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Chancellor Jeremy Hunt has not ruled out increasing pay offers to public sector workers, but warned that giving more money to teachers and nurses could entrench high inflation.

Speaking as it was revealed the UK economy narrowly avoided recession in 2022, Mr Hunt also indicated he would resist pressure to cancel a planned cut to household energy support that will see typical bills rise by £500 to around £3,000 in April.

Asked if there were any circumstances in which he would consider increasing pay offers to avert more public sector pay strikes the chancellor told Sky News: “It’s not a no, but I’m saying we’ll talk about absolutely anything, except things that will dig in the very high inflation that is causing people to see the cost of their weekly shop go up and the value of their wages erode.

“We’ll talk about absolutely anything to resolve the strikes except measures that will entrench high inflation.

“We don’t think strikes are helpful, they’re very damaging and very disruptive. The best way to resolve these issues is to sit and talk and find a solution that doesn’t entrench the very inflation that is upsetting so many people.”

Many economists dispute the argument that increasing public sector pay can entrench inflation, but Mr Hunt said it was a key factor in holding down pay.

“We should listen to a very clear warning from the Bank of England governor on Thursday who said that if you fund higher wage settlements through borrowing, that is inflationary, and that’s why it’s a very difficult situation. We want to get back into a situation where people’s real wages are growing.”

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Why is the UK economy so weak?

On maintaining energy support, a measure that would reduce inflation for family budgets, he argued that continuing support at current levels would damage the public finances.

The cost to the taxpayer of existing support has proved much lower than initially forecast because wholesale gas prices have fallen, leading campaigners and the energy industry to call for support to be maintained.

“We are doing absolutely everything we can to help families through this difficult period,” Mr Hunt said. “We’re giving about £3,500 of support on average to every family in the country this year and last year, so it’s a massive amount, about £99bn.

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“But we also have to be responsible with public finances. Because if we’re not we just give them a different pressure, which is higher interest rates as a result of the reasons. We look at everything we can do, but we won’t do things that lead to higher interest rates.”

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Thousands of NHS workers strike

The chancellor’s position on pay and energy reflects the dismal state of the public finances.

The official figures released by the Office for National Statistics earlier on Friday paint a grim picture of a stagnating economy with a dysfunctional public sector.

The Bank of England is forecasting a recession this year, albeit slightly less acute than previously, and forecast the UK will not recover to its pre-pandemic scale until 2026.

There is also acute pressure on Mr Hunt from businesses to incentivise investment and growth. Pharmaceutical giant AstraZeneca offered a stark example of the impact of government policy this week, citing rising corporation tax as the reason it has chosen to build a new manufacturing facility in Ireland not the UK.

Mr Hunt rejected the characterisation of the UK’s prospects.

“We believe that this country has some of the most exciting growth prospects anywhere if you look at our strengths in technology,” he said.

“Last year, we became only the third country in the world to have a trillion-dollar tech economy, our strengths are the life sciences and in clean energy where we’re a world leader in offshore wind. We think we have fantastic growth prospects.

“But to take to make the most of those we have to deal with our inflation issue which is over 10%, and for companies that want to invest high interest rates are a real disincentive.

“We need to get interest rates down. That was working with the Bank of England to deal with inflation. And then we think we have tremendous growth prospects.”

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How did your MP vote on Labour’s welfare bill?

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How did your MP vote on Labour's welfare bill?

Labour’s welfare reforms bill has passed, with 335 MPs voting in favour and 260 against.

It came after the government watered down the bill earlier this evening, making a dramatic last-minute concession to the demands of would-be rebel MPs who were concerned about the damage the policy would do to disabled people.

The concessions could end up leaving the government with £5.5bn to make up from either tax rises or cuts elsewhere.

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The government has a working majority of 166, so it would have taken 84 rebels to defeat the bill.

In total, 49 Labour MPs still voted against the bill despite the concessions. No MPs from other parties voted alongside the government, although three MPs elected for Labour who have since had the whip removed did so.

Which Labour MPs rebelled?

