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Sir Keir Starmer has confirmed there will be tax rises in the budget to prevent a “devastating return to austerity” and rebuild public services.

In a speech in Birmingham, the prime minister also announced the £2 bus fare cap will rise to £3, while £240m will be injected into efforts to get people back to work.

Politics Live: PM condemns ‘shocking’ footage of Labour MP

It follows weeks of speculation on how the government plans to grow the economy and close a £40bn blackhole in the nation’s finances when it delivers its first fiscal statement on Wednesday.

Giving a teaser of what is to come, Sir Keir said: “It is time to embrace the harsh light of fiscal reality.

“Stability to prevent chaos. Borrowing will drive long term growth. Tax rises to prevent austerity and rebuild public services.”

Sir Keir did not specify what tax rises would be included, but it is widely expected that employer national insurance will go up, alongside possible increases to capital gains and inheritance tax.

Ministers have been facing repeated questions about the government’s definition of “working people”, after Labour’s election manifesto pledged not to increase taxes on working people – explicitly ruling out a rise in VAT, national insurance and income tax.

Read more:
What is likely to be in the budget?
PM denies ‘waging war against middle Britain’

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Can tax rises in future budgets be ruled out?

Facing down critics, the prime minister said a return to austerity would be “devastating” and “disastrous”.

“This is not 1997 when the economy was decent, but public services were on their knees.

“And it’s not 2010 where public services were strong, but the public finances were weak.

“We have to deal with both sides of that coin. These are unprecedented circumstances.”

The Budget - a special programme on Sky News

Sir Keir said the budget, to be delivered by Chancellor Rachel Reeves, will include funding for local services to help get people back to work.

He said the UK is “the only G7 country for whom economic inactivity is still higher than it was before COVID”.

“That’s not just bad for our economy, it’s also bad for all those who are locked out of opportunity,” he said.

“So the chancellor will announce £240m in funding to provide local services that can help people back into work.”

Clearest indication yet that tax rises are coming


Liz Bates is a political correspondent

Liz Bates

Political correspondent

@wizbates

This may be the starkest terms we’ve ever heard the prime minister speak in as Wednesday’s defining budget looms.

He repeated the refrain of “tough choices” suggesting the pain inflicted by the cuts to the winter fuel allowance was just the beginning.

This is also the clearest expression ever that tax rises are coming, with Sir Keir Starmer describing them as necessary to prevent austerity.

What was also clear was his concept of “working people” – those who are just about getting by financially, and his determination to put them first.

It was resolute and determined, but as the budget approaches it does create a political risk, as those who don’t fit into that narrow category – business owners, pensioners, and others – are left wondering how hard they are going to be hit.

Taking questions afterwards, he confirmed reports that the £2 bus fare cap will go up by 50%.

He said the previous government only funded the current limit to the end of 2024 “and therefore that is the end of the funding in relation to a £2 capped fare”.

“I do know how much this matters, particularly in rural communities where there’s heavy reliance on buses,” he said.

“And that’s why I’m able to say to you this morning that in the budget we will announce there will be a £3 cap on bus fares to the end of 2025 because I know how important it is.”

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Appeals court overturns injunction that blocked asylum seekers from Epping hotel

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Appeals court overturns injunction that blocked asylum seekers from Epping hotel

A temporary injunction that would have blocked asylum seekers from being housed at the Bell Hotel in Essex has been overturned at the Court of Appeal.

The Home Office and Somani Hotels, which owns the Bell Hotel in Epping, have successfully challenged a High Court ruling. Today’s hearing saw both parties win the right to appeal, before also winning the appeals themselves.

Lord Justice Bean, sitting with Lady Justice Nicola Davies and Lord Justice Cobb, quashed an earlier injunction granted to Epping Forest District Council, saying: “We allow the appeals and we set aside the injunction imposed on 19 August 2025.”

This means asylum seekers will stay in the accommodation in Essex past 12 September. There are currently 138 asylum seekers being housed at the hotel.

