Tories accused of ‘picking pockets of entire country’ as budget leaves more than half of households worse off
Jeremy Hunt has been accused of “picking the pockets of working people” after announcing billions worth of tax hikes in his Autumn Statement – as Britons face the biggest fall in disposable income on record.
The Office for Budget Responsibility (OBR), which checks the government’s fiscal plans and provides economic forecasts to go alongside them, has given a bleak assessment of the UK’s economic outlook.
The country is now in a recession, with more than half a million people forecast to lose their jobs while living standards crash as a result of rising prices.
Politics live: Britons face ‘staggering’ fall in disposable income
The spiralling cost of living will erode real wages and reduce living standards by 7% in total over the next two years, the OBR’s assessment said, wiping out the previous eight years’ growth, despite over £100bn of additional government support.
Paul Johnson, the head of the Institute for Fiscal Studies, said the figures were “simply staggering”.
“Simply staggering numbers in OBR report,” he said on Twitter.
“Real Household Disposable Income per person to fall more than 7% over next two years. Biggest fall on record. Taking incomes down to 2013 levels.”
In his Autumn statement, Mr Hunt set out a package of around £30bn of spending cuts and £24bn in tax rises over the next five years.
The measures will see around 55% of households worse off, according to the Treasury’s own analysis.
Among the “difficult decisions” Mr Hunt said he was forced to make to curb inflation, he announced the cap on average household energy bills would increase from £2,500 to £3,000 from April.
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Sky’s economics and data editor Ed Conway takes a look at the key figures from the chancellor’s autumn statement.
But Mr Hunt said “this still means an average of £500 support for every household”, while there would also be additional cost-of-living payments for people on means-tested benefits, pensioner households and those on disability benefits.
In addition to rising energy bills, millions more Britons will pay more tax due to a freeze on income tax personal allowance, national insurance and inheritance tax thresholds.
Sometimes known as a “stealth tax”, the measure will drag more people into higher tax brackets, so is effectively a tax rise.
The Federation of Small Businesses (FSB) slammed the move, calling the budget “high on stealth-creation and low on wealth-creation”.
Some of the other main announcements from the Autumn Statement include:
- The higher rate of tax threshold reduced to £125,140
- Benefits and state pension to rise in line with inflation
- Windfall tax extended until March 2028 and increased to 35%
- Electric cars no longer exempt from car tax from April 2025
- An extra £2.4bn per year on schools
- NHS to get £3.3bn and adult social care £1bn next year and £1.7bn in 2024
- Government spending will continue to increase in real terms every year for the next five years, but at a slower rate than previously planned.
- Freeze on income tax personal allowance, national insurance and inheritance tax thresholds
A former Labour economist and policymaker, Torsten Bell, who was in the Treasury during the last financial crisis, has said the autumn statement could have been announced by the opposition.
But Labour branded it an “invoice to the economic carnage the government has created”.
Hunt a ‘scrooge who has not cancelled Bankers’ Christmas’
Shadow chancellor Rachel Reeves questioned the fairness of not abolishing nom-dom status, which she called a “tax-free income for millionaires”, and of lifting the cap on bankers’ bonuses while “urging wage restraint for everybody else”.
“He’s asking working people to take the hit with less money in their pockets in the run-up to Christmas, but also for years to come,” she said.
“But if you’re a banker, a non-dom, or a private equity manager, don’t worry – Scrooge hasn’t cancelled your Christmas.
“In the last hour, the Conservatives have picked the pockets of purses and wallets of the entire country as the chancellor has deployed a raft of stealth taxes taking billions of pounds from ordinary working people.
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Rachel Reeves said all the country got today was an invoice to the ‘carnage’ created by the government
“The country is sick of being ripped off by the Tories, we want our money back.”
Mr Hunt sought to blame Russia’s invasion of Ukraine for the “global energy crisis, a global inflation crisis and a global economic crisis” and said “we have risen to bigger challenges before”.
“We aren’t immune to these headwinds, but with this plan for stability, growth and public services, we will face into the storm,” he said.
But Green Party MP Caroline Lucas said the chancellor did not acknowledge the “elephant in the room”, which she said was “the economic catastrophe of Brexit”.
SNP Treasury spokeswoman Alison Thewlis also told MPs: “This is a UK so weak that no one would wish to join it. Scotland cannot be forced to stay in broke, broken, Brexit Britain.”
