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Sir Keir Starmer has refused to rule out increases to national insurance for employers.

A key tenet of the Labour Party’s manifesto was promising to not raise national insurance, VAT and income tax.

But when asked by Conservative leader Rishi Sunak if the commitment on national insurance applies to both employer and employee contributions, Sir Keir dodged the question.

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Rishi Sunak
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Rishi Sunak pressed Keir Starmer on tax and fiscal rules

During the first Prime Minister’s Questions in four weeks, Sir Keir also refused to answer whether he agreed with Chancellor Rachel Reeves’s comment that she was against changing the fiscal rules.

Asked by Mr Sunak whether national insurance will increase for employers, Sir Keir said: “We made an absolute commitment in relation to not raising tax on working people.”

Not satisfied with the prime minister’s answer, Mr Sunak said he did not think “even Lord Alli is buying any of that nonsense”, in reference to the Labour donor who has given tens of thousands of pounds in donations and gifts to Sir Keir and leading Labour MPs.

The former prime minister asked Sir Keir the same question on national insurance again, but he simply said: “We set out our promises in the manifesto.”

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Could chancellor ‘find’ more money?

National insurance contributions are the UK’s second-largest tax, and are expected to raise just under £170bn in 2024-25 – about a sixth of all tax revenue, according to the Institute for Fiscal Studies (IFS).

They are paid by employees and the self-employed on their earnings, and by employers on the earnings of those they employ – at a higher rate than employees pay.

National insurance is not paid by employers on pension contributions they make to employees, which is what experts have said could be targeted.

File photo dated 23/09/24 of Chancellor of the Exchequer, Rachel Reeves taking applause after she addressed the Labour Party Conference in Liverpool. Warnings from the Chancellor about "difficult decisions" ahead of this month's Budget could "dent" confidence for both businesses and consumers, a leading economist has warned. Issue date: Friday October 4, 2024.
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Rachel Reeves said in November she would not ‘fiddle the figures to get different results’. Pic: PA

With the government’s first budget coming up on 30 October, all eyes are on whether Ms Reeves will change the fiscal rules – the restrictions governments put in place to constrain how much they can borrow to fund public spending.

A report by the centre-left Institute for Public Policy Research (IPPR), which carries significant influence in the Treasury, has called on Ms Reeves to target “public sector net worth” as her debt measure to unlock up to £57bn for investment.

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How fiscal rules are impeding investment

Is a Rachel Reeves U-turn coming?

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Mr Sunak asked Sir Keir twice if he agreed with Ms Reeves’ previous comment that she was “not going to fiddle the figures or make something to get different results” when asked if she would consider changing the debt target, set by the Conservatives.

The prime minister would not directly answer as he deflected by criticising the Tory government’s record and saying he would fix the economy as he highlighted investment the Labour government has already secured.

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The English town where almost a third of working-age people are economically inactive

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The English town where almost a third of working-age people are economically inactive

On a hilltop above Ashfield, a sculpture of a miner watches over the local towns.

In a part of Nottinghamshire with a proud mining heritage, almost a third of working-age people are now economically inactive.

It’s places like this where they’re bracing for the impact of welfare reform.

Holly, 17, who dropped out of college due to long term condition
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‘I practically live off’ personal independence payments, says Holly

A group of young people meet here in a local park. They’re among the UK’s almost a million so-called NEETS – people aged 16-24 not in employment, education or training.

Holly, 17, had to drop out of college for having too much time off and explained she has a long-term condition that makes her sick, as well as autism and ADHD.

“I’m still living with my parents but I’m also on PIP,” she says. She’s concerned that the government is expected to tighten eligibility for PIP – personal independence payments – as part of cuts to sickness and disability benefits.

“It shouldn’t happen because I practically live off of it,” she says. “I use it to get around – transport – because I struggle to get buses and trains and stuff so I get Ubers a lot which can be quite pricey.”

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A sculpture of a miner above Ashfield
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It’s places like Ashfield, in Nottinghamshire, that are bracing for the government’s welfare reforms

She accepts that as a PIP claimant, she can work and says she’s been looking for jobs. “I do want to work,” she insists.

“It’s just the fact that I don’t know if I could work full time with it, and because I’m off sick a lot, I just don’t know if I’d be able to hold a job.”

It’s that concern that’s led her to pursue another option.

“I’m working on getting a fit note at the moment,” she says, referring to a note from her doctor that could lead to her being signed off.

