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Business Secretary Grant Shapps has hinted that the government may extend the windfall tax on oil and gas companies in this month’s autumn budget as it tries to stabilise the UK’s public finances.

Speaking to Sky News with just 10 days to go before the government’s fiscal plans are unveiled, Mr Shapps said: “I mean, it is the case that because fuel prices have been so high, there have been unexpected profits, of course.

“But I think it’s important that we do carry on investing in making sure not on fossil fuels, but on the renewable energy as well, that we’ve we’ve got the capacity, we’ve got the ability to get that market moving as well.”

Sunak to raise migrant crossings with Macron – Politics latest

He added that the general public will “have to wait until the 17th” to know exactly which measures the government is going to pursue to tackle what the Resolution Foundation thinktank has said is a £40bn financial black hole.

Last week, an initial report in The Times suggested that Prime Minister Rishi Sunak and Chancellor Jeremy Hunt were planning to extend windfall taxes on oil and gas companies to raise an estimated £40bn over five years.

Mr Sunak and Mr Hunt want to maximise revenues from the windfall tax by increasing the rate from 25% to 30%, extending the policy until 2028, and expanding it to cover electricity generators – according to the paper.

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With BP unveiling profits that doubled to more than £7.1bn in the three months to September, pressure is continuing to mount for an enhanced windfall tax on oil and gas giants to help fill the Treasury coffers.

COP26 president Alok Sharma, who was demoted from the cabinet by Mr Sunak, has backed the move, saying: “We need to raise more money from a windfall tax on oil and gas companies and actively encourage them to invest in renewables.”

The Resolution Foundation said in a report last week that tax raises are “likely” to come soon as the government faces an “unpalatable menu” to find ways to re-balance the nation’s finances after former chancellor Kwasi Kwarteng’s ill-fated economic plans.

A combination of tax rises and spending cuts is likely to find the £40bn needed, it said.

Mr Sunak and Mr Hunt are currently figuring out how to tackle the abysmal economic forecast ahead of the autumn statement on 17 November, which was pushed back soon after Mr Sunak reappointed Mr Hunt.

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Why do Shell’s profits matter?

The Resolution Foundation’s report added that a recession next year could be predicted by the government’s independent forecaster, the Office for Budget Responsibility.

Last week, the Bank of England raised its official interest rates by 0.75 percentage points to 3% and said the UK was already in recession.

It was the single biggest increase in more than three decades.

While GDP forecasts could be cut by up to 4% by the end of 2024.

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BoE interest rate hike explained

The autumn statement this month will likely encompass “rough” tax rises, Sky News has been told by a source in the Treasury.

The tax rises are likely to be across the board, although Mr Sunak and Mr Hunt are said to have agreed those with the “broadest shoulders” should bear the greatest burden, it is understood.

Read more: Demand for mortgages falls as customers grapple with high interest rates

Few concrete details have emerged but, according to The Times, public sector workers could face deep real-terms cuts to wages, with the Treasury reportedly looking at an increase of 2% across the board for 2023-24, at a time when inflation is expected to be well above that threshold.

The Resolution Foundation has said £9bn could be saved by the government choosing not to raise benefits and pensions in line with rising prices next year, but any such move would have a “huge” impact on those already struggling to make ends meet.

Another option would be to re-instate the health and social care levy to raise £15bn by 2026-2027, while around £2bn could be raised by extending the “stealth” freezes in income tax threshold by a further year to 2026-2027.

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Hostage release talks imminent to kickstart Gaza peace deal

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Hostage release talks imminent to kickstart Gaza peace deal

Talks aimed at starting the process of releasing Israeli hostages look set to begin on Monday.

Egypt has agreed to host delegations from Israel and Hamas tomorrow. An Israeli delegation led by Strategic
Affairs Minister Ron Dermer will attend the indirect negotiations in the Red Sea resort of Sharm el-Sheikh.

US envoy Steve Witkoff is also expected to join.

Israeli Prime Minister Benjamin Netanyahu has said he hopes to announce the release of hostages being held in Gaza “in the coming days” and Hamas announced on Friday it would return all remaining hostages in Gaza, dead and alive.