Last week, 127 Labour MPs signed what they called a “reasoned amendment”, a letter stating their objection to the bill as it was.

The government responded with some concessions to try and win back the rebels, which was enough to convince some of them. But they were still ultimately forced to make more changes today.

In total, 68 MPs who signed the initial “reasoned amendment” eventually voted in favour of the bill.

Nine in 10 MPs elected for the first time at the 2024 general election voted with the government.

That compares with fewer than three quarters of MPs who were voted in before that.

A total of 42 Labour MPs also voted in favour of an amendment that would have stopped the bill from even going to a vote at all. That was voted down by 328 votes to 149.

How does the rebellion compare historically?

If the wording of the bill had remained unchanged and 127 MPs or more had voted against it on Tuesday, it would have been up there as one of the biggest rebellions in British parliamentary history.

As it happened, it was still higher than the largest recorded during Tony Blair’s first year as PM, when 47 of his Labour colleagues (including Diane Abbott, John McDonnell and Jeremy Corbyn, who also voted against the bill on Tuesday) voted no to his plan to cut benefits for single-parent families.

Follow more updates live on the Sky News Politics Hub.


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.

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Ryland Headley: Man, 92, who raped and murdered Louisa Dunne in Bristol nearly 60 years ago, jailed for life

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Ryland Headley: Man, 92, who raped and murdered Louisa Dunne in Bristol nearly 60 years ago, jailed for life

A 92-year-old man has been sentenced to life with a minimum term of 20 years in prison for the rape and murder of an elderly widow nearly 60 years ago.

Ryland Headley was found guilty on Monday of killing 75-year-old Louisa Dunne at her Bristol home in June 1967, in what is thought to be the UK’s longest cold case to reach trial, and has been told by the judge he “will die in prison”.

The mother-of-two’s body was found by neighbours after Headley, then a 34-year-old railway worker, forced his way inside the terraced house in the Easton area before attacking her.

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The UK’s longest cold case to reach trial

Police found traces of semen and a palm print on one of the rear windows inside the house – but it was about 20 years before DNA testing.

The case remained unsolved for more than 50 years until Avon and Somerset detectives sent off items from the original investigation and found a DNA match to Headley.

He had moved to Suffolk after the murder and served a prison sentence for raping two elderly women in 1977.

Prosecutors said the convictions showed he had a “tendency” to break into people’s homes at night and, in some cases, “target an elderly woman living alone, to have sex with her despite her attempts to fend him off, and to threaten violence”.

Louisa Parker (later Dunne) in 1933. Pic: Avon and Somerset Constabulary
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Louisa Dunne in 1933. Pic: Avon and Somerset Constabulary

Headley during his arrest. Pic: Avon and Somerset Constabulary
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Headley during his arrest. Pic: Avon and Somerset Constabulary

Headley, from Ipswich, who did not give evidence, denied raping and murdering Ms Dunne, but was found guilty of both charges after a trial at Bristol Crown Court.

Detectives said forces across the country are investigating whether Headley could be linked to other unsolved crimes.

Mrs Dunne’s granddaughter, Mary Dainton, who was 20 when her relative was killed, told the court that her murder “had a big impact on my mother, my aunt and her family.

“I don’t think my mother ever recovered from it. The anxiety caused by her mother’s brutal rape and murder clouded the rest of her life.

“The fact the offender wasn’t caught caused my mother to become and remain very ill.

“When people found out about the murder, they withdrew from us. In my experience, there is a stigma attached to rape and murder.”

The front of Louisa Dunne's home. Pic: Avon and Somerset Constabulary
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The front of Louisa Dunne’s home. Pic: Avon and Somerset Constabulary

Louisa Dunne's skirt. Pic: Avon and Somerset Constabulary
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Louisa Dunne’s skirt. Pic: Avon and Somerset Constabulary

Finding out her grandmother’s killer had been caught after almost six decades “turned my life upside down,” she said.

“I feel sad and very tired, which has affected the relationships I have with those close to me. I didn’t expect to deal with something of such emotional significance at this stage of my life.

