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The Conservatives will promise a tax cut for parents on Friday by raising the threshold for when families have to pay a levy on their child benefit.

The current system means if either parents or a parent’s partner earns more than £60,000, they begin paying the high income child benefit tax charge, and lose the benefit altogether when a salary hits £80,000.

But if the Tories win the election on 4 July, they have promised to increase the threshold to £120,000 before any tax is paid, and to £160,000 before the benefit is withdrawn, as well as base it on a household income, rather than an individual.

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Chancellor Jeremy Hunt claimed the policy would lead to an average tax cut of £1,500 for around 700,000 families, and in turn “boost families’ financial security and give them more money to spend on the things that matter most”.

But Labour called it “another chaotic scattergun announcement from Rishi Sunak, adding to his list of desperate and unfunded policies that he knows can’t be delivered”.

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This latest move by the government follows its decision in April to raise the threshold for when the high income child benefit tax charge kicks in from £50,000 to £60,000.

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The party said the new £120,000 policy would cost £1.3bn by 2029 and be paid for by “clamping down on tax avoidance” – a measure it has promised to use throughout the campaign that it estimates will raise £6bn.

The Tories said the change would “end the unfairness that means single-earner households can start paying the tax charge when a household with two working parents and a much higher total income can keep the child benefit in full”.

But it would not come into force until autumn 2025 due to the “significant reform” to HMRC procedures that would need to take place first.

Jeremy Hunt meets staff during a visit to a builders merchant in south east London
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Chancellor Jeremy Hunt will unveil his new plan on Friday. Pic: PA

Mr Hunt said: “Raising the next generation is the most important job any of us can do so it’s right that, as part of our clear plan to bring taxes down, we are reducing the burden on working families.”

But a Labour spokesperson said: “Rishi Sunak clearly wants to pretend the last 14 years didn’t happen, because almost all his policies reverse decisions his own party has taken.

“The choice at this election is five more years of Conservative chaos or stability with a changed Labour Party.”

The SNP’s David Linden attacked the plan, saying: “The Tories’ time is up – and no amount of desperate, last-minute policy announcements will stop the democratic drubbing that is coming their way.

“The Scottish people can see right through the Tories’ empty election promises because they know the only thing that Westminster has delivered is austerity cuts, Brexit and a cost-of-living crisis.

And the Liberal Democrats’ Treasury spokesperson, Sarah Olney, also said her rivals’ policies weren’t “worth the paper they are written on, after years of hiking taxes on hardworking families”.

She added: “Conservative ministers have had years to help parents with the cost of living but have done absolutely nothing apart from hiking taxes. It begs the question, what have they been doing all this time?”

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Her party will also be focusing on parents with their election announcement, promising to double statutory maternity pay to £350 a month, and introduce a “dad month” of paid leave for new dads.

They will also make paid parental rights available from day one of a job and extend them to self-employed parents.

Lib Dem leader Sir Ed Davey said the proposals would “give new parents the choice and flexibility they need, backed up by a package of proper support”.

Meanwhile, Labour will talk about their housing strategy – including making the mortgage guarantee scheme permanent and promising to build 1.5 million homes over the next parliament.

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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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