Jeremy Hunt to unveil package of tax hikes and spending cuts in autumn statement to plug £54bn black hole
Jeremy Hunt will promise to weather an economic “storm” by raising taxes, cutting public spending and scaling back energy support to fill a £54bn black hole in the nation’s finances.
The chancellor will insist to MPs on Thursday that his autumn statement puts the UK on a “balanced path to stability” as he tackles the “enemy” of inflation, which has soared to a 41-year high.
But the measures could put him on a collision course with Tory MPs on the right of his party who are already voicing anger about the prospect of some of the plans.
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An 11th hour petition from two dozen Tory MPs, led by Jonathan Gullis, has been sent to the chancellor asking him not to hike fuel duty in the statement.
The package will be in the form of £30bn of spending cuts and £24bn in tax rises over the next five years – a stark contrast to Kwasi Kwarteng’s unfunded tax-slashing spending splurge two months ago.
Among the measures, annual energy bills for a typical household will stay capped at £2,500, but this will rise to £3,000 in April 2023, when support will become more targeted with additional payments for low-income households and pensioners, Sky’s political editor Beth Rigby understands.
On tax rises, those with the broadest shoulders will bear most of the burden, but there will be pain all around.
The chancellor is expected to lower the threshold for paying the highest rate of tax to £125,000 – down from the existing £150,000.
This is a marked difference to Liz Truss’s plans to scrap the 45p rate altogether, giving the highest earners an average tax cut of £10,000.
Analysis says lowering the threshold will bring an extra 246,000 people into the highest bracket at a cost to them of around £580 each a year, which in turn would raise the Treasury £1.3bn a year.
Mr Hunt is also expected to announce a freeze on personal income tax and national insurance tax thresholds lasting until 2028.
Sometimes referred to as a “stealth tax”, freezing tax thresholds drags more earners into paying higher rates of tax.
Mr Hunt has already hinted he will make it easier for local authorities to increase council tax, with reports suggesting the threshold for raising bills without a referendum could increase from 2.99% to 5%.
There is also expected to be a big increase in the windfall tax on energy companies, and a new tax on electricity generators.
Labour has previously said a windfall tax extension could raise an additional £50bn, and criticised what it calls the “loophole” that allows gas and oil firms to offset their tax liability if they invest back into the UK.
On spending cuts, departments are expected to be told to live within an envelope of the March Spending Review, when inflation at was 3%.
With inflation now at 11.1%, that amounts to a real-terms cut across the board, meaning tough choices will be necessary.
However, there will be some exceptions, with the NHS expected to get more money.
There is also likely to be some protection for the schools budget, Sky’s deputy political editor Sam Coates understands.
“There will inevitably be some good news after the weeks of doom-laden warnings,” he said.
Mr Sunak and Mr Hunt have spent weeks warning that tough choices lay ahead.
However, the prime minister told Sky News on Tuesday that “fairness and compassion” will be at the heart of his decisions.
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It is understood the chancellor will keep the triple lock for pensioners in his autumn statement – honouring a manifesto commitment.
He is also expected to uprate benefits in line with inflation, rather than earnings (a controversial move that would have saved £5bn).
The government has not confirmed what measures will be in the statement, but there has been a constant stream of measures reportedly being considered.
This “pitch rolling” helps markets get an idea of what is coming down the road and avoids spooking traders.
When Ms Truss and Mr Kwarteng made several surprise announcements in their mini-budget in September, it contributed to the financial chaos which saw the pound crash and the Bank of England forced to intervene to prevent pension funds from collapsing.
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Analysis released on Monday by the independent Resolution Foundation think tank found the mistakes they made cost the UK £30bn, doubling the sum the Treasury says will have to be raised.
Mr Hunt will say that his “difficult decisions” are necessary to keep mortgage rates low and tackle the rocketing energy and food prices intensifying the cost of living crisis.
“Families across Britain make sacrifices every day to live within their means, and so too must governments because the United Kingdom will always pay its way,” he is expected to say.
But Tories on the right of the Conservative Party are already voicing anger about the prospect of raising taxes.
Among the Tory critics, former cabinet minister Esther McVey has warned she will not support tax rises without the scrapping of the “unnecessary vanity project” of HS2.
Former business secretary Jacob Rees-Mogg told ITV’s Peston he would vote for the budget so as to not bring the government down, but warned he opposes tax increases, which he believes “risks making a recession worse”.
Labour has also warned that Britain is “falling behind on the global stage”.
Shadow chancellor Rachel Reeves said: “The country is being held back by 12 years of Tory economic failure and wasted opportunities and working people are paying the price.
“What Britain needs in the autumn statement are fairer choices for working people, and a proper plan for growth.”
