This week Sky News has been identifying the gaps in Britain’s border defences.
As the number of small boats crossing the Channel breaks new records and European countries brace for a new wave of people fleeing Afghanistan, the issue is rising up the public consciousness once more.
Ministers are meant to be able now to deliver on their promise to take back control post Brexit. So why does it not yet feel like that to some?
The government response to this issue is being led by Home Secretary Priti Patel. Nobody would doubt her right-wing credentials, and interestingly she has had plaudits from across the political spectrum for her handling of the migration aspects of the Afghanistan crisis.
Image: Home Secretary Priti Patel talking to a refugee from Afghanistan who arrived on a evacuation flight at Heathrow Pic: AP
Her answer to the questions around Britain’s borders is the Nationality and Borders Bill currently in committee stage in the House of Commons. But does it answer the problems, many of which are caused beyond Britain’s borders?
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Italian island is migrant gateway to EU
Tom Tugendhat, Tory chair of the foreign affairs select committee told Sky News the answer is to send more Royal Navy vessels to help in the Med.
More on Asylum
“Our great strength we have with NATO allies around is that our border doesn’t start at Dover, it starts at the southern tip of Italy and Greece – working together and making sure these borders are defended and reinforced is exactly what we should be doing… but need to do more.
“Not about being kind to Italians. Its about defending ourselves further out.”
The Nationality and Borders Bill tightens the penalties for people smugglers in an attempt to tackle the problem.
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Tracking migrants with French Border Police
Another issue comes when migrants who have made it to the EU then try and cross the Channel to Britain. Sky News’ Michelle Clifford found that while French authorities would stop anyone still on land who looked like they would be attempting to cross the Channel, they would not stop boats once they were in the water, even when it was under French control.
They blame international law, thought many in Britain including MPs on the home affairs select committee claim the French are wrongly interpreting this.
Tim Loughton, Tory member of the home affairs select committee, said the French interpretation was “completely wrong”.
He added “We have evidence from maritime international lawyers – they made it clear that French authorities have power to intercept and repatriate passengers on boats, but actually have an obligation under international law – people on boats guilty of trying to enter UK illegally and paying organised crime to facilitate that journey, that would give grounds to French authorities to apprehend people, that is only what is going to stop that horrendous trade – people paying money to people smugglers, highly likely with them being taking back…that could stop that miserable trade stone dead.”
Asked why the British government hasn’t succeeded in convincing French they’re wrong, he said: “It’s all excuses, we made it clear – French claiming it’s a different interpretation, that’s wrong – also internal politics going on, a big row with those who run Calais and the federal government. They’re each trying to make it each other’s problem.”
The Nationality and Borders Bill will mark a serious attempt to block illegal immigration, alongside the new post Brexit points based entry system.
It will make it easier to return some illegal asylum seekers more quickly, make some asylum seekers apply before they reach UK shores and give border officials powers to turn back boats in UK waters.
But this does not – and cannot – stop Britain being an attractive country for economic migrants and asylum seekers.
Alp Mehmet, Chairman of Migration Watch said that Britain would remain a country many aspire to live in so more had to be done to turn back illegal arrivals.
“Britain is an attractive country, so is France, US – most people wanted to got to the US first, we are part of wider picture of prosperous civilised fun countries.
“A lot of those coming are young man who want a better life – we are part of the story, in a way we have create the opportunity for a lot of Afghans to want to come here.”
But he added that once here, many were treated generously with little chance of being sent back.
“One of the principle reasons why the traffickers are able to sell Britain as the destination of choice is that having arrived here there’s very little chance of being sent back – very few people who apply for asylum and fail actually are sent back.
“That is a huge factor, while they’re here, we look after – hotels, detention centres that have been used – even these are not bad accommodations, there is a bit of money given for people to spend.
“Once you’re in the system you’re looked after – people see messages coming across, it is all made to be very attractive.”
Crypto-friendly White House economic adviser Kevin Hassett has reportedly emerged as a top candidate for the next Federal Reserve chair, replacing Jerome Powell when his tenure is up in May.
President Donald Trump’s advisers and backers see Hassett as the frontrunner to take over as Fed chair, as he’s expressed sympathy with Trump’s desire to cut rates, Bloomberg reported on Tuesday, citing people familiar with the matter.
Hassett is the director of the National Economic Council, who oversees the White House’s digital asset working group that Trump created in January. This group released a report in July outlining policy considerations for crypto.
