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Briefings and speculation are rife over what will be included in the chancellor’s budget on Wednesday, particularly the scale of tax rises.

The biggest expected revenue raiser, set to generate as much as £20bn for public services, is a hike in employers’ national insurance.

Government sources have given strong indications of the chancellor’s thinking, prompting questions about whether this breaks Labour’s manifesto commitment not to hike the three main taxes – income tax, national insurance and VAT for “working people”.

Hikes in capital gains tax and inheritance tax have been touted as ways the Labour government could find money to balance the books and fix public services.

The budget’s contents will be only be official when Rachel Reeves sets it out on Wednesday, but these are some measures Sky News expects – and doesn’t expect – to be included.

No rises to income tax, national insurance or VAT

Labour ruled out increasing income tax, national insurance and VAT in its manifesto before getting elected, promising to protect “working people” – though who they define as a “working person” has come into question of late.

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The chancellor is also expected to prolong the freeze on income tax thresholds by two years to 2030 after the previous Conservative government froze them until 2028.

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Employers’ national insurance hike expected

The amount employers pay in national insurance is set to rise by up to two percentage points, and the money will – in part – be used to help inject £10bn into cutting NHS waiting lists.

A government source told Sky News: “There is a universal consensus that the NHS needs more money.

“That means asking businesses to help out.

“The choice is investment versus decline. She [Rachel Reeves] is choosing not to ask working people to pay the price for their [Conservatives’] failures.”

Housing

The government has confirmed that a large boost in affordable housing will be in the upcoming budget.

It says there will be £500m in new funding to help build up to 5,000 social homes and bring total investment in housing supply to £5bn as part of the government’s Affordable Homes Programme.

£1.4bn for crumbling schools

The chancellor has promised her budget will include £1.4bn to rebuild crumbling schools.

She said children “should not suffer” due to the UK’s depleted public purse, while economists said the funding would generally ensure existing plans keep going, rather than pay for many new initiatives. Teachers said much more cash was needed.

The Treasury said the £1.4bn would “ensure the delivery” of the school rebuilding programme, which was announced in 2020 under then prime minister Boris Johnson.

Funding for nurseries, breakfast clubs and childcare

The Treasury has also confirmed £1.8bn would be allocated for the expansion of government-funded childcare, with a further £15m of capital funding for school-based nurseries.

The Treasury said the first stage of the plan would pay for 300 new or expanded nurseries across England.

Ms Reeves also said she would “triple” investment in free breakfast clubs to £30m in 2025-26, after she announced at Labour’s party conference in September a £7m trial across up to 750 schools starting in April.

VAT exemption for private schools to be scrapped

Labour have long made clear their plans to scrap the VAT exemption and business rates relief for private schools in a bid to fund 6,500 new teachers in state schools.

Details of the government’s assessment of the expected impacts of these policy changes will be published when the budget comes out on 30 October.

This is only two months before the policy is due to come into effect on 1 January 2025, and will likely include details of whether schools will be forced to increase their fees.

It is now expected that military families, a number of whom send their children to private boarding schools because they could be posted abroad at short notice, will be exempt from paying increased fees.

Changes to the £2 bus fare cap

Bus fares have been capped at £2 on more than 4,600 routes in England since 1 January 2023.

Hundreds of operators outside of London have been part of the scheme, which has cost around £500m.

Introducing the scheme in 2023, former transport secretary Mark Harper said it was aimed at helping passengers afford bus travel for both their sakes and the sake of the environment.

But the scheme, which is currently meant to run until at least 31 December, is set to be changed as it is reportedly not generating economic benefit. It is unclear if the cap will be raised or removed entirely.

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Billions to be allocated to NHS

The government will be putting aside up to £10bn for the NHS, largely to help it tackle ballooning waiting lists after COVID, currently at a record high of 7.6 million, and to deliver on their promise of another 40,000 hospital appointments per week.

Health Secretary Wes Streeting last week said he has agreed on a plan for NHS funding with the chancellor – but noted the funds won’t actually be available until six months’ time.

“Investment in the budget, that comes in the new fiscal year in April, so that’s spring,” he said.

