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.
It is one of the most notorious and secret places in Iran.
Somewhere foreign journalists are never allowed to visit or film. The prison where dissidents and critics of Iran’s government disappear – some never to be seen again.
But we went there today, invited by Iranian authorities eager to show the damage done there by Israel.
Evin Prison was hit by Israeli airstrikes the day before a ceasefire ended a 12-day war with Iran. The damage is much greater than thought at the time.
We walked through what’s left of its gates, now a mass of rubble and twisted metal, among just a handful of foreign news media allowed in.
A few hundred yards in, we were shown a building Iranians say was the prison’s hospital.
Behind iron bars, every one of the building’s windows had been blown in. Medical equipment and hospital beds had been ripped apart and shredded.
Debris scattered across what Iran says was the prison hospital
It felt eerie being somewhere normally shut off to the outside world.
On the hill above us, untouched by the airstrikes, the buildings where inmates are incarcerated in reportedly horrific conditions, ominous watch towers silhouetted against the sky.
Evin felt rundown and neglected. There was something ineffably sad and oppressive about the atmosphere as we wandered through the compound.
The Iranians had their reasons to bring us here. The authorities say at least 71 people were killed in the air strikes, some of them inmates, but also visiting family members.
Authorities say this building was the visitor centre
Iran says this is evidence that Israel was not just targeting military or nuclear sites but civilian locations too.
But the press visit highlighted the prison’s notoriety too.
Iran’s critics and human rights groups say Evin is synonymous with the brutal oppression of political prisoners and opponents, and its practice of hostage diplomacy too.
British dual nationals, including Nazanin Zaghari-Ratcliffe were held here for years before being released in 2022 in exchange for concessions from the UK.
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Inmates are held in building on a hill above, which has been untouched by airstrikes
Interviewed about the Israeli airstrikes at the time, Ms Zaghari-Ratcliffe showed only characteristic empathy with her former fellow inmates. Trapped in their cells, she said they must have been terrified.
The Israelis have not fully explained why they put Evin on their target list, but on the same day, the Israeli military said it was “attacking regime targets and government repression bodies in the heart of Tehran”.
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The locus of their strikes were the prison’s two entrances. If they were trying to enable a jailbreak, they failed. No one is reported to have escaped, several inmates are thought to have died.
The breaches the Israeli missiles made in the jail’s perimeter are being closed again quickly. We filmed as a team of masons worked to shut off the outside world again, brick by brick.
Israeli-backed American contractors guarding aid centres in Gaza are using live ammunition and stun grenades as starving Palestinians scramble for food, an investigation has claimed.
The Associated Press has reported the accounts by two contractors from the Gaza Humanitarian Foundation (GHF), although the organisation has strongly denied the allegations, describing them as “categorically false”.
GHF was established in February to deliver desperately needed aid to people in the besieged enclave, but its work has been heavily criticised by international aid groups.
It has also been subject to intense scrutiny about its operations, which Sky News previously reported are associated with a significant increase in deaths.
AP’s claims, which have not been independently verified by Sky News, came from GHF contractors who spoke on condition of anonymity as they were revealing their employer’s internal operations.
Palestinians are shown scrambling for aid in the footage provided to AP. Pic: AP
They said they were motivated to speak out as they were disturbed by what they considered dangerous practices by security staff who were often heavily armed.
AP reported the contractors had claimed “their colleagues regularly lobbed stun grenades and pepper spray in the direction of the Palestinians” and “bullets were fired in all directions – in the air, into the ground and at times toward the Palestinians, recalling at least one instance where he thought someone had been hit”.
Contractor: ‘Innocent people being hurt’
“There are innocent people being hurt. Badly. Needlessly,” the contractor told AP.
Videos reportedly provided by one contractor show aid sites, located in Israeli military-controlled zones, with hundreds of Palestinians crammed between metal gates, scrambling to reach aid.
In the background, gunfire can be heard, and stun grenades are allegedly fired into crowds.
Footage provided to the AP news agency allegedly shows tear gas being fired at an aid distribution site in Gaza. Pic: AP
The footage does not show who was shooting or what was being shot at, but another video shows contractors in a compound, when bursts of gunfire can be heard. One man is then heard shouting in celebration: “Whoo! Whoo!”.