Holly, 17, who dropped out of college due to long term condition
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‘Because I’m off sick a lot, I just don’t know if I’d be able to hold a job’

It would mean she’d get more money in benefits – around double the amount a jobseeker receives with no condition to look for work – but she’d then risk losing it if she got a job, a situation she believes is perverse.

“If you have a fit note then it tells you that you cannot work ever – you shouldn’t be looking for a job – which I think is wrong,” she says.

Other young people who are looking for jobs here say when they apply for work they often don’t hear back.

Read more:
Sir Keir Starmer says welfare bill is ‘indefensible’

Big benefits cuts are imminent – here’s what to expect

Pippa Carter, the director of the Inspire and Achieve Foundation, which works with more than 200 young people a year, says: “Mental health is the largest barrier with our young people.

“And COVID was an impact as well. They’re just not really able to get out of their rooms. They haven’t got that social confidence.

“And then if you then layer on top of that the benefits and welfare system… if they are signed off sick, for example, with their struggling mental health, they’re then stopped from trying to get employment and take steps forward.”

Pippa Carter, the director of the Inspire and Achieve Foundation
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Pippa Carter tells Sky News young people ‘haven’t got that social confidence’

Many here would welcome a system that gives more help to young people taking their first steps into the workplace.

However, others worry that changes to health-related benefits will push some of society’s most vulnerable people deeper into poverty.

A sculpture of a miner above Ashfield
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It’s places like Ashfield, in Nottinghamshire, that are bracing for the government’s welfare reforms

In the centre of Sutton in Ashfield, former care assistant Allison leans on a Zimmer frame as she walks along the high street.

Now 59, she says she was signed off sick with a range of health conditions around 15 years ago and claims PIP.

Recently, life has become a struggle. “We did use a food bank the other day for the first time, so degrading,” she says.

Former care assistant Allison, in Sutton, Ashfield
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Allison, almost 60, is afraid a cut to benefits would force her to use food banks ‘every week’

But she’s afraid that cuts to benefits would force her to rely on it.

“I’d be going there every week, I’d have to because I wouldn’t be able to survive.”

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King and Queen set to meet Pope next month despite pontiff’s ill health

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King and Queen set to meet Pope next month despite pontiff's ill health

The King and Queen’s planned state visit to the Vatican to meet Pope Francis will go ahead despite his continuing ill health.

The palace confirmed that King Charles has written privately to the pontiff since he was admitted to hospital in February, and the historic gathering is still scheduled to take place in Rome in early April.

A Buckingham Palace source said they had shared “our hopes and prayers that Pope Francis’s health will enable the visit to go ahead”, although they signalled that alterations would be made to the visit if needed.

Pope Francis at an audience at the Vatican in February. Pic: REUTERS/Ciro De Luca
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Pope Francis at an audience at the Vatican in February. Pic: Reuters

Pope Francis in the chapel of the apartment on the tenth floor of the Policlinico Gemelli. Pic: Holy See Press Office
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Pope Francis in the first photo released since the pontiff was admitted to hospital. Pic: Holy See Press Office

Outlining details of the planned meeting, a Buckingham Palace spokesperson said: “On Tuesday 8 April, and clearly subject to Pope Francis’s health, their majesties will visit the Holy See to join Pope Francis in celebrating the 2025 jubilee.

“Held traditionally once every 25 years, the jubilee is a special year for the Catholic Church; a year of reconciliation, prayer and walking together as ‘Pilgrims of Hope’, which is the jubilee’s theme.

“The King and Queen will have an audience with Pope Francis. Their Majesties will also attend a service in the Sistine Chapel, focused on the theme of ‘care for creation’, reflecting Pope Francis’s and His Majesty’s long-standing commitment to nature.”

The tour, from 7 to 10 April, will include two state visits to Rome and Ravenna in Italy, and the Holy See – the government of the Roman Catholic Church – in the Vatican.

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Behind the scenes at the Vatican

Charles will pass two milestones, becoming the first British monarch to visit the Papal Basilica of St Paul Outside the Walls, the resting place of St Paul since the reformation, and address both houses of Italy’s parliament.

The King will hold audiences with Italy’s President Sergio Mattarella and Prime Minister Giorgia Meloni, and the monarch and his wife will attend a black-tie state banquet at the Palazzo Quirinale.

At the weekend, the Vatican released the first photograph of the Pope since he was admitted to hospital on 14 February with a severe case of bronchitis, which developed into double pneumonia.

Medical staff said last week that the pontiff, 88, was no longer in a critical, life-threatening condition, but added that his condition remained complex due to his age, lack of mobility and the loss of part of a lung as a young man.

