Jeremy Hunt to defend autumn statement amid warning of record fall in living standards
Jeremy Hunt will continue to defend his autumn statement today as experts warn of a record fall in living standards across the country.
The chancellor presented his economic plan to parliament on Thursday, littered with stealth taxes and curbs on government spending amounting to £55bn in an attempt to plug the black hole in public finances.
But the independent Office for Budget Responsibility warned the disposable incomes of UK households would fall by 7.1% over the next two years – the lowest level since records began in 1956/7, and taking incomes down to 2013 levels.
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As a result of the Mr Hunt’s announcements, the tax burden in the UK will also now be at its highest since the Second World War, and there are stark warnings about increased bills and higher unemployment as the recession takes hold – as well as predictions the economy will still shrink 1.4% in 2023.
But most of the difficult decisions on spending have been postponed until after the next general, due in 2024.
Both the Resolution Foundation and the Institute for Fiscal Studies will lay out their own analysis of the plans later this morning, but Treasury analysis already suggests around 55% of households will be worse off as a result of the measures.
Meanwhile, Labour has blamed “12 weeks of Conservative chaos” and “12 years of Conservative economic failure” for the bleak outlook.
Shadow chancellor Rachel Reeves accused the government of forcing the UK economy into a “doom loop where low growth leads to higher taxes, lower investments and squeezed wages, with the running down of public services”.
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During his statement, Mr Hunt distanced himself from the philosophy of Liz Truss’s short-lived government – which promised billions of unfunded tax cuts and sent the markets into turmoil.
Yet, while the chancellor froze tax thresholds, lowered the point the higher rate of income tax kicks in and extended the windfall tax on energy firms (the latter, a Labour policy) amid other measures, he also promised more spending on the NHS, social care and education, as well as re-committing to uprating pensions and benefits in line with inflation.
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Hunt questioned over autumn statement
Mr Hunt also pledged to continue support for energy bills from April next year – though raising the cap to £3,000 for the average household.
Speaking to reporters after the announcement, he said the government was “helping every bit as much as we can” to reduce the impact of the recession on households and businesses, as well as protecting public services.
But he pointed to those spending decisions, adding: “As soon as the recession is behind us, then, yes, we will consolidate to make sure that we’re balancing our books – and I think that’s what people would want.”
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’12 weeks of Conservative chaos’ – Rachel Reeves
While many in his party were supportive of the “difficult decisions”, the chancellor made in light of the energy crisis, the war in Ukraine and the fallout from the pandemic – as well as Ms Truss’s tenure in office – other Tories warned against hiking taxes while the country is in a recession.
Former party leader Sir Iain Duncan Smith told Sky News: “My worry is they’ve estimated that they will get certain revenues from their tax rises [but] those tax rises could end up damaging the economy and they won’t get the revenues thereafter, which means they’ll be back again looking for more.
“[There] is every chance that tax increases don’t yield what you think they will, so this could lead to a deeper recession. We need to watch that very carefully and see where it goes.”
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And former Wales Secretary David Jones told the Telegraph that the if high taxes continue, “the prospects of Tories winning the next election… are going to become more remote”.
Opposition parties were also quick to condemn the plan, with Liberal Democrat MP Sarah Olney saying it will “cause untold pain for everyone”, and the SNP’s Kirsty Blackman saying it “ushered in a new era of damaging austerity cuts”.
MPs will debate the measures in the Commons on Monday and Tuesday next week.
World
UN’s Antonio Guterres condemns ‘teaspoon’ of aid allowed into Gaza after dozens die in airstrikes
The head of the UN has said Israel has only authorised for Gaza what amounts to a “teaspoon” of aid after at least 60 people died in overnight airstrikes.
UN secretary general Antonio Guterres said on Friday the supplies approved so far “amounts to a teaspoon of aid when a flood of assistance is required,” adding “the needs are massive and the obstacles are staggering”.
He warned that more people will die unless there is “rapid, reliable, safe and sustained aid access”.
A woman at the site of an Israeli strike in Jabalia, northern Gaza. Pic: Reuters
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Gaza: ‘Loads of children with huge burns’
Israel says around 300 aid trucks have been allowed through since it lifted an 11-week blockade on Monday, but according to Mr Guterres, only about a third have been transported to warehouses within Gaza due to insecurity.
The IDF said 107 vehicles carrying flour, food, medical equipment and drugs were allowed through on Thursday.
Many of Gaza’s two million residents are at high risk of famine, experts have warned.
Meanwhile, at least 60 people have been killed by Israeli airstrikes across Gaza overnight.
Ten people died in the southern city of Khan Younis, and deaths were also reported in the central town of Deir al-Balah and the Jabaliya refugee camp in the north, according to the Nasser, Al-Aqsa and Al-Ahli hospitals where the bodies were brought.
A body is carried out of rubble after an Israeli strike in Jabalia, northern Gaza. Pic: Reuters
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‘Almost everyone depends on aid’ in Gaza
The latest strikes came a day after two Israeli embassy workers were killed in Washington.
The suspect, named as 31-year-old Elias Rodriguez from Chicago, Illinois, told police he “did it for Gaza”.
Israeli Prime Minister Benjamin Netanyahu accused Sir Keir Starmer, Emmanuel Macron and Mark Carney of fuelling antisemitism following the shootings.