The group also said in a statement that it wants to engage in negotiations to discuss further points in the US president’s peace plan.

Speaking to our US partner network NBC, Donald Trump‘s Secretary of State Marco Rubio said Hamas had also agreed “in principle” to what happens after the war in Gaza is over, but he warned the second phase of the deal, which concerns Hamas’s disarmament and demobilisation, was “not going to be easy”.

“We’ll know very quickly whether Hamas is serious or not by how these technical talks go in terms of the logistics,” Mr Rubio added.

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On his way to a US Navy event on Sunday, Mr Trump told journalists he was looking forward to “peace in the Middle East for the first time in about 3,000 years”.

He said the peace plan was “a great deal for Israel” and that “people are very happy about it”.

Progress in the discussions in Cairo will largely depend on whether the militant group agrees to Washington’s withdrawal map, a Palestinian official close to the talks told Reuters.

Mr Trump released a map showing the areas of Gaza the Israeli Defence Forces would need to withdraw its troops from, which he said had been agreed to already by Israel.

Map showing the 'yellow line' in Gaza to which IDF troops would need to pull back to
Image:
Map showing the ‘yellow line’ in Gaza to which IDF troops would need to pull back to

Currently, the Israeli military has covered around 80% of the enclave in what it calls a “dangerous combat zone”.

If the peace plan follows the boundaries shown on the map, Israel’s initial withdrawal would leave Gaza about 55% occupied, while the second withdrawal would leave it about 40% occupied.

After the final withdrawal phase, which would create a “security buffer zone”, about 15% of Gaza would be occupied by the Israeli military.

It is this part – as well as the peace plan proposal for an international group to manage Gaza – “that is going to be a little tougher to work through,” Mr Rubio added.

Calls for ceasefire

Meanwhile, international support for an immediate ceasefire is growing.

On Friday, Mr Trump told Israel to “stop bombing Gaza”, and on Sunday Pope Leo renewed calls for a permanent ceasefire in the nearly two-year conflict.

Smoke rises during an Israeli military operation in Gaza City. Pic: Reuters
Image:
Smoke rises during an Israeli military operation in Gaza City. Pic: Reuters

This was followed by the foreign ministers of eight Muslim-majority countries issuing a joint statement urging steps toward a possible end to fighting.

In backing Hamas’ willingness to hand over the running of Gaza to a transitional committee, the ministers called for an “immediate launch of negotiations to agree on mechanisms to implement the proposal”.

They also underlined their commitment to the return of the Palestinian Authority to Gaza, unifying Gaza and the West Bank, and reaching an agreement on security leading to a “full Israeli withdrawal” from Gaza.

Read more:
Why Trump accepted the Hamas peace plan response
If Hamas and Israel agree a deal, it will be Trump’s success

Israeli government spokeswoman Shosh Bedrosian told journalists: “While certain bombings have actually stopped inside of the Gaza Strip, there’s no ceasefire in place at this point in time.”

She said Mr Netanyahu is in “regular contact” with Mr Trump and that the prime minister has stressed talks in Egypt “will be confined to a few days maximum, with no tolerance for manoeuvres that will delay talks by Hamas”.

Residents and local hospitals said strikes continued across the Gaza Strip over the weekend.

At least eight people were killed on Sunday in multiple strikes in the city, according to the Shifa hospital, which received the casualties.

Half of them were killed in a strike that hit a group of people in Gaza City, the hospital said.

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Wrecked, uninhabitable and destroyed: Sky News reports from inside Gaza City

Four people also were killed in a shooting near an aid distribution site in the southern city of Rafah, according to Nasser hospital.

The Israeli military said it was not involved in the shooting and did not immediately comment on the strikes.

“We’re on the brink, and we don’t know whether one will die of a strike or starvation,” said Mahmoud Hashem, a Palestinian father of five, who is forced to shelter in a tent in the center of Gaza City.

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Israeli Prime Minister Benjamin Netanyahu said he hopes to announce the release of all hostages from Gaza

When will hostages be freed?

