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Rishi Sunak has promised he will cut taxes now the government has achieved its pledge to halve inflation by the end of the year.

The prime minister has been under pressure from many in his party to reduce the tax burden – which currently sits at a 70-year high – ahead of the next election, and rumours have been swirling that such policies could be announced in the autumn statement on Wednesday.

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Making a speech in north London on his economic plans, Mr Sunak said his “argument has never been that we shouldn’t cut taxes – it’s been that we can only cut taxes once we have controlled inflation and debt”.

And with the change in inflation – confirmed last week by the Office for National Statistics (ONS) to have dropped to 4.6% – it was time for the government to “begin the next phase” of its plan and “turn our attention to cutting tax”.

The prime minister did not reveal what taxes would be for the chop, but they are expected to be confirmed on Wednesday when Chancellor Jeremy Hunt delivers his statement in the Commons.

Can the chancellor lift the gloom? Watch live coverage on Sky News of the autumn statement from 11am on Wednesday.

During his speech, Mr Sunak celebrated the fall in inflation – though it still remains more than double the Bank of England target of 2% – saying it showed “when we make a major economic commitment, we will deliver it”.

Then moving on to the big question ahead of the autumn statement, he said: “I want to cut taxes, I believe in cutting taxes, what clearer expression could there be of my governing philosophy than the belief that people, not government, make the best decisions about their money.

“But doing that responsibly is hard. We must avoid doing anything that puts at risk our progress of controlling inflation, and no matter how much we might want them to, history shows that tax cuts don’t automatically pay for themselves.

“And I can’t click my fingers and suddenly wish away all the reasons that taxes had to increase in the first place – partly because of COVID and Putin’s war in Ukraine, and partly because we want to support people to live in dignity in retirement with a decent pension and good health care which will cost more as the population ages.”

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But the prime minister added: “Now that inflation has halved and our growth is stronger, meaning revenues are higher, we can begin the next phase and turn our attention to cutting tax.”

The prime minister said the government “can’t do everything at once”, and it would take “discipline” to “prioritise” what should be reduced.

However, he promised to make the reductions “in a serious, responsible way, based on fiscal rules”, adding: “Over time we can and we will cut taxes.”

Sunak’s argument has flaws – he’ll have to work hard to win it


Sam Coates

Sam Coates

Deputy political editor

@SamCoatesSky

Well, that was wild. Today, Rishi Sunak appeared to have perfected the art of the low-key big speech.

The prime minister announced tax cuts are coming right now, set out the five long-term priorities he’ll fight the election on and made his most aggressive attack on the Tory right’s belief in self-funding tax cuts.

All done on a hugely busy political day, competing with the COVID inquiry, CBI annual conference featuring the chancellor, an AI event with the deputy prime minister on the day a refreshed plan for foreign aid spending was being released and Lord Cameron’s formal arrival in the Lords.

At the heart of Sunak’s speech was an argument that having reduced inflation and debt, now everyone can share in the rewards. A prime minister – justifiably – wanting to share some of the credit for Wednesday’s tax cut announcement in the autumn statement.

This is his argument: “We could only cut taxes once we’ve controlled inflation and debt… and the official statistics show that promise has now been met.”

There are there problems with this statement from the prime minister. The first is that he has met only one, not both of his inflation targets – his government’s other is to get it back down to 2%, and at 4.6% it’s still very high by the standards of the last 20 years.

Secondly, debt is not going down – in absolute terms it is rising. Sunak means, but does not say, that debt is falling as a proportion of GDP, a slight of hand that matters.

Thirdly, he is boasting about growth, saying: “Our growth is stronger.” Yes, stronger than the March budget, but the last quarterly GDP figures came in at 0.0%, nil growth, and the latest indications from business point to all but no growth and maybe even recession in the coming months.

Instead what has changed is circumstance – the election, even at its furthest away point, is getting closer, while his colleagues are circling on a range of topics and he feels more unstable than at any point since the start of the year after the Rwanda court defeat.

This is an argument he is going to have to work very hard if he wants to win.

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What chancellor could announce in autumn statement

Over the weekend, Mr Hunt insisted the focus of the upcoming budget would be on growth for business, telling Sky News he wanted to help create a “productive, dynamic, fizzing economy”.

But the chancellor also said “everything is on the table” when asked about swirling rumours over possible tax cuts.

Sky’s deputy political editor Sam Coates understands taxes on personal incomes will fall in Wednesday’s statement, as the government also seeks to help households with the cost of living crisis.

