Expect a steady the ship budget with promises of jam tomorrow from Chancellor Jeremy Hunt | Beth Rigby
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.”
Tax cuts, I’m told, will have to wait.
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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.
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.
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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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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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.
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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.
Rishi Sunak and Jeremy Hunt will be hoping to reassure people they are making the right choices for the UK economy.
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.
Israel has approved 19 new Jewish settlements in the occupied West Bank in a fresh blow to the possibility of a Palestinian state.
The move brings the number of new settlements over the past few years to 69, a new record, according to Israel‘s far-right finance minister Betzalel Smotrich.
Widely considered illegal under international law, the settlements have been criticised for fragmenting the territory of a future Palestinian state by confiscating land and displacing residents.
Ganim pictured in 2005. Pic: Reuters
Under Israel’s current government, figures show, the number of settlements in the West Bank has surged by nearly 50%, rising from 141 in 2022, to 210 with the new approvals, according to Peace Now, an anti-settlement watchdog.
The government’s latest action retroactively authorises some previously-established outposts or neighbourhoods of existing settlements, and the creation of settlements on land where Palestinians were evacuated.
It also approves Kadim and Ganim, two of the four settlements dismantled in 2005, and which Israelis were previously banned from re-entering as part of Israel’s withdrawal from the Gaza Strip.
Since Israel repealed the 2005 act in March 2023, there have been multiple attempts to resettle them.
Betzalel Smotrich is among prominent names backing the settlements. Pic: AP
The move comes amid mounting pressure from the US to move ahead with the second phase of the Gaza ceasefire, which took effect on 10 October.
Mr Smotrich is one of a number of figures now prominent in Israel’s government who back the settlements.
The West Bank, east Jerusalem, and Gaza are claimed by the Palestinians for their future state, but were captured by Israel in the 1967 war.
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Today over 500,000 Jews are settled in the West Bank, in addition to over 200,000 in contested east Jerusalem.
Settlements can range in size from a single dwelling to a collection of high-rises, and the occupied territories are also host to a number of unauthorised Israeli outposts.
Australia’s prime minister was met with boos and insults when he arrived at a Bondi Beach vigil for victims of last week’s gun attack.
Prime Minister Anthony Albanese was booed when his name was announced on the stage set up in front of the crowd – amid anger that the premier hasn’t done more to tackle rising antisemitism in Australia.
In contrast, New South Wales Premier Chris Minns’s name was greeted with cheers and a standing ovation.
The premier was thanked for his leadership and for not missing “a funeral, synagogue service, or an opportunity to be with the Jewish community this week”.
Before going to the vigil, Albanese had announced a review of the country’s police and intelligence agencies a week after the deadly Bondi Beach gun attack.
Albanese said the review, led by a former chief of Australia’s spy agency, would probe whether federal police and intelligence agencies have the “right powers, structures, processes and sharing arrangements in place to keep Australians safe”.
The review comes as Australia marks a day of reflection to honour those killed and injured by two gunmen at Sydney’s Bondi Beach.
Authorities invited Australians to light a candle on Sunday evening, the start of the eighth and final day of the Jewish festival of lights, “as a quiet act of remembrance with family, friends or loved ones” of the victims.
Australia’s Prime Minister Anthony Albanese and his wife arrive at a Bondi Beach attack vigil
An evening memorial event at Bondi Beach will take place under a heavy police presence, including officers carrying long-arm firearms, police said in a statement.
A minute’s silence was also held at 6.47pm (7.47am UK time).
Earlier this week, around 700 people on paddle boards and surfboards took to the sea at Bondi Beach, forming a huge circle in a show of solidarity.
Gaps in the system
The attack exposed gaps in gun-license assessments and information-sharing between agencies that politicians have said they want to plug.
Albanese has announced a nationwide gun buyback, while gun safety experts say the nation’s gun laws, among the world’s toughest, are full of loopholes.
Authorities believe the gunmen were inspired by Islamic State.
“The ISIS-inspired atrocity last Sunday reinforces the rapidly changing security environment in our nation.