A lawyer representing the families of Israeli hostages held in Gaza has told Sky News now feels “as good a chance as any” to finally get the remaining captives out.

Adam Wagner said hostage families were facing “a huge mix of emotions” as they awaited the latest developments in Mr Trump’s 20-point peace plan.

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“We’ve seen hopes raised and the talks fail a number of times, but this seems as good a chance as any to get those 48 remaining hostages out,” he said.

Wagner also agreed the “big question” for the talks was whether Hamas would agree to full disarmament and complete removal from the administration of Gaza.

Israel estimates 48 hostages remain in Gaza, 20 of whom are alive.

Watch Yalda Hakim’s The World at 9pm on Sky News.

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‘We don’t have anything for winter’: Families fear months ahead after earthquake wiped out entire villages in Afghanistan

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'We don't have anything for winter': Families fear months ahead after earthquake wiped out entire villages in Afghanistan

It is a breathtaking and, at points, pretty perilous journey through the remote mountainous region of eastern Afghanistan.

We’re trying to reach the Mazar Dara valley, where an earthquake wiped out whole villages. The force of the quake ripped apart roads, cut off communities and buried multiple generations.

It’s slow going – navigating around sheer drops on a road scattered with rocks and boulders. But after three hours, we start to see the first signs of the disaster that, within minutes, plunged this region into darkness.

Last month's earthquake killed some 2,000 people and was one of the worst Afghanistan has seen
Image:
Last month’s earthquake killed some 2,000 people and was one of the worst Afghanistan has seen

We are driving into Wadir, a village in Nurgal District, where everyone we meet has lost someone. The earthquake, which struck around midnight, killed many in their sleep here, especially women and children.

Standing by a makeshift graveyard peppered with white flags and gravestones, we meet little Rahmanullah. He’s eight but looks much younger, and his glassy eyes look heavy with grief.

His fragile, tiny hands point to the grave where his six-year-old brother Abouzar is buried. He was sleeping alongside him.

The earthquake struck around midnight and killed many in their sleep
Image:
The earthquake struck around midnight and killed many in their sleep

The only reason Rahmanullah survived was because his older sibling, Saied Rahman, was able to pull him out.

“I was asleep when I heard a crash,” Rahmanullah tells me. “My brother said ‘it’s an earthquake, get up, or the building will fall on you’.

“He took my hand and pulled me out, put me on some wood, and said, ‘get out quick’.”

Saied Rahman pulled Rahmanullah from his home during the quake
Image:
Saied Rahman pulled Rahmanullah from his home during the quake

Rahmanullah takes us up a steep hill to show us what remains of his home.

On the edge of a vast drop, it is now a mound of rubble – only a broken bed and shoes left behind.

Rahmanullah (pictured) lost his younger brother Abouzar after the earthquake in Wadir
Image:
Rahmanullah (pictured) lost his younger brother Abouzar after the earthquake in Wadir

The earthquake killed some 2,000 people and was one of the worst Afghanistan has seen. And it came at an already desperate time for Afghans – with an economic crisis, rising unemployment, drought and malnutrition.

The quake's epicentre was near the city of Jalalabad
Image:
The quake’s epicentre was near the city of Jalalabad

In Afghanistan, there has been a seemingly endless cycle of hunger and displacement. Compounding those problems since the Taliban took control in 2021, aid has dropped off a cliff.

This year, the US cut almost all of its funding to the country, and it’s had a massive impact.

The demise of the US Agency for International Development this year has forced the closure of 400 health facilities and left hundreds of thousands of Afghans without consistent access to food.

Nearly everyone we spoke to in this region praised the speed and effectiveness of the Taliban response – the government sending in helicopters to evacuate the injured and the dead.

White tents have sprouted up next to each affected village too – a sign international aid was able to get to these far-flung communities against the odds.

But winter is coming, and sickness is starting to spread. In Andarlackhak, we meet Ajeebah. She’s keen to speak to us in private, in the tent she now calls home.

She married at 10 years old and went on to have 10 children. But five of them died in the quake – three-year-old Shabhana, seven-year-old Wali Khan, nine-year-old twins Razimah and Nasreen, and 13-year-old Saleha.