Hassett is one of many reported crypto-friendly Fed chair picks who have backed Trump’s desire for the central bank to cut rates to juice up the markets. Powell’s time as chair is up in May, but his tenure on the Fed Board extends until January 2028.
Asked by Fox News on Tuesday if he would take a job as Fed chair, Hassett said, “Of course I’d have to say yes, because I want to serve my country and I want to serve my president.”
Kevin Hassett was speaking to Fox News on Tuesday. Source: Fox News
“President Trump and I have talked a lot about it,” he added.
Hassett owns Coinbase stocks, was a crypto adviser
In June, Hassett reportedly disclosed that he owned at least $1 million worth of Coinbase (COIN) stock.
He also disclosed that he received a $50,001 salary from Coinbase for serving on the crypto exchange’s Academic and Regulatory Advisory Council, which the company created in 2023 and also included Manhattan US Attorney Jay Clayton.
Hassett has previously served on the advisory board for the crypto fund manager One River Digital Asset Management and was chair of the White House Council of Economic Advisers from 2017 to 2019, in Trump’s first term.
Also on the potential to take over the Fed is its vice supervision chair, Michelle Bowman, who said Fed staff should be allowed to invest a small amount in crypto to get a “working understanding of the underlying functionality.”
Whoever Trump picks, he’ll be pressuring them to cut rates. The Fed has cut rates twice this year by a total of 50 basis points.
The market has turned bullish on a Christmas cut when the Fed meets in December, with CME’s FedWatch putting the chances of a 25-basis-point cut at around 85%.
A raft of tax rises is expected in the budget this lunchtime – with the chancellor acknowledging that voters are “angry at the unfairness in our economy”.
In a newly released video, Rachel Reeves said the public is “frustrated at the pace of change” – but vowed to “take the fair and necessary choices” to tackle the cost of living crisis.
And in a dig at the Conservatives – especially former prime minister Liz Truss – she pledged not to impose austerity, lose control of public spending, or engage in more reckless borrowing.
But given the chancellor had ruled out such a measure last year – because it would “hurt working people” and “take more money out of their payslips” – this will attract criticism from opposition parties.
The chancellor has backed away from raising income tax rates outright, a move that would have breached Labour’s manifesto, but she still needs to find the cash to pay for her public spending plans.
Image: Watch our special programme for Budget 2025 live on Sky News from 11am
Some measures already confirmed by the government include:
It is being reported that the chancellor will also put a cap on the tax-free allowance for salary sacrifice schemes, raise taxes on gambling firms, and bring in a pay-per-mile scheme for electric vehicles.
Setting the scene ahead of the budget at 12.30pm, Ms Reeves said she will “push ahead with the biggest drive for growth in a generation”, promising investment in infrastructure, housing, security, defence, education, and skills.
Although she has vowed not to “duck challenges” nor “accept that our past must define our future”, she admitted that “the damage done from austerity, a chaotic Brexit, and the pandemic were worse than we thought”.
What are the key timings for the budget?
11am – Sky News special programme starts.
About 11.15am – Chancellor Rachel Reeves leaves Downing Street and holds up her red box.
12pm – Sir Keir Starmer faces PMQs.
12.30pm – The chancellor delivers the budget.
About 1.30pm – Leader of the Opposition Kemi Badenoch delivers the budget response.
2.30pm – The independent Office for Budget Responsibility (OBR) holds a news conference on the UK economy.
4.30pm – Sky News holds a Q&A on what the budget means for you.
7pm – The Politics Hub special programme on the budget.
The fiscal black hole is down to several factors – including a downgrade in the productivity growth forecast, U-turns on cuts to benefits and the winter fuel allowance, as well as “heightened global uncertainty”.
Nonetheless, the chancellor has promised more investment to cut NHS waiting lists, deal with “waste in the public sector”, and reduce the national debt.
“This budget is for you, the British people. So that together we can build a fairer, stronger, and more secure Britain,” she said.
Conservative shadow chancellor Sir Mel Stride has said Ms Reeves is “trying to pull the wool over your eyes” – having promised last year that she would not need to raise taxes again.
Meanwhile, Liberal Democrat deputy leader Daisy Cooper has accused her and the prime minister of “yet more betrayals”.
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2:08
What is the ‘milkshake tax’?
What could her key spending announcements be?
As well as filling the black hole in the public finances, these measures could allow the chancellor to spend money on a key demand of Labour MPs – partially or fully lifting the two-child benefits cap, which they say will have an immediate impact on reducing child poverty.