Labour are facing “difficult and big choices”, Mr Streeting warned, as he said the government “can’t fix 14 years in one budget”.

Carer’s Allowance expansion

Ms Reeves is expected to raise the limit people can earn before being ineligible for the Carers Allowance from £151 a week to £181.

It would mean tens of thousands of carers who aren’t currently eligible would get an extra £81.90 a week under the scheme.

The budget is set to take place at 12.30pm on Wednesday 30 October.

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Wyoming proposes bill for Strategic Bitcoin Reserve

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Wyoming proposes bill for Strategic Bitcoin Reserve

Wyoming has become the latest US state to propose a bill for a Strategic Bitcoin Reserve, just days before Donald Trump’s US presidential inauguration.

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Was Tusk doing Brussels’s bidding with his ‘Breturn’ plea?

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Was Tusk doing Brussels's bidding with his 'Breturn' plea?

When Nigel Farage’s Reform UK is just one point behind you in the opinion polls, the last thing you want to be reminded about is Brexit.

If you’re Sir Keir Starmer, that is.

No doubt Poland’s prime minister, Donald Tusk, was trying to be friendly. After all, as Sir Keir said, they share a passion for Arsenal Football Club.

But when Mr Tusk declared at their joint news conference in Warsaw that his dream was “instead of a Brexit, we will have a Breturn”, Sir Keir visibly cringed.

Was it an ambush? Not quite. But it was certainly awkward for the UK prime minister. He stood stiffly and didn’t respond, not once uttering the word “Brexit”.

Mr Tusk, however, has form for bemoaning Brexit. He was, after all, the president of the European Council when the UK voted to leave the EU in 2016.

He might now be in his second spell as Poland’s PM, but his five years at the EU make him the ultimate Brussels insider, who’s never made any attempt to hide his feelings on Brexit.

Prior to the UK referendum, in September 2015, he said Brexit “could be the beginning of the destruction of not only the EU but also of western political civilisation in its entirety”.

His most outspoken attack on the UK’s Eurosceptics came in 2019 when the-then prime minister Theresa May was struggling to get a deal. He spoke of “what the special place in hell looks like for those who promoted Brexit“.

Keir Starmer and Volodymyr Zelenskyy arrive to lay wreaths at The Wall of Remembrance .
Pic: PA
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Sir Keir also visited Ukraine on his trip to Eastern Europe. Pic: PA


Standing alongside Sir Keir, he revealed that “for obvious reasons” they discussed co-operation between the UK and the EU. He recalled that his emotional reaction to the referendum in 2016 was “I already miss you”.

He went on: “This is not just about emotions and sentiments – I am aware this is a dream of mine, that instead of a Brexit we will have a Breturn.

“Perhaps I’m labouring under an illusion. I’d rather be an optimist and harbour these dreams in my heart – sometimes they come true in politics.”

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A dream? Or a calculated move? As a Brussels insider, was Mr Tusk speaking for the EU as a whole? Was he doing Brussels’ bidding?

He may have returned to lead his homeland, but he remains a key player in Brussels.

On becoming Poland’s PM in 2023, he ended a dispute with Brussels which unlocked billions of frozen EU funds for his country.

He also orchestrated the return of his centre-right ally Ursula von der Leyen as European Commission president.

And Poland has just taken over the rotating presidency of the EU, which means Mr Tusk will be hugely influential once again, chairing meetings and setting agendas.

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Poland is back in the European mainstream. It’s where Mr Tusk would like the UK to be as well.

It’s where, privately, Sir Keir would like the UK to be. It’s just that with Reform UK almost neck and neck with Labour in the polls, he daren’t say so.

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Polish PM says he ‘dreams’ of a ‘Breturn’ as UK seeks new defence pact with ally

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Polish PM says he 'dreams' of a 'Breturn' as UK seeks new defence pact with ally

Poland’s prime minister has said he hopes for the “Breturn” of the UK as a member of the European Union – as he discussed a defence treaty with Sir Keir Starmer.

Donald Tusk, who was hosting the prime minister for discussions on a UK-Polish defence pact in Warsaw, said it was his “dream” that “instead of a Brexit, we will have a Breturn”.

