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.
Read More:
Energy bills help, pensions up and other key announcements from chancellor at a glance
Public support for Brexit at all-time low
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.”
Donald Trump has announced his “highly anticipated” meeting with Vladimir Putin will take place next Friday in the US state of Alaska.
The two presidents are expected to discuss the war in Ukraine – with the talks potentially leading to a breakthrough in Mr Trump’s effort to end the conflict.
But there’s no guarantee it will stop the fighting since Moscow and Kyiv remain far apart on their conditions for peace.
Earlier, the US president told reporters “we’re getting very close to a deal” that would end the war.
Mr Trump added there will be “some swapping of territories to the betterment of both sides”.
Follow latest: Ukraine war live updates
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‘I’m not against meeting Zelenskyy’
The meeting between the two leaders will be the first US-Russia summit since 2021, when former US President Joe Biden met Mr Putin in Switzerland.
Mr Trump wrote on Truth Social: “The highly anticipated meeting between myself, as President of the United States of America, and President Vladimir Putin, of Russia, will take place next Friday, August 15, 2025, in the Great State of Alaska. Further details to follow. Thank you for your attention to this matter!”
The meeting was also confirmed by Kremlin aide Yury Ushakov, who said the leaders will “focus on discussing options for achieving a long-term peaceful resolution to the Ukrainian crisis”.
He added that the two presidents could meet in Russia in future and that an invitation has already been extended to Mr Trump.
Yesterday, Mr Trump had told reporters at the White House that he couldn’t announce where or when the meeting would take place but he would do so soon.
He also suggested that his meeting with the Russian leader could come before any discussion involving Ukrainian President Volodymyr Zelenskyy.
“We’re going to have a meeting with Russia, start off with Russia. And we’ll announce a location. I think the location will be a very popular one,” Mr Trump said.
The US president added: “President Putin, I believe, wants to see peace, and Zelenskyy wants to see peace … in all fairness to President Zelenskyy, he’s getting everything he needs to, assuming we get something done.”
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Donald Trump, right, and Vladimir Putin at a summit in Vietnam in 2017. Pic: Reuters
Territory to form part of talks
Speaking about the role that territory will play in the peace talks, Mr Trump said: “You’re looking at a territory that’s been fought over for three-and-a-half years. A lot of Russians have died. A lot of Ukrainians have died.
“So we’re looking at that, but we’re actually looking to get some back, and some swapping.
“It’s complicated, actually. Nothing is easy. It’s very complicated. But we’re going to get some back.
“We’re going to get some switched. There’ll be some swapping of territories to the betterment of both.”
Analysts, including some close to the Kremlin, have suggested that Russia could offer to give up territory it controls outside of the four regions it claims to have annexed.
Pressed on if this was the last chance to make a major peace deal, Mr Trump said: “I don’t like using the term last chance … when those guns start going off, it’s awfully tough to get them to stop.”
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Trump says he will meet Putin
Western officials ‘to meet in UK’
Meanwhile, senior officials from the US, Ukraine and several European countries are due to meet in the UK this weekend to try and reach common positions ahead of the Trump-Putin meeting, according to Axios.
Ukraine and several NATO allies are reported to be privately concerned that Mr Trump might agree to Mr Putin’s proposals for ending the war without taking their positions into consideration.
Since his return to the White House in January, Mr Trump has moved to mend relations with Russia and sought to end the war – with public comments veering between admiration and sharp criticism of Mr Putin.
In a sign of his growing frustration with Russia’s refusal to halt its military offensive, Mr Trump had threatened to impose new sanctions and tariffs against Moscow – and countries that buy its exports – unless the Kremlin agreed to end the conflict.
A deadline was set for yesterday, but it is unclear whether these sanctions are taking effect, or if they will be delayed or cancelled in light of the talks.
Ukrainian servicemen of the 148th artillery brigade load ammunition into a M777 howitzer before firing in Zaporizhzhia.
Pic: AP
War grinds on ahead of talks
The meeting has been arranged as Russia’s bigger army is slowly advancing deeper into Ukraine at great cost in troops and armour while it relentlessly bombards Ukrainian cities.
Ukrainian forces are locked in intense battles along the 620-mile frontline that snakes from northeast to southeast Ukraine.
The Pokrovsk area of the eastern Donetsk region is taking the brunt of punishment as Russia seeks to break out into the neighbouring Dnipropetrovsk region.
Five days before he was killed by a falling aid package, father-of-two Uday al Qaraan called on world leaders to open Gaza’s borders to food – and criticised the use of airdrops.
“This isn’t aid delivery,” said the 32-year-old medic as a crowd of children rummaged through the remains of an airdrop behind him. “This is humiliation.”
Using footage from social media, satellite imagery, eyewitness testimony and flight tracking data, Sky News has examined the dangers posed by airdrops – and just how little difference they are making to Gaza’s hunger crisis.
A tangled parachute and a crowd in chaos
Based on six videos of the airdrop that killed Uday, we were able to locate the incident to a tent camp on the coast of central Gaza.