In the latest edition of the Politics at Jack and Sam’s podcast, by Sky News and Politico, he said the cut was unlikely to be on the basic rate of income tax though.

Click to subscribe to Politics at Jack and Sam’s wherever you get your podcasts

However, the head of the Institute for Fiscal Studies, Paul Johnson, warned there was “no headroom there at all” for major tax cuts.

The economist said chancellors could “always find a few billion in a budget or an autumn statement if they want to”, but the public finances were “in such a mess” due to the amount being spent on debt interest, that there wasn’t a lot of wriggle room for Mr Hunt.

During his speech, Mr Sunak also promised to “clamp down” on welfare fraudsters, calling it a “national scandal” and “an enormous waste of human potential” that around two million people of working age were not in employment.

The government is said to be considering a big squeeze on benefits in order to find savings, effectively cutting working age welfare payments for millions of people.

The prime minister said: “We believe in the inherent dignity of a good job, and we believe that work, not welfare is the best route out of poverty.

“So we must do more to support those who can work to do so, and we will clamp down on welfare fraudsters because the system must be fair for taxpayers who fund it.”

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Chancellor: ‘Tax burden is too high’

Mr Sunak also used his speech to launch an attack on Labour for having “no experience” in business, and accused Sir Keir Starmer and the shadow chancellor Rachel Reeves of offering “fairy tale” answers to the questions of how to grow the economy.

But Labour’s national campaign coordinator, Pat McFadden, said: “The Tories have failed to deliver on so many pledges from the past. Why should people believe they will deliver on pledges for the future?

“It sums up this Conservative Party to claim things will be better tomorrow when they can’t even fix the problems of today.”

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Hadush Kebatu: CCTV images show last sightings of wanted asylum seeker after he was released from prison in error

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Hadush Kebatu: CCTV images show last sightings of wanted asylum seeker after he was released from prison in error

CCTV images have been released of a jailed asylum seeker who was accidentally freed from prison – as police detailed the last sighting of him.

Hadush Kebatu was released in error from HMP Chelmsford on Friday instead of being handed over to immigration officials for deportation – one month into a 12-month sentence.

As the manhunt continues, the images show him in the Essex town on Friday and later the same day in Dalston, east London, where he was carrying a “distinctive white bag with pictures of avocados on it”, said the Metropolitan Police.

The last sighting of Kebatu is thought to have been in Dalston CLR James Library in Dalston Square on Friday evening.

The Ethiopian national had been found guilty in September of sexually assaulting a 14-year-old girl and a woman in Epping.

His crimes while staying at The Bell Hotel in Epping sparked weeks of protests over the summer.

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Police call on public to assist on manhunt

The Met Police, which has been leading the search for Kebatu, alongside Essex Police and the British Transport Police, has made a direct appeal Kebatu to hand himself in.

He left Chelmsford train station at 12.42pm on Friday and arrived at Stratford station in east London soon after at 1.12pm.

Kebatu had since taken “a number of journeys” across London and had “access to funds”, according to Met Commander James Conway.

(L-R) Hadush Kebatu in Chelmsford on Friday and later in Dalston, east London. Pic: Met Police
Image:
(L-R) Hadush Kebatu in Chelmsford on Friday and later in Dalston, east London. Pic: Met Police

Last sighting

The force said he was last seen shortly before 8pm on Friday evening in the Dalston area of Hackney in east London.

It has released two CCTV images of him from Friday, one in Chelmsford where he was wearing his prison-issued, grey tracksuit and holding a clear, plastic bag containing his possessions.

Hadush Kebatu was arrested in July. Pic: Crown Prosecution Service/PA
Image:
Hadush Kebatu was arrested in July. Pic: Crown Prosecution Service/PA

The other was taken in Dalston, where he was still wearing his grey tracksuit, but was carrying his belongings “in a distinctive white bag with pictures of avocados on it”.

A Met statement added: “Additional officers have been deployed to the area to carry out further searches, but we are appealing for the help of local residents to report any sightings as soon as possible.”

Mr Conway has asked for members of the public who have given assistance to Kebatu to contact them or anyone who sees him to call 999.

And in a direct appeal to Kebatu, Mr Conway added: “We want to locate you in a safe and controlled way.

“You had already indicated a desire to return to Ethiopia when speaking to immigration staff, the best outcome for you is to make contact directly with us by either calling 999 or reporting yourself to a police station.”