“I think you hit one,” another says, followed by the comment: “Hell, yeah, boy!”
The contractor who took the video told AP that colleagues were shooting in the direction of Palestinians.
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According to the Hamas-run Gaza Health Ministry and witnesses, several hundred people have been killed and hundreds more wounded since the GHF sites started operating more than a month ago, amid claims by Palestinians of Israeli troops opening fire almost every day at crowds seeking to reach the aid.
In response, Israel’s military says it fires only warning shots and is investigating reports of civilian harm. It denies deliberately shooting at any innocent civilians and says it’s examining how to reduce “friction with the population” in the areas surrounding the distribution centres.
Bursts of gunfire can be heard in the footage as Palestinians run towards aid being distributed. Pic: AP
GHF attacks ‘false claims’
GHF has vehemently denied the accusations, adding that it has investigated AP’s allegations.
In a statement on X, GHF wrote: “Based on time-stamped video footage and sworn witness statements, we have concluded that the claims in the AP’s story are categorically false. At no point were civilians under fire at a GHF distribution site.
“The gunfire heard in the video was confirmed to have originated from the IDF, who was outside the immediate vicinity of the GHF distribution site.
“It was not directed at individuals, and no one was shot or injured. What is most troubling is that the AP refused to share the full video with us prior to publication, despite the seriousness of the allegations.”
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Safe Reach Solutions, the logistics company subcontracted by GHF, told the AP there have been no serious injuries at any of their sites to date.
But the organisation admitted that, in isolated incidents, security professionals fired live rounds into the ground and away from civilians to get their attention.
A Safe Reach Solutions spokesperson told AP this happened at the start of their operations at “the height of desperation where crowd control measures were necessary for the safety and security of civilians”.
Liverpool star Diogo Jota has died in a car crash.
The 28-year-old Portuguese forward died in the accident in the early hours of Thursday morning near Zamora, in northwestern Spain.
His brother, Andre Silva, was also killed in the crash on the Rias Bajas Highway (A-52) near Palacios de Sanabria, heading towards Benavente.
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Jota’s former teammate: ‘This can’t be real’
The site of the accident on the A52
Follow the latest updates following Diogo Jota’s death
Jota and Silva were driving to Santander to catch a ferry back to England ahead of the start of Liverpool’s pre-season training on Monday, CNN Portugal reports.
The news outlet reports that Jota was advised against flying back to England due to recent surgery.
Police said the accident happened at 12.30am when the Lamborghini the pair were travelling in veered off the road.
Palacios de Sanabria in the north of Spain
“A vehicle left the road and everything indicates a tyre burst while overtaking,” the Guardia Civil in Zamora told Sky Sports News in a statement.
“As a result of the accident, the car caught fire and both people were killed. Pending the completion of forensic tests, one of the deceased has been identified as Diogo Jota, a Liverpool FC player, and his brother, Andre Felipe.”
A Spanish government source told the PA news agency that police were investigating the crash as “a possible speeding incident”.
The aftermath of the crash. Pic: AP
Pic: AP
Police added that no other vehicles were involved in the incident.
Pictures of the aftermath of the crash showed debris scattered along the side of the road, including what appeared to be charred parts of the vehicle.
It comes just 10 days after the player married his long-term girlfriend, Rute Cardoso.
Diogo Jota holds the Premier League trophy aloft after the club’s title win in the 2024/25 season. Pic: Reuters
Diogo Jota walks the pitch with his family in 2022.
Pic: PA
He had three children.
The footballer, who played as a striker for Liverpool, began his career in his native Portugal and played at Atletico Madrid in Spain before moving to England.
He joined the Merseyside club from Wolverhampton Wanderers in 2020.
Former Liverpool manager Jurgen Klopp with Diogo Jota. Pic: PA
Portugal’s Cristiano Ronaldo (left) and Diogo Jota (right) during a training session. Pic: PA
Jota played an important role throughout his five years with the Reds, including scoring six times in Liverpool’s recent Premier League-winning season.
He scored a total of 47 times in 123 matches for the club. He also played 49 times for the Portugal national side, scoring 14 times.
Silva, 25, played for Penafiel, a Portuguese second division club.
Diogo Jota holding the trophy on the team bus during the Premier League winners parade in Liverpool. Pic: PA
Teammates and football legends pay tribute
A statement issued by Liverpool FC said the club was “devastated” by their player’s death.
