Connect with us

Published

on

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.

Please use Chrome browser for a more accessible video player

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.

Please use Chrome browser for a more accessible video player

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
Image:
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.”

Ed Conway analysis:
Could budget’s ‘jiggery-pokery’ scare investors?

Follow Sky News on WhatsApp
Follow Sky News on WhatsApