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Any tax cuts made during this budget will “one way or another be undone after the election”, according to one economist.

Speaking to Sky News, Paul Johnson, the director of the Institute for Fiscal Studies, explained that – if it were not an election year – it is unlikely that Chancellor Jeremy Hunt would be looking to trim the tax burden.

Speaking to Sunday Morning with Trevor Phillips, Mr Hunt said his budget would be “prudent and responsible” – but added that he wanted to “make some progress” on the “journey” started by the two pence cut to National Insurance announced in the autumn statement six months ago.

The chancellor is facing pressure to cut taxes to try and shift the polls in favour of his own party, which is languishing well behind Labour.

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Mr Johnson said: “I think this is going to be a political decision in an election year. If this weren’t an election year, I don’t think we’d be talking about tax cuts at all.”

He added: “If we weren’t looking at an election, I think he would be saying, let’s steady as she goes, let’s see where we are in a year or two.

“But given it is an election, I suspect we will get some tax cuts.

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“My guess, though, is that those will, one way or another, be undone after the election.

“The state of public finances, the state of public services, the shortage of money for everything from the health service to local government to social care indicates to me, we’re going to need more money over the next five years rather than less.”

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Budget 2024 explained

Changes to income tax and National Insurance have been mooted as potential options, as well the government taking Labour’s policy of scrapping the non-dom tax status.

But with the budget itself not due until Wednesday lunchtime, Sky News understands decisions are still being made in Downing Street about what to include.

The tricky financial picture means there has been limited space to make pre-budget announcements.

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Budget will be ‘prudent and responsible’

The tax burden is reaching record levels, with it expected to rise to its highest point since the Second World War before the end of this decade as the country looks to pay back heavy borrowing used for support during COVID-19 and the energy spike in the aftermath of Russia’s invasion of Ukraine.

Mr Hunt has already announced plans for an £800m package of technology reforms which government hopes will free up public sector workers.

Mr Hunt claims that “we shouldn’t fall into the trap of thinking more spending buys us better public services” – and that the £800m investment will yield £1.8bn in benefits by 2029.

Torsten Bell, the head of the Resolution Foundation, worked in the Treasury as a civil servant before going to work for chancellor Alistair Darling in the financial crisis.

He explained to Sky News why Mr Hunt is having difficulty “rolling the pitch” – preparing the ground for the announcements in the budget.

Mr Bell said: “The reason why the chancellor is finding things quite difficult is two reasons; One is the difficult economic circumstance.

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What public finance figures mean for the budget

“We’re obviously coming out of a high inflation period, but we’re not seeing a lot of economic growth.

“And then on top of that, we’re in a world where they’re talking about tax cuts, but everybody around the country, everybody watching this knows that, the reality is this is an era of taxes going up.

“So it’s a difficult situation.”

Mr Hunt said he wants to cut taxes as it helps faster growth as seen in North America and Asia.

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“But it would be deeply unconservative to cut taxes in a way that increased borrowing that wasn’t fully funded,” the chancellor said.

“If I think of the great tax-cutting budgets of the past – Nigel Lawson’s budget in 1988.

“The reason that was so significant is because those tax cuts were permanent and people need to know that these are tax cuts you can really afford.

“So it will be responsible and everything I do will be affordable.”

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UK-US trade talks ‘moving in a very positive way’, says White House spokesperson Karoline Leavitt

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UK-US trade talks 'moving in a very positive way', says White House spokesperson Karoline Leavitt

Trade talks between the UK and the United States are “moving in a very positive way”, according to the White House.

President Donald Trump’s press secretary Karoline Leavitt spoke about the likelihood of the long-discussed agreement during a press briefing.

In Westminster, there are hopes such a deal could soften the impact of the Trump tariffs announced last month.

Leavitt told reporters: “As for the trade talks, I understand they are moving in a very positive way with the UK.

“I don’t want to get ahead of the president or our trade team in how those negotiations are going, but I have heard they have been very positive and productive with the UK.”

She said Mr Trump always “speaks incredibly highly” of the UK.

“He has a good relationship with your prime minister, though they disagree on domestic policy issues,” she added.

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“I have witnessed the camaraderie between them first hand in the Oval Office, and there is a deep mutual respect between our two countries that certainly the president upholds.”

White House Press Secretary Karoline Leavitt speaks during a press briefing at the White House April 28, 2025. (Francis Chung/POLITICO via AP Images)
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White House Press Secretary Karoline Leavitt said she was positive about a deal. Pic: AP

Chancellor of the Duchy of Lancaster Pat McFadden gave the UK’s position on the talks when speaking to Sunday Morning With Trevor Phillips.

He said there was “a serious level of engagement going on at high levels” to secure a UK-US trade deal.

Mr McFadden is one of the most powerful members of Sir Keir Starmer’s government and a key ally of the prime minister.

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He was careful to not get ahead of developments, however, saying: “I think an agreement is possible – I don’t think it’s certain, and I don’t want to say it’s certain, but I think it’s possible.”