The OBR said in its forecast that the withdrawal from the EU had a “significant adverse impact” on UK trade, while a former Bank of England economist said this week that it had “permanently damaged” the economy and was the ultimate reason for many of the austerity measures announced today.
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The assessments from the OBR have been long awaited after the official forecasting body was not used during the tax-slashing September mini-budget, which spooked the markets, pushed up the cost of borrowing, sent the pound falling and forced the Bank of England to intervene to stop pension funds from collapsing.
Mr Hunt’s package is in stark contrast to his predecessor’s ill-fated plan, which analysis released on Monday found cost the UK £30bn – doubling the sum the Treasury said would have to be raised to plug the “black hole”.
But the pound has still dropped sharply against the US dollar as financial markets fret over warnings the UK is already in recession.
The Lib Dems blamed the problems on government incompetence, calling today’s announcement a “cost of chaos budget (that) will cause untold pain for everyone”.
But some of the measures announced have been welcomed.
Martin Lewis, the money saving expert, said: “I am very pleased that both benefits and the state pension are being increased by the 10.1% September inflation rate.
“It only happens from next April, and it will still be hard for many, but if it was less than this it would’ve been devastating.”
Hezbollah leader Hassan Nasrallah has been killed after airstrikes in Beirut, the Israeli army has said.
Recent weeks have seen Israel unleash a barrage of strikes against Lebanon after it turned its attention to the conflict at its northern border.
On Friday, Israel targeted the capital Beirut with a series of attacks claiming to have struck the headquarters of Hezbollah.
People stand near a picture of Nasrallah during the funeral of a Hezbollah member. Pic: Reuters
People watch Hassan Nasrallah delivering a televised address in Beirut. Pic: Reuters
The Israel Defence Forces (IDF) said it carried out a “precise strike” on Hezbollah’s “central headquarters”, which it claimed was “embedded under residential buildings in the heart of the Dahieh in Beirut”.
The first wave of attacks shook windows across the city and sent thick clouds of smoke billowing into the air.
Smoke rises from Israeli airstrikes in Beirut’s southern suburbs. Pic: AP
While Israel stressed it had been a “precise” strike, preliminary figures from Lebanon’s health ministry confirmed at least six other people were killed and 91 were wounded.
Israel said Nasrallah was the intended target and initially there were claims he had survived.
However, after several hours of confusion, his death was confirmed by Israel.
“Hassan Nasrallah will no longer be able to terrorise the world,” the IDF said.
Hours later, a defiant Hezbollah confirmed Nasrallah’s death but vowed their fight with Israel would continue after confirming they had fired upon sites in northern Israel.
“The leadership of Hezbollah pledges to the highest, holiest, and most precious martyr in our path full of sacrifices and martyrs to continue its jihad in confronting the enemy, supporting Gaza and Palestine, and defending Lebanon and its steadfast and honourable people,” they said.
Recent days have seen Israel launch strikes in Beirut, the Bekaa Valley, and Bhamdoun
The Israeli strike that allegedly took Nasrallah’s life was on residential buildings in Dahieh, Beirut
Alongside claiming to have killed Nasrallah, the IDF said it had killed a number of other commanders, including Ali Karaki, the commander of the southern front.
The country’s military said the strike was carried out while Hezbollah leadership met at their underground headquarters in Dahieh.
In the aftermath of the most recent attacks, an Israeli military spokesperson declined to comment on whether US-made Mark 84 heavy bombs were used in the strike against Nasrallah.
“The strike was conducted while Hezbollah’s senior chain of command were operating from the headquarters and advancing terrorist activities against the citizens of the State of Israel,” Lieutenant Colonel Nadav Shoshani said in a media briefing.
He continued: “We hope this will change Hezbollah’s actions.”
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Hezbollah leader killed says IDF
He added the number of civilian casualties was unclear but blamed Hezbollah for positioning itself in residential areas.
“We’ve seen Hezbollah carry out attacks against us for a year. It’s safe to assume that they are going to continue carrying out their attacks against us or try to,” he said.
Meanwhile, Iran said it was in constant contact with Hezbollah and other allies to determine its “next step”, but Reuters reported the country’s supreme leader was transferred to a secure location in light of the latest attack.