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Watch: Witness describes confusion outside prison

Meanwhile, a lorry driver, who was delivering equipment to Chelmsford jail on Friday, told Sky News correspondent Tom Parmenter he saw the “confused” offender outside the facility being directed by prison staff to the town’s railway station following his release.

The witness, called Sim, said Kebatu came out of the jail saying, “Where am I going? What am I doing?” and hanging around for about 90 minutes as he tried to find out where he should be going.

Sim said the offender returned to the prison “four or five times” but was turned away.

He said Kebatu knew he should be deported but the prison staff were “basically sending him away” and saying to him, “Go, you’ve been released, you go”.

Hadush Kebatu, who was jailed for two sexual assaults in Epping. Pic: Essex Police/PA
Image:
Hadush Kebatu, who was jailed for two sexual assaults in Epping. Pic: Essex Police/PA

Kebatu was spotted later in Chelmsford town centre asking for assistance before getting on a train to London.

HM Prison and Probation Service is introducing new and mandatory procedures for prisoner releases after Kebatu was mistakenly freed, Ministry of Justice sources say.

Duty governors, who are responsible for the daily secure operation of prisons, will now be required to complete additional checks the evening before a release, it is understood.

Governors will need to provide assurance that the procedure is in place on Monday, Sky News understands.

Justice Secretary David Lammy said on Friday night that Kebatu was “at large in London”. He said he was “livid on behalf of the public” and added that he had launched an investigation.

Sir Keir Starmer said he was “appalled” at the accidental release and said it was “totally unacceptable”, adding: “This man must be caught and deported for his crimes.”

A prison officer has been taken off duties to discharge prisoners while an investigation takes place.

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Lucy Powell named Labour’s new deputy leader

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Lucy Powell named Labour's new deputy leader

Former Commons leader Lucy Powell has been crowned Labour’s new deputy leader in a closely fought race against Education Secretary Bridget Phillipson.

Ms Powell received 87,407 votes to Ms Phillipson’s 73,536 – a majority of 13,871 – in a contest that was widely perceived as a referendum on Sir Keir Starmer’s popularity with the membership.

Ms Powell was seen as the “anti-Starmer” candidate given she was sacked from cabinet just last month, and centred her campaign on being an independent voice for the backbenches.

Politics live: Follow for updates as Labour names new deputy leader

Ms Phillipson was seen as Number 10’s preferred option, and she had pitched herself as the “unity candidate”, warning that voting for her opponent would result in “internal debate and divisions that leads us back to opposition”.

However speaking to Sky News’s political editor Beth Rigby following the result, Ms Powell insisted she would be a “friend” to the prime minister, adding: “I am confident we can work well together.”

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She said she was not here to “write an alternative policy platform” but rather “to make sure Labour values and beliefs are right at the heart of the conversation, and that we’re giving a really clear sense of who we’re for”.

Ms Powell’s earlier victory speech made clear where she thought Labour was going wrong, and what she would challenge the government on.

The Manchester Central MP said Labour “won’t win by trying to out-Reform Reform, but by building a broad progressive consensus”.

She said that started with “wrestling back the political megaphone” from Reform leader Nigel Farage, and “setting the agenda more strongly”.

“Let’s be honest, we’ve let Farage and his ilk run away with it. He wants to blame immigration for all the country’s problems. We reject that,” she said.

“Our diagnosis is different, that for too long the country and the economy has worked in the interests of the few, not the many.”

The reference to “for the many not the few” – the slogan during Jeremy Corbyn’s time at the helm, was not lost on his then shadow chancellor John McDonnell.

The veteran left-winger said on X: “The Labour Party members have spoken & the message is clear, they want change. It’s good to see a return to references to the Labour Party serving once more the many not the few & that Labour must not try out Reform, Reform. Our members realise a new start is desperately needed.”

‘Unwanted deputy imposed on PM’

The deputy leadership role is important as it’s the key connection between the Labour members and the upper echelons of the Labour Party.

The race was triggered by the sudden departure of Angela Rayner, after she admitted to underpaying stamp duty.

The scandal sparked a reshuffle in which Ms Powell was one of the only casualties. It makes the new partnership potentially very awkward for Sir Keir, especially as his new deputy will be free to speak out against his policies from the back benches rather than being bound by collective responsibility like Ms Phillipson.

However in a possible olive branch, Sky News understands Ms Powell will be asked to attend political cabinet meetings, even though she will not officially be a member of cabinet.