He went on to say the government wanted an “agreement in the UK’s interests” and not a “hasty deal”, amid fears from critics that Number 10 could acquiesce a deal that lowers food standards, for example, or changes certain taxes in a bid to persuade Donald Trump to lower some of the tariffs that have been placed on British goods.

Mr McFadden’s tone was more cautious than Chancellor Rachel Reeves’ last week.

She had been in the US and, speaking to Sky News business and economics correspondent Gurpreet Narwan, the chancellor said she was “confident” a deal could be done.

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‘We’re confident’, says Reeves

But she sought to play down fears that UK standards could be watered down, both on food and online safety.

“On food standards, we’ve always been really clear that we’re not going to be watering down standards in the UK and similarly, we’ve just passed the Online Safety Act and the safety, particularly of our children, is non-negotiable for the British government,” Ms Reeves said.

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End the ‘absolute scandal’ of new homes built without solar panels, government urged

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End the 'absolute scandal' of new homes built without solar panels, government urged

The government is being urged to end the “absolute scandal” of new homes being built without solar panels.

Doing so would cut both household bills and greenhouse gases that cause climate change, the Local Government Association (LGA) said in a new report.

Just four in 10 new homes in England come with solar power, according to separate figures from the industry body Solar Energy UK.

Although that is a significant three-fold increase over the space of a year, the LGA said making it mandatory would benefit bill-payers and the climate for years to come, saving people £440 per year.

The UK lags behind its neighbours in the European Union, which last year adopted new legislation demanding all new residential buildings come with solar panels from 2030.

Greenpeace UK called it an “absolute scandal that homes are built without rooftop solar panels in this day and age”.

Its campaigner, Lily Rose Ellis, said: “Given the soaring cost of electricity, our desperate need to cut planet-heating emissions, and the relatively low cost of installation to housebuilders, solar panels on all new builds should be mandatory.”

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Last year, Labour promised a “rooftop revolution” that would see millions more homes fitted with solar panels.

But they have been accused of wavering over proposals to make it mandatory, as it also courts the house-building industry to help it meet its target to build 1.5 million homes during this parliament.

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The LGA wants the government to allocate them long-term funding in the upcoming spending review so they can help the country meet net zero.

A spokesperson for the Ministry of Housing, Communities and Local Government said they plan to “maximise the installation of solar panels on new homes” in its long-delayed new regulations, the Future Homes Standard, due later this year.

The Home Builders Federation said “Moving forward, to meet the ever more challenging carbon reductions set by government, we will see solar on the overwhelming majority of new homes, albeit it is not appropriate in every situation.”

Pylon rows

The push on solar power is part of the government’s broader plans to ensure all the UK’s electricity comes from green sources by 2030.

Electricity demand is also growing as the country switches to electric cars and heating, and builds more data centres.

All this requires more wind and solar farms, as well as 1,000 kilometres of new cables to carry the electricity from where it is generated – often a wind farm in the North Sea – to where it is used in urban areas far away.

In parts of the country like East Anglia, a row has been simmering over whether to run those cables overhead on pylons or, to protect countryside views, underground.

A hefty new report by the Institution of Engineering and Technology today weighed in on the debate, finding underground cables are on average 4.5 times more expensive than overhead lines.

Liam Hardy, head of research at thinktank Green Alliance, said: “Those costs need to go somewhere. They go on to all of our electricity bills. And of course, it’s the poorest in society for whom those bills make up a bigger percentage of their income.

He added: “What they want to see is value for money as we build out that clean infrastructure that we need.”

The government has promised communities disrupted by the new infrastructure that they should reap some of the benefits, including giving households near new pylons £2,500 off their energy bills over 10 years.

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M&S tells agency workers to stay at home after cyberattack

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M&S tells agency workers to stay at home after cyberattack

Marks & Spencer (M&S) has ordered hundreds of agency workers at its main distribution centre to stay at home as it grapples with the unfolding impact of a cyberattack on Britain’s best-known retailer.

Sky News has learnt that roughly 200 people who had been due to undertake shift work at M&S’s vast Castle Donington clothing and homewares logistics centre in the East Midlands have been told not to come in amid the escalating crisis.

Agency staff make up about 20% of Castle Donington’s workforce, according to a source close to M&S.

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The retailer’s own employees who work at the site have been told to come in as usual, the source added.

“There is work for them to do,” they said.

M&S disclosed last week that it was suspending online orders as a result of the cyberattack, but has provided few other details about the nature and extent of the incident.

In its latest update to investors, the company said on Friday that its product range was “available to browse online, and our stores remain open and ready to welcome and serve customers”.

“We continue to manage the incident proactively and the M&S team – supported by leading experts – is working extremely hard to restore online operations and continue to serve customers well,” it added.

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It was unclear on Monday how long the disruption to M&S’s e-commerce operations would last, although retail executives said the cyberattack was “extensive” and that it could take the company some time to fully resolve its impact.

Shares in M&S slid a further 2.4% on Monday morning, following a sharp fall last week, as investors reacted to the absence of positive news about the incident.

M&S declined to comment further.

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