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The UK’s economic outlook will be “challenging” for the next two years, Jeremy Hunt says.

The chancellor presented his autumn statement 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 the public finances.

But the independent Office for Budget Responsibility (OBR) 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.

Politics live: Tax burden reaches highest level since WWII

Speaking to Sky News, Mr Hunt said it was “a difficult time for everyone” but tax hikes and spending cuts are needed to get the economy “on an even keel”.

“Over the next two years it is going to be challenging,” he said.

“But I think people want a government that is taking difficult decisions, has a plan that will bring down inflation, stop those big rises in the cost of energy bills and the weekly shop, and at the same time is taking measures to get through this difficult period.”

More on Autumn Statement 2022

The chancellor insisted that his autumn statement is a “very Conservative package” following criticism from some Tory MPs.

“The Office for Budgetary Responsibility said yesterday that what we’re doing is actually recession shallow, it’s saving jobs,” he said.

“But what I would say to my Conservative colleagues is there is nothing Conservative about spending money that you haven’t got, there is nothing Conservative about not tackling inflation, there is nothing Conservative about ducking difficult decisions that put the economy on track.

“And we’ve done all of those things and that is why this is a very Conservative package to make sure we sort out the economy.

“None of this is easy, but it’s the right thing to do.”

Former business secretary Jacob Rees-Mogg accused the chancellor of taking the “easy option” in Thursday’s autumn statement rather than bearing down harder on public spending.

He said the country needed lower taxes to drive up growth.

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Hunt questioned over autumn statement

Probed on how it can be fair that pensions will go up by inflation when public sector workers will not see pay increase alongside prices, Mr Hunt said the elderly do not have the ability to work more to improve their take home pay.

Well, I think the truth is, first of all, pensioners have retired. They don’t have the ability to work more or work longer hours in the way that people of working age do,” the chancellor said.

“But I think it is wrong to say that only the poorest pensioners are feeling the squeeze at the moment.

“I think this is something that’s affecting everyone and I think it’s right.

“Having made that promise to pensioners in our manifesto that we would have this triple lock, I think this is exactly the kind of tough time that people want it to kick in.

“And so that’s why I think it’s the right thing to do.”

The chancellor added: “We’re not pretending that this isn’t going to be a difficult time for everyone. But what we have is a plan.”

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’12 weeks of Conservative chaos’ – Rachel Reeves

In yesterday’s autumn statement, Mr Hunt announced economic policies which the government hopes will help to rebalance the nation’s finances after the economic turmoil which followed former chancellor Kwasi Kwarteng’s mini-budget.

These included:

• Income tax thresholds being frozen for two more years until April 2028

• Top level of income tax now being paid on earnings over £125,140 instead of £150,000

• Pensions triple lock will remain – with pensioners to see a 10.1% increase in weekly payments in line with inflation

• Benefits to also rise in line with inflation – by 10.1%

• Energy cap to rise from £3,000 a year to £2,500 a year beyond April

• UK minimum wage to rise from £9.50 to £10.42 an hour for those aged over 23

• Windfall tax on oil giants’ profits to rise from 25% to 35% and be extended by two years until March 2028

• Additional cost of living payments of £900 for those on benefits and £300 for pensioners

• Spending on public services in England to rise slower than planned

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As a result of 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 election, due in 2024.

Treasury analysis suggests around 55% of households will be worse off as a result of the measures.

Read more: Jeremy Hunt’s autumn statement had all the hallmarks of a Labour budget

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”.

Ms Reeves told Sky News she is “really worried about what’s going to happen to people’s living standards next year from April” and said a Labour government would have done more “to alleviate some of that pressure on the ordinary working person”.

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What does the autumn statement mean?

As Mr Hunt took part in the broadcast round Friday morning, economic think-tank the Resolution Foundation published analysis suggesting his autumn statement’s tax rises would deliver a 3.7% income hit to typical households.

The foundation said the statement had piled further pressure on the “squeezed middle” and that the focus on “stealthy” tax threshold freezes to raise revenue would extend far beyond high earners.

The think tank also found that the budget would reverse much of the government’s levelling up agenda.

“The £15 billion of cuts to capital investment announced yesterday will undo 80% of the remaining increases in public investment announced by previous chancellor Rishi Sunak, which underpinned the levelling-up agenda,” it said.

