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Jeremy Hunt said the British economy is “proving the doubters wrong” and will avoid recession, as he delivered his first full budget speech to Parliament.

The chancellor said the government’s plan for the economy was “working” as he announced what he called a “budget for growth”.

He said forecasts from the Office for Budget Responsibility (OBR) showed the UK would avoid recession – two-quarters of negative growth – in 2023, despite previous predictions.

But the economy will still contract overall this year by 0.2%, and the OBR has warned living standards are still expected to fall by the largest amount since records began – although the decline is not as bad as had been forecast in November.

Budget 2023 – read more:
Politics live: The budget as it happened and reaction

The key points of the budget at a glance

The OBR forecasts also said inflation in the UK would fall from 10.7% in the final quarter of last year to 2.9% by the end of 2023.

Mr Hunt said it showed Rishi Sunak’s goal of halving inflation this year would be met, but he added: “We remain vigilant and will not hesitate to take whatever steps are necessary for economic stability”.

However, Labour leader Sir Keir Starmer said the chancellor’s “boasts” about lower inflation were “ridiculous”, adding: “The idea that it’s a tax cut, British people can see through that.

“They see their tax burden at its highest level for 70 years and they know it’s not the government that’s lowering inflation.

“It’s working people, earning less, enjoying less. It’s their sacrifice that is helping to bring inflation down and they deserve better than another cheap trick from the government of gimmicks, making them pay whilst trying to claim the credit.”

Interest Rate Expectations
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Interest Rate Expectations

A number of other plans were unveiled by Mr Hunt, including:

• Bringing charges for prepayment meters in line with direct debit charges, impacting over four million households and saving them an average of £45 per year

• Making duty on draught products in pubs up to 11p lower than supermarkets

• Maintaining the freeze in fuel duty

The chancellor also said £11bn will be added to the defence budget over the next five years – following an announcement earlier this week – saying it would be nearly 2.25% of GDP by 2025. The government’s ambition is for it to reach 2.5%, he added.

And after reports he would increase the pensions lifetime allowance to £1.8m in an attempt to encourage doctors and other high earners back to work, Mr Hunt decided to scrap the limit entirely, as well as increasing the pensions annual tax-free allowance from £40,000 to £60,000.

He told the Commons: “In the face of enormous challenges I report today on a British economy which is proving the doubters wrong.

“In the autumn we took difficult decisions to deliver stability and sound money. Since mid-October, 10-year gilt rates have fallen, debt servicing costs are down, mortgage rates are lower and inflation has peaked.

“The International Monetary Fund says our approach means the UK economy is on the right track.”

But Sir Keir said the only permanent tax cut in the budget was for “the richest 1%”, adding: “How can that possibly be a priority for this government?”

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‘This a failure you can measure not just in the figures but in the empty pockets of working people,’ says the Labour leader.

The Labour leader continued: “Again we see a failure to grip the long-term challenges. No determination to create growth that unlocks the potential of the many – working people being made to pay for Tory choices and Tory mistakes.”

Some policies were revealed ahead of the chancellor’s speech, including keeping the cap on energy prices at £2,500 for a further three months, despite a planned rise to £3,000 in April, and 12 new investment zones.

Sky News also reported last night his promise to provide 30 hours of childcare a week to parents of one and two-year-olds, and to give a further cash injection to the sector to increase the availability of existing free childcare for three to four-year-olds.

But Mr Hunt went further on this measure, saying the care would be available from September 2024 when a child reaches nine months, as well as promising to increase funding for nurseries and pay those on Universal Credit upfront for the childcare they need to get.

However, he also confirmed the ratio for how many children each staff member looks after can be raised from one per four to one per five – though he said it was optional for both providers and parents.

There were more announcements to fit with Mr Hunt’s “three E’s” philosophy – enterprise, employment and education.

They included:

• Incentive payments of up to £1,200 for childminders who sign up to the profession

• Enhanced credit for small and medium businesses, and creative firms

• An extension to relief for theatres, orchestras and museums

• Tax relief on energy efficient measures in firms

• £900m investment into supercomputing

The chancellor also confirmed widely reported plans to abolish the Work Capability Assessment for disabled people to “separate benefit entitlement from an individual’s ability to work”.

Mr Hunt promised a new programme called Universal Support, describing it as “a new, voluntary employment scheme for disabled people where the government will spend up to £4,000 per person to help them find appropriate jobs and put in place the support they need”.

And he said there would be a £400m fund to help those who are forced to leave work because of a health condition to get support in the workplace.

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Chancellor Jeremy Hunt MP has announced that the energy price guarantee will remain at £2,500 until the end of June.

Mr Hunt confirmed he would keep the incoming rise in corporation tax – from 19% to 25% – despite anger from some of his own backbenchers.

