Starmer says ‘terrible inheritance’ to blame for emergency prison measures
The government is “managing the risk” to public safety with its emergency measures to prevent prisons from overcrowding, Sir Keir Starmer said.
Speaking during a trip to Belfast, the prime minister blamed the “terrible inheritance” from the Conservative government and the recent far-right riots on his need to activate Operation Early Dawn.
Politics Live: Chris Whitty joins government meeting on mpox
The long-standing contingency mechanism delays defendants being summoned to a magistrates’ court until a prison space becomes available, should they be remanded into custody.
It was previously used by the Conservative government and allows defendants to be kept in police cells when prisons reach full capacity.
Asked whether the plan posed a risk to public safety in respect of policing resources being diverted, or more prisoners being bailed, Sir Keir said the government was making “really tough decisions, and nobody wants to take them”.
He blamed this on the “terrible inheritance of prisons that we had as an incoming government from the previous government”.
“There was a basic failure, which is a failure to have enough prison places for the number of prisoners that were being sentenced to prison,” the prime minister said.
“That was about as basic a failure of government from the previous government that you could possibly have got.
“We’ve had to deal with that with the additional strain of the disorder in recent weeks.”
Pressed on the threat to public safety, Sir Keir said the government is “managing that risk… to make sure we do have the spaces available for the prisoners”.
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Do prisons have space for rioters?
Pointing to the swift response to the riots, the PM added: “I think the response of the criminal justice to the recent disorders has been a major reason that the disorders have subsided for the time being.”
Prosecutors have been trying to fast-track cases of people accused of involvement in the recent riots in parts of the UK, with over 1,000 arrests and 400 charges made so far and lengthy sentences handed down to those found guilty.
The disorder erupted following the spread of misinformation online after the fatal stabbing of three young girls in Southport.
The Ministry of Justice said that in taking “decisive action to tackle violent thuggery on our streets”, the UK’s longstanding capacity issues in prisons, which it said had been operating at critical levels for the last several years, had been exacerbated.
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Operation Early Dawn will be put in place in the North East and Yorkshire, Cumbria and Lancashire, and Manchester, Merseyside and Cheshire regions.
Downing Street said the plans could be triggered and deactivated several times over the next few weeks as needed.
Policy ‘will delay court hearings’
The move has concerned prison bosses and legal experts.
Tom Franklin, chief executive of the Magistrates’ Association, said the measures would lead to delays in defendants appearing in court.
Mark Fairhurst, national chairman of the Prison Officers’ Association, said while the most serious offenders would still end up in court and be guaranteed a prison cell, less serious offenders would either spend longer in police cells or be bailed.
However, he clarified that this would not mean that some people who would normally go to jail would avoid it.
Rioting broke out in Southport after the fatal stabbing of three girls. Pic: PA
Nick Emmerson, president of the Law Society of England and Wales, said that reactivating Operation Early Dawn would impact victims, defendants, and lawyers, and that sustained investment is needed in the criminal justice system “to avoid it collapsing completely”.
Operation Early Dawn was triggered by the Conservative government in May in a bid to tackle overcrowding in jails.
Read More:
Prison service continues to operate ‘hand to mouth’
Last month, the Ministry of Justice said violence and self-harm in prison had risen to “unacceptable” levels as overcrowding pushed jails to the “point of collapse”.
Justice Secretary Shabana Mahmood announced plans to cut the proportion of the sentence inmates must serve behind bars from 50% to 40%.
The temporary move – which does not apply to those convicted of sex offences, terrorism, domestic abuse or some violent offences – is expected to result in 5,500 offenders being released in September and October.
The SEC has just issued its second “no-action letter” toward a decentralized physical infrastructure network (DePIN) crypto project in recent months, giving its native token “regulatory cover” from enforcement.
The no-action letter was sent to the Solana DePIN project Fuse, which issues a network token, FUSE, as a reward to those actively maintaining the network.