“Our security agencies must be in the best position to respond,” Albanese said in a statement, adding that the review would conclude by the end of April.
Albanese has been under pressure from critics who say his centre-left government has not done enough to curb a surge in antisemitism since the start of the war in Gaza.
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The prime minister has since vowed to strengthen hate laws in the wake of the attack.
On Saturday, the government of New South Wales, which includes Sydney, committed to introducing a bill to ban the display of symbols and flags of “terrorist organisations”, including those of Islamic State, Hamas and Hezbollah.
Authorities say Islamic State flags were found in the car the attackers took to Bondi.
One of the alleged gunmen, Sajid Akram, 50, was shot dead by police at the scene.
His 24-year-old son Naveed Akram, who was also shot by police and emerged from a coma on Tuesday, has been charged with 59 offences, including murder and terrorism, according to police.
He remains in custody in hospital.
Several victims of Jeffrey Epstein have told Sky News that the incomplete release of the files relating to the dead paedophile financier have left them feeling shocked, outraged and disappointed.
Thousands of files relating to Epstein, who died in prison in 2019 while awaiting trial on sex trafficking charges, were made public late on Friday – but only a fraction of them have been released so far, with many heavily redacted.
‘Nothing transparent about release’
Marina Lacerda, a Brazilian-born survivor who suffered sexual abuse by Epstein as a teenager, expressed her disappointment over the incomplete release, calling it “a slap in our faces”.
“We were all excited yesterday before the files came out,” she told Sky News presenter Anna Botting.
“And when they did come out, we were just in shock, and we see that there is nothing there that is transparent. So it’s very sad, it’s very disappointing.”
Ms Lacera said she had just turned 14 when she met Epstein before “our relationship, our friendship I should say” ended when she was 17.
“At that point, he had made it very clear to me that I was old, that I was no longer fun for him. So, he booted me out, and I was no longer needed for him,” she said.
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The Department of Justice (DoJ) suggests that 1,200 victims and their families have effectively been shielded from view in the released documents.
Ms Lacera said: “From what I know, [the number of Epstein victims] is over a thousand, but that’s just what the DoJ can collect or the FBI can collect, but I presume there may be more than that.”
Marina Lacerda spoke outside the US Capitol in favour of the Epstein Files Transparency Act. Pic: AP
‘No way it’s not a cover-up’
Ashley Rubright met the late sex offender when she was just 15 in Palm Beach and was subject to abuse over several years.
Asked about her dissatisfaction with yesterday’s government release and if there was a sense of a cover-up operation, she noted that there had been knowledge of Epstein’s crimes “for so, so long”.
“There’s no way that there’s not a cover-up – what it is, I don’t know,” she told Sky News’ US correspondent James Matthews.
“I just hope that nobody’s allowed to fly under the radar with their involvement.”
Regarding the extent of the redactions, she said: “I’m so not shocked, but let down. Disappointed.
“Seeing […] completely redacted pages, there’s no way that that’s just to protect the victims’ identities, and there better be a good reason. I just don’t know if we’ll ever know what that is.
“We’ve been left behind since day one. That’s why I think we’re all fighting so loud now, because we’re tired of it.”
Ashley Rubright speaks at a rally in support of Epstein victims. Pic: Reuters
‘He wanted to man-handle me’
Another survivor, Alicia Arden, told Sky News that she met Epstein in a California hotel room in 1997 for an audition, when she was a 25-year-old model and actress.
“He let me in and he started looking over my portfolio, which is customary to do in a talent audition, and then he insinuated, ‘oh, you should come closer to me and let me see your body’,” she said.
Epstein then started “taking off my top and my pants and touching my rear end and my breasts”.
“He goes, ‘let me come over here and spin for me and let me man-handle you. Let me man-handle you.’ And I got very nervous and started to cry. I said, ‘I have to go, Jeffrey. I don’t really think this is gonna work out’,” Ms Arden said.
“He got a phone call and I was crying in front of him. And he said, ‘I have this beautiful girl in front of me and she’s very upset’. I said ‘I’m gonna leave’ and he offered me $100 and I said ‘I’m not a prostitute’.”
