Rachel Reeves to deliver ‘fixing the foundations and change’ budget – but it’ll be a difficult sell
The Labour manifesto never did add up.
On the one hand, Keir Starmer vowed there would be “no return to austerity” under his government, while also insisting he had “no plans” to raise taxes beyond an £8bn raid on private equity, oil and gas companies, private school fees and non-doms to pay for more teachers and NHS appointments.
Follow live: All the latest on budget day
In reality, whoever won the election faced tens of billions of pounds in tough choices over tax and spending. But instead of levelling with us, the two main parties embarked in a “conspiracy of silence” in order to win votes.
Today, the truth will out, in a budget which will define Sir Keir Starmer’s first term in a way his manifesto did not.
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What to expect from the budget
There will be huge tax rises and there will be changes in the fiscal rules to allow the chancellor to borrow more to invest in Britain’s crumbling infrastructure.
And we will finally find out which “working people” are the ones Sir Keir Starmer wants to protect as small and big businesses, property owners, shareholders – and perhaps “Middle England” too – braces itself for tax rises, and the government braces itself for the fall-out.
The prime minister set the hare running on who’s in the firing line for tax rises last week at the Commonwealth Heads of Government summit in Samoa when he told me “working people” were those who “go out and earn their living, usually paid in a sort of monthly cheque” but they did not have the ability to “write a cheque to get out of difficulties”.
He told me explicitly that “working people” who also owned assets, such as property or shares, did not fit his definition.
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Sky News questions Starmer on tax rises
So business owners, property owners and Middle England do have some cause for alarm.
The pledge to “not increase national insurance, the basic, higher, or additional rates of income tax, or VAT” has been tweaked in recent weeks to a promise to “protect the payslips of working people”.
Employers are expecting an increase in national insurance contributions they must pay on wages – many will argue this is a flagrant breach of a manifesto pledge.
In another blow to employers, but a win for those struggling on low wages, Labour have also announced a 6.7% increase in the National Living Wage for over three million workers next year, amounting to a pay boost worth £1,400-a-year for an eligible full-time worker.
Is this the moment the manifesto is revealed as a sham? Labour insiders insist not and point, again, to the “£22bn black hole” in the current financial year they discovered when their took office – and which ratchets up to a £40bn gap in the public finances over the course of the parliament – that they now have to plug.
Politically, they hope to blame the big tax rises and borrowing on the economic inheritance left to them by the Tories and buy some space with voters.
As one senior government figure put it to me: “The scale of the economic inheritance is bigger than thought and it has blown a political and economic hole in our first few months.”
This will be a message Rachel Reeves will want to land at the despatch box on Wednesday.
But a public disillusioned with politicians might not see it like that as they watch a Labour chancellor, flanked by a prime minister who promised the opposite in the election, embark on a massive round of tax rises that but months ago they were told were not coming down the tracks.
Ms Reeves is set to deliver the budget from 12.30pm. Pic: Treasury
Insiders acknowledge this is going to be a tax and spend budget that goes far beyond what we were told to expect when Labour were asking for votes.
But they hope what they can do with this big moment is to take it beyond the winners and losers and frame this first Labour budget in over 14 years as “forging a new settlement” for the people and the country.
To that end, this will be the “fixing the foundations and change” budget: “This is a new economic settlement from a government willing to investment and, in particular, borrow to invest, and that is a change and it will show a path towards long term growth.”
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Because, as we drill into who is a working person, and who is going to be hit with tax raises in this budget, there will also be a big story about billions of investment in our country’s energy and transport infrastructure, into housing and hospitals and schools.
“If we get it right, on the evening of the budget, we want to be able to show that we protected your pay slip, are fixing the NHS and investing to rebuild Britain,” one senior figure explains. “What’s the alternative? Choice is going to feature very heavily in the chancellor’s speech. We have made our choices and we are asking business and the wealthiest to pay a bit more to grow our economy and protecting working people.”
