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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.

Read more:
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.

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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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UK to hand over sovereignty of Chagos Islands to Mauritius after decades-long dispute

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UK to hand over sovereignty of Chagos Islands to Mauritius after decades-long dispute

The UK will hand over sovereignty of the remote Chagos Islands to Mauritius after a decades-long dispute.

The deal to transfer the Indian Ocean archipelago to Mauritius includes the tropical atoll of Diego Garcia, home to a military base used by the UK and the US that plays a crucial role in the region’s stability and international security.

Under the agreement, the base will remain under UK and US jurisdiction for at least the next 99 years.

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The UK government said that the treaty would “address wrongs of the past and demonstrate the commitment of both parties to support the welfare” of Chagossians – the native people of the islands.

Several leading Conservatives have called the decision “weak”, with former securities minister Tom Tugendhat saying it is a “shameful retreat undermining our security and leaving our allies exposed”.

Since 1971, only Diego Garcia has been allowed inhabitants – US military employees – after the UK expelled the Chagossians at the request of the US. Some moved to Mauritius and some have lived in the UK, in Crawley, West Sussex, since 2002.

About 89 Sri Lankan Tamil asylum seekers arrived on Diego Garcia in 2021 but the UK government has argued the refugee convention does not apply there so they remain in limbo.

Mauritius has been trying to claim the Chagos Islands back from the UK since the French handed them over in 1845.

Map: OpenStreetMap
Image:
Map: OpenStreetMap

A statement from the Mauritian and UK governments said Mauritius is now “free to implement a programme of resettlement” on the islands, other than Diego Garcia, and the UK will provide money and other support to Chagossians who had to leave.

The UK will also provide a “package of financial support” to Mauritius, including annual payments for the next 99 years and will provide funding for an infrastructure partnership.

Foreign Secretary David Lammy said: “This government inherited a situation where the long-term, secure operation of the Diego Garcia military base was under threat, with contested sovereignty and ongoing legal challenges.

“Today’s agreement secures this vital military base for the future.

“It will strengthen our role in safeguarding global security, shut down any possibility of the Indian Ocean being used as a dangerous illegal migration route to the UK, as well as guaranteeing our long-term relationship with Mauritius, a close Commonwealth partner.”

Fuel tanks at the edge of a military airstrip on Diego Garcia.File pic: Reuters
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Fuel tanks at the edge of a military airstrip on Diego Garcia.File pic: Reuters

US President Joe Biden welcomed the move, saying: “I applaud the historic agreement.

“It is a clear demonstration that through diplomacy and partnership, countries can overcome long-standing historical challenges to reach peaceful and mutually beneficial outcomes.”

The agreement is subject to the finalisation of a treaty and supporting legal instruments, with both Mauritius and the UK committing to complete “as quickly as possible”.

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Police Scotland considered logging double rapist Isla Bryson as female on sex offenders’ register

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Police Scotland considered logging double rapist Isla Bryson as female on sex offenders' register

Police Scotland considered recording notorious double rapist Isla Bryson as a female on the sex offenders’ register, Sky News can reveal.

Bryson, who changed gender while waiting to stand trial, was last year jailed for eight years for raping two women in West Dunbartonshire and Glasgow while known as Adam Graham.

Scottish Prison Service (SPS) guidance at the time saw Bryson initially housed in segregation at Cornton Vale women’s prison near Stirling while awaiting sentencing.

Bryson was quickly moved to the male estate following a public outcry, with the scandal engulfing the final weeks of Nicola Sturgeon’s premiership as first minister.

 Adam Graham before they transitioned
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Bryson while known as Adam Graham

The row occurred around the same time the Scottish parliament voted to make it easier for transgender people to change their legally recognised sex.

The controversial Gender Recognition Reform (Scotland) Bill was ultimately blocked from becoming law by the UK government, with Holyrood since dropping further legal action to contest the overruling.

Isla Bryson arrives at the High Court in Glasgow
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Pic: PA

Last week, Police Scotland was forced to say it would never record a male rapist as female.

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In Scotland, rape is defined in law as penetration by a penis without consent.

Chief Constable Jo Farrell told Sky News: “You can only commit that crime as a man.”

When questioned by Sky News amid confusion over the force’s gender policy, CC Farrell denied that its stance had changed.

She stated: “No, that isn’t a different position. That’s exactly, exactly the same position.”

But now a leaked document obtained by Sky News casts doubt on whether that has always been the case.

The internal file from last year titled Sex and Gender discussed how Bryson could be dealt with when released from prison.

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It stated: “When this individual comes back into contact with Police Scotland it would likely be a public protection matter in the management of sex offenders.

“In this instance they may be recorded as a female with the name Isla Bryson however the trans history would be appropriate to be retained on relevant policing systems.”

