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There’s going to be “a lot of bad news” in the chancellor’s autumn budget – which the prime minister has said will be “painful”.

Speaking from Downing Street, Sir Keir Starmer said the public will have to “accept short-term pain for long-term good“.

Sky’s economics and data editor Ed Conway heard there was going to be “a lot of bad news” in the fiscal event as the government continues to remind voters about its financial inheritance from the Tories, with borrowing at levels not seen since the pandemic.

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Rachel Reeves’s first budget on 30 October will be “quite miserable”, Conway has said – with spending cuts and tax rises both expected.

The latter is something Ms Reeves herself has admitted will be on the cards, though Sir Keir vowed in its election manifesto that income tax, national insurance, and VAT wouldn’t budge – remaking the pledge in August.

With that in mind, Sky News looks at which ones could be targeted.

Inheritance tax

This is one of the taxes most likely to be changed.

Inheritance tax is charged at 40% on the value of an estate above £325,000 when someone dies.

The tax rate could be increased, or the value people have to pay inheritance from could be lowered to raise money.

There are currently several exemptions, including on agricultural land and family businesses, but these could be lifted to include them.

The government could also reduce the number of years allowed when giving away assets before someone dies before inheritance tax kicks in.

A leaked recording from March revealed now chief secretary to the Treasury, Darren Jones, saying inheritance tax could be used to “redistribute wealth” and address “intergenerational equality”.

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Will Labour raise taxes?

Capital gains tax

Capital gains is imposed on the profit from the sale of capital assets, including second homes, shares, business assets and most personal possessions worth £6,000 or more, apart from cars.

Currently, people do not have to pay tax on the first £3,000 of profits, or £1,500 for trusts.

The minimum limit could be removed and the tax could be imposed on assets currently exempt.

Like inheritance tax, it is one of the taxes that is being most talked about to be targeted.

Read more:
Rachel Reeves says ‘more difficult decisions to come’

Chancellor says Jeremy Hunt lied about UK’s finances

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Council tax

In the leaked recording from Mr Jones, he said he was frustrated by the “out of date” council tax system and hinted homes worth over £1m may have to pay more.

Former shadow minister Jonathan Ashworth told Sky News during the election campaign that Labour would not change council tax bands.

Council tax is currently set in bands that are based on the 1991 value of homes, which has been branded “absurd” by the Institute for Fiscal Studies (IFS) and “incredibly poorly designed” by the Institute for Government “(IfG).

Gemma Tetlow, chief economist at the IfG, said council tax could be reformed “in a very sensible way… rather than having the banded system you could move to something that is much more proportional tax on land revenue”.

She added: “You could do that sensible structural reform and raise some extra money at the same time.”

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Labour ‘rolling the pitch’ for tax hikes

Business rates

Labour are understood to be consulting on changing business rates, which are charged on most non-domestic properties with relief for some including small businesses, retail, hospitality and leisure properties.

A change could be made so they are related to the value of the land instead of the current rateable value, which is an estimate of how much it would cost to rent that property for a year in April 2021.

Pic: iStock
Image:
Pic: iStock

Stamp duty

Stamp duty is paid on the cost of a property over £250,000, with more paid for second homes and by non-UK residents, and relief for first-time buyers.

It currently discourages people from moving home and is part of the reason older people are not moving out of expensive, larger properties.

Labour could change the tax so it is focused on annual land value tax instead of on a transaction – but that could be a hard sell with the party.

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Pressure mounts on PM to raise Israel’s Gaza offensive with Trump

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Pressure mounts on PM to raise Israel's Gaza offensive with Trump

Sir Keir Starmer is under mounting pressure to raise Israel’s bombardment of Gaza with Donald Trump during his UK state visit, after a UN Commission said a genocide was taking place.

Liberal Democrat leader Sir Ed Davey used the president’s arrival on Tuesday night to call for action on the escalating situation, as Israeli forces advance in Gaza City.

Sky News analysis has found thousands of families remain in the city’s crowded tent camps, despite a ground offensive beginning yesterday.

Sir Ed, who is boycotting the state dinner being held for Mr Trump, said Sir Keir must “press” the president now.

He said: “What is happening in Gaza is a genocide. And the president of the United States, who wants a Nobel Peace Prize, is doing nothing to stop it.”

Displaced Palestinians flee northern Gaza. Pic: AP
Image:
Displaced Palestinians flee northern Gaza. Pic: AP

On Tuesday, a United Nations Commission agreed Israel was committing genocide in Gaza – the first time such an explosive allegation has been made publicly by a UN body.

Israel‘s foreign ministry said it “categorically rejects this distorted and false report” and called for the commission to be abolished.

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Is Israel committing genocide?