Standing alongside Sir Keir at a joint news conference, the Polish premier also said he had discussed greater cooperation between the UK and the EU.

Mr Tusk, who was the president of the European Council during the years that Britain left the EU, said: “For obvious reasons, we also discussed another issue, the cooperation between Great Britain and the European Union.

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“I’m sure you will recall when we learned about the results of the Brexit referendum. I was head of the European Council… at that time. My first emotional reaction was to say: ‘I already miss you.’

“I remember our press briefings as if it was yesterday. I already miss you, that’s what I said.”

He added: “This is not just about emotions and sentiments – I am aware this is a dream of mine, that instead of a Brexit we will have a Breturn.

“Perhaps I’m labouring under an illusion. I’d rather be an optimist and harbour these dreams in my heart – sometimes they come true in politics.”

Sir Keir, who held the role of shadow Brexit secretary while Labour was in opposition and backed remain in the 2016 referendum, has repeatedly ruled out rejoining the customs union or single market.

He has, however, said he wants to deepen post-Brexit ties with Brussels

Mr Tusk was speaking after Sir Keir travelled to Poland to discuss a defence pact with the NATO ally – which Mr Tusk said he hoped would be ratified “this year”.

The new treaty is designed to protect Europe from Russian aggression, tackle people-smuggling gangs, and combat misinformation and cyber threats.

Sir Keir was also asked whether the UK’s attendance at a defence summit in Poland earlier this week meant he was in favour of “creating an army” for Europe – to which he replied he was not.

Asked about the E5 defence ministers meeting in Warsaw and whether he supported creating a common European army, Sir Keir said: “The meeting that happened the other day is vitally important. That isn’t about creating armies.

“It’s about how we share our security concerns and build on what we’ve already got.”

British Prime Minister Keir Starmer and his wife Victoria Starmer visit the Memorial And Museum Auschwitz-Birkenau, a former German Nazi concentration and extermination camp, in Oswiecim, Poland January 17, 2025. REUTERS/Aleksandra Szmigiel
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Sir Keir Starmer and his wife Victoria Starmer visit the Memorial And Museum Auschwitz-Birkenau. Pic: Reuters

As part of the defence pact, a £4bn partnership for new air defence systems in Poland has been agreed. The project will be headquartered in Bristol.

“The UK has secured £8bn of defence deals in Poland over the last three years alone, and we’re going further today, opening a new joint programme office in Bristol to deliver our £4bn partnership, to deliver the next generation of air defence systems to Poland,” he said.

He added: “We share an unbreakable commitment to NATO and an unbreakable commitment to Ukraine.”

During his visit to Poland, Sir Keir also made his first visit to Auschwitz, which he described as “utterly harrowing”.

The prime minister visited the former Nazi concentration camp, where he laid a wreath ahead of the 80th anniversary of its liberation.

After he and his wife Victoria, who is Jewish, visited the site, Sir Keir said: “Nothing could prepare me for the sheer horror of what I have seen in this place. It is utterly harrowing.

“The mounds of hair, the shoes, the suitcases, the names and details, everything that was so meticulously kept, except for human life.”

British Prime Minister Keir Starmer and his wife Victoria Starmer visit the Memorial And Museum Auschwitz-Birkenau, a former German Nazi concentration and extermination camp, in Oswiecim, Poland January 17, 2025. REUTERS/Aleksandra Szmigiel
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Sir Keir Starmer and his wife Victoria Starmer visit the Memorial And Museum Auschwitz-Birkenau. Pic: Reuters

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His visit to Poland came following a surprise trip to Kyiv on Thursday, where he reiterated his support for Ukraine and suggested that British troops could be deployed to the country as part of peacekeeping efforts.

In an exclusive interview with Sky News’ political editor Beth Rigby, Sir Keir said the UK would play its “full part” in any peace negotiations – including by deploying British troops for peacekeeping – though added that he did not want “to get ahead of ourselves”.

During his visit, Sir Keir also met Polish businesses, including the firm InPost which has announced it will invest a further £600m into the UK in the next five years to grow its operations.

It is thought that the overall £1bn investment by the firm, which operates parcel lockers, could support up to 12,000 new jobs.

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