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Budgets are all about numbers.

In the coming 24 hours, we’ll be engulfed with all sorts of figures – about the state of the economy, about the size of the deficit, about the fiscal rules the new chancellor is planning to introduce in the coming months.

But in fact most budgets, this one included, can really be boiled down to the difference between two big numbers.

Politics live blog: Budget 2024 latest developments

Total government spending and total government receipts.

Right now the UK government is spending just over £1.2trn a year and bringing in just over £1.1trn in taxes and receipts.

In other words, this country is spending more than it generates in tax receipts.

So it has to borrow the difference.

That borrowing, also known as the deficit, is (as you’ve already probably worked out from the above numbers) around £100bn a year.

And politicians, including the chancellor, spend rather a lot of time fretting about the deficit.

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Indeed, the main objective of the various different fiscal rules they’ve imposed on themselves in recent decades has been to narrow the gap between those two big numbers.

Broadly speaking, the easiest way to do this is to cut something few people notice in the short run – government investment.

When he came into office in 2010, George Osborne cut a lot of parts of public spending, but he absolutely slashed the amount the public sector spent on buildings, infrastructure and machinery – capital spending.

Having lifted the total briefly after the pandemic, Jeremy Hunt was planning a similar fall in investment in the coming years.

Rachel Reeves has said repeatedly ahead of the budget that she plans to invest far more in the coming years.

This is a noble goal, given investment tends to benefit future generations, however, it will not be cheap in the short run.

pic pic graph

Indeed, keeping investment spending at current levels will cost roughly £30bn a year by the end of this decade.

So how does the chancellor square that with her fiscal rules?

Well, one part of the answer is that she’s planning to increase the revenues coming into the Exchequer, reportedly via higher national insurance charges for insurers.

But the other part of the answer is that she’s changing her fiscal rules as well.

Budget 2024: Rachel Reeves vs the fiscal rules

The long and the short of it is that Ms Reeves looks likely to choose a set of fiscal rules that ignore investment spending.

Both her updated debt rule and her current budget rule essentially omit capital spending – although they include debt interest costs, so she can’t just borrow willy-nilly.

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That might sound like fiscal jiggery-pokery, and some in the market fret that investors will soon take fright as a result.

Indeed, some suggest they already are, and point to the fact the UK’s cost of government borrowing – as measured by the benchmark 10-year bond yield – has risen from under 4% to nearly 4.3% in the past month alone.

However, this is a slight misreading of this market, which is as affected by global economic factors and central bank action as much as by UK budgetary policy.

Indeed, compare the recent changes in the UK’s borrowing rates with those in Germany and the US and British government bond yields are close to where they usually trade in the run up to a budget.

And they are far, far below where they were in the run-up to Liz Truss’s mini-budget.

graph

Even so, there are bound to be a few unexpected surprises and some relevant new data points in this fiscal event.

It is a budget after all.

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Justice secretary highlights Sky News reporting – as he says migrant release mistake ‘totally unacceptable’

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Justice secretary highlights Sky News reporting - as he says migrant release mistake 'totally unacceptable'

Justice Secretary David Lammy has said an exclusive Sky News interview will be used as part of an independent inquiry into how migrant Hadush Kebatu was mistakenly released from prison.

Kebatu, who was found guilty in September of sexually assaulting a 14-year-old girl and a woman in Epping, Essex, was arrested on Sunday morning in London’s Finsbury Park after just under 48 hours at large.

While the manhunt was ongoing, Sky’s national correspondent Tom Parmenter sat down with a delivery driver who spoke to Kebatu at HMP Chelmsford, describing him as being “confused” as he was being guided to the railway station by prison staff.

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Witness: Wrongly freed migrant ‘asked me for help’

Asked if he saw the interview, which also revealed the migrant returned to the prison reception four or five times before leaving the area on a train, Mr Lammy said on Sunday: “I saw the Sky reporting from yesterday and of course, that will be subject to the independent inquiry that must now take place.”

He made the comments during a visit to Wood Green Police Station in north London, where he said he wanted to thank officers for apprehending Kebatu.

He called his accidental release from prison on Friday “totally unacceptable” and said Kebatu will be deported back to Ethiopia this coming week.

Sky News understands the deportation will take place on Tuesday.

Kebatu being arrested in Finsbury Park. Pic: Sunday Times
Image:
Kebatu being arrested in Finsbury Park. Pic: Sunday Times

‘They have all failed’

The manhunt has sparked questions over how Kebatu – whose crimes sparked protests in Epping over the use of asylum hotels – was able to be freed.

The father of the 14-year-old schoolgirl who was sexually assaulted by Kebatu wrote in a statement that his family feels “massively let down and infuriated” by the migrant’s accidental release.

In the statement, which was read by Epping Forest Councillor Shane Yerrell, says Kebatu being released from HMP Chelmsford due to a system failure was “unbelievably irresponsible”.

“Myself and my family feel massively let down and infuriated by HMP Chelmsford, the police, the justice system and our Labour government. They have all failed,” the statement read.

“Not just us as a family, but they have failed everyone in the country.”