Speaking after the attack, Ayatollah Ali Khamenei called on Muslims “to stand by the people of Lebanon and the proud Hezbollah” and said: “The fate of this region will be determined by the forces of resistance, with Hezbollah at the forefront,” state media reported.
Nasrallah’s death will be a blow to Hezbollah as it continues to reel from a campaign of escalating Israeli attacks.
Flames rise after an Israeli airstrike in the southern suburbs of Beirut on Saturday. Pic: AP
Nasrallah is latest Hezbollah leader to fall
While Nasrallah’s death is certainly the most high-profile of recent attacks, it continues a trend of Israel targeting Hezbollah’s leadership structure.
Also on Saturday, in the early hours of the morning, the commander of the group’s missile unit and his deputy were killed in another Israeli attack in southern Lebanon.
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Then, in a separate strike overnight on Friday, the IDF said it killed the head of Hamas’s network in southern Syria.
This followed the deaths of other senior commanders, including Muhammad Qabisi, earlier in the month.
A Swiss teenage cyclist with “a bright future ahead of her” has died a day after suffering a serious head injury at the world championships.
Muriel Furrer crashed while competing on rain-slicked roads in the junior women’s road race in her home country.
The 18-year-old rider fell heavily on Thursday in a forest area south of the city of Zurich and was airlifted to hospital by helicopter, reportedly in a critical condition.
Race organisers announced on Friday she had died.
The cyclist died at Zurich University Hospital. Pic: Reuters
They said in a statement: “Muriel Furrer sadly passed away today at Zurich University Hospital.”
The UCI governing body for world cycling paid tribute to her in a statement on its website, entitled “The cycling world mourns the loss of Muriel Furrer”.
It read: “It is with great sadness that the Union Cycliste Internationale (UCI) and the Organising Committee of the 2024 UCI Road and Para-cycling Road World Championships today learned the tragic news of the death of young Swiss cyclist Muriel Furrer.
“With the passing of Muriel Furrer, the international cycling community loses a rider with a bright future ahead of her. We offer sincere condolences to Muriel Furrer’s family, friends and her Federation Swiss Cycling.”
Swiss Cycling said in a post on X: “Our hearts are broken, we have no words. It is with a heavy heart and infinite sadness that we have to say goodbye to Muriel Furrer today.
“We are losing a warm-hearted and wonderful young woman who always had a smile on her face. There is no understanding, only pain and sadness.”
At a news conference, a director of the Swiss organising committee Olivier Senn said he could not confirm exactly where the crash happened.
Police and the public prosecutor’s office were investigating the incident, Mr Senn said.
Furrer had finished in 44th position in the junior women’s time trial earlier in the week.
The rider’s family has asked for the championships – which last for nine days – to continue, said UCI sports director Peter van den Abeele.
The women’s and men’s elite races, scheduled for Saturday and Sunday respectively, will use the same stretch of road where the fatal crash happened.
A UCI gala event scheduled for Saturday evening has been cancelled, along with public events to mark races planned for Friday.
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Second Swiss cyclist death
Furrer is the second Swiss cyclist to die in just over a year after crashing on home roads.
At the Tour de Suisse in June 2023, Gino Mader went off the road and down a ravine during a descent. The 26-year-old died from his injuries the next day.
“Obviously it is another tragic death,” Mr Senn said. “There are a lot of similarities, similar feelings. Today is about Muriel.”
World
Hassan Nasrallah killed: Decapitated and in disarray, Hezbollah and Iran must now decide to fight or backdown
The leader of Hezbollah is dead.
This is a very big moment, not just in this conflict but for the future of the Middle East.
In 2006, the last Lebanon War, Israel tried and failed to kill him.
Last night, in a huge series of strikes on southern Beirut, they finally hit their target.
Read more: Who was Hassan Nasrallah?
Listen: What is Hezbollah and how powerful is it?
People watch the speech of Hezbollah leader Hassan Nasrallah earlier this month. Pic: AP
A man checks a damaged building at the site of an Israeli airstrike in Choueifat, south east of Beirut on Saturday. Pic: AP
Over the past 18 years Nasrallah has grown Hezbollah in his image, expanding its forces, building its infrastructure and significantly expanding its arsenal.
He wasn’t just the leader of Hezbollah, he was a global figurehead of anti-Israel resistance.
With Iran’s help, Hezbollah became one of the best armed non-state militaries in the world.
It is now decapitated and in disarray.
