After the debacle of Liz Truss’s September mini-budget, with all its mega ramifications, and an autumn statement eight weeks later that performed an about-turn so big that the country’s tax burden hit a 70-year-high, Wednesday’s budget will be all about stability and sticking to the plan.
“No big bangs in this budget,” is how one senior government insider put it to me last week. “It’s got to be a growth budget.
“We’re fighting to be competitive again with Labour. If we can get to next summer and the economy is ticking up, and we can narrow the gap to five to eight points behind in the polls, there’s a chance in an election campaign we can shift the dial.”
What the chancellor and prime minister want to project this week is the sense that they are getting the economy back on track, and working towards Rishi Sunak’s pledges to halve inflation, get debt down and get the UK economy growing again.
Do that, argue his allies, and the tax cuts will come – just in time for a general election.
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But there is pressure, and lots of it, from voters and from the Tory backbenchers to do more on tax cuts and cost-of-living now, not tomorrow.
And that pressure is all the more palpable after the chancellor received a £30bn windfall in the public finances last month, after it emerged that in the year to January, the public sector had borrowed less than forecast in November by the UK’s official fiscal watchdog.
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Floating voters we spoke to in a focus group in one Tory shire seat last week told us that struggling with the cost-of-living and a buckling NHS were top of their concerns, and they expressed scepticism that the government was up to the job.
One voter in the Wycombe constituency in Buckinghamshire described the government as “stale”, with another telling us: “The current crisis emphasises that our government is fairly broken.”
On the cost-of-living, our group of floating voters spoke of their anxiety around energy bills, food prices and childcare.
Charlotte, a working mum, told us she had to change her working hours because she couldn’t afford childcare costs.
“I can’t afford to work full time anymore,” she told us. “It’s not feasible for our family, so I’ve had to rope my mum in to do childcare.
“I wouldn’t say we’re a low earning family. That’s just the way it is now.”
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2:54
Voters talk about their priorities with our political editor Beth Rigby.
Food bills were also a concern, with voters saying they’d switched to cheaper supermarkets and cut back in the face of galloping food price inflation.
Ashley, who in the past has voted Conservative but is now undecided, told us he’d switched his weekly shop from Tesco and M&S to Aldi, while energy bills were a problem all round.
“I’ve voted Conservative a long time,” the father-of-two told us. “And then I got a bit tired of, you know, Boris and the promises.
“We need to have some results and I want to see some improvement, not the deflection bit around immigration, [but] some real positive on the cost of living. For me, that’s the most key…it’s what’s important to people.”
Short and long term plans
The Treasury is alive to the pressure, with insiders telling me there will be two parts to Mr Hunt’s budget on Wednesday: a short-term support plan to provide immediate relief on the cost-of-living crisis and then the long-term plan for growth.
On the first part of that, the government is expected to extend the £2,500 energy price guarantee for another three months from April (where there had been a planned rise to £3,000) to give people support on their bills.
The chancellor is also under pressure to again freeze fuel taxes in this budget, at a cost of £6bn.
When it comes to childcare, the chancellor is expected to change rules so that parents on Universal Credit are given more money for childcare and given the funding upfront.
The Treasury is also believed to be planning a cash injection of hundreds of millions into increasing the availability of the 30 hours of free childcare to three to four-year-olds.
Mr Hunt also plans to loosen staff-to-child ratios for two-year-olds, which could make the cost of childcare a little cheaper.
But anything really big bang on childcare, such as extending 30 hours of free childcare to one-and two-year-olds, is unlikely – that policy would cost around £6bn.
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1:54
These are some predictions for the budget.
And when it comes to the most obvious way of helping people manage their bills – wage packets – the government is standing firm, with Treasury insiders insisting there will be no above inflation pay sector awards.
Neither is the chancellor expected to offer voters any cuts to personal taxes.
“We haven’t got £30bn to cut taxes,” is how one government insider put it to me, in a nod to the boost from revised public finances.
“What we’ve got to do is get people back into work, be that through better childcare support or incentives to get those in their 50s back into work.
“That is where we have to focus policy, and that could amount to say £5bn and that comes out of the [£30bn] headroom.”