The leaders of the UK, France and Canada are “on the wrong side of humanity and (…) history”, he said, after they threatened “concrete action” against Israel this week if it continues its “egregious” military operations in Gaza.
Mr Netanyahu also accused Sir Keir, Mr Macron and Mr Carney of siding with “mass murderers, rapists, baby killers and kidnappers”.
Palestinians search for casualties in Jabalia, northern Gaza. Pic: Reuters
But UK government minister Luke Pollard told Sky News on Friday morning he “doesn’t recognise” Mr Netanyahu’s accusation.
Earlier this week, Mr Netanyahu said he was recalling negotiators from the Qatari capital, Doha, after a week of ceasefire talks failed to bring results. A working team will remain.
The war in Gaza began when Hamas-led militants attacked southern Israel on 7 October 2023, killing some 1,200 people, mostly civilians, and kidnapping 251 others.
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The militants are still holding 58 captives, around a third of whom are believed to be alive, after most of the rest were returned in ceasefire agreements or other deals.
Israel’s offensive, which has destroyed large swaths of Gaza, has killed more than 53,000 Palestinians, mostly women and children, according to Gaza’s Hamas-run health ministry.
A woman has been arrested after 12 people were reportedly injured in a stabbing at Hamburg’s central train station in Germany.
An attacker armed with a knife targeted people on the platform between tracks 13 and 14, according to police.
They added that the suspect was a 39-year-old woman.
Police at the scene. Pic: AP
Officers said they “believe she acted alone” and investigations into the stabbing are continuing.
There was no immediate information on a possible motive.
The fire service said six of the injured were in a life-threatening condition, three others were seriously hurt, and another three sustained minor injuries, news agency dpa reported.
The attack happened shortly after 6pm local time (5pm UK time) on Friday in front of a waiting train, regional public broadcaster NDR reported.
A high-speed ICE train with its doors open could be seen at the platform after the incident.
Railway operator Deutsche Bahn said it was “deeply shocked” by what had happened.
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Four tracks at the station were closed in the evening, and some long-distance trains were delayed or diverted.
Hamburg is Germany‘s second biggest city, with the train station being a hub for local, regional and long-distance trains.
In mid-May, the World Health Organisation assessed that there were “nearly half a million people in a catastrophic situation of hunger, acute malnutrition, starvation, illness and death”.
“This is one of the world’s worst hunger crises, unfolding in real time,” its report concluded.
Warning: This article contains images of an emaciated child which some readers may find distressing
Israel‘s decision this week to reverse the siege and allow “a basic level of aid” into Gaza should help ease the immediate crisis.
But the number of aid trucks getting in, so far fewer than 100 per day, is considered dramatically too few by aid organisations working in Gaza, and the United Nations accuses Israel of continuing to block vital items.
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“Strict quotas are being imposed on the goods we distribute, along with unnecessary delay procedures,” said UN secretary general Antonio Guterres in New York on Friday.
“Essentials, including fuel, shelter, cooking gas and water purification supplies, are prohibited. Nothing has reached the besieged north.”
Nineteen of Gaza’s hospitals remain operational, all of them are overwhelmed with the number of patients and a lack of supplies.
Baby Aya at Rantisi hospital in northern Gaza is dangerously thin
“Today, we receive between 300 to 500 cases daily, with approximately 10% requiring admission. This volume of inpatient cases far exceeds the capacity of Rantisi hospital, as the facility is not equipped to accommodate such large numbers,” Jall al Barawi, a doctor at the hospital, told us.
At least 94% of the hospitals have sustained some damage, some considerable, according to the UN.
Jall al Barawi, a doctor at Rantisi hospital
Paramedic crews are close to running out of fuel to drive ambulances.
The lack of food, after an 11-week blockade, has left thousands malnourished and increasingly vulnerable to surviving injuries or recovering from other conditions.
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Children are the worst affected.
Our team in Gaza filmed with baby Aya at the Rantisi hospital in northern Gaza. She is now three months old and dangerously thin.
Her skin stretches over her cheekbones and eye sockets on her gaunt, pale face. Her nappy is too big for her emaciated little body.
Aya’s nappy is too big for her emaciated little body.
Lethal spiral
Her mother Sundush, who is only 19 herself, cannot get enough food to produce breastmilk. Baby formula is scarce.
Aya, like so many other young children, cannot get the vital nutrition she needs to grow and develop.
It’s a lethal spiral.
This is what Aya looked like shortly after she was born
“My daughter was born at a normal weight, 3.5kg,” Sundush tells us.
“But as the war went on, her weight dropped significantly. I would breastfeed her, she’d get diarrhoea. I tried formula – same result. With the borders closed and no food coming in, I can’t eat enough to give her the nutrients she needs.”
“I brought her to the hospital for treatment, but the care she needs isn’t available.
“The doctor said her condition is very serious. I really don’t want to lose her, because I lost my husband and she’s all I have left of him. I don’t want to lose her.”
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Aya and her mother Sundush
Some of the aid entering Gaza now is being looted. It is hard to know whether that is by Hamas or desperate civilians. Maybe a combination of the two.
The lack of aid creates an atmosphere of desperation, which eventually leads to a breakdown in security as everyone fights to secure food for themselves and their families.
Only by alleviating the desperation can the security situation improve, and the risk of famine abate.
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