During the past decades Israel has also been at work, steadily gathering intelligence on Nasrallah and Hezbollah, building a vast database of information, an effort which arguably distracted them from better understanding the intentions of Hamas.
The intelligence successes of the past days have helped restore Israel’s reputation after the stunning failures on October 7.
Iran and Hezbollah must choose
This is a pivotal moment.
Iran and Hezbollah must now decide how to respond: fight, or backdown.
The strike also killed Ali Karaqi, commander of Hezbollah’s southern front and labelled as the second most wanted by the IDF.
It is still unclear who else died in the strike, but given the location and the presence of top officials, it seems likely that other senior figures would have been eliminated too.
Nasrallah will be replaced.
The assassination of enemy leaders can prove to be a short-term victory because they are often succeeded by someone more formidable than before, as witnessed by the killing of the former Hezbollah leader Abbas al Moussawi in 1992.
He was succeeded by Nasrallah.
The working assumption is that the group will respond with barrages of missiles into Israel, probably targeting Tel Aviv.
But Hezbollah’s command structure has been severely degraded by Israel.
Nasrallah had become isolated as the IDF had steadily killed commanders over a fortnight of scything airstrikes on their compounds in Beirut and elsewhere.
It will probably take time to co-ordinate a response and it will probably be done with Iranian guidance.
Nasrallah might be dead, but Hezbollah isn’t
Hezbollah is badly wounded, not just as a paramilitary force but in the eyes of the Lebanese people, many of whom are angry their country is now facing another period of devastating violence.
This might be a moment for more moderate voices within Lebanon, including the national armed forces, to step in.
As the war escalated over recent weeks, noticeable divisions emerged between Tehran and Nasrallah.
He remained an important ally, however, a trusted advisor to Iran’s Supreme Leader, and this will come as a personal blow to him.
Having resisted the opportunity to get involved so far, Iran might decide the time has come to take the gloves off and deploy what is left of the thousands of missiles they’ve provided Hezbollah with.
Alternatively, after such a difficult ten days, Tehran might conclude that this round of fighting needs to end and pull back with its main proxy still in some shape to rebuild and fight another day.
With such momentum behind Israel, Iran will also be concerned about its own fate and that of its smaller proxies in Iraq and Syria.
Ultimately, the reason for Hezbollah’s existence – to act as insurance against an Israeli attack on Iran’s nuclear facilities – hasn’t changed, but if Tehran calculates its proxies can no longer act as that shield it might try to accelerate its nuclear programme.
Could a ground invasion follow?
The Israeli government has choices of its own: order a ground invasion of southern Lebanon or continue with an air campaign that has delivered such dramatic successes.
There will be strong and compelling voices in Netanyahu’s cabinet urging him to take advantage of the situation and send troops in, but Hezbollah is not defeated, thousands of its soldiers remain and they are likely hiding in the vast tunnel network under the hills across the border.
Even a limited ground invasion risks large loss of life, on both sides, and the potential Israel will be lured into something more prolonged than it intended.
Nasrallah’s death might change the dynamic in Gaza too.
Yahya Sinwar, the leader of Hamas, has clung on and rejected ceasefire attempts in the hope that Hezbollah and Iran would go to war with Israel, dragging its enemy into a multi-front and unwinnable conflict.
That might still happen, but just as Nasrallah became isolated, so too is Sinwar.
The much trumpeted “unity of arenas” has failed to join up.
The Middle East might often look chaotic to outsiders, but there are unspoken rules generally acknowledged and followed by belligerents.
For years Hezbollah and Israel acted within the unwritten but understood parameters of a shadow war.
Then, eleven months ago on 8 October, Hezbollah attacked Israel out of solidarity with Hamas.
Nasrallah tied Lebanon’s fate to Hamas, insisting that Hezbollah would only stop when the fighting ended in Gaza.
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That ceasefire never came.
The rules shifted as the crossfire escalated, but it remained broadly contained within boundaries understood by both sides.
Until two weeks ago, 17 September, when thousands of pagers started exploding across Beirut and Lebanon.
It is possible Nasrallah had concluded that Israel was war-weary, and he overestimated the domestic and international pressure Netanyahu was under to end the fighting.
He might have believed that Netanyahu had neither the will nor the support to open up another front.
He, like so many of us, maybe assumed US influence on Israel would prevail.
Those miscalculations cost him his life.
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