Because beyond the short-term support measures, the focus for this budget will be on trying to get the economy moving and getting people back to work post-pandemic, with a package of measures to try to shift parents, the sick, disabled and older workers back into jobs.
To that end, the chancellor is expected to raise the lifetime allowance for pension savings from £1m to an expected £1.8m – a record level – in order to try to incentivise doctors and other professionals out of retirement and back into work.
He could also lift the annual tax-free allowance for pensions from £40,000 to £60,000.
It’s a package that could cost £2bn a year and would be much welcomed by higher earners, but also opens the chancellor up to criticism that he is giving a tax break to the rich while offering nothing to basic rate taxpayers.
And when it comes to the other group of voters the chancellor and PM need to placate, his backbenchers, there is disquiet over the high level of tax burden, with many Tory MPs keen for tax cuts.
One former cabinet minister told me last week that they wanted to see the £30bn windfall in the public finances used to reverse the planned increase in corporation tax from 19p to 25p in April.
It is a pretty popular refrain.
But Treasury insiders insist the tax hike will go ahead and instead the chancellor will offer business tax breaks to try to encourage growth.
When Mr Sunak was chancellor back in March 2021, he created the £25bn “super-deduction” tax allowance for capital investment – a two-year measure offering 130% tax relief on companies’ purchases of equipment – in order to try to boost investment and growth.
Mr Hunt is coming up with a new set of plans to try to support business and could give firms much more generous capital allowances to incentivise investment.
Watch too for policies and reforms targeting certain industries and sectors, from artificial intelligence to green energy and advanced manufacturing: all of it will be framed as the government’s long-term plan for growth.
Wednesday will be, if you like, the third act of the prime minister’s performance over the past few weeks to try and win a jaded public back around by trying to convince them he will stick to his plan and deliver on promises.
On the international stage, he has rehabilitated the UK with allies after the bumpy years of Prime Minister Johnson and then Prime Minister Truss, symbolised most strongly in a deal with the EU over post-Brexit trading arrangements in Northern Ireland – where even his foes conceded Mr Sunak had got more than they expected.
At home, the PM has put forward his plan to “stop the boats” – a key priority of many of the voters he needs to keep onside or win back in 2024.
Whether the plan, surrounded in legal and practical controversies, will come off remains to be seen.
But Mr Sunak will at least be able, to quote one of his allies, “build a narrative” that blames the failure of the policy around France and the EU refusing to grant the UK a returns agreement and the international courts blocking his plans.
“At least he can then make the argument it wasn’t his fault,” they said.
Narrow path back
On Wednesday, the focus will be on the PM’s three economic targets – halving inflation, cutting debt and growing the economy – as the chancellor tries to lay down the best conditions he can for the Conservatives’ run into the general election in 2024.
Mr Sunak’s allies tell me they think there is a way back to victory for this government at the ballot box once again, but the “path is very narrow”.
A budget then building the foundations rather than lighting the fireworks, all of this the groundwork for the pre-election showstopper next year.
But with the cost-of-living squeeze so acute, the promise of jam tomorrow is unlikely to satisfy the public, particularly if those being given some of the spoils this time around look to be business and the wealthy.
Mr Hunt may be charged with steadying the ship, but he’ll have to be skilful on Wednesday not to lose more ground.
A real-life drama is unfolding just outside Hollywood. Ferocious wildfires have ballooned at an “alarming speed”, in just a matter of hours. Why?
What caused the California wildfires?
There are currently three wildfires torching southern California. The causes of all three are still being investigated.
The majority (85%) of all forest fires across the United States are started by humans, either deliberately or accidentally, according to the US Forest Service.
But there is a difference between what ignites a wildfire and what allows it to spread.
However these fires were sparked, other factors have fuelled them, making them spread quickly and leaving people less time to prepare or flee.
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1:35
LA residents face ‘long and scary night ahead’
What are Santa Ana winds?
So-called Santa Ana winds are extreme, dry winds that are common in LA in colder winter months.
The California Department of Forestry and Fire Protection warned strong Santa Ana winds and low humidity are whipping up “extreme wildfire risks”.