And Sharon Graham, the general secretary of the Unite union, warned Mr Hunt “workers are ready to take a stand”.
“He can choose to inject investment into the NHS and deliver a fair pay deal – or he can leave it as it is today, in danger of fatal collapse,” she said.
Israeli Prime Minister Benjamin Netanyahu will be meeting Donald Trump next Monday, according to US officials.
The visit on 7 July comes after Mr Trump suggested it was possible a ceasefire in Gaza could be reached within a week.
On Sunday, he wrote on social media: “MAKE THE DEAL IN GAZA. GET THE HOSTAGES BACK!!!”
At least 60 people killed across Gaza on Monday, in what turned out to be some of the heaviest attacks in weeks.
Benjamin Netanyahu, left, with Donald Trump during a previous meeting. Pic: Reuters
According to the Hamas-run health ministry, 56,500 people have been killed in the 20-month war.
The visit by Mr Netanyahu to Washington has not been formally announced and the officials who said it would be going ahead spoke on condition of anonymity.
An Israeli official in Washington also confirmed the meeting next Monday.
White House Press Secretary Karoline Leavitt said the administration was in constant communication with the Israeli government.
She said Mr Trump viewed ending the war in Gaza and returning remaining hostages held by Hamas as a top priority.
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The war in Gaza broke out in retaliation for Hamas’ 7 October 2023 attacks on southern Israel that killed 1,200 people and saw a further 250 taken hostage.
An eight-week ceasefire was reached in the final days of Joe Biden’s US presidency, but Israel resumed the war in March after trying to get Hamas to accept new terms on next steps.
Talks between Israel and Hamas have stalled over whether the war should end as part of any ceasefire.
World
Brutal murder on ‘date’ exposes robbery gang suspected of targeting dozens of women in South Africa
Thirty-year-old Olorato Mongale made sure to take all the measures necessary for a safe first date in South Africa’s biggest city, Johannesburg.
She had agreed to meet ‘John’ in the daytime. She sent her friends her phone location after leaving her house and promptly texted them “on the road” at 2.47pm.
They replied “enjoy!”, hoping she would find love.
An hour later, their friend had gone silent and her phone location was showing up in dangerous areas of the city.
A search party of seven friends set off to trace Olorato’s digital footsteps.
It’s believed Olorato’s killers were part of a gang robbing young women at gunpoint
“It didn’t make sense. Where is she? Why is she missing?” says Karabo Mokoena, as we drove to the locations involved in their search.
“Every place we went to looked dodgier and dodgier. It made me panic – I was very scared.”
After finding her bag on a pile of bricks off the side of a main road, they filed a missing person report at a police station.
“I thought there was no way we were not going to find her. We did end up finding her but not in the way we would have hoped,” says Karabo.
Olorato’s body had been dumped at the dirt entrance of a random house less than 100m from where her friends were searching into the night.
Her face was swollen and her eyes black-blue from violent impact. Her top was ripped open to expose her breasts.
Police told Sky News that her post-mortem showed signs of blunt force trauma. She was likely beaten to death.
Olorato’s body was dumped outside this gate – she was likely beaten to death
“It was like I was dreaming, seeing her body like that with those bruises and blood everywhere,” says Olorato’s mother, Keabetswe Poppy Mongale, describing the moment she had to identify her only child at the morgue.
“I don’t think what I saw will ever go away,” she adds.
“It was very painful. I don’t wish that on any parent because my beautiful little girl looked different because someone chose to do that to her.”
Olorato’s mother says the image of her daughter in the morgue will never go away
CCTV from the driveway of Olorato’s building shows the last time she was seen alive, leaving her home to meet ‘John’.
In the video, she walks towards a white Volkswagen Polo and hesitates as she reaches the left back door. John had come with a friend.
Four days after Olorato was killed, police found the car in a different province with traces of her blood splattered across the back seat.
CCTV showed Olorato walking to a car for what she thought was a date
One suspect was shot dead but the second man is still on the run
Philangenkosi Sibongokuhle Makanya – ‘John’ – was shot dead by police in KwaZulu-Natal shortly after they found the vehicle.
The second man in the car, Bongani Mthimkhulu, is still on the run.
The two men have since been identified as part of a dangerous criminal syndicate that lure young women out on dates and rob them at gunpoint.
“Within the four days, the investigating officers received 94 calls from women who were raising concerns and identifying the suspects as those they once met,” South African Police Service deputy national commissioner Lieutenant General Tebello Mosikili told Sky News.
“It was unfortunate about Olorato, but others were released after being robbed.”
Olorato’s friends say she ‘ticked all the boxes when it came to being careful’
A 24-year-old student who survived an armed robbery at the hands of Olorato’s suspected killers says she was happy to see Philangenkosi killed but she’s still scared for her life.