But in a bid to keep businesses happy, he introduced a new benefit where every pound a company invests in equipment can be deducted in full and immediately from taxable profits – “a corporation tax cut worth an average of £9bn a year for every year it is in place”.

In what appeared to echo recent Labour policy, the chancellor announced continued state-financed investment in nuclear power and the launch of Great British Nuclear, saying the public body will “bring down costs and provide opportunities across the nuclear supply chain to help provide up to one quarter of our electricity by 2050”.

And he said nuclear energy would be reclassified as “environmentally sustainable” to give it the same access to investment incentives as renewables.

Today’s statement was Mr Hunt’s first full budget as chancellor – having been brought in by Liz Truss to reverse a number of measures from her disastrous mini-budget last October and kept on by Rishi Sunak after he took over as prime minister.

It came against a backdrop of mass industrial action, with hundreds of thousands of workers today staging what is believed to be the biggest walkout since the current wave of unrest began.

Teachers, university lecturers, civil servants, junior doctors, London Underground drivers and BBC journalists are among those taking to picket lines around the country amid widespread anger over pay, job security, pensions and conditions.

Labour’s shadow chancellor, Rachel Reeves, said ahead of the budget that it was “an opportunity for the government to get us off their path of managed decline”.

She added, if her party were in power, their focus would be on securing the highest growth in the G7.

“Our plan will help us lead the pack again, by creating good jobs and productivity growth across every part of our country, so everyone, not just a few, feel better off,” she added.

Our politics, business and finance reporters will be hosting a Q&A after the budget statement. To submit a question, click here.

Have your say on the budget with Sky News

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Ukrainian troops ‘start surrendering’ in key city but Kyiv says situation ‘dynamic’

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Ukrainian troops 'start surrendering' in key city but Kyiv says situation 'dynamic'

Ukrainian soldiers encircled by Russian forces in the key eastern city of Pokrovsk have started surrendering, the defence ministry in Moscow claims.

But Ukraine‘s military has pushed back on the report by the TASS state news agency, saying the situation is “difficult and dynamic”.

Kyiv has also claimed its positions in some districts of Pokrovsk have improved despite its city being infiltrated by Russian troops.

Latest: Russian attacks are ‘nuclear terrorism’, Ukraine warns

Ukraine is increasing its number of assault troops in the area, the 7th Rapid Response Corps said on Facebook.

And Ukrainian troops are also working to cut Moscow’s military logistics routes, it added.

The Russian defence ministry also said its forces defeated a team of Ukrainian special forces that headed to Pokrovsk in a bid to prevent Russian forces from advancing further into the city.

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‘Footage of Ukrainian troops after surrendering’

It later posted videos of two Ukrainian troops who, it claimed, had surrendered.

The footage showed the men, one dressed in fatigues and the other in a dark green jacket, sat against a wall in a dark room, as they spoke of fierce fighting and encirclement by Russian forces.

The videos’ authenticity could not be independently verified, and there was no immediate public comment from Kyiv on the Russian ministry’s claims.

Ukrainian police officers on patrol in Pokrovsk. File pic: Reuters
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Ukrainian police officers on patrol in Pokrovsk. File pic: Reuters

Ukraine’s President Volodymyr Zelenskyy has previously acknowledged that some Russian units had infiltrated the city. But he maintained that Ukraine is tackling them.

He said Russia had deployed 170,000 troops in Ukraine’s eastern Donetsk province, where Pokrovsk is located, in a major offensive to capture the city and claim a big battlefield victory.

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Multiple Russian missiles strike Ukraine’s Zaporizhzhia

‘Operation to destroy enemy forces’

Ukraine’s army chief Oleksandr Syrskyi said on Saturday the situation in Pokrovsk remained “hardest” for Ukrainian forces, who were trying to push Russian troops out.

But he insisted there was no encirclement or blockade as Moscow has claimed.

“A comprehensive operation to destroy and push out enemy forces from Pokrovsk is ongoing. The main burden lies on the shoulders of the units of the armed forces of Ukraine, particularly UAV operators and assault units,” Mr Syrskyi said.

Read more:
Ukraine will work on ceasefire plan within next 10 days
24 hours in the kill zone

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Why is Ukraine attacking Moscow? What’s behind Putin’s nuclear test?

Why is Pokrovsk important?

One of Moscow’s key aims has been to take all of Ukraine’s industrial heartland of coal-rich Donbas, which comprises of the Luhansk and Donetsk provinces. Kyiv still controls about 10% of Donbas.

Capturing Pokrovsk, which Russian media has dubbed “the gateway to Donetsk”, and Kostiantynivka to its northeast, would give Moscow a platform to drive north towards the two biggest remaining Ukrainian-controlled cities in Donetsk – Kramatorsk and Sloviansk.