Tory chairman Kevin Hollinrake said “weak Keir Starmer” has had an unwanted deputy leader “imposed on him by the Labour Party”, adding: “The failure of the Keir Starmer candidate, Bridget Philipson, is another defeat of the prime minister’s authority.”

Turnout for the vote was low – just 16.6%, suggesting a lack of enthusiasm among party members and its affiliates.

Sir Keir congratulated Ms Powell after the results were announced, saying she “has always been a proud defender of Labour values, and that is exactly what we need at this moment”.

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PM: Powell is ‘a proud defender of Labour values’

He echoed some of her language around immigration, as he attacked the Tories for this week suggesting they supported a policy to deport people who have settled in the UK legally, something Reform UK has advocated.

“That is what we’re up against on the right of politics, a politics of division and grievance that wants to take this great country to a very dark place”, Sir Keir said.

PM warns of ‘battle for the soul of our nation’

The prime minister is under pressure as the party plummets in the polls, with many MPs on the left predicting he could be gone by May if the local elections go badly.

Sir Keir acknowledged Labour is having a difficult time after it lost the Caerphilly by-election to Plaid Cymru on Thursday.

He said it was a “bad result” and “a reminder that people need to look out their window and see change and renewal in their community, opportunities for their children, public services rebuilt, the cost of living crisis tackled”.

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Phillipson ‘disappointed to lose’

“We must unite. We must keep our focus on what is, in my view, the defining battle for the soul of our nation. I know that Lucy will do just that,” he said.

Saturday’s result is the culmination of a six week contest, with the pair having had to secure nominations from 80 MPs in the first round and then win the backing of 5% of local parties or Labour affiliated groups before making it to the final vote.

Initially six candidates entered, but it quickly became a two-horse race as only Ms Powell and Ms Phillipson reached the 80 threshold, following claims from the left of a “stitch up”.

Ms Phillipson said she was “disappointed to lose” but Ms Powell “has my full support”.

She added: “What we all need to do now is unite this party, beat Reform and secure that second term Labour government.”

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How many prisoners are released by mistake? Here are the stats as search for migrant sex offender continues

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How many prisoners are released by mistake?  Here are the stats as search for migrant sex offender continues

The manhunt for a migrant who sexually assaulted a schoolgirl, and was released from prison in error, is ongoing.

Hadush Gerberslasie Kebatu was jailed for 12 months earlier this year after he sexually assaulted a 14-year-old girl and a woman in Epping.

He had been staying in the Bell Hotel in Epping and his arrest triggered large-scale protests and disorder.

The Ethiopian national, who came to the UK on a small boat in the summer, is now being searched for by the police after he was accidentally freed on Friday.

Follow the latest updates on the manhunt

Hadush Kebatu, jailed for two sexual assaults in Epping. Pic: Essex Police / PA
Image:
Hadush Kebatu, jailed for two sexual assaults in Epping. Pic: Essex Police / PA

How many prisoners are released in error?

According to government statistics published in July, 262 prisoners were released in error in the 12 months to March 2025 – a 128% increase from 115 the previous year.

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The report states: “Of the 262 releases in error, 233 of these releases in error occurred from prison establishments, while 29 were released in error at the courts.

“Releases in error from establishments could also be a result of errors by the court.”

This is out of a total prison population across England and Wales of roughly 86,000.

Sky News has contacted the HM Prison & Probation Service to know how many of the 262 prisoners have since been found and returned to custody.

In September 2024, Sky News reported how dozens of people released from jail under the government’s emergency prison scheme were freed by mistake.

The Labour government said it was forced to release hundreds of inmates early because prisons were at capacity.

William Fernandez. Pic: PA
Image:
William Fernandez. Pic: PA

Kebatu, who is thought to be in the London area, was due to be deported when he was mistakenly released from HMP Chelmsford on Friday.

Previous high-profile manhunts

William Fernandez, who was awaiting trial for sexual assault, was released from HMP Wormwood by error in March 2021. He then went on to rape a 16-year-old girl and sexually assault a young woman.

Joseph McCann. Pic: Police handout
Image:
Joseph McCann. Pic: Police handout

In December 2019, the prisons and probation service “apologised unreservedly” after serial rapist Joseph McCann was freed to commit a series of sex attacks on women and children.

In July 2017, an inmate who was released from prison just months into a nine-year sentence due to a “clerical error” was arrested after weeks on the run.

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