A leading Tory former minister has suggested Prime Minister Liz Truss abandon a flagship policy to keep down corporation tax to avoid savage cuts to public services.
Stephen Hammond is the first Tory MP to effectively call for the measure to be scrapped to balance the books and reassure the markets.
Mr Hammond, a minister in successive Tory governments who has close links to the City, said the corporation tax could be lowered at a later date, but should be allowed to rise now as planned by the last administration.
Under Boris Johnson’s government, corporation tax – the levy on the profits of UK businesses – was due to rise from 19% to 25% in April next year.
But Chancellor Kwasi Kwarteng ruled out the hike during his mini-budget last month, saying keeping the tax lower would help growth in the country.
Speaking exclusively to Sky News, Mr Hammond said: “It is clear that if you look at international tax rates for corporates, keeping it at a level below the 24p level but keeping it above the 19p level would raise money and that would be a sensible way at this stage.”
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He said the government needed to prioritise “making sure that the poorest in our society are looked after”, and said the government should limit cuts to education, health and defence rather than spending money preventing corporation tax from rising.
Keeping the 19% figure was one of a number of tax-cutting measures in Mr Kwarteng’s mini-budget, with the Treasury ordering an additional £72bn of borrowing on the financial markets to pay for them all.
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The move sent the markets into turmoil, with the pound dropping, mortgage products being withdrawn and the Bank of England having to step in to save some pension funds.
Mr Kwarteng and Liz Truss were forced into a U-turn over the plan to scrap the 45p tax rate for the wealthiest earners, and to bring forward the chancellor’s medium-term economic plan from late November to Halloween.
But now, the Institute for Fiscal Studies (IFS) has warned the chancellor will need to cut spending or raise taxes by £62bn if he is to stabilise or reduce the national debt, as he has promised to do.
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How can UK reduce debt?
Mr Hammond praised the support the government was providing to households and businesses to tackle rising energy bills.
But he also appealed to the prime minister, saying he hoped she would “recognise the need to increase benefits with inflation because that is key I think – making sure that the poorest in our society are looked after”.
Instead, he said the “obvious” area where savings could be made was on whether to keep the reduction of corporation tax the chancellor has planned.
He added: “What is clear is that the government has an ambitious growth plan and it is clear at the moment that a lot of it is coming through very quickly and some of that probably can’t be… this is a matter of timing and it is clear that some of that needs to wait.”
The majority of a panel of Brazilian Supreme Court judges have voted to convict the country’s former president Jair Bolsonaro of attempting a coup after his 2022 election defeat.
The far-right politician, who ruled Brazil between 2019 and 2022, was found guilty on five counts by three members of a five-justice panel.
Just one of the five judges has acquitted Bolsonaro and when the final one has voted, the panel will decide on the former president’s sentence – which could amount to decades in prison.
The five counts were trying to stage a coup, being part of an armed criminal organisation, attempted violent abolition of the democratic rule of law, being implicated in violence, and posing a serious threat to the state’s assets and listed heritage.
Image: Pic: AP
The 70-year-old, who has denied any wrongdoing, is currently under house arrest at his home in Brasilia.
His lawyers have said they will appeal the verdict.
The ruling will deepen political divisions in Brazil and is also likely to prompt a backlash from the United States government.
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Bolsonaro ally Donald Trump has already called the case a “witch hunt”, slapped Brazil with tariff hikes and revoked US visas for most members of Brazil’s high court.
Bolsonaro is the first former Brazilian president to be convicted of attempting a coup.
He has not attended the court proceedings, and on Thursday he was seen at his garage at his property, but did not talk to the media.
Justice Alexandre de Moraes, who is overseeing the case, said on Tuesday that Bolsonaro was the leader of a coup plot and of a criminal organisation, and voted in favour of convicting him. Justices Flavio Dino, Carmen Lucia and Cristiano Zanin sided with Justice Moraes in the trial.
On Wednesday, another justice, Luiz Fux, disagreed and voted to acquit the ex-president of all charges.
Justice Lucia said she was convinced by the evidence the attorney general’s office put forward against Bolsonaro.
She said: “He is the instigator, the leader of an organisation that orchestrated every possible move to maintain or seize power.”
The far-right politician had been previously banned from running for office until 2030 in a different case.
He is expected to choose an heir who is likely to challenge President Luiz Inacio Lula da Silva next year.
Qatar’s prime minister said Israel has “killed any hope” of seeing more hostages returned from Gaza after carrying out an attack targeting Hamas leadership in his country.
“I was meeting one of the hostage’s families the morning of the attack,” Sheikh Mohammed told CNN in an interview aired late Wednesday.
“They are counting on this [ceasefire] mediation, they have no other hope for that.”