Benefits more broadly will be uprated in line with inflation, at a cost of £6bn, The Times reports.
In an attempt to help households with the cost of the living, the paper also reports that the chancellor will seek to cut energy bills by removing some green levies, which could see funding for some energy efficiency measures reduced.
Other measures The Times says she will announce include retaining the 5p cut in fuel duty, and extending the Electric Car Grant by an extra year, which gives consumers a £3,750 discount at purchase.
The government has already confirmed several key announcements, including:
Extra funding for the NHS will also be announced in a bid to slash waiting lists, including the expansion of the “Neighbourhood Health Service” across the country to bring together GP, nursing, dentistry and pharmacy services – as well as £300m of investment into upgrading technology in the health service.
And although the cost of this is borne by businesses, the chancellor will confirm a 4.1% rise to the national living wage – taking it to £12.71 an hour for eligible workers aged 21 and over.
For a full-time worker over the age of 21, that means a pay increase of £900 a year.
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11:05
What the budget will mean for you
Britons facing ‘cost of living permacrisis’
However, the Tories have hit out at the chancellor for the impending tax rises, with shadow chancellor Sir Mel Stride saying in a statement: “Having already raised taxes by £40bn, Reeves said she had wiped the slate clean, she wouldn’t be coming back for more, and it was now on her. A year later and she is set to break that promise.”
He described her choices as “political weakness” – choosing “higher welfare and higher taxes”, and “hardworking families are being handed the bill”.
The Liberal Democrat deputy leader Daisy Cooper is also not impressed, and warned last night: “The economy is at a standstill. Despite years of promises from the Conservatives and now Labour to kickstart growth and clamp down on crushing household bills, the British people are facing a cost-of-living permacrisis and yet more betrayals from those in charge.”
She called on the government to negotiate a new customs union with the EU, which she argues would “grow our economy and bring in tens of billions for the Exchequer”.
Green Party leader Zack Polanski has demanded “bold policies and bold choices that make a real difference to ordinary people”.
The SNP is calling on the chancellor to “help families” rather than “hammer them with billions of pounds of cuts and damaging tax hikes that destroy jobs and hurt economic growth”.
A headline tax-raising measure expected in today’s budget is an extension of the freeze on income tax thresholds for another two years beyond 2028, which should raise about £8bn.
The amount people pay is dependent on how much they earn, with different tax bands kicking in at different income levels.
In the past, these thresholds have been increased in line with inflation. But more recently they have been frozen, leaving people paying more to the exchequer even if actual tax rates stay the same.
Sky News looks at what the thresholds are, the implications of freezing them, and how that causes “fiscal drag”.
Income tax thresholds
England, Northern Ireland and Wales all have the same income tax rates, set by the British government.
Scotland’s income tax bands are set by the Scottish government, so Westminster budget announcements on income tax do not affect workers in Scotland.
For England, Northern Ireland and Wales, there is a “personal allowance” of £12,570, under which no income tax is paid.
For those earning above £100,000, the personal allowance goes down by £1 for every £2 of income, and can go down to zero, so a person can end up paying income tax on all of their income.
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Thresholds were previously increased annually by consumer price index (CPI) inflation – the estimate of the level of prices of goods and services bought by households.
But, because income tax thresholds have been frozen while wages continue to rise, more people are being brought into higher bands and having to pay more income tax.
A worker whose earnings just keep up with inflation is paying a larger proportion of their salary in tax due to the freeze.
This means more money for the government – a lot more.
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11:05
The budget vs your wallet: How the chancellor could raise billions
The Office for Budget Responsibility (OBR) estimates a continuing freeze in thresholds would raise about £42.9bn annually by the 2027/28 tax year.
And the Institute for Fiscal Studies (IFS) has projected that freezes to the basic and higher rates of income tax alone would raise £39bn a year by 2029-30.
That is roughly similar to the amount of revenue that would be raised by increasing all income tax rates by 3.5 percentage points.
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3:35
Sky News goes inside the room where the budget is decided
Fiscal drag
Freezing income tax thresholds without tax rates increasing has been branded a “stealth tax”, as the government collects more revenue without having to pass a law to raise tax rates.
It is also known as fiscal drag, as more people are pulled into paying tax, or into paying tax at a higher rate.
The OBR estimates the freeze will bring nearly four million more people into paying income tax, three million more people into the higher rate (40%) and 400,000 more into the additional rate (45%) by 2028-29.