Starmer says budget did not break manifesto tax pledge – as it happened

5.54pm GMT

Early evening summary

• The government is to ditch its flagship policy from the workers’ rights bill, removing the right to protection from unfair dismissal from the first day of employment and replacing it with a six-month threshold.

• Rachel Reeves has positioned Labour to fight the next general election with tax increases and spending cuts that resemble a work of “fiscal fiction”, an analysis by leading economists has warned.

• Keir Starmer has conceded that the budget “asked everybody to contribute” but argued that it had “done it in a fair way” as he sought to rebuff claims that Labour had broken its tax promises.

• Net migration to the UK has fallen by more than two-thirds to 204,000 in a single year, the lowest annual figure since 2021, according to the latest official statistics.

For a full list of all the stories covered on the blog today, do scroll through the list of key event headlines near the top of the blog.

5.51pm GMT

6 leading business groups welcome U-turn on workers' rights bill, saying it shows how 'meaningful dialogue' works

Business groups have welcomed the government’s U-turn on day one protection from unfair dismissal. In a joint statement, six groups said:

Businesses will be relieved that the government has agreed to a key amendment to the employment rights bill which can pave the way to its initial acceptance.

We welcomed this chance to hold meaningful dialogue and believe the constructive nature of our discussions can be a template to resolve outstanding issues.

Businesses have always been clear that making the employment rights ill work would take business, trade unions and government working together to find a landing zone for these major policy changes.

This agreement keeps a qualifying period that is simple, meaningful, and understood within existing legislation. It is crucial for businesses confidence to hire and to support employment, at the same time as protecting workers.

This change addresses the key problem that must be sorted in primary legislation. It shows that dialogue works and is a model for how to consider the important questions that need answering in regulations before new rules come into force.

The statement is issued on behalf of:

British Chambers of Commerce

Chartered Institute of Personnel and Development

Confederation of British Industry

Federation of Small Businesses

Recruitment and Employment Confederation

Small Business Britain