Fuse initially submitted a letter to the SEC’s Division of Corporation Finance on Nov. 19, asking for official confirmation that it would not recommend the SEC take enforcement action if the project continues to offer and sell FUSE tokens.
Fuse also outlined in its letter that FUSE is designed for network utility and consumptive purposes, not for speculation. They can only be redeemed for an average market price via third parties.
“Based on the facts presented, the Division will not recommend enforcement action to the Commission if, in reliance on your opinion as counsel, Fuse offers and sells the Tokens in the manner and under the circumstances described in your letter,” the Division of Corporation Finance’s deputy chief counsel, Jonathan Ingram, wrote on Monday.
The latest SEC no-action letter comes just a few months after the SEC issued a similar “highly coveted” letter to Double Zero, which was seen as a result of a new, more crypto-friendly leadership at the SEC.
At the time, DoubleZero co-founder Austin Federa said such letters are common in TradFi but are “very rare” in the crypto space.
“It was a months long process, but we found the SEC to be quite receptive, we found them to be quite professional, quite diligent, there was no crypto animosity.”
The SEC was put under new leadership in April, after Paul Atkins was sworn in as the 34th chairman, and the agency has since been seen taking a more balanced approach to crypto. As part of the leadership, crypto-friendly Hester Peirce also heads up the agency’s crypto task force.
SEC no-action letters are a form of regulatory clarity
Adding to the discussion on X, Rebecca Rettig, a legal representative of Solana MEV infrastructure platform Jito Labs, said that no-action letters are sought after by many crypto projects.
“Why do crypto teams want them? ‘Regulatory clarity.’ If you’re planning to issue a token, a NAL provides reasonable assurance you won’t face immediate enforcement for violations of securities laws. It’s a kind of ‘regulatory cover,’” she wrote.
SEC giving a pass to Fuse wasn’t unexpected: Crypto lawyer
The no-action letter doesn’t necessarily set any new precedents, however.
Commenting on the subject via X on Monday, Consensys lawyer Bill Hughes said this was “an easy case,” given the nature of Fuse’s token.
“The take away is that there is not a lawyer in crypto that would have thought this token was a security. And maybe not even any lawyer who is merely familiar with Howey,” Hughes said.
Crypto founders praise SEC’s new leadership
After an era in which many US crypto founders, businesses and projects said they felt hostility from the SEC under former chair Gary Gensler, the latest interaction with Fuse indicates the agency has dramatically shifted its approach.
Related: SEC to hold privacy and financial surveillance roundtable in December
The same month that Double Zero secured its no-action letter, the SEC also issued a similar no-action letter for crypto-custodians that don’t qualify as banks.
While they still have to meet strict conditions, the no-action letter provides clear guidelines for acceptable ways for these types of firms to operate and deal with crypto, something which the industry has been begging for over the past few years.
Magazine: 2026 is the year of pragmatic privacy in crypto: Canton, Zcash and more
Politics
Budget 2025: Three things Rachel Reeves’s speech boils down to – and two tricks the chancellor will fall back on
This is going to be a big budget – not to mention a complex budget.
It could, depending on how it lands, determine the fate of this government. And it’s hard to think of many other budgets that have been preceded by quite so much speculation, briefing, and rumour.
All of which is to say, you could be forgiven for feeling rather overwhelmed.
But in practice, what’s happening this week can really be boiled down to three things.
1. Not enough growth
The first is that the economy is not growing as fast as many people had hoped. Or, to put it another way, Britain’s productivity growth is much weaker than it once used to be.
The upshot of that is that there’s less money flowing into the exchequer in the form of tax revenues.
2. Not enough cuts
The second factor is that last year and this, the chancellor promised to make certain cuts to welfare – cuts that would have saved the government billions of pounds of spending a year.
But it has failed to implement those cuts. Put those extra billions together with the shortfall from that weaker productivity, and it’s pretty clear there is a looming hole in the public finances.