And this new settlement, when it lands, will be massive. Rachel Reeves intends to change her borrowing rules to allow up to £53bn more in borrowing to be spent on public services and infrastructure.
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Trailing the decision at the International Monetary Fund summit in Washington last week, the chancellor said she was making the change in order to take opportunities for the economy “in industries from life sciences to carbon capture, storage and clean energy to AI and technology”, as well as using borrowing to “repair our crumbling schools and hospitals”.
The danger for the chancellor is that what actually comes out the other side is anger over tax rises not flagged in the manifesto, or accusations that the government is being Janus-faced if it claims it’s protecting working people should it also, as speculated, extend the freeze on income tax thresholds beyond the 2028 deadline set by the last government, which would drag millions of workers into higher tax bands (and raise as much as £7bn a year for the government).
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Will there be ‘budget nasties?’
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How might the middle classes and wealthier voters respond to their incomes being squeezed? And how might businesses respond to being asked to pay billions more in taxes from a government that has been banging on about being pro-business for months?
It is going to be a difficult sell, no doubt. But this government is calculating that short-term pain now will translate into gains in the medium to long term if Reeves can pull it off and kick-start economic growth.
The hope is that come the next Labour manifesto, the pledges on the NHS, economy, better housing and jobs have been met and the public can forgive the tax rises foisted on them to get there.
Starmer talked endlessly about it being a change election and it will be this budget, not his manifesto, that proves the point.
Virginia Giuffre, who accused Prince Andrew of sexual assault, has died aged 41.
In a statement to Sky’s US partner network NBC News on Friday, her family said she took her own life in the Perth suburb of Neergabby, Australia, where she had been living for several years.
“It is with utterly broken hearts that we announce that Virginia passed away last night at her farm in Western Australia,” her family said.
“She lost her life to suicide, after being a lifelong victim of sexual abuse and sex trafficking.
“Virginia was a fierce warrior in the fight against sexual abuse and sex trafficking. She was the light that lifted so many survivors.
“In the end, the toll of abuse is so heavy that it became unbearable for Virginia to handle its weight.”
Pic: AP
Police said emergency services received reports of an unresponsive woman at a property in Neergabby on Friday night.
“Police and St John Western Australia attended and provided emergency first aid. Sadly, the 41-year-old woman was declared deceased at the scene,” a police spokeswoman said.
“The death is being investigated by Major Crime detectives; early indication is the death is not suspicious.”
Sexual assault claims
Prince Andrew has denied all claims of wrongdoing. File pic: Reuters
Ms Giuffre sued the Duke of York for sexual abuse in August 2021, saying Andrew had sex with her when she was 17 and had been trafficked by his friend, the billionaire paedophile Jeffrey Epstein.
The duke has repeatedly denied the claims, and he has not been charged with any criminal offences.
In March 2022, it was announced Ms Giuffre and Andrew had reached an out-of-court settlement – believed to include a “substantial donation to Ms Giuffre’s charity in support of victims’ rights”.
‘An incredible champion’
Sigrid McCawley, Ms Giuffre’s attorney, said in a statement that she “was much more than a client to me; she was a dear friend and an incredible champion for other victims”.
“Her courage pushed me to fight harder, and her strength was awe-inspiring,” she said. “The world has lost an amazing human being today.”
“Rest in peace, my sweet angel,” she added.
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Dini von Mueffling, Ms Giuffre’s representative, also said that “Virginia was one of the most extraordinary human beings I have ever had the honour to know”.
“Deeply loving, wise, and funny, she was a beacon to other survivors and victims,” she added. “She adored her children and many animals.
“She was always more concerned with me than with herself. I will miss her beyond words.
“It was the privilege of a lifetime to represent her.”
Ms Giuffre said at the end of March she had four days to live after a car accident, posting on social media that “I’ve gone into kidney renal failure”. She was discharged from hospital eight days later.
Raised mainly in Florida, she said she was abused by a family friend early in life, which led to her living on the streets at times as a teenager.