Hadush Kebatu arrived in the UK days before he tried to kiss a 14-year-old girl and woman
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Hadush Kebatu arrived in the UK days before he tried to kiss a 14-year-old girl and woman

Police are believed to be questioning Kebatu “to get to the bottom of what’s happened” and to learn what his movements were between his accidental release from prison on Friday and his arrest.

Read more:
Timeline of how manhunt for Hadush Kebatu unfolded
HMP Chelmsford released second person by mistake in 2023

Mr Lammy said he would make a statement in parliament on Monday and a “full investigation into how this happened” will take place.

He said: “We need to get to the bottom of how this happened and why it happened, and, of course, on behalf of the public, I want to be reassured that it won’t continue to happen and that the systems that we put in place, the checks and balances, are there to reassure the public.”

Earlier on Sunday, Sir Keir Starmer said police officers had worked “quickly and diligently to bring him back into custody” and that the government had “ordered an investigation to establish what went wrong”.

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‘It’s absolutely shocking’

Government has ‘serious questions’ to answer

Opposition parties have said that the government has “serious questions” to answer over the incident.

Chelmsford’s Liberal Democrat MP Marie Goldman called for a “rapid” national inquiry, adding: “The government has serious questions to answer and major work to do to make the system fit for purpose. It certainly isn’t at the moment.”

Speaking on Sunday Morning with Trevor Phillips, Zia Yusuf, Reform’s head of policy, said that while he was “relieved” Kebatu had been re-arrested, the case was a sign of Britain’s “descent into a Monty Python sketch”.

He referred to a Sky News report detailing how the wanted migrant spoke to a delivery driver at Chelmsford prison and appeared “confused” at why he had been released.

“This is a man who the eyewitnesses said was actively trying to go back into prison after being accidentally let go,” Mr Yusuf said.

He said the case was “absolutely shocking” and questioned how victims of sexual assault could have confidence in the government.

It is understood Kebatu, who crossed the Channel in a small boat to enter the UK on 29 June, left prison with an amount of personal money but was not given a discharge grant to cover subsistence costs.

He was convicted of 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 on 4 September.

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Timeline of how manhunt for wrongly released sex offender migrant Hadush Kebatu unfolded

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Timeline of how manhunt for wrongly released sex offender migrant Hadush Kebatu unfolded

The small-boat sex offender Hadush Kebatu was arrested on Sunday morning on the third day of a manhunt after he was mistakenly freed from prison.

The Ethiopian national had been serving a 12-month sentence at HMP Chelmsford since September. He was due to be released in order to be immediately deported, but instead he was able to board a train to London.

The mistake triggered a manhunt that involved three police forces looking for the prisoner. He was finally tracked down to Finsbury Park on Sunday, where he was arrested.

Here, Sky News examines how the event has unfolded:

Friday 24 October

Kebatu is released from HMP Chelmsford wearing a prison-issued grey tracksuit. He is also holding a clear plastic bag containing his possessions.

The prison released him on the expectation that he would be picked up by immigration enforcement, and the Home Office was ready to take Kebatu to an immigration removal centre, it is understood.

But it is unclear exactly what happened next.

A lorry driver, who was delivering equipment to Chelmsford jail on Friday, told Sky News correspondent Tom Parmenter he saw the “confused” offender outside the facility being directed by prison staff to the city’s railway station following his release.

The offender is said to have returned to the prison “four or five times” but was turned away.

Footage later appears to show Kebatu in Chelmsford High Street.

In the video he appears to ask a group of people for help.

12.41pm: The prisoner boards a Greater Anglia London-bound train at Chelmsford station.

12.51pm: The train arrives at Shenfield station, in the Essex borough of Brentwood.

12.57pm: Essex Police are informed by the prison service that Kebatu was mistakenly released.

The force says it has launched a search operation and is working closely with partner agencies.

CCTV footage of Kebatu in Chelmsford. Pic: Met Police
Image:
CCTV footage of Kebatu in Chelmsford. Pic: Met Police

By the time the search started, the train that Kebatu boarded at Chelmsford had already called at Shenfield, according to Trainline data.

Essex Police appeals to anyone who has seen the prisoner to contact the force immediately.

1.12pm: Kebatu gets off the train at Stratford in east London.

8pm: Kebatu was seen in the Dalston area of Hackney.

He was pictured still wearing his prison-issue grey tracksuit top and bottoms, and was carrying his belongings “in a distinctive white bag with pictures of avocados on it”.

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Wanted asylum seeker captured on CCTV

Kebatu in Dalston. Pic: Met Police
Image:
Kebatu in Dalston. Pic: Met Police

Saturday 25 October

12.37pm: The Metropolitan Police announces it has taken over the manhunt for Kebatu.

In a statement, commander James Conway says senior investigating officers are “examining CCTV” from around Stratford station and further afield, to establish information about the prisoner’s subsequent movements.

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Police call on public to assist on manhunt

2.00pm: A delivery driver who spoke to Kebatu outside Chelmsford prison tells Sky News the “confused” offender was guided to the railway station by prison staff.

He says Kebatu approached him with no idea of where he was supposed to go.