3. Not enough levers
The third thing to bear in mind is that Rachel Reeves has pledged to tie her hands in the way she responds to this fiscal hole.
She has fiscal rules that mean she can’t ignore it. She has a manifesto pledge which means she is somewhat limited in the levers she can pull to fill it.
Put it all together, and it adds up to a momentous headache for the chancellor. She needs to raise quite a lot of money and all the “easy” ways of doing it (like raising income tax rates or VAT) seem to be off the table.
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The Budget Explained – in 60 seconds
So… what will she do?
Quite how she responds remains to be seen – as does the precise size of the fiscal hole. But if the rumours in Westminster are to be believed, she will fall back upon two tricks most of her predecessors have tried at various points.
First, she will deploy “fiscal drag” to squeeze extra income tax and national insurance payments out of families for the coming five years.
What this means in practice is that even though the headline rate of income tax might not go up, the amount of income we end up being taxed on will grow ever higher in the coming years.
Second, the chancellor is expected to squeeze government spending in the distant years for which she doesn’t yet need to provide detailed plans.
Together, these measures may raise somewhere in the region of £10bn. But Reeves’s big problem is that in practice she needs to raise two or three times this amount. So, how will she do that?
Most likely is that she implements a grab-bag of other tax measures: more expensive council tax for high value properties; new CGT rules; new gambling taxes and more.
No return to austerity, but an Osborne-like predicament…
If this summons up a particular memory from history, it’s precisely the same problem George Osborne faced back in 2012. He wanted to raise quite a lot of money but due to agreements with his coalition partners, he was limited in how many big taxes he could raise.
The resulting budget was, at the time at least, the single most complex budget in history. Consider: in the years between 1970 and 2010 the average UK budget contained 14 tax measures. Osborne’s 2012 budget contained a whopping 61 of them.
And not long after he delivered it, the budget started to unravel. You probably recall the pasty tax, and maybe the granny tax and the charity tax. Essentially, he was forced into a series of embarrassing U-turns. If there was a lesson, it was that trying to wodge so many money-raising measures into a single fiscal event was an accident waiting to happen.
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Can the budget fix economic woes?
Except that… here’s the interesting thing. In the following years, the complexity of budgets didn’t fall – it rose. Osborne broke his own complexity record the next year with the 2013 budget (73 tax measures), and then again in 2016 (86 measures). By 2020 the budget contained a staggering 103 measures. And Reeves’s own first budget, last autumn, very nearly broke this record with 94 measures.
In short, budgets have become more and more complex, chock-full of even more (often microscopic) tax measures.
Read more from Sky News:
What tax measures are expected in budget?
The political jeopardy facing Rachel Reeves in budget
In part, this is a consequence of the fact that, long ago, chancellors seem to have agreed that it would be political suicide to raise the basic rate of income tax or VAT. The consequence is that they have been forced to resort to ever smaller and fiddlier measures to make their numbers add up.
The question is whether this pattern continues this week. Do we end up with yet another astoundingly complex budget? Will that slew of measures backfire as they did for Osborne in 2012? And, more to the point, will they actually benefit the UK economy?
Politics
Budget 2025: Rachel Reeves calls for Labour MPs to unite – but admits they might not like everything
A defiant Rachel Reeves has urged Labour MPs to unite behind this week’s budget – but appeared to admit they might not like all of her policies.
Addressing the Parliamentary Labour Party last night, the chancellor described politics as a “team sport” and insisted that tomorrow’s announcements will be “fair”.
Backbenchers are said to have become increasingly frustrated at the prospect of further tax hikes, which come against a backdrop of falling opinion poll ratings.
Ed Conway: Three things the budget boils down to
Rachel Reeves. Pic: PA
Ms Reeves argued the budget should be regarded as a package – and not a “pick ‘n’ mix” where MPs “like the cola bottles but not the fruit salad”.