Ajeebah, with her niece Zarmina, 22, daughter Asiya, 8, and son Abdul Raziq, 11
Image:
Ajeebah, with her niece Zarmina, 22, daughter Asiya, 8, and son Abdul Raziq, 11

Their mother is clearly still processing the immense, almost unimaginable loss.

“I don’t want to bury them. What could I do?” she says. “I can’t keep them outside. But I don’t want to put them in a graveyard.”

Outside, dozens of children are playing, many orphaned by the disaster.

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Children, many of whom are orphaned, are living in tents
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Children, many of whom are orphaned, are living in tents

Malnutrition is a major issue in Afghanistan and keeping these children fed will be an overwhelming burden in the months ahead.

With women unable to work under the Taliban and a struggling economy, families were already in dire straits.

Mohammad Salem, who’s 45, has injured his foot. And he’s deeply worried about the months ahead.

“We don’t have anything for winter,” he said. “The snow is coming, and our children are living in tents.

“They’re lying in the dirt. We don’t have any shelter for the future. Everything we had is destroyed.”

Mohammad Salem injured his foot and is deeply worried about the months ahead
Image:
Mohammad Salem injured his foot and is deeply worried about the months ahead

The Taliban forbids physical contact between men and women who are not family members, even in emergencies. That raised fears some women would be left without help.

However, the villagers we spoke to praised the rescue efforts and said female aid workers were able to reach them.

But what hangs over every community in these deep and now scarred valleys is the fear of the hardships to come and the realisation that their communities, their families, have been changed forever.

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Gunfire and explosions followed by unsettling silence: Sky News reports from inside Gaza City

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Gunfire and explosions followed by unsettling silence: Sky News reports from inside Gaza City

There is a loud boom, the noise of an explosion, followed by the rat-a-tat of automatic gunfire.

Another explosion, more distant. A sign on the wall warns people against snipers. And all around us is the rubble of destruction.

Welcome to Tel al-Hawa, once one of the most affluent suburbs of Gaza City. Now wrecked, uninhabitable and destroyed.

Like so much of Gaza – and like all the places we drove through to get here – it is a wasteland. Buildings reduced to rubble, with a layer of dust covering everything.

The only people you see are Israeli soldiers.

Throughout my day in Gaza, I didn’t see a single Gazan.

Partly that’s because we were there with the Israeli military, who controlled all our movements. Partly it’s because places like this have been so completely wrecked that everyone has fled.

More on Gaza

I came here on Friday afternoon, along with journalists from a variety of media outlets from around the world.

There was no sign that, a few hours later, Hamas would offer a response to the Trump peace plan, nor that there would be a surge of global optimism.

Because here, amid the dust and debris, everything is bleak and threatening. Everywhere you look there is devastation. The filaments of war are everywhere.

Gaza latest: World leaders welcome Hamas response to US peace deal

The soundscape is military. There are the roars of explosions, bursts of gunfire, the buzz of drones, the clatter of troops crunching through rubble and the roar of the engines that power tanks and armoured personnel carriers (APCs).

But every now and then there is silence. No birdsong, no gentle chatter. Nothing. It is unsettling.

IDF soldiers escort our correspondent throughout the city
Image:
IDF soldiers escort our correspondent throughout the city

The proof that people ever lived here is strewn around, as if a plane has crashed. There are scraps of everyday life – a milk carton, a phone cable, a shoe. A red toy car.

And curiously, amid all this horror, there is a bouquet of red roses. They are artificial, of course, but they lie in the street, dusty and forgotten. What were they for? A party, a wedding? Or just to brighten up a home that has now been blown away.

Booby traps, snipers on roofs

We spoke to Israeli military officials, who told us they had only recently taken control of this area.

The picture they paint of Hamas fighters is that of a depleted fighting force, reduced to maybe 2,000 people, including young and inexperienced conscripts.

Their tactics are those of a guerrilla force – snipers on roofs, booby traps, improvised explosive devices.

“But it can work. We had a soldier killed very near here a couple of weeks ago. And Hamas – they are brave,” he says.