Winds have already topped 60mph and could reach 100mph in mountains and foothills – including in areas that have barely had any rain for months.
It has been too windy to launch firefighting aircraft, further hampering efforts to tackle the blazes.
These north-easterly winds blow from the interior of Southern California towards the coast, picking up speed as they squeeze through mountain ranges that border the urban area around the coast.
They blow in the opposite direction to the normal onshore flow that carries moist air from the Pacific Ocean into the area.
The lack of humidity in the air parches vegetation, making it more flammable once a fire is started.
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0:59
Wildfires spread as state of emergency declared
The ‘atmospheric blow-dryer’ effect
The winds create an “atmospheric blow-dryer” effect that will “dry things out even further”, said Daniel Swain, a climate scientist at University of California, Los Angeles (UCLA).
The longer the extreme wind persists, the drier the vegetation will become, he said.
“So some of the strongest winds will be at the beginning of the event, but some of the driest vegetation will actually come at the end, and so the reality is that there’s going to be a very long period of high fire risk.”
What role has climate change played?
California governor Gavin Newsom said fire season has become “year-round in the state of California” despite the state not “traditionally” seeing fires at this time of year – apparently alluding to the impact of climate change.
Scientists will need time to assess the role of climate change in these fires, which could range from drying out the land to actually decreasing wind speeds.
But broadly we know that climate change is increasing the hot, dry weather in the US that parches vegetation, thereby creating the fuel for wildfires – that’s according to scientists at World Weather Attribution.
But human activities, such as forest management and ignition sources, are also important factors that dictate how a fire spreads, WWA said.
Southern California has experienced a particularly hot summer, followed by almost no rain during what should be the wet season, said Professor Alex Hall, also from UCLA.
“And all of this comes on the heels of two very rainy years, which means there is plenty of fuel for potential wildfires.
“These intense winds have the potential to turn a small spark into a conflagration that eats up thousands of acres with alarming speed – a dynamic that is only intensifying with the warmer temperatures of a changing climate.”
The flames from a fire that broke out yesterday evening near a nature reserve in the inland foothills northeast of LA spread so quickly that staff at a care home had to push residents in wheelchairs and hospital beds down the street to a car park.
A billowing cloud of black smoke loomed over the main shopping street with its fancy restaurants and designer shops, threatening to destroy what many here consider to be their slice of paradise.
It is a reminder of the destructive power of this sort of weather.
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1:02
Martha Kelner reports from Pacific Palisades
Reza, a lifelong resident of Pacific Palisades, was evacuating with what belongings he could fit in his SUV.
“This is surreal, this is unbelievable,” he said.
“I’ve lived here all my life but this is like nothing I’ve ever seen before. This is the worst of the worst.
“I’ve never seen it with these winds, we just keep praying that the direction changes. But if the direction changes it’s to the detriment of somebody else, that’s the horrible part about it all.”
January is not normally wildfire season, but these are not ordinary circumstances, the blazes being propelled by the strongest winds in southern California for more than a decade, fuelled by drought conditions.
Authorities are warning that the winds will grow stronger overnight, meaning that conditions will likely worsen before they get better.
Police and the fire department went door to door, urging people to evacuate or risk losing their lives.
On the main road out of town, there was gridlock traffic, with some abandoning their cars to flee on foot.
On Mount Holyoake Avenue, Liz Lerner, an 84-year-old with congestive heart failure, was on her driveway and visibly panicked.
“I don’t drive, and I’m by myself,” she said.
“I have no relatives, I’m 100% alone and I don’t know what to do. My father built this house in 1949, this is my family home and this is the end. I’ve never seen anything like this.”
Around the corner, another man was hosing down his multi-million dollar home in a bid to save his property from the fire bounding towards it from a nearby canyon.
“I can’t decide whether to evacuate or stay and carry on hosing down my house,” he said.
“It’s hard to know which way the flames are heading.”
Other blazes were breaking out across LA with firefighting planes grounded because of winds which are growing stronger by the hour.
More homes, neighbourhoods and lives are under threat from this perfect and petrifying storm.