‘We cannot be bystanders’

Reports suggest the situation will be a talking point between Sir Keir and Mr Trump during his visit.

It comes before the UK is due to recognise a Palestinian state at the UN General Assembly later this month, along with allies including Canada and France.

In a late night statement, Canada’s foreign ministry described the Gaza City offensive as “horrific”.

Lib Dem leader Sir Ed added: “We have long said that Hamas is genocidal and condemned them for their actions.

“Now, I think we have to say that what the Netanyahu government is doing amounts to genocide.”

Labour MP Rosena Allin-Khan, a former shadow minister, also called on her party leader to make discussing the situation in Gaza with Mr Trump a “top priority”.

Speaking to Sky News’ Politics Hub With Sophy Ridge, she said: “We say ‘never again’ when we look at Bosnia and Rwanda, but here we are again, and it’s been livestreamed, and we’ve all seen it.

“We cannot be bystanders to a genocide.”

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‘We cannot be bystanders’

UN report pulls no punches

The accusation of genocide is made by the UN Independent International Commission of Inquiry on the Occupied Palestinian Territory.

It alleges Israel has been “killing Palestinians or forcing them to live in inhumane conditions that led to death; causing serious bodily or mental harm, including through torture, displacement and sexual crime; deliberately imposing inhumane conditions, and fourthly, imposing measures intending to prevent births”.

Read more from Sky News:
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Trump sues New York Times

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Earlier this month, the International Association of Genocide Scholars also passed a resolution stating that Israel’s conduct passed the threshold of committing genocide.

However, a report from the British government said it had “not concluded” that Israel intended to “destroy in whole or in part a national, ethnic, racial or religious group”.

Nearly 65,000 people are now believed to have died, according to figures collated by Gaza’s Hamas-run health ministry. It does not distinguish between civilians and combatants in its count.

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No 10 insists migrant returns deal isn’t a ‘shambles’ after court blocks man’s removal

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No 10 insists migrant returns deal isn't a 'shambles' after court blocks man's removal

Downing Street has insisted its migrant returns scheme with France is not a “shambles” after the High Court blocked a man’s deportation.

Having seen the previous Conservative government’s Rwanda scheme run into trouble with the courts, the Labour administration’s alternative suffered its own setback on Tuesday.

An Eritrean man, who cannot be named for legal reasons, was due to be on a flight to France this morning.

He brought a legal claim against the Home Office, with lawyers acting on his behalf saying the case “concerns a trafficking claim”.

They also said he had a gunshot wound to his leg, and would be left destitute if he was deported.

The Home Office said it was reasonable to expect him to have claimed asylum in France before he reached the UK in August, but the ruling went in his favour.

Mr Justice Sheldon granted the man a “brief period of interim relief”.

While the judge said there did not appear to be a “real risk” he would face destitution in France, the trafficking claim required further interrogation.

He said the case should return to court “as soon as is reasonably practical in light of the further representations the claimant […] will make on his trafficking decision”.

A Number 10 spokesperson downplayed the development, insisting removals under the deal with France will start “imminently” and ministers are not powerless in the face of the courts.

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‘One in, one out’ deal: What do we know?

‘We told you so’

The pilot scheme was announced to much fanfare in July, after Emmanuel Macron made a state visit to the UK.

Sir Keir Starmer had hoped the agreement – which would see the UK send asylum seekers who have crossed the Channel back over to France in exchange for migrants with links to Britain – would prove more resilient to court challenges than the Tories’ Rwanda plan.

He wants the number of migrants being returned to France to gradually increase over the course of the scheme, to deter them from coming in small boats.

The pilot came into force last month and is in place until June 2026.

Tory leader Kemi Badenoch was quick to say “we told you so” following Tuesday’s court decision, while Reform UK’s Nigel Farage criticised the government’s plan.

Mr Farage – who has said he would deport anyone who arrives in Britain illegally – said: “Even if the policy worked, one in, one out, and with another one in, still means plus one for everyone that crosses the Channel.”

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Migrant deal with France has ‘started’

The small boats crisis represents one of the biggest challenges for the new home secretary, Shabana Mahmood, following her promotion in Sir Keir’s recent reshuffle.

Speaking to Sky News’ Politics Hub With Sophy Ridge, Labour peer Maurice Glasman backed her to deliver.

Describing the former justice secretary as “very tough”, he said: “She’s completely for real. I’ve known her for over 10 years – she really wants to see law and order restored.”

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UK to strengthen ties with US on crypto matters: Report

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UK to strengthen ties with US on crypto matters: Report

UK to strengthen ties with US on crypto matters: Report

The UK has discussed adopting a more crypto-friendly approach with the US in a bid to boost industry innovation and attract more investment to Britain.

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