“As women, we are not even safe anymore – we can’t even walk freely,” she says.
“The moment you leave your house you wonder if you will make it back alive. I don’t feel comfortable walking around the street. I leave the house and then turn back.
“Even when I’m home, I still don’t feel safe and always want to keep myself locked indoors,” she says with a shaky voice – choosing to remain anonymous.
After meeting other victims of the syndicate, she was shocked to hear details of almost identical abductions.
“This other girl was surprised because we went through the exact same situation. They also approached her with the same tactic – let me take you out to lunch to get to know you – only for her to be robbed.”
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
South Africa has one of the highest femicide rates in the world – an average 15 women are killed a day, many by their intimate partners.
According to police statistics, more than 5,500 women were murdered in South Africa last year. An increase of 33.8% compared with the previous year.
“South Africa has six times the average rate of femicide – hundreds of women have already been killed since Olorato’s murder,” says Cameron Kasambala from Women for Change.
The advocacy group raises awareness of rising cases of femicide and gender-based violence across South Africa.
Campaigner Cameron Kasambala says many femicide cases take a long time to be resolved
In the hours after her murder, Olorato’s friends contacted Women for Change to share her missing poster after receiving little immediate help from the local police station.
“I think her friends were the real heroes in that moment,” says Cameron.
“Two police stations that were 10 minutes apart, one finds a body and one has a missing case, don’t make a connection for hours. It’s not the most reassuring police work. And if the friends had not come forward, how long would it have taken?
“Unfortunately, Olorato’s case is an exception. Most cases are not handled that quickly.”
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Olorato’s friends say she would be ‘proud to know that her name has not gone in vain’
Olorato’s friends are still contending with the violence of her death – what it means for their daily lives and how they navigate their safety as women in South Africa.
“It is difficult to process and difficult to believe. This is somebody who ticked all the boxes when it came to being careful – being meticulous, checking her surroundings and leaving clues,” says Olorato’s friend, Koketso Sejosengoe.
“It shows it can happen to anybody no matter how safe you are. It is happening to the average girl. They are being targeted. These men know what they are doing and who they are looking for.”
“In the purest sense, Olorato wanted women to be safe and wanted women to be protected,” adds Koketso.
“I think she would be very proud to know that her name has not gone in vain and that her death is standing for something – that there will be change that comes with this.”
Major heatwaves across southern Europe have left Spain, Portugal, Italy, and Greece in sweltering conditions of more than 40C (104F).
Two-thirds of Portugal was on high alert for extreme heat and risk of wildfires on Sunday, with temperatures in Lisbon expected to exceed 42C (107F).
In parts of southern Spain, temperatures are well above average, with 42C also expected in Seville and other cities.
The country’s meteorological service says June is likely to be the hottest Spain has experienced since records began.
In several Italian regions, including Lazio, Tuscany, Calabria, Puglia, and Umbria, outdoor work was banned during peak hours of sun on Sunday, with trade unions pushing for the measures to be extended and rolled out nationwide.
Twenty-one out of 27 cities were under the highest possible heat alert, including Rome, Milan, and Naples.
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Greece has already been plagued by wildfires this summer, with one breaking out south of Athens on Thursday, and several on the island of Chios last Sunday.
Near Athens, authorities deployed 130 firefighters, 12 helicopters, and 12 planes, with 40 people evacuated from the highest-risk areas.
A woman was arrested on suspicion of unintentional arson after wildfires spread across brush and pastureland for three days on Chios.
Flames rise above Thymari, near Athens, after wildfires broke out on Friday. Pic: Reuters
Tourists battle scorching temperatures at the Parthenon in Greece on Friday. Pic: Reuters
Scientists link increasing frequencies of extreme weather events such as heatwaves, wildfires, and storms to climate change.
In France and Germany, at least three people died amid stormy conditions.
A ridge of high pressure above central and western Europe is driving the scorching conditions, says Sky News meteorologist Chris England.
Hotter-than-normal sea temperatures, dry land, and surface winds are also partly to blame, he added.
Tourists in Retiro Park in Madrid on Saturday. Pic: AP
Locals fan themselves in Lisbon on Saturday. Pic: AP
UK heatwave also likely
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UK heatwaves explained
The UK is halfway through a four-day amber heat health alert, with temperatures expected to peak in the mid-30s (86F) on Tuesday.
Heat health alerts are not public weather warnings – but are instead designed to prepare health and social care bodies for the potential impact on their infrastructure and vulnerable groups.
Heatwave thresholds are likely to be met on Monday and Tuesday, which vary between 28C (82F) in the south of England and 25C (77F) across the rest of the country.
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