She added that her three top priorities were to cut the cost of living, reduce NHS waiting lists and slash the cost of servicing debt – with £1 in every £10 now spent on interest.
Newspaper reports suggest there were cheers in the room when Ms Reeves vowed to stay in Number 11 and withstand criticism about her handling of the economy.
She was quoted as saying: “I’ll show the media, I’ll show the Tories, I will not let them beat me, I’ll be there on Wednesday, I’ll be there next year, and I’ll be back the year after that.”
The chancellor suggested Labour MPs will be happy with 95% of the budget’s contents, but hinted there are difficult political decisions yet to be announced.
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Is growth downgrade a problem for Reeves?
Setback for Reeves as growth forecasts cut
Yesterday, Sky News revealed that the Office for Budget Responsibility’s growth forecasts are going to be downgraded every year until the current parliament ends in 2029.
Our deputy political editor Sam Coates reports that the government will argue there are “a number of reasons” for the revision.
But he added: “However you cut it, whatever the reasoning, once again, last year, growth will be lower after this budget than before, which is not a great position for a government that had claimed growth as their top priority.”
In some better news for the government, Ms Reeves is expected to announce that she has more headroom than first thought – meaning ministers will be able to claim that the country is no longer in an “economic doom loop”.
“That might well be one of the positive surprises when we actually get to Wednesday’s budget,” Coates added on the Politics At Sam and Anne’s podcast.
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Employment Rights Bill is ‘anti-growth blueprint’
‘I think she’s doing a terrible job’
Meanwhile, Conservative leader Kemi Badenoch has accused the government of stymying growth and pursuing “job-killing measures”.
She told Sky News that she thinks Ms Reeves is “doing a terrible job” as chancellor – and warned Labour should pay close attention to public perception of the budget.
“A lot of people out there in the country, men and women, thinks that she needs to cut tax, and if she raises it, then she should go,” Ms Badenoch added.
At the CBI conference in London yesterday, the Opposition leader urged the government to scrap the Employment Rights Bill – describing it as an “assault on flexible working” that would empower trade unions and drag the UK back to the 1970s.
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How do business leaders feel before budget?
Ms Badenoch said: “Killing it would be a signal to the world that Britain still understands what makes an economy grow.
“If the chancellor had any sense, and any regard for business, she would use the budget to say ‘we got this one wrong’ and drop it.”
This Employment Rights Bill includes measures that would ban zero hours contracts, but Ms Badenoch has argued that this would amount to a “de facto ban” on seasonal and flexible work.
The CBI conference marks a difficult anniversary for the government – with attention turning to the speech Ms Reeves gave there a year ago.
Having already delivered her first budget, she had told businesses that she was “not coming back with more borrowing or more taxes” – a statement that flies in the face of what the chancellor is expected to unveil tomorrow.
Read more from Sky News:
What tax rises and spending cuts will be announced?
Analysis: Chancellor’s authority is on shaky ground
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Can the budget fix economic woes?
Greens call for wealth tax
In other developments, the Green Party has called on the government to introduce a 1% tax on wealth over £10m – rising to 2% over £1bn. Its estimates suggest this measure could help potentially raise £15bn a year in revenues.
Zack Polanski also wants the rates of capital gains tax, which is currently one of the lowest among G7 nations, to be raised in line with income tax.
He will outline his demands on Mornings With Ridge And Frost ahead of a protest in Westminster.
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Sky News goes inside the room where the budget happens
Announcements have been gradually trickling through ahead of the budget tomorrow, with the chancellor widely expected to freeze income tax thresholds once again.
Ms Reeves is also set to lift the two-child cap on benefits, with figures suggesting this policy will cost about £3bn a year.
Over the weekend, it was confirmed that rail fares in England will be frozen for the first time since the 1990s – meaning some commuters will save hundreds of pounds on season tickets.
An above-inflation rise to the state pension is planned too, meaning 13 million people will receive an extra £550 a year from April.
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