacting? this was a big budget with big spending _ markets are reacting? this was a big budget with big spending and - markets are reacting? this was a big budget with big spending and big - markets are reacting? this was a bigj budget with big spending and big tax rises and _ budget with big spending and big tax rises and also big borrowing, additional borrowing over the course

of this— additional borrowing over the course of this parliament. the concern was how the _ of this parliament. the concern was how the markets would take it. we all remember what happened in 2022 with a _ all remember what happened in 2022 with a trig _ all remember what happened in 2022 with a big borrowing leading to a real market breakdown after liz truss _ real market breakdown after liz truss and — real market breakdown after liz truss and kwasi kwarteng's mini budget— truss and kwasi kwarteng's mini budget so let's see how the markets reacted~ _ budget so let's see how the markets reacted. this shows the ten year borrowing — reacted. this shows the ten year borrowing costs in the market. you can see _ borrowing costs in the market. you can see from — borrowing costs in the market. you can see from the line where she started — can see from the line where she started to — can see from the line where she started to speak and going up around 2pm _ started to speak and going up around 2pm there _ started to speak and going up around 2pm. there was a bit of a wobble when _ 2pm. there was a bit of a wobble when the — 2pm. there was a bit of a wobble when the markets but it came down and overall— when the markets but it came down and overall it is fair to say that the markets absorbed what she proposed today, but make no mistake, the treasury _ proposed today, but make no mistake, the treasury will be looking at that chart _ the treasury will be looking at that chart very — the treasury will be looking at that chart very closely to make sure it really _ chart very closely to make sure it really has — chart very closely to make sure it really has landed. are there any other potential concerns for the government? 0n on any budget day the opposition are looking very carefully and saying can we trip them up anywhere? and then the government is saying, is there anything that could be difficult for us? one area where

questions are being asked. rachel reeves announced she would change some of the elements of inheritance tax to raise £2 billion in the final year of the forecast. the area with question marks as changes to agricultural property relief in the business property relief. until now no inheritance tax is paid on combined business and agricultural assets. that will change from april 2026 so there will be no inheritance tax on the first i 2026 so there will be no inheritance tax on the firsti million but above 1 tax on the firsti million but above i million year will pay an effective rate of 20% inheritance tax. the national farmers' union are saying that will have potentially a very big impact on the abilities of families to pass family farms down the generations. earlier today we spoke to richard payne who took over his family farm in somerset in 1989 and his father set it up in the 19505. ,., , ,

and his father set it up in the 19505. , , ., ., ., ., 19505. the sadness for me out of all of this as i — 19505. the sadness for me out of all of this as i had _ 19505. the sadness for me out of all of this as i had a _ 19505. the sadness for me out of all of this as i had a conversation - 19505. the sadness for me out of all of this as i had a conversation with l of this as i had a conversation with my son _ of this as i had a conversation with my son who— of this as i had a conversation with my son who is working in london at the moment, — my son who is working in london at the moment, that he is going to have to think— the moment, that he is going to have to think of— the moment, that he is going to have to think of alternative employment and he _ to think of alternative employment and he will not have the same opportunities that i have had to form _ opportunities that i have had to form the — opportunities that i have had to form the farm down here in somerset. not an— form the farm down here in somerset. not an easy— form the farm down here in somerset. not an easy conversation to have. and probably pretty devastating for him as— and probably pretty devastating for him as well. if this goes ahead and all the _ him as well. if this goes ahead and all the estates have to pay significant death duties and inheritance tax, it will be the end of farming — inheritance tax, it will be the end of farming as we know it in the country — and that issue with farmers i speak up and that issue with farmers i speak up with labour's darrenjones and you will hear that any or two. this is ian and rochdale. i am retired

and i live off investments and i will now be paying much higher tax on capital gains but i am happy to do so based upon the investment being made in our public services and investment in industrial strategy. i should pay more tax as i can afford to to make our country and society stronger. finally a grown—up budget that is going to invest in people services, exactly what this country needs. this is stephen montgomery who says he is from the scottish hospitality group. thank you very much for those. i went to westminster a couple of hours ago and spoke to chief secretary to the treasury darren jones. you said you were all about growth

than from the 0br forecast it will fall back to around 1.5%. is that it? it fall back to around 1.5%. is that it? , ., , ., that fall back to around 1.5%. is that l it?_ that sounds it? it is a good start. that sounds like the tories. _ it? it is a good start. that sounds like the tories. if _ it? it is a good start. that sounds like the tories. if you _ it? it is a good start. that sounds like the tories. if you look- it? it is a good start. that sounds like the tories. if you look at the | like the tories. if you look at the numbers under— like the tories. if you look at the numbers under the _ like the tories. if you look at the numbers under the tories - like the tories. if you look at the numbers under the tories it - like the tories. if you look at the numbers under the tories it was | like the tories. if you look at the - numbers under the tories it was 0.1, 0.2. the economy was dipping into recession. this is growth back into the british economy and that is a good thing. do we want more growth? absolutely we do it. this is the first labour budget and we will be working hard to get more growth across the country.— working hard to get more growth across the country. let's talk about the national _ across the country. let's talk about the national insurance _ across the country. let's talk about the national insurance tax - across the country. let's talk about the national insurance tax rises. i the national insurance tax rises. the obr the national insurance tax rises. the 0br say it means there will be fewer people in work as a result of those tax rises. that is not progrowth. those tax rises. that is not progrowth— those tax rises. that is not roarowth. ~ . . , ., , those tax rises. that is not roarowth. . . , ., , ., progrowth. we made a promise on taxes at the _ progrowth. we made a promise on taxes at the election _ progrowth. we made a promise on taxes at the election not _ progrowth. we made a promise on taxes at the election not to - taxes at the election not to increase income tax, national insurance or vat. it is about the choice on national insurance so it

is relevant. choice on national insurance so it is relevant-— choice on national insurance so it is relevant. the question is about urowth is relevant. the question is about growth and _ is relevant. the question is about growth and i _ is relevant. the question is about growth and i am _ is relevant. the question is about growth and i am saying _ is relevant. the question is about growth and i am saying the - is relevant. the question is about growth and i am saying the obr. is relevant. the question is about - growth and i am saying the obr today growth and i am saying the 0br today having looked at national insurance tax rises say it 1421 00:12:07,371 --> 00:12:0