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Everyone in UK ‘must step up’ to deter Russian threat of wider war, armed forces chief to warn

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Everyone in UK 'must step up' to deter Russian threat of wider war, armed forces chief to warn

The whole of the UK – not just its armed forces – needs to step up to deter the threat posed by Russia of a wider war in Europe, Britain’s military chief will say.

In the kind of nation-wide call to action that has not been heard since the height of the Cold War, Air Chief Marshal Sir Richard Knighton will use a speech in London on Monday evening to urge the British public to make defence and resilience “a higher priority”.

He will say Russia’s war in Ukraine shows that Vladimir Putin’s willingness to target his neighbours “threatens the whole of NATO, including the UK. The Russian leadership has made clear that it wishes to challenge, limit, divide and ultimately destroy NATO”.

Yet there was nothing in excerpts of the speech – released in advance by the Ministry of Defence – that pointed to any push by Sir Keir Starmer’s government to increase defence spending faster than planned, despite the flashing warning signs and concerns among senior military officers that the budget is currently set to grow too slowly.

In a further articulation of the threat, Blaise Metreweli, the new head of MI6, will use a separate speech on Monday to warn that the “front line is everywhere” in a new “age of uncertainty”.

“The export of chaos is a feature not a bug in the Russian approach to international engagement,” she will say, in her first public comments since becoming the first female chief of the Secret Intelligence Service in October.

“We should be ready for this to continue until Putin is forced to change his calculus.”

More on Mi6

Read more:
Head of MI6: ‘Never seen the world in a more dangerous state’
NATO chief calls for 400% increase in air and missile defence

Defence and security chiefs across the NATO alliance are increasingly sounding the alarm about the potential for Russia’s war in Ukraine to ignite a much wider conflict.

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NATO ‘must prepare for scale of war our grandparents faced’, warns chief Mark Rutte

Mark Rutte, the head of NATO, last week said Europe must ready itself for a confrontation with Russia on the kind of scale “our grandparents and great-grandparents endured” – a reference to the First and Second World Wars.

At the same time, Al Carns, the UK’s armed forces minister, said Britain is “rapidly developing” plans to ready the entire country for the possible outbreak of war.

Sky News revealed last year that the UK had no national plan for the defence of the country or the mobilisation of its people.

By contrast, a detailed blueprint for the transition from a state of peace to one of war existed throughout the Cold War, setting out not just what the armed forces, emergency services and local governments had to do in the event of conflict, but also wider society, including people working in industry, schools and public transport.

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‘New era’ of threats from Russia, China and Iran

However, this Government War Book was quietly shelved after the Soviet Union collapsed and successive governments took a so-called “peace dividend”, shifting investment out of defence and into other priorities such as health and welfare.

Sky News and Tortoise have documented the hollowing out of the UK’s armed forces and wider national resilience in a podcast series called The Wargame.

The expected comments by Air Chief Marshal Knighton in an annual lecture at the Royal United Services Institute (RUSI) appear to signal an attempt by the government to put the country back on more of a war footing in the face of rising threats.

But military insiders have warned that a timeline set out by the government of 10 years to boost defence spending to 3.5% of GDP from 2.3% is far too slow.

👉 Click here to listen to The Wargame on your podcast app 👈

The chief of the defence staff will say: “The situation is more dangerous than I have known during my career and the response requires more than simply strengthening our armed forces. A new era for defence doesn’t just mean our military and government stepping up – as we are – it means our whole nation stepping up.”

He will nod to the planned uplift in spending, noting “the price of peace is increasing”.

He is set to say: “The war in Ukraine shows that Putin’s willingness to target neighbouring states, including their civilian populations, potentially with such novel and destructive weapons, threatens the whole of NATO, including the UK.”

This is a threat that wider society needs to prepare for as well as the military.

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Military analyst Sean Bell looks at the threat Russia poses

“Our armed forces always need to be ready to fight and win – that’s why readiness is such a priority,” Air Chief Marshal Knighton will say.

“But deterrence is also about our resilience to these threats, it’s about how we harness all our national power, from universities, to industry, the rail network to the NHS. It’s about our defence and resilience being a higher national priority for all of us. An ‘all-in’ mentality.”

It is a highly unusual intervention that has echoes of the Cold War when the UK last involved all of society in a programme of national defence and resilience against the threat of World War Three and potential nuclear Armageddon posed by the then Soviet Union.