“It is hard for us to have fought for two years, but it is harder for Hamas than us. We are strong enough to finish this war, bring the hostages back, eliminate Hamas and ensure 7 October can never happen again.”

Read more:
Guns, cash and American aid: Israel’s support for Gaza militia revealed
Why Trump accepted the Hamas peace plan response

The military has occupied a building that was once either a large house or perhaps a series of apartments. Some of the rooms are simply forgotten, others are used by the IDF for offices, meals or meetings.

At the top of the building is a room with a large picture window. It looks out towards the Jordanian Hospital – the only building here, and I think the only building I saw throughout my visit that is unscathed.

The view of Gaza City from inside an armoured personnel carrier
Image:
The view of Gaza City from inside an armoured personnel carrier

The soldiers show us drone footage from inside the hospital campus, revealing a tunnel opening. Twenty metres below the ground, they say, was a Hamas workshop for designing and building missiles and rockets.

“It’s very significant,” one of the soldiers tells me, his face obscured by a balaclava. “The weapons manufactured here are being fired at our civilians. To find it here, under the compound with the hospital, shows how Hamas is using civilians to hide behind.

“We cannot attack that,” – he points at the hospital – “we don’t want to hurt the people there. It’s very significant to us as Israelis and also to the citizens of Gaza, who are being used by Hamas.”

An IDF official told me the hospital had also been used to “accommodate” between 50 and 80 Hamas fighters, and said Jordanian Hospital officials “definitely knew” about these people.

The destroyed skyline and the hospital
Image:
The destroyed skyline and the hospital

We later put these allegations to a Jordanian official source, who described the hospital’s work as “purely a humanitarian mission” that “has been providing treatment for tens of thousands of Gazans since 2009”.

“Jordan has no knowledge of the presence of tunnels under the location of the Tel al-Hawa hospital. Gaza is riddled with tunnels.

“There was no access into the hospital from any underground tunnels. Over its 16 years of operation, no fighters were present within the hospital’s premises.”

There are many stories of Israeli reserve soldiers saying they are both weary and wary, reluctant to sign up for another tour of duty.

Looking out over the hellish landscape of this shattered town, I could understand why some would think twice before rushing back.

Yet Richard Hecht did. Formerly the spokesperson for the IDF, Hecht, whose family moved from Glasgow to Israel when he was a boy, had been called at 11pm the previous evening and asked to accompany us.

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We talked, with dust billowing around us at a military compound on the outskirts of Gaza City.

“I hope this war comes to an end, and it would stop in a matter of moments if Hamas returned our hostages,” he told me.

“But the IDF is very determined – we want our hostages back. We are doing everything we can because we have to fight Hamas. What alternative do we have? We need to obliterate this group.”

Adam Parsons sees first hand the destruction around Gaza City
Image:
Adam Parsons sees first hand the destruction around Gaza City

I suggest to him Israel’s military action now looks wildly disproportionate, especially bearing in mind they believe Hamas to now have only a couple of thousand fighters.

More than 65,000 people have been killed in Gaza, half of them women and children. And many, including a UN commission, have claimed this is genocide.

Hecht bristles. “That is an atrocious thing to say. Genocide has intent, it entails intent. It is an atrocious accusation and I cannot connect it. We are fighting Hamas. We are not fighting Palestinians.”

We have to leave. This town is regarded as an active conflict zone, and the regular chorus of gunfire and explosions testifies to that.

We clamber back into the APC, crewed by two men in their early 20s. One drives, the other stands up, using a hatch to access a machine gun based on the roof. He beckons me up to see the view.

Around us, a line of military vehicles. A digger comes into view, and then a plume of dust flies up as the APC reverses. I look down and see hundreds of spent casings around the machine gun. I point at them, and he nods slowly.

We drive away. The dust envelopes the vehicles again, and we leave Gaza City behind us.

As we head back towards the border, to the gates that divide a war zone from Israeli towns and kibbutzim, we see a huge plume of smoke rising a mile or two away.

In Gaza, the concept of peace feels almost unthinkable.

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