Lord Justice Bean delivering the ruling. Pic: PA
Image:
Lord Justice Bean delivering the ruling. Pic: PA

Last week, the initial court ruling centred on the change in use of the premises without consent from the local authority.

But after the Home Office argued its case – which involved stating it had the right to appeal – judges have backed the government’s side.

The decision avoids a precedent for other councils to appeal against asylum hotels in their areas.

Council ‘will continue the fight’

A councillor for Epping said the “battle is not over” after the Court of Appeal ruling and vowed the council would “continue the fight”.

Councillor Ken Williamson. Pic: PA
Image:
Councillor Ken Williamson. Pic: PA

Speaking outside the London court, Ken Williamson, said: “We are deeply disappointed by the outcome of today’s hearing.

“The concern and motivation of Epping Forest District Council throughout has been the wellbeing of our local residents, where we had clarity and resolution, we now have doubt and confusion.”

The council could still be granted an injunction following a full hearing of the legal claim, which is due to be heard in October.

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Reform UK’s deputy leader Richard Tice: Epping residents should feel ‘angry and frustrated’

Reform UK leader Nigel Farage also criticised the ruling, claiming that “illegal migrants have more rights than the British people under (Keir) Starmer”.

Tory leader Kemi Badenoch echoed this in her own statement, saying: “Keir Starmer has shown that he puts the rights of illegal immigrants above the rights of British people who just want to feel safe in their towns and communities.”

She also urged Conservative councillors seeking similar injunctions against asylum hotels to “keep going” despite the ruling.

Focal point of protests

Epping Forest District Council had asked for the injunction after the Bell Hotel became the focal point of several protests and counter-protests. It claimed its owner, Somani Hotels, had breached planning rules.

Lord Justice Stephen Eyre, who gave the original High Court decision, had said that while the council had not “definitively established” that the company had breached planning rules, “the strength of the claimant’s case is such that it weighs in favour” of granting the injunction.

Anti-migration protesters in Epping in July
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Anti-migration protesters in Epping in July

Regular protests have been held outside the Bell Hotel since an asylum seeker housed there was accused of sexually assaulting a 14-year-old girl in July.

Hadush Gerberslasie Kebatu, 38, denies two counts of sexual assault, one count of attempted sexual assault, one count of inciting a girl to engage in sexual activity, and one count of harassment without violence.

His trial has been taking place this week and verdicts are expected at Chelmsford Magistrates’ Court on 4 September.

A view of an England flag outside the Bell Hotel in Epping, Essex, after a temporary injunction that would have blocked asylum seekers from being housed at the Bell Hotel in Epping, Essex, was overturned at the Court of Appeal. Picture date: Friday A
Image:
A view of an England flag outside the Bell Hotel in Epping, Essex, after a temporary injunction that would have blocked asylum seekers from being housed at the Bell Hotel in Epping, Essex, was overturned at the Court of Appeal. Picture date: Friday A

After the Court of Appeal ruling, a small number of protesters gathered outside the Bell Hotel carrying England and Union flags, with police officers guarding the entrance to the hotel, which is gated off with metal fencing.

An England flag has been attached to a drainpipe outside the hotel, while England flags have also been painted onto signs and a speed camera outside the hotel.

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Avalanche leads blockchain transaction growth amid US gov’t implementation

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Avalanche leads blockchain transaction growth amid US gov’t implementation

Avalanche leads blockchain transaction growth amid US gov’t implementation

Avalanche transaction growth topped all blockchain networks with 66%, as the smart-contract network saw more government implementation and renewed ETF applications.

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Unicoin says SEC distorted its filings in $100M fraud case

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Unicoin says SEC distorted its filings in 0M fraud case

Unicoin says SEC distorted its filings in 0M fraud case

Unicoin urged a New York judge to toss the SEC’s $100 million fraud case, arguing the regulator misquoted filings and relied on “snippets” taken out of context.

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