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Labour will pursue tax avoiders to fund its commitments on schools and the NHS after the government stole its revenue-raising plan to abolish the non-dom tax status.

The party had long pledged to scrap the rule – that allows wealthy individuals to live in the UK but not pay domestic rates of tax on their overseas income and wealth – if they came into power, giving them billions to pay for their own policy agenda.

But in his last Budget, Chancellor Jeremy Hunt lifted the policy for the Tories – despite their long-held opposition to the move – in order to fund cuts to national insurance, and leaving a gap in Labour’s spending plans.

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Shadow chancellor Rachel Reeves is today set to announce that Labour now plans to raise £5bn a year by the end of the next parliament, which will fund its polices on breakfast clubs for primary school children and additional appointments in the NHS.

However, it is understood that only £2bn of the £5bn raised per year will fund the two policies, with the rest of the money being kept back for other uses.

Labour has said it will also raise £2.6bn over the next parliament by closing “loopholes” in the government’s plans to abolish exemptions for non-doms – a move Ms Reeves branded an “utter humiliation” for the Conservatives.

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As well as the non-dom tax status, the government also adopted Labour’s plans to extend the windfall tax on oil and gas companies, which also would have been used to fund the breakfast clubs and NHS appointments.

Ms Reeves is expected to say: “I have been clear that everything in our manifesto will be fully costed and fully funded. There will be no exceptions.

“That is why last month I promised to go through all the government documents in an orderly way to identify the funding streams to honour our commitments to the NHS and schools.

“That process is now complete and the funding a future Labour government will raise from taking on the tax dodgers will fund more appointments in NHS hospitals, new scanners, extra dentist appointments and free breakfast clubs for all primary school pupils.”

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Labour HQ painted red in protest at the sale of weapons to Israel

Labour said the “tax gap” – the difference between the amount of money HMRC is owed and the amount it receives – had widened to £36bn in 2021/22 – £5bn more than it had been the previous year.

To close the gap, Labour said it would invest up to £555m a year in boosting the number of compliance officers at HMRC, increasing productivity and improving the organisation’s “dire” customer service.

It will also consider requiring more tax schemes to be registered with HMRC to ensure they are legitimate, and renew the focus on offshore tax compliance.

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Chief Secretary to the Treasury Laura Trott said: “After a month of searching for a plan to pay for Labour’s unfunded spending, the shadow chancellor still cannot say how she will fill the enormous black hole in their promises. And that means one thing – more taxes.

“The Labour Party hasn’t changed. They remain committed to unfunded spending, including their £28bn a year decarbonisation promise, meaning they will have to raise taxes on working families – taking us back to square one.

“The Conservatives have introduced over 200 measures to clamp down on tax non-compliance and we are sticking to the plan to strengthen the economy so we can cut taxes, putting £900 in the pockets of the average worker and helping families to build a brighter future.”

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Why Boris’s best mate is off to Reform

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Why Boris's best mate is off to Reform

👉Listen to Politics at Sam and Anne’s on your podcast app👈       

Former Conservative chairman and friend of Boris Johnson – Sir Jake Berry – is defecting to Reform UK, causing more problems for Tory leader Kemi Badenoch.

On today’s episode, Sky News’ Sam Coates and Politico’s Anne McElvoy discuss if his defection will divide parts of Reform policy.

Elsewhere, the Anglo-French summit gets under way, with Prime Minister Sir Keir Starmer hoping to announce a migration deal with French President Emmanuel Macron to deter small boat crossings.

Plus, chatter around Whitehall that No10 are considering a pre-summer reshuffle, but will it have any value?

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Australia to test CBDCs, stablecoins in next stage of crypto play

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Australia to test CBDCs, stablecoins in next stage of crypto play

Australia to test CBDCs, stablecoins in next stage of crypto play

The trial is part of Project Acacia, an initiative from the RBA exploring how digital money and tokenization could support financial markets in Australia.

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Starmer and Macron agree need for ‘new deterrent’ to stop small boat crossings

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Starmer and Macron agree need for 'new deterrent' to stop small boat crossings

Sir Keir Starmer and Emmanuel Macron have agreed the need for a “new deterrent” to deter small boats crossings in the Channel, Downing Street has said.

The prime minister met Mr Macron this afternoon as part of the French president’s state visit to the UK, which began on Tuesday.

High up the agenda for the two leaders is the need to tackle small boat crossings in the Channel, which Mr Macron said yesterday was a “burden” for both the UK and France.

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The small boats crisis is a pressing issue for the prime minister, given that more than 20,000 migrants crossed the English Channel to the UK in the first six months of this year – a rise of almost 50% on the number crossing in 2024.

Sir Keir is hoping he can reach a deal for a one-in one-out return treaty with France, ahead of the UK-France summit on Thursday, which will involve ministerial teams from both nations.

The deal would see those crossing the Channel illegally sent back to France in exchange for Britain taking in any asylum seeker with a family connection in the UK.

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However, it is understood the deal is still in the balance, with some EU countries unhappy about France and the UK agreeing on a bilateral deal.

French newspaper Le Monde reports that up to 50 small boat migrants could be sent back to France each week, starting from August, as part of an agreement between Sir Keir and Mr Macron.

A statement from Downing Street said: “The prime minister met the French President Emmanuel Macron in Downing Street this afternoon.

“They reflected on the state visit of the president so far, agreeing that it had been an important representation of the deep ties between our two countries.

“Moving on to discuss joint working, they shared their desire to deepen our partnership further – from joint leadership in support of Ukraine to strengthening our defence collaboration and increasing bilateral trade and investment.”

It added: “The leaders agreed tackling the threat of irregular migration and small boat crossings is a shared priority that requires shared solutions.

“The prime minister spoke of his government’s toughening of the system in the past year to ensure rules are respected and enforced, including a massive surge in illegal working arrests to end the false promise of jobs that are used to sell spaces on boats.

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“The two leaders agreed on the need to go further and make progress on new and innovative solutions, including a new deterrent to break the business model of these gangs.”

Chris Philp, the shadow home secretary, seized on the statement to criticise Labour for scrapping the Conservatives’ Rwanda plan, which the Tories claim would have sent asylum seekers “entering the UK illegally” to Rwanda.

He said in an online post: “We had a deterrent ready to go, where every single illegal immigrant arriving over the Channel would be sent to Rwanda.

“But Starmer cancelled this before it had a chance to start.

“Now, a year later, he’s realised he made a massive mistake. That’s why numbers have surged and this year so far has been the worst in history for illegal channel crossings.

“Starmer is weak and incompetent and he’s lost control of our borders.”

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