‘Key Russian fuel pipeline struck’

Meanwhile, Ukraine’s military intelligence, known as HUR, has said its forces have hit an important fuel pipeline in the Moscow region that supplies the Russian army.

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Dramatic drone rescue in Ukraine’s kill zone

In a statement on Telegram, HUR said the operation late on Friday was a “serious blow” to Russia’s military logistics.

HUR said its forces struck the Koltsevoy pipeline, which is 250 miles long and supplies the Russian army with gasoline, diesel and jet fuel from refineries in Ryazan, Nizhny Novgorod and Moscow.

The operation, which targeted infrastructure near Ramensky district, destroyed all three fuel lines, HUR said.

The pipeline was capable of transporting up to three million tonnes of jet fuel, 2.8 million tonnes of diesel and 1.6 million tonnes of gasoline annually, HUR said.

Russia ‘targets gas production site’

Also overnight, Russia launched an attack on a gas production site in Poltava, in central Ukraine.

A fire broke out, the local administration said, but no injuries were reported.

Kyiv condemns ‘nuclear terrorism’

Ukraine’s foreign ministry has condemned Russian strikes this week on substations powering some of its nuclear plants.

It accused Russia of carrying out “targeted strikes on such substations” which “bear the hallmarks of nuclear terrorism”.

Elsewhere, a civilian died and 15 more were injured on Saturday morning after Russia struck the Mykolaiv region in southern Ukraine with a ballistic Iskander missile, local official Vitaliy Kim said.

A child was among those hurt in the strike, he added.

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‘We have no food, no water… it feels like the wilderness’: The communities shredded and still stranded by Hurricane Melissa

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'We have no food, no water... it feels like the wilderness': The communities shredded and still stranded by Hurricane Melissa

The death toll in Jamaica after Hurricane Melissa could rise, with certain communities still marooned from the rest of the island, according to the police chief for the worst-affected area. 

Coleridge Minto, superintendent of police for St Elizabeth Parish, told Sky News that his area has recorded six deaths directly related to the hurricane.

“We are hoping there is no more,” he said. “The reality is we have not yet communicated with all our station commanders in some of the other areas and so as soon as we have those reports, we could be hearing of other injuries, other situations that we were not privy to at this moment.”

The UK has pledged a total of £7.5m to assist the Caribbean’s recovery from the hurricane. Aid flights have been arriving over the past couple of days into Jamaica’s two international airports, but it’s not getting to where they need it the most.

Black River has been described as ground zero after Hurricane Melissa swept through it
Image:
Black River has been described as ground zero after Hurricane Melissa swept through it

In the town of Middle Quarters, close to where the hurricane made landfall, Vivienne Bennett is sitting, propped up against a house without a roof. Her right hand is wrapped in a kitchen towel. “I lost my finger in the hurricane,” she says, showing me her finger which is exposed to the bone. “I opened the door of my house to try and escape, and the wind slammed it back and cut my finger off.”

She asks me for painkillers and says she doesn’t have any medication to stave off infection. I ask if she has seen any government aid. “No,” she replies, “we haven’t seen anybody yet, so we’re trying to get some help. I need to get to a hospital but I don’t know how because all the roads are blocked.”

The situation is growing more dire by the day
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The situation is growing more dire by the day

Her daughter, Leila, has a baby and other children are playing nearby. “We have no nappies, we have no food, we have no water,” Leila says, “it feels like the wilderness here now.”

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The road leading to Black River, the town authorities are referring to as “ground zero” for this disaster, is difficult to pass, but not impossible. A journey from the capital, Kingston, that would usually take two hours, now takes six. We drive through murky floodwater, a couple of feet deep, and through an avenue of twisted bamboo stalks.

On arrival, it’s a desperate scene. People here seem almost shell-shocked, still processing what has happened to them, unsure what to do next. One man walks past our cameraman and holds his hands in the air. “Jamaica needs help,” he says, “it’s been mashed up.” I ask what help he needs. “We need houses, food and water,” he replies.

Black River was once a wealthy town, the first in Jamaica to have electricity. But the storm has laid waste to the main street. The 300-year-old church, the seafront restaurant, the pharmacy, the Chinese supermarket, the whole town has been shredded.

A group of people sit at a bus stop on the seafront surrounded by huge rocks washed up by a 16-foot storm surge. “It’s a disaster, a disaster,” one woman calls out to me.

With communications still down across most of the island, people here have been unable to contact friends and family for five days now.

Black River has been described as ground zero after Hurricane Melissa swept through it
Image:
Black River has been described as ground zero after Hurricane Melissa swept through it

A woman called Inkiru Bernard, who is Jamaican but lives in New York, has been in touch with our team and asked us to try to find her 67-year-old mother, who lives in Black River. She’s not heard from her since the storm.