“We are heading into uncertainty, and that uncertainty is becoming more profound, both as our adversaries become more capable and unpredictable, and as unprecedented technology change manifests itself,” Air Chief Marshal Knighton will say.

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Specialist teams and online investigators deployed across England and Wales to tackle ‘national emergency’ of violence against women and girls

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Specialist teams and online investigators deployed across England and Wales to tackle 'national emergency' of violence against women and girls

Specialist investigation teams for rape and sexual offences are to be created across England and Wales as the Home Secretary declares violence against women and girls a “national emergency”.

Shabana Mahmood said the dedicated units will be in place across every force by 2029 as part of Labour’s violence against women and girls (VAWG) strategy due to be launched later this week.

The use of Domestic Abuse Protection Orders (DAPOs), which had been trialled in several areas, will also be rolled out across England and Wales. They are designed to target abusers by imposing curfews, electronic tags and exclusion zones.

The orders cover all forms of domestic abuse, including economic abuse, coercive and controlling behaviour, stalking and ‘honour’-based abuse. Breaching the terms can carry a prison term of up to 5 years.

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Govt ‘thinking again’ on abuse strategy

Nearly £2m will also be spent funding a network of officers to target offenders operating within the online space.

Teams will use covert and intelligence techniques to tackle violence against women and girls via apps and websites.

A similar undercover network funded by the Home Office to examine child sexual abuse has arrested over 1,700 perpetrators.

More on Domestic Abuse

Abuse is ‘national emergency’

Home Secretary Shabana Mahmood said in a statement: “This government has declared violence against women and girls a national emergency.

“For too long, these crimes have been considered a fact of life. That’s not good enough. We will halve it in a decade.

“Today we announce a range of measures to bear down on abusers, stopping them in their tracks. Rapists, sex offenders and abusers will have nowhere to hide.”

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Angiolini Inquiry: Recommendations are ‘not difficult’

The target to halve violence against women and girls in a decade is a Labour manifesto pledge.

The government said the measures build on existing policy, including facial recognition technology to identify offenders, improving protections for stalking victims, making strangulation a criminal offence and establishing domestic abuse specialists in 999 control rooms.

Read more from Sky News:
Demands for violence and abuse reforms
Women still feel unsafe on streets
Minister ‘clarifies’ violence strategy

Labour has ‘failed women’

But the Conservatives said Labour had “failed women” and “broken its promises” by delaying the publication of the violence against women and girls strategy.

Shadow Home Secretary, Chris Philp, said that Labour “shrinks from uncomfortable truths, voting against tougher sentences and presiding over falling sex-offender convictions. At every turn, Labour has failed women.”

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UK has seen longest period without migrants arriving on small boats since 2018, figures show

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UK has seen longest period without migrants arriving on small boats since 2018, figures show

There have been no migrant arrivals in small boats crossing the Channel for 28 days, according to Home Office figures.

The last recorded arrivals were on 14 November, making it the longest uninterrupted run since autumn 2018 after no reported arrivals on Friday.

However, a number of Border Force vessels were active in the English Channel on Saturday morning, indicating that there may be arrivals today.

So far, 39,292 people have crossed to the UK aboard small boats this year – already more than any other year except 2022.

The record that year was set at 45,774 arrivals.

It comes as the government has stepped up efforts in recent months to deter people from risking their lives crossing the Channel – but measures are not expected to have an impact until next year.

Debris of a small boat used by people thought to be migrants to cross the Channel lays amongst the sand dunes in Gravelines, France. Pic: PA
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Debris of a small boat used by people thought to be migrants to cross the Channel lays amongst the sand dunes in Gravelines, France. Pic: PA

December is normally one of the quietest for Channel crossings, with a combination of poor visibility, low temperatures, less daylight and stormy weather making the perilous journey more difficult.

The most arrivals recorded in the month of December is 3,254, in 2024.

Deputy Prime Minister David Lammy met with ministers from other European countries this week as discussions over possible reform to the European Convention on Human Rights (ECHR) continue.

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France agrees to start intercepting small boats

The issue of small boat arrivals – a very small percentage of overall UK immigration – has become a salient issue in British politics in recent years.

Last month, French maritime police announced they would soon be able to intercept boats in the English Channel.

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