He adds the prisoner must have been outside the prison for roughly “an hour and a half”, before he finally left, adding: “They [the officers] were basically sending him away, saying, ‘Go, you’ve been released, you go’.”

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Witness: Wrongly freed migrant ‘asked me for help’

4.30pm: Met Police Commander James Conway makes a direct appeal to Kebatu.

“We want to locate you in a safe and controlled way. You had already indicated a desire to return to Ethiopia when speaking to immigration staff,” he says.

“The best outcome for you is to make contact directly with us by either calling 999 or reporting yourself to a police station.”

He says he believes Kebatu has access to funds and that he’s sought assistance from members of the public and station staff in both Chelmsford and London.

Read more:
How many prisoners are released by mistake?

Sunday 26 October

8.30am: After receiving information from the public, the Met trace Kebatu to Finsbury Park where he is arrested and taken into custody.

9.30am: Met Police put out press statement confirming the arrest of Kebatu and say: “This has been a diligent and fast paced investigation led by specialist officers from the Metropolitan Police, supported by Essex Police and the British Transport Police.

“Information from the public led officers to Finsbury Park and following a search, they located Mr Kebatu. He was detained by police, but will be returned to the custody of the Prison Service.

“I am extremely grateful to the public for their support following our appeal, which assisted in locating Mr Kebatu.”

What happened in the lead up to the wrongful release?

Kebatu was found guilty of five offences after a three-day trial at Chelmsford and Colchester magistrates’ courts in September.

His case led to protesters and counter-protesters taking to the streets in Epping, Essex, and eventually outside hotels housing asylum seekers across the country.

The incidents occurred in July, eight days after he arrived in the UK by small boat

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‘Terrible’ Caerphilly result akin to Hartlepool by-election loss, says Wes Streeting

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'Terrible' Caerphilly result akin to Hartlepool by-election loss, says Wes Streeting

The health secretary has compared the collapse of Labour’s vote in the Caerphilly by-election to the party’s defeat in Hartlepool in 2021 – when Sir Keir Starmer considered resigning as leader.

Wes Streeting described the party’s performance in the Senedd seat – where it took just 3,713 votes – as “terrible” and said it had to match Labour’s response to the Hartlepool by-election defeat.

Politics latest: UK in ‘despair’, warns Streeting

Plaid Cymru's Lindsay Whittle was elected to represent his hometown of Caerphilly. Pic: PA
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Plaid Cymru’s Lindsay Whittle was elected to represent his hometown of Caerphilly. Pic: PA

Speaking to Sunday Morning with Trevor Phillips, Mr Streeting said the loss of Hartlepool to the Tories while the party was in opposition was a “shock to Labour’s core” and prompted Sir Keir to “change the Labour Party with a pace and scale of ambition” that paved the way for its landslide election victory last year.

The prime minister has admitted in several interviews that he considered resigning in the wake of the defeat.

Asked whether he was providing “withering criticism” of Sir Keir and the direction of his government, Mr Streeting said he was not but acknowledged that the public was “not yet feeling the change” Labour had promised.

“If I have one criticism of us collectively as a team, we are not telling a compelling enough story about who we are, who we’re for and what it is we are driving to do,” he said.

“Take that result in Caerphilly on the chin, take it to heart and show the same level of ambition and drive and the scale of change within government that the public are crying out for.”

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What does Plaid Cymru’s victory in Caerphilly mean for Labour?

Support for Labour in the Welsh town of Caerphilly slumped in the by-election on Thursday, where it came in third place behind winners Plaid Cymru, who won with 15,960 votes.

While a defeat was denied to Reform UK, which came second with 12,113 votes, the result has prompted fear within Labour ranks that it is losing support to rival left-wing parties as well as those on the right.

The result, which Sir Keir admitted was “bad” and “disappointing”, came during another challenging week for the prime minister.

On Saturday Lucy Powell, the former Commons leader who was sacked by Sir Keir in his most recent reshuffle, was elected Labour deputy leader in what has been interpreted as a repudiation of the prime minister’s leadership.

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Powell on plans to unite Labour Party

And the day before, a nationwide manhunt was triggered after Hadush Kebatu, an Ethiopian migrant who was jailed for 12 months in September for sexually assaulting a 14-year-old girl and a woman in Essex, was accidentally released from HMP Chelmsford.

The Metropolitan Police has confirmed it has now found Kebatu – whose crimes sparked protests outside the asylum hotel in Epping where he was staying – and that he was arrested in the Finsbury Park area of London at around 8.30am on Sunday morning.

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Mr Streeting said there needed to be accountability for the “egregious failure” which resulted in Kebatu’s release.

He said he agreed the incident was an example of “state failure” that played into the “sense of despair” felt across the country about the state of the country’s public services.

“There is a deep disillusionment in this country at the moment and, I’d say, growing sense of despair about whether anyone is capable of turning this country around,” he said.

“Now, I am an optimist in politics. I think there are green shoots of recovery in the NHS, in the economy, in our public services, but there is also so much more to do and we’ve got to attack those challenges with the level of energy and focus that the scale of the challenge demands.”

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