“It saddens me deeply that all the people who knew and loved Louisa are not here to see that justice has been done.”

Palmprint images. Pic: Avon and Somerset Constabulary
Image:
Palmprint images. Pic: Avon and Somerset Constabulary

After her statement, Mr Justice Sweeting told Mrs Dainton: “It is not easy to talk about matters like this in public.

“Thank you very much for doing it in such a clear and dignified way.”

The judge told Headley his crimes showed “a complete disregard for human life and dignity.

“Mrs Dunne was vulnerable, she was a small elderly woman living alone. You treated her as a means to an end.

“The violation of her home, her body and ultimately her life was a pitiless and cruel act by a depraved man.

“She must have experienced considerable pain and fear before her death,” he said.

Sentencing Headley to life imprisonment with a minimum term of 20 years, the judge told him: “You will never be released, you will die in prison.”

Detective Inspector Dave Marchant of Avon and Somerset Police said Headley was “finally facing justice for the horrific crimes he committed against Louisa in 1967.

“The impact of this crime has cast a long shadow over the city and in particular Louisa’s family, who have had to deal with the sadness and trauma ever since.”

The officer praised Ms Dainton’s “resilience and courage” during what he called a “unique” case and thanked investigators from his own force, as well as South West Forensics, detectives from Suffolk Constabulary, the National Crime Agency and the Crown Prosecution Service (CPS).

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Charlotte Ream, of the CPS, described Headley’s crimes as “appalling”.

She said Louisa Dunne “died in a horrifying attack carried out in the place where she should have felt safest – her own home.

“Mrs Dunne’s death continues to have a traumatic impact on her family members: the passage of time has not lessened their pain.

“For 58 years, this appalling crime went unsolved and Ryland Headley, the man we now know is responsible, avoided justice.”

Jeremy Benson KC, defending Headley, offered no personal mitigation on behalf of the defendant.

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Three members of Lucy Letby hospital’s senior leadership team arrested

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Three members of Lucy Letby hospital's senior leadership team arrested

Three managers at the hospital where Lucy Letby worked have been arrested on suspicion of gross negligence manslaughter.

They were in senior roles at the Countess of Chester Hospital in 2015 and 2016 and have been bailed pending further enquiries, Cheshire Constabulary said. Their names have not been made public.

Letby, 35, was found guilty of murdering seven children and attempting to murder seven more between June 2015 and June 2016 while working in the hospital’s neonatal unit.

Detective Superintendent Paul Hughes explained that gross negligent manslaughter focuses on the “action or inaction of individuals”.

There is also an investigation into corporate manslaughter at the hospital, which began in October 2023.

That focuses on “senior leadership and their decision-making”, Mr Hughes said. The intention there is to determine whether any “criminality has taken place concerning the response to the increased levels of fatalities”.

The scope was widened to include gross negligence manslaughter in March of this year.

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Lucy Letby was found guilty of murdering seven children and attempting to murder seven more

Mr Hughes said it is “important to note” that this latest development “does not impact on the convictions of Lucy Letby for multiple offences of murder and attempted murder”.

He added: “Both the corporate manslaughter and gross negligence manslaughter elements of the investigation are continuing and there are no set timescales for these.

“Our investigation into the deaths and non-fatal collapses of babies at the neo-natal units of both the Countess of Chester Hospital and the Liverpool Women’s Hospital between the period of 2012 to 2016 is also ongoing.”

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A public inquiry has also been examining the hospital’s response to concerns raised about Letby before her arrest.

In May, it was announced the inquiry’s final report into how the former nurse was able to commit her crimes will now be published early next year.

Earlier this year, lawyers for Lucy Letby called for the suspension of the inquiry, claiming there was “overwhelming and compelling evidence” that her convictions were unsafe.

In February, an international panel of neonatologists and paediatric specialists told reporters that poor medical care and natural causes were the reasons for the collapses and deaths.

Their evidence has been passed to the Criminal Cases Review Commission (CCRC), which investigates potential miscarriages of justice, and Letby’s legal team hopes her case will be referred back to the Court of Appeal.

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