Sheikh Mohammed added that he thought Netanyahu had “just killed any hope for those hostages”.
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Ceasefire talks left in ‘tatters’
A total of 48 Israeli hostages captured during Hamas’ 7 October attacks on southern Israel have not been returned home.
With its attack in Qatar, Israel had sought to kill the political leaders of the Islamist group Hamas.
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Hamas has said its top leaders survived the airstrike, but five members were killed, including the son of its exiled Gaza chief and top negotiator Khalil al Hayya.
The Israeli military operation in Doha has been widely condemned internationally and was particularly sensitive as Qatar has been mediating negotiations to bring about a ceasefire in the war in Gaza.
US President Donald Trump reportedly held a heated phone call with Mr Netanyahu after the attack, telling him his decision to target Hamas leadership in Qatar was not wise, according to The Wall Street Journal.
There has been no immediate acknowledgement of the remarks from Mr Netanyahu, however, he’s continued to defend the strikes and threatened further action against Qatar.
“I say to Qatar and all nations who harbour terrorists, you either expel them or you bring them to justice,” Mr Netanyahu said. “Because if you don’t, we will.”
A senior figure in the Qatari government, Dr Majed Al-Ansari, was the one to announce to the world on X that America’s call to alert them to the attack came 10 minutes after the first explosion sounded in Doha.
Dr Al-Ansari, who serves as Qatar’s foreign ministry spokesperson, recounted the moment of the attack to Sky News’ correspondent Sally Lockwood.
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“I was coming home to my family and the moment I stepped out of the car I started hearing the loud noises that can only be compared to bombs,” he said.
“Being a diplomat and working for the foreign ministry throughout the mediation that we have conducted, I immediately knew that that meant that something terrible has happened.
“I can’t tell you enough how as a father living here in Qatar, that moment was a moment of reckoning for me and for all my countrymen and people who reside here in Qatar, where our lives were at risk because of the narcissistic and personal ambitions of a political operator who wants to throw the whole region into chaos.”
Donald Trump had a heated phone call with Israeli Prime Minister Benjamin Netanyahu after his military targeted Hamas inside Qatar, according to a report.
The American president told Mr Netanyahu on Tuesday that the decision to strike inside the US ally’s territory was not wise, The Wall Street Journal reported, citing senior administration officials.
The Israeli prime minister responded by saying he had a brief window to launch the airstrike and took the opportunity, according to the newspaper.
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Anger over Israeli strikes on Qatar
A second call between the two leaders later that day was cordial, with Mr Trump asking Mr Netanyahu if the attack had been successful, the publication added.
Israel attempted to kill the political leaders of the Islamist group Hamas with the attack in the Qatari capital Doha on Tuesday.
Hamas has said its top leaders survived the airstrike, but five members were killed, including the son of its exiled Gaza chief and top negotiator Khalil al Hayya.
The Israeli military operation in Doha has been widely condemned internationally and was particularly sensitive as Qatar has been hosting and mediating in negotiations which are trying to bring about a ceasefire in the war in Gaza.
On Wednesday, Mr Netanyahu warned Qatar to either expel Hamas officials or “bring them to justice. Because if you don’t, we will”.
Qatar has hit back at him, saying his comments about the Gulf nation hosting a Hamas office were “reckless”.
Image: Donald Trump with Benjamin Netanyahu at the White House earlier this year. Pic: Reuters
Meanwhile, the Israeli ambassador to the US, Yechiel Leiter, has said that if Israel failed to kill Hamas leaders on Tuesday, it would succeed next time.
“We have put terrorists on notice, wherever they may be… we’re going to pursue them, and we’re going to destroy those who will destroy us,” he said.
In another development, Sir Keir Starmer has had talks with Israeli President Isaac Herzog in Downing Street, with Mr Herzog saying they argued during a “tough meeting”.
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PM meets Israeli president
PM condemns Israeli action
The prime minister has condemned the Israeli attack in Qatar, and raised the matter with the president, saying it was “completely unacceptable”.
“He said the strikes were a flagrant violation of a key partner’s sovereignty and do nothing to secure the peace we all desperately want to see,” a Downing Street spokesperson said.
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Israel has been angered by Britain’s plans to join several other Western countries, including France and Canada, in recognising a Palestinian state later this month – unless Israel meets conditions including a ceasefire in Gaza.
“Things were said that were tough and strong, and clearly we can argue, because when allies meet, they can argue. We are both democracies,” Mr Herzog said at an event at Chatham House.
He also proposed offering a “fact-finding mission” to Israel, “sitting with us and studying the situation in Gaza on the humanitarian level”.
“Because we have full answers, and we are fully transparent,” he said.