The dossier describes the areas where Bryson could be recorded as female, including the crime database and sex offenders’ register.

Read more from Sky News:
Transgender woman wins landmark case against female-only app
Emergency ban on puberty blockers by government ‘was lawful’

A police source said this would mean the rapist would likely be treated and referred to as a woman.

A Police Scotland spokesperson said: “This report from 2023 set out proposals on potential future recording practices and standards in relation to sex and gender from a data analysis perspective.

“The chief constable addressed the matter of gender self-identification at the Scottish Police Authority board in September 2024, during which Police Scotland committed to a broader review.”

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Disabled mum’s ‘terrifying’ prosecution over non-payment of TV licence

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Disabled mum's 'terrifying' prosecution over non-payment of TV licence

“I still have panic attacks now.”

Claire (not her real name), a disabled mum in her 30s, never imagined she’d ever face criminal prosecution. But earlier this year, that’s what happened – for non-payment of her TV licence.

The stress took its toll on her mental and physical health.

“I don’t think I’m a criminal,” she says. “I have two kids I take to school every day, I try and pay my bills… I had to get anxiety tablets because I couldn’t sleep.”

Claire* speaks to Sky News' Katie Spencer
Image:
Claire* speaks to Sky News’ Katie Spencer

As the BBC looks to broker a new funding deal with the government in the next three years, critics of the current licence fee model argue it is hard to justify how non-payment is still seen as serious enough to merit criminal prosecution.

The fee is currently a flat rate of £169.50 – poorest households pay as much as the richest.

Claire, who was fined £750 for non-payment, spoke to us anonymously about her experience of dealing with the fast-track system of processing cases.

The whole process, she says, was “terrifying”. At the time the enforcement officer knocked on her door, her partner had recently been jailed for domestic violence. He had previously taken control of her finances.

“All my money was in his account and I wasn’t getting access… from what I was aware he was paying the bills but it turned out he wasn’t,” she says.

The enforcement officer said he understood, Claire says. But a week later she received a letter to say she was going to be prosecuted.

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The BBC is looking to broker a deal with the government in the next three years

Claire was told she would need paperwork to prove her situation, but didn’t have the money to send off for it. With 21 days to respond she felt she had to plead guilty or the costs might escalate.

“All you think is, ‘If I don’t pay this are they going to put me in prison?’.”

The licence fee has always been the BBC’s bread and butter – but given 500,000 households cancelled last year, there are questions over its sustainability. Other models such as Netflix, for example, successfully exist without needing the threat of prosecution.

Can the BBC still justify it?

Mary Marvel, head of policy at access-to-justice charity Law For Life, says “innocent people are feeling forced to plead otherwise” so their fine is reduced.

Under the Conservative government, various reviews looked into the pros and cons of decriminalising non-payment – ultimately concluding to keep the system as it is for now. Previously, the BBC said switching to a civil system would cost more than £1bn and lead to major cuts.

The Times newspaper recently claimed the current Labour government intends to scrap prosecutions over concerns women are being unfairly penalised. However, Sky News understands this is not the case.

Ahead of the BBC’s next charter review, all the government has officially said is that it isn’t ruling out making changes – and there will be consultation before making any decisions.

Almost three-quarters of 2023 prosecutions were women

Currently, the vast majority of prosecutions are dealt with via a system called the single justice procedure – a fast-track for relatively straightforward cases designed to fix the backlog of court delays.

Cases are processed by a single magistrate in private, and letters from defendants often go unread by prosecutors if an individual pleads guilty.

Almost 31,000 people were prosecuted for non-payment of the TV licence last year. Just over 73% were women.

Why the disparity? In 2023, a BBC review found that more than 60% of single-adult households are female, compared with less than 40% male. The review also found behavioural differences: women are more likely to be at home; more likely to open the door; and more likely to be the point of contact for bills and domestic admin.

Tom Franklin, chief executive of the Magistrates' Association,  wants tweaks made to how cases are dealt with
Image:
Tom Franklin, chief executive of the Magistrates’ Association, wants tweaks made to how cases are dealt with

Magistrates Association chief executive Tom Franklin says the TV Licensing authority should review pleas and mitigations before cases come before magistrates, giving an opportunity for them to be withdrawn if not in the public interest – “particularly for the most vulnerable in society”.

The government says the decision to prosecute “sits with TV Licensing”, but it is “keeping under review” its oversight and regulation of organisations using the single justice procedure.

A TV Licensing spokesperson said the authority would contact Claire and review the prosecution.

“We have the ability to overturn a conviction when provided with evidence that it was not in the public interest,” they said.

Significant reasons could include domestic violence, and mental and physical ill-health, the spokesperson said, adding that prosecution is always a “last resort”.

For now, Claire is incrementally using universal credit to pay back a fine she arguably shouldn’t have been prosecuted for in the first place.

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