“The club have been informed the 28-year-old has passed away following a road traffic accident in Spain along with his brother, Andre,” the club said in a statement.
“Liverpool FC will be making no further comment at this time and request the privacy of Diogo and Andre’s family, friends, teammates and club staff is respected as they try to come to terms with an unimaginable loss.
“We will continue to provide them with our full support.”
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Sky’s Greg Milam reports from Anfield Stadium where Liverpool fans are hearing about the death of Diogo Jota.
The Portuguese football federation said it was “utterly devastated by the deaths”.
“Far beyond being an exceptional player, with nearly 50 caps for the national team, Diogo Jota was an extraordinary person, respected by all teammates and opponents, someone with a contagious joy and a reference within his own community.
“We have lost two champions. The passing of Diogo and Andre Silva represents irreparable losses for Portuguese Football, and we will do everything to honour their legacy daily.”
The Portugal and Spain women’s teams held a minute’s silence for Jota and Silva before their match in the Women’s Euros in Switzerland on Thursday evening.
Floral tributes left at Anfield this morning. Pic: Sky
It came after Liverpool’s manager Arne Slot said in a statement: “What can anyone say at a time like this when the shock and the pain is so incredibly raw? I wish I had the words but I know I do not.
“All I have are feelings that I know so many people will share about a person and a player we loved dearly and a family we care so much about.
“My first thoughts are not those of a football manager. They are of a father, a son, a brother and an uncle and they belong to the family of Diogo and Andre Silva who have experienced such an unimaginable loss.”
Jota’s former manager at Liverpool, Jurgen Klopp, offered his thoughts in a post on Instagram.
“This is a moment where I struggle! There must be a bigger purpose, but I can’t see it,” he said.
“I’m heartbroken to hear about the passing of Diogo and his brother Andre. Diogo was not only a fantastic player, but also a great friend, a loving and caring husband and father.
“We will miss you so much. All my prayers, thoughts and power to Rute, the kids, the family, the friends and everyone who loved them.”
Liverpool captain Virgil van Dijk posted on Instagram: “What a human being, what a player, but most importantly what an unbelievable family man.
“You mean so much to all of us and you always will!”
Cristiano Ronaldo, Jota’s captain in the national team, said: “It doesn’t make sense. Just now we were together in the National Team, just now you had gotten married.
“To your family, your wife, and your children, I send my condolences and wish them all the strength in the world.
“I know you will always be with them. Rest in Peace, Diogo and Andre. We will all miss you.”
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Diogo Jota married his long-term girlfriend just two weeks ago
Jota’s Liverpool teammates Darwin Nunez, Cody Gakpo and Dominik Szoboszlai have also paid tribute.
Szoboszlai wrote: “Words cannot describe how heartbroken and devastated we are… Your smile, your love for the game will never be forgotten.
“We will miss you so much, but you will stay with us forever, on and off the pitch.”
Jota’s former teammates Trent Alexander-Arnold, Sadio Mane, Roberto Firmino and Thiago Alcantara have also shared messages on social media.
Mane posted a picture of himself and Jota with heartbreak emojis.
It came as Liverpool legend Kenny Dalglish wrote on X: “You feel helpless, knowing there’s so little we can do to ease the pain for his wife of just two weeks, his three beautiful children.”
Liverpool legend Steven Gerrard shared an image of Jota on Instagram and wrote: “Condolences to his family and friends during this incredibly sad time.”
Liverpool owners Billy Hogan, John Henry and Tom Werner, who are part of the Fenway Sports Group, said: “This tragic situation and the reality of it is truly shocking, devastating and has left us numb with grief.”
Football icon Lionel Messi has also paid tribute, sharing an image of Jota on Instagram with the message “QEPD” – short for the Spanish phrase ‘que en paz descanse’, which translates to “may he rest in peace'”.
European football clubs such as Barcelona and AC Milan have also shared messages, along with basketball player LeBron James and tennis icon Rafael Nadal.
Meanwhile Liverpool FC have opened a physical and digital book of condolence for supporters and members of the public to sign.
The physical book is at the club’s stadium, in the Anfield Road Stand reception area until Sunday evening.
An avid video gamer, Jota also owned an eSports team and regularly streamed on Twitch.
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