She said that in 2000, she met Ghislaine Maxwell, a British socialite who was convicted in 2021 on federal sex trafficking and conspiracy charges and was sentenced to 20 years in prison.
Ghislaine Maxwell and Jeffrey Epstein. Pic: US Department of Justice
Ms Giuffre said Maxwell then introduced her to Epstein and hired her as his masseuse, and said she was sex trafficked and sexually abused by him and associates around the world.
‘A survivor’
After meeting her husband in 2002, while taking massage training in Thailand at what she said was Epstein’s behest, she moved to Australia and had a family.
She founded the sex trafficking victims’ advocacy charity SOAR in 2015, and is quoted on its website as saying: “I do this for victims everywhere.
“I am no longer the young and vulnerable girl who could be bullied. I am now a survivor, and nobody can ever take that away from me.”
:: Anyone feeling emotionally distressed or suicidal can call Samaritans for help on 116 123 or email jo@samaritans.org in the UK. In the US, call the Samaritans branch in your area or 1 (800) 273-TALK.
The Pope’s funeral will take place today at St Peter’s Basilica at the Vatican.
A pope’s funeral traditionally brings world leaders together, and some have already revealed they are attending.
Watch full coverage of the Pope’s funeral live on Sky News from 8am
Here’s a look at the list.
The Prince of Wales will attend the funeral of Pope Francis on behalf of the King, Kensington Palace has said.
The King was in Rome with Queen Camilla earlier this month, and met the pontiff at the Vatican.
Pope Francis meets King Charles and Queen Camilla during a private audience at the Vatican on 9 April. Pic: Vatican Media/Reuters
The trip came just a week-and-a-half after Buckingham Palace confirmed the King had been taken to hospital following side effects related to his ongoing cancer treatment.
Number 10 has confirmed the prime minister received an invite and will attend the ceremony.
Speaking on Tuesday, Sir Keir said there had been “an outpouring of grief and love” for the Pope.
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Sky News inside Vatican
He added: “I think it reflects the high esteem in which he was held, not just by millions and millions of Catholics, but by many others, across the world, myself included.”
Donald Trump and Pope Francis meet at the Vatican in 2017. Pic: Reuters
The US president was one of the first to confirm he would be flying to Rome, adding he would be joined by first lady Melania Trump.
Writing on his social media platform Truth Social on Monday, he said: “Melania and I will be going to the funeral of Pope Francis, in Rome. We look forward to being there!”
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Trump: ‘Pope Francis loved the world’
The Pope had been critical of Mr Trump at times during his tenure.
In January, he said it would be a “disgrace” if the president went ahead with his crackdown on immigration, telling an Italian television station: “It would make the migrants, who have nothing, pay the unpaid bill.
“It doesn’t work. You don’t resolve problems this way.”
Zelenskyy shakes hands with the pontiff in May 2023. Pic: Vatican News/AP
The Ukrainian president, who met the Pope three times, is expected to attend, according to officials in Ukraine.
In his tribute, Mr Zelenskyy said his country was grieving the Pope and recalled how he often prayed for peace in Ukraine.
Pope Francis shakes hands with Emmanuel Macron in December 2024. Pic: Reuters
The French president told local reporters he would be going to the funeral.
In his tribute on Monday, Mr Macron said of the Pope: “In this time of war and brutality, he had a sense for the other, for the most fragile.”
Pope Francis and Javier Milei at the G7 summit in Italy last June. Pic: Reuters
The president of Pope Francis’s native Argentina will attend, despite having launched insults at Francis in recent years.
Before taking office in December 2023, the far-right politician called him “an imbecile, the representative of evil on Earth”.
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Full order of service
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Mr Milei alluded to their “differences” in his tribute to the late Pope, writing: “It is with profound sorrow that I learned this sad morning that Pope Francis, Jorge Bergoglio, passed away today and is now resting in peace.
“Despite differences that seem minor today, having been able to know him in his goodness and wisdom was a true honour for me.”
Lula da Silva and the Pope at the G7 summit last year. Pic: Vatican Media/Reuters
The Brazilian president and first lady Janja Lula da Silva will be at the funeral, the country’s government announced.