When we arrive at the address she provides, her mother, Inez McRae, is sitting on the porch. She shows me around what remains of the house where she weathers the storm. The roof is entirely gone, everything is sodden and thick with mud.

“But I’m alive,” she says, “I’ve been spared.” When Inkiru finally sees her mother on a video call, she cries with relief. “Oh mummy,” she says, “I’ve been so worried.”

Ms McRae is thankful of having 'been spared'
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Ms McRae is thankful of having ‘been spared’

Tanks have been positioned on the main street in Black River and soldiers patrol it after shops and businesses were looted.

The police chief for this area, Coleridge Minto, says he understands the desperation but is urging people to be patient.

“We can appreciate that persons are trying to grab things,” he says, “persons are devastated, but we want to ensure that we maintain law.”

Army helicopters were flying over the disaster zone and some aid is now arriving into Black River. But with other villages still largely cut off from the rest of the island, this situation is growing more dire by the day.

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‘Send help’: The desperate pleas from Hurricane Melissa survivors

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'Send help': The desperate pleas from Hurricane Melissa survivors

Driving through western Jamaica, it’s staggering how wide Hurricane Melissa’s field of destruction is.

Town after town, miles apart, where trees have been uprooted and roofs peeled back.

Some homes are now just a pile of rubble, and we still don’t know how deadly this storm has been, although authorities warn the death toll will likely rise.

A total of 49 people have died in Melissa’s charge across the Caribbean – 19 in Jamaica alone.

Roads are still flooded in Jamaica
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Roads are still flooded in Jamaica

The storm has blown over telephone poles, which are blocking the roads
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The storm has blown over telephone poles, which are blocking the roads

My team and I headed from Kingston airport, towards where the hurricane made landfall, referred to as “ground zero” of this crisis.

On the way, it’s clear that so many communities here have been brought to their knees and so many people are desperate for help.

We drive under a snarl of mangled power lines and over huge piles of rocks before reaching the town of Lacovia in Saint Elizabeth Parish.

The hurricane stripped the entire roof off this church
Image:
The hurricane stripped the entire roof off this church

Many children live in homes with caved-in roofs
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Many children live in homes with caved-in roofs

At the side of the road, beside a battered and sodden primary school, a woman wearing a red shirt and black tracksuit bottoms holds a handwritten sign in the direction of passing cars.

“Help needed at this shelter,” it says. The woman’s name is Sheree McLeod, and she is an admin assistant at the school.

She is in charge of a makeshift shelter in the school, a temporary home for at least 16 people between the ages of 14 and 86.

I stop and ask what she needs and almost immediately she begins to cry.

The primary school that has been housing those with no other place to stay
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The primary school that has been housing those with no other place to stay

‘No emergency teams’

“I’ve never seen this in my entire life,” she says. “It’s heartbreaking, I never thought in a million years that I would be in the situation trying to get help and with literally no communication.

“We can’t reach any officials, there are no emergency teams. I’m hoping and praying that help can reach us soon.

“The task of a shelter manager is voluntary and the most I can do is just ask for help in whatever way possible.”

Read more:
Before and after images show hurricane’s destruction
What we know from the ground following the devastation

Sheree McLeod pleads for help for those sheltering at the school
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Sheree McLeod pleads for help for those sheltering at the school

At least 16 people currently live at the school, which is being used as a temporary shelter
Image:
At least 16 people currently live at the school, which is being used as a temporary shelter

Sheree shows me the classroom where she and 15 other people rode out the hurricane which she says hung over the town for hours.

They had just a sheet of tarpaulin against the window shutters to try to repel gusts of more than 170mph and a deluge of rain.

They took a white board off the wall to try to get more shelter.

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Hurricane Melissa was ‘traumatising’

“It was very terrible,” Sheree says. “We were given eight blankets for the shelter and that was it, but there were 16 people.

“Now all their clothes and blankets that they were provided with got damaged. Some people are sleeping in chairs and on wooden desks.”

Her plea for help is echoed across this part of Jamaica.

Toppled-over chairs and rubbish line a classroom in the school
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Toppled-over chairs and rubbish line a classroom in the school

The water tank at the school has run out
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The water tank at the school has run out

As we’re filming a pile of wooden slats that used to be a house, a passing motorcyclist shouts: “Send help, Jamaica needs help now.”

The relief effort is intensifying. After I leave Sheree, a convoy of army vehicles speed past in the direction of Black River, the town at the epicentre of this disaster.

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Diggers work to clear debris from the road late into the night. Ambulance sirens also grow more regular as the day goes on.

Help is coming and for many here, it can’t come soon enough.

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