Alicia Arden
She said she went to the Santa Monica Police Department to file a report.
“That was as difficult, and I’m like shaking telling you, but as difficult as being in the hotel room with him because they weren’t supportive at all about it,” she said. Her redacted report was included in previous files.
‘Epstein was a monster’
Asked what she thought about Epstein now, she said: “He’s a monster […] and just horrible. I mean, I’m trembling thinking about him and talking about him.
“If I could do anything, I’m happy I got the police report filed. If they would have pursued him and maybe gone over the hotel [where he was] essentially living, then I could have maybe saved the girls. I’ve always thought that.”
Ms Arden’s redacted police report. Pic: AP
Ms Arden does not believe she has seen justice as one of Epstein’s victims.
“I want to see all of the files come out. I want all of the men in there or women that were trafficking these girls, and they shouldn’t be able to walk around free and not pay for if they did something,” she said.
“They should be actually arrested if they’re in the files and it’s proven that they did horrible things to these girls, and they should lose their jobs, their lives, their homes, their money, and pay for what they did, and it was all supposed to come out, and it hasn’t.”
Jeffrey Epstein died in prison in 2019 while awaiting trial on federal sex trafficking charges
‘I feel redeemed’ by file release
Maria Farmer, who made a complaint to the Miami FBI in 1996 in which she alleged that Epstein stole and sold photos she had taken of her 12- and 16-year-old sisters, expressed gratitude for the release of the files.
“This is amazing. Thank you for believing me. I feel redeemed. This is one of the best days of my life,” she said in a statement through her lawyers.
“I’m crying for two reasons. I want everyone to know that I am shedding tears of joy for myself, but also tears of sorrow for all the other victims that the FBI failed.”
Annie Farmer holds a photo of herself and her sister, Maria Farmer, when they were victims of Epstein. Pic: AP
A positive-leaning reaction also came from Dani Bensky, who said she was sexually abused by Epstein when she was 17 years old.
She told Sky News’ US partner network NBC News: “There is part of me that feels a bit validated at this moment, because I think so many of us have been saying, ‘No, this is real, like, we’re not a hoax’.
“There’s so much information, and yet not as much as we may have wanted to see.”
‘It is not over’
Lawyer Gloria Allred, who has represented several Epstein victims, told Sky News about the partial release on Friday: “It’s very disappointing that all of the files were not released yesterday as required and, in fact, mandated by law.
“The law didn’t say they could do this over a period of time, it didn’t say that weeks could go by.”
Lawyer Gloria Allred
Deputy attorney general Mr Blanche said additional file disclosures can be expected by the end of the year.
“But that’s not what the law says. So clearly, the law has been violated. And it’s the Department of Justice letting down the survivors once again,” Ms Allred said.
The lawyer labelled the incomplete release of the files a “distraction”, adding: “This is not over, and it won’t be over until we get the truth and transparency for the survivors.”
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‘Only redactions required by law’
The tranche of material was released just hours before a legal deadline in the US following the passing of the Epstein Files Transparency Act – and at the same time as a US strike targeting Islamic State fighters in Syria.
The US deputy attorney general, Todd Blanche, said the justice department was continuing to review the remaining files and was withholding some documents under exemptions meant to protect the victims.
But Sky News’ James Matthews said the significance of the files “is undermined by the lack of context”, while some Democrats and Republicans criticised the partial release as failing to “comply with law”.
Meanwhile, the justice department has defended the redactions made in the released files.
“The only redactions being applied to the documents are those required by law – full stop. Consistent with the statute and applicable laws, we are not redacting the names of individuals or politicians unless they are a victim,” it quoted deputy attorney general Mr Blanche in a post on X.
The Trump administration has claimed to be the most transparent in history.
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In a statement, the White House claimed the release also demonstrated its commitment to justice for Epstein’s victims, criticising previous Democratic administrations for not doing the same.
But that statement ignored that the disclosures only happened because Congress forced the administration’s hand with a bill demanding the release, after Trump officials declared earlier this year that no more Epstein files would be made public.
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