Brazil has also declared a seven-day mourning period for the Pope.
“Humanity is today losing a voice of respect and welcome for others,” the president said in his tribute.
“Pope Francis lived and propagated in his daily life the love, tolerance and solidarity that are the basis of Christian
teachings.”
Pope Francis meets Ursula von der Leyen at the Vatican in 2022. Pic: Vatican Media/Reuters
The EU Commission President confirmed she would be attending after calling Francis a worldwide inspiration.
“He inspired millions, far beyond the Catholic Church, with his humility and love so pure for the less fortunate,” she said in her tribute.
Council President Antonio Costa, Parliament President Roberta Metsola are also expected to attend.
Here are some of the other notable attendees:
• Ireland’s taoiseach Micheal Martin
• Spain’s King Felipe and Queen Letizia
• Albanian president Bajram Begaj
• Angola’s president Joao Lourenco
• Austrian president Alexander Van der Bellen
• Bangladesh’s chief adviser and interim leader Muhammad Yunus
• Belgium’s King Philippe and Queen Mathilde, along with prime minister Bart De Wever
• Canada’s governor general Mary Simon
• Cape Verde president Jose Maria Neves
• Croatia’s president Zoran Milanovic
• Cyprian president Nikos Christodoulides
• Czech Republic’s prime minister Petr Fiala
• Democratic Republic of Congo president Felix Tshisekedi
• Dominican Republic’s president Luis Abinader
• East Timor’s president Jose Ramos-Horta
• Ecuador’s president Daniel Noboa
• Estonia’s president Alar Karis
• Finland’s president Alexander Stubb
• Gabon’s president Brice Oligui Nguema
• German president Frank-Walter Steinmeier and outgoing chancellor Olaf Scholz
• Greece’s prime minister Kyriakos Mitsotakis
• Honduras president Xiomara Castro
• Hungary’s president Tamas Sulyok
• Italy’s president Sergio Mattarella and prime minister Giorgia Meloni
• Latvian president Edgars Rinkevics
• Lithuanian president Gitanas Nauseda
• Moldova’s president Maia Sandu
• Netherlands’ prime minister Dick Schoof
• New Zealand’s prime minister Christopher Luxon
• Norway’s Crown Prince Haakon and Crown Princess Mette-Marit
• The Philippines’ president Ferdinand Marcos Jr
• Poland’s president Andrzej Duda
• Portugal’s president Marcelo Rebelo de Sousa and prime minister Luis Montenegro
• Romania’s interim president Ilie Bolojan
• Sweden’s King Carl XVI Gustaf, Queen Silvia and prime minister Ulf Kristersson
• Switzerland’s president Karin Keller-Sutter
Who won’t be there?
Pope Francis walks next to Putin at the Vatican in 2015. Pic: AP
The Russian president will not be attending the funeral, the Kremlin has confirmed.
But the controversial leader paid tribute to the Pope, writing a message to Cardinal Kevin Farrell, who is interim chief of the Catholic Church.
“Please accept my most sincere condolences on the passing of His Holiness Pope Francis,” Mr Putin said.
“Throughout the years of his pontificate, he actively promoted the development of dialogue between the Russian
Orthodox and Roman Catholic churches, as well as constructive cooperation between Russia and the Holy See.”
Pope Francis and Benjamin Netanyahu meet at the Vatican in 2013. Pic: AP
The Israeli prime minister is not expected to attend, with the country’s ambassador Yaron Sideman going instead.
The Jewish state and the Vatican have had strong relations in the past, with Israel sending a presidential delegation to the funeral of Pope John Paul II in 2005, and Pope Francis visiting Israel in 2014.
But their relationship has deteriorated since the start of the war in Gaza.
A month after the conflict started in 2023, a dispute broke out over whether Pope Francis had used the word “genocide” to describe events in Gaza. Palestinians who met with him said he did, but the Vatican said he did not.