Other highlights of the April trip will see the UK and Italy’s defence co-operation recognised by a joint flypast over Rome by the Italian Air Force’s aerobatic team, Frecce Tricolori, and the RAF’s Red Arrows.

In Ravenna, near Bologna, Charles and Camilla will mark the 80th anniversary of the province’s liberation from Nazi occupation by Allied forces on 10 April 1945, during a town hall reception.

The couple will also mark their 20th wedding anniversary on 9 April.

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Big benefits cuts are imminent – here’s what to expect and why it could be just the start

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Big benefits cuts are imminent - here's what to expect and why it could be just the start

Those with “milder mental health” issues and “lower-level physical conditions” could see their disability benefits cut, as the government looks to shave £6bn off the welfare bill.

Liz Kendall, the work and pensions secretary, is expected to target sickness and disability benefit payments for savings on Tuesday, which comes ahead of the spring statement next Wednesday.

Politics latest: Welfare reforms ‘imminent’

Her welfare reform green paper will arrive after Downing Street insisted there is a “moral and an economic case for fixing our broken system”.

Government figures argue the rising sickness and disability bill, which has ballooned since the pandemic, is unsustainable and will “leave the welfare state losing legitimacy” in the eyes of the wider public if not dealt with.

The cuts come as the chancellor eyes a hole in the public finances on the back of lower than expected growth and rising borrowing costs, with the £9.9bn headroom she had at the budget in October now wiped out.

Rachel Reeves’ self-imposed fiscal rules mean day-to-day government spending must be covered by tax revenue by 2029-30, which leaves her needing billions of pounds in spending cuts (after ruling out further tax rises, her other option).

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Welfare reforms will ensure ‘trust in system’

What changes should we expect?

Ms Kendall is expected to target personal independence payments (PIP) – one of the main forms of disability benefits for those with long-term illnesses or disabilities – amid a spike in claimants.

The PIP bill has grown from £13.7bn a year before the pandemic to £21.8bn in the current financial year, and is set to increase to £34.1bn by the end of the decade.

The number of people claiming this disability benefit is projected to more than double from two million to 4.3 million.

The work and pensions secretary will tell MPs that Labour will protect those who have a serious condition and can’t work, and the government’s rowed back from plans to freeze PIP payments after backlash from its backbench MPs.

These payments are now expected to rise in line with inflation, but the eligibility criteria will be tightened to whittle back the number of people eligible to claim.

One government figure told me it would result in some conditions, such as “milder mental health” or “lower-level physical conditions”, being ineligible for PIP.

But they stressed that those with more severe conditions and who are never going to be able to work would be protected and cared for.

Read more:
Which benefits could be cut?

Why Labour MPs are so uncomfortable

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Why is there a surge in youth unemployment?

The key principles driving reforms

The changes are likely to draw criticism from some MPs, though one senior Labour source said they didn’t think there would be any ministerial resignations over the benefit announcements.

Another Labour figure told me they would be “massively shocked” if there were resignations.

However, a number of Labour MPs have voiced their concerns, as has the Manchester mayor Andy Burnham.

In a bid to assuage MPs, the work and pensions secretary is also expected to earmark £1bn of savings into employment support programmes as she frames the reforms around three clear principles.

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The first will be to prevent people from falling into long-term economic inactivity with a better support offer to get people back into work quickly.

The second will be to change the incentive systems to move people away from welfare dependency.

This could see Ms Kendall slash the highest level of incapacity benefit for working age people who have an illness or disability that limits their ability to work, while increasing the basic rate of support for those out of work (universal credit).

This is because the lower level of unemployment benefit has led to more people claiming for additional incapacity and disability benefits, while disincentivising them to try to find work.

The government will also announce a “right to try” scheme, allowing those on incapacity benefits to try returning to work without the risk of losing their benefits, as happens in the current system.

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Will there be a backlash over benefits?

‘I don’t think they go far enough’

But with one in 10 working age people claiming sickness benefits, and one in eight young people not in education, employment or training, the reforms on Tuesday could be just the start of bigger changes – and potentially bigger political battles.

The cost of long-term sickness and disability benefits for working-age people has risen by about £20bn since the pandemic to about £48bn, and is forecast to hit almost £100bn by 2030.

“People are trapped on benefits and the bill is getting out of hand,” said one government figure.

“We are currently spending more than three times the annual policing bill on these benefits. It’s getting out of hand.

“I don’t think the reforms go far enough, and I don’t think people have clocked the size of the numbers going on here.”

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