We determined that the drop occurred at approximately 11.50am on 4 August, based on metadata from these videos shared by three eyewitnesses.
Flight tracking data shows that only one aid plane, a UAE Armed Forces C-130 Hercules, was in the area at that time.
Footage from the ground shows 12 pallets falling from the plane. The four lowest parachutes soon become tangled, and begin to fall in pairs.
As a crowd surges towards the landing zone, a gunshot rings out. Nine more follow over a 90-second period.
Sakhr al Qaraan, an eyewitness and Uday’s neighbour, says that Uday was among those running after the first pallet to land.
“He didn’t see the other pallet it was tangled up with, and it fell on him moments later,” says Sakhr.
“People ran to collect the aid in cold blood, devoid of humanity, and he suffocated under that damned blanket – under the feet of people who had lost all humanity.”
The scene descended into chaos as Palestinians, some armed, tussled over the limited food available.
By the time Uday was pulled from the crowd and rushed to hospital, it was too late.
The UAE Ministry of Foreign Affairs did not respond to a request for comment.
Medic and father-of-two Uday al Qaraan, 32, was killed on 4 August by an aid package dropped from a UAE Armed Forces plane.
Parachutes failed in half of airdrops analysed
This was not the first time that airdrops at this location had posed a threat to those on the ground.
The day before Uday was killed, the same plane had dropped aid over the site.
The footage below, shared by the UAE Armed Forces, shows the view from inside the plane. Just before the footage ends, it shows that one of the parachutes was broken.
Hisham al Armi recorded the scene from the ground. His video shows the broken parachute, as well as another that had failed completely.
Military planes dropped aid at the site on eight consecutive days between 30 July and 6 August. Sky News verified footage showing parachute failures during four of those eight airdrops.
Flight tracking data shows that almost all of the 67 aid flights over that period followed a similar route along the coast, which is densely packed with tent camps.
An Israel Defence Forces (IDF) official told Sky News that the airdrops are routed along the coast, because this is where much of Gaza’s population is now concentrated.
An IDF spokesperson added the Israeli military “takes all possible measures to mitigate the harm to uninvolved civilians”.
Hisham al Armi told Sky News he is grateful to the countries that donated the aid, but “the negatives outweigh the positives”.
“Fighting occurs when aid is dropped, and some people are killed … due to the crush and parachutes.”
Other dangers are also posed by the airdrops.
The footage below, taken on 29 July, shows Palestinians venturing into the sea in order to chase aid that had drifted over the water. The IDF has banned Palestinians from entering the sea.
One woman, a relative of Uday who witnessed his death, described the airdrops as the “airborne humiliation of the people”.
“There is not enough aid for them,” she said. “It creates problems among the people, and some are killed just to obtain a little aid. And most people don’t receive any aid, they remain hungry for days.”
Between 27 July and 1 August, Gaza received an estimated 1,505 tonnes of food aid per day via land routes – 533 tonnes short of what the UN’s food security agency says is needed to meet basic needs.
Based on flight tracking data, we estimated that airdrops added just 38 tonnes daily, 7% of the shortfall.
“The quantities involved are minuscule in terms of the scale of the need,” says Sam Rose, Gaza director of UNRWA, the UN agency previously responsible for distributing food in the territory.
UNRWA claims it has enough food stationed outside of Gaza to feed the population for three months, but that Israel has not allowed the agency to bring in any food since 2 March.
“We should be dealing with that rather than introducing something else which is costly, dangerous, undignified and somehow legitimises … the access regime by suggesting that we found a way round it through airdrops,” Rose says.
COGAT, the Israeli agency responsible for coordinating aid deliveries, referred Sky News to a statement in which it said there is “no limit on the amount of aid” allowed into Gaza.
An IDF spokesperson also denied restricting aid, and said the Israeli military “will continue to work in order to improve the humanitarian response in the Gaza Strip, along with the international community”.
In his interview five days before he was killed, Uday al Qaraan appealed to world leaders to open Gaza’s borders.
“What would happen if they just let the aid in?” he asked. “If you can fly planes and drop aid from the sky then you can break the siege, you can open a land crossing.”
The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.
World
Trump vowed to end Ukraine war in first 24 hours of his presidency – nearly 200 days in, could he be close?
Seven hours is a long time in US politics.
At 10am, Donald Trump accused Russia of posing a threat to America’s national security.
By 5pm, Mr Trump said there was a “good prospect” of him meeting Vladimir Putin “soon”.
There had, he claimed, been “great progress” in talks between his special envoy Steve Witkoff and the Russian president.
It’s difficult to gauge the chances of a meeting between the two leaders without knowing what “great progress” means.
Is Russia “inclined” towards agreeing a ceasefire, as Ukraine’s president now claims?
Is Mr Putin prepared to meet with his Ukrainian foe, Volodymyr Zelenskyy, too?
The very fact that we’re asking those questions suggests something shifted on a day when there was no expectation of a breakthrough.
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