The Pope met relatives of Israeli hostages on the same day.
Israeli officials have since lobbied the Vatican to be more forceful in its condemnation of Hamas.
In January, the Pope called the humanitarian situation in Gaza “shameful”, prompting criticism from Rome’s chief rabbi, Riccardo Di Segni, who accused Francis of “selective indignation”.
Rabbi Di Segni says he will be attending the funeral, despite it taking place on the Jewish sabbath.
Is there a seating plan?
The seats are assigned in advance, with the heads of state sitting in French alphabetical order based on their country’s name, rather than on the individual’s.
This applies to everyone apart from the presidents of Italy and Argentina, who get the best seats because the Pope lived in Italy and was an Argentinian native.
UK
Vincent Nichols: British cardinal who will be in the conclave says picking the next pope is ‘intimidating’
The head of the Catholic Church in England and Wales has told Sky News it’s “intimidating” to be one of those responsible for choosing the next pope.
Vincent Nichols is among four UK cardinals in Rome for the Pope’s funeral on Saturday.
Following the funeral, and after nine days of mourning, cardinals from around the world will gather in the Vatican’s Sistine Chapel to cast their votes, with white smoke announcing to the world when a new pope has been elected.
Cardinal Vincent Nichols speaks to Sky’s Anna Botting
Cardinal Nichols told Sky’s Anna Botting: “I hope nobody goes into this conclave, as it were, with the sole purpose of wanting to win. I think it’s very important that we go in wanting to listen to each other… It has to be together, trying to sense what God wants next. Not just for the church.”
He described the procession that took Pope Francis to lie in state as “the most moving thing I’ve ever attended here”.
Describing the Pope as a “master of the gesture and the phrase”, he also recalled the pontiff’s last journey away from the Vatican.
Cardinal Nichols said Pope Francis had visited the Regina Coeli prison, telling the inmates: “You know, except for the grace of God, it could well have been me … Don’t lose hope, God has you written in his heart.”
Read more:
How Pope Francis’s funeral will unfold
The full order of service
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‘Pope touched the hearts of millions’
The Pope later told his doctor his last regret was not being able to wash the feet of the prisoners during that visit.
Becoming emotional, he also said the final message he would like to have given Pope Francis is “thank you”.
The 88-year-old died peacefully on Easter Monday, the Vatican confirmed.
Heads of state – including Sir Keir Starmer, Donald Trump and Emmanuel Macron – have all confirmed their attendance at his funeral, which takes place on Saturday at St Peter’s Square.
Prince William will attend on behalf of the King, Kensington Palace has said.
You can watch full coverage of the funeral live on Sky News on Saturday
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Where will Pope Francis be buried?
Talking about the seating plan at the funeral, Cardinal Nichols said he understood it to be “royalty first, then heads of state, then political leaders”.
Cardinal Nichols explained event would be “exactly the same Catholic rite as everyone else – just on a grander scale”.
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3D map shows pope’s funeral route
In a break from tradition, Pope Francis will be the first pope in a century to be interred outside the Vatican – and will instead be laid to rest at his favourite church, Santa Maria Maggiore Basilica in Rome’s Esquilino neighbourhood.
He will also be buried in just one simple wooden coffin, instead of the traditional three coffins which are usually used for pontiffs.
Born in Crosby near Liverpool, Cardinal Vincent Nichols hoped to be a lorry driver as a child – but as a teenager reportedly felt the calling to join the priesthood while watching Liverpool FC.
As cardinal, he is known for leading the church’s work tackling human trafficking and modern slavery, for which he received the UN Path to Peace Award.
He was criticised by the UK’s Independent Inquiry into Child Sexual Abuse, which said he “demonstrated a lack of understanding” of the impact of abuse and “seemingly put the reputation of the church first”.
Cardinal Nichols, responding to the findings, previously told Sky News he was “ashamed at what has happened in the context of the Catholic Church” and promised to improve the church’s response.
He has appeared to rule himself out of the running for pope, telling reporters he was “too old, not capable”.
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