Soldiers working within the UK’s special forces discussed concerns that Afghans who posed no threat were being murdered in raids against suspected Taliban insurgents, an inquiry has been told.
One soldier, who was reading operational reports of SAS actions, said in an email in 2011 that they feared that UK special forces seemed “beyond reproach”, with “a golden pass allowing them to get away with murder”.
Another soldier said they were aware of rumours of special forces soldiers using “dropped weapons” – which were munitions allegedly placed next to targets to give the impression they were armed when they were shot.
It was also suggested that the act was known as a “Mr Wolf” – supposedly a reference to the fixer “Winston Wolfe” from the film Pulp Fiction.
The claims come from hundreds of pages of documents detailing evidence given to a public inquiry into alleged war crimes committed by British special forces soldiers in Afghanistan between 2010 and 2013.
The independent inquiry was ordered by the Ministry of Defence (MoD) after the BBC reported claims that SAS soldiers from one squadron had killed 54 people in suspicious circumstances during the war in Afghanistan more than a decade ago.
The inquiry is examining a number of night-time raids carried out by British forces from mid-2010 to mid-2013.
On Wednesday, it released evidence from seven UK special forces (UKSF) witnesses who gave their evidence in secretfor national security reasons and cannot be named.
None of the soldiers who gave evidence to the inquiry, which opened in 2023, said they had witnessed any such behaviour themselves.
‘Fighting age males’
One of the soldiers, known only as N1799, told the inquiry they had raised concerns in 2011 about a unit referred to as UKSF1 after having a conversation about its operations with one of its members on a training course.
“During these operations it was said that ‘all fighting age males are killed’ on target regardless of the threat they posed, this included those not holding weapons,” their witness statement said.
“It was also indicated that ‘fighting age males’ were being executed on target, inside compounds, using a variety of methods after they had been restrained. In one case it was mentioned a pillow was put over the head of an individual before being killed with a pistol.”
The soldier said he was also informed that weapons were being “dropped” next to victims “to give the impression that a deceased individual had been armed when shot”, the inquiry heard.
Such a dropped weapon was colloquially known as a “Mr Wolf”, but N1799 stated he had “no idea at all” where the term came from.
Counsel to the inquiry Oliver Glasgow KC asked: “When you heard it described as a ‘Mr Wolf’, was that used by one person or by more than one person or can you not remember?”
N1799 replied: “At least two or three people.”
Mr Glasgow continued: “Have you seen the film Pulp Fiction by Quentin Tarantino, where the individual who introduces himself as Mr Wolf says ‘I’m Mr Wolf and I’m here to solve problems’? Do you remember that?
The witness said: “No, I don’t.”
Mr Glasgow said: “Well, it is probably not essential viewing for anyone, but that particular individual in that film, he acts to clear up problems and to make crimes go away, does he not?”
N1799 responded: “Right. I had not put two and two together.”
The inquiry heard that N1799 escalated their concerns to other senior officers who took them seriously.
But, questioned by Mr Glasgow on whether they had any concerns for their own personal wellbeing after making allegations, the witness said: “I did then and I still do now.”
‘Mud-slinging’
Another officer, referred to as N2107, emailed colleagues expressing his disbelief at summaries of operations which suggested detained suspects had been allowed back into compounds where they were then said to have picked up weapons and attempted to attack the unit.
Meanwhile, a special forces commanding officer told the inquiry he believed reporting allegations of murder to his counterpart in another unit may have been seen as “mud-slinging”.
He said there was an “at times fractious and competitive” relationship between his unit and the accused unit.
In one of the hearings, he was asked whether he thought about reporting the allegations to his direct counterpart within the unit, but said it was a “deliberate act” to report up rather than sideway as it may be seen as “mud-slinging”.
British military police have previously conducted several inquiries into allegations of misconduct by forces in Afghanistan, including those made against the SAS.
However, the MoD has said none found enough evidence for prosecutions.
The inquiry’s aim is to ascertain whether there was credible information of extra-judicial killings, whether investigations by the military police years later into N1799’s concerns were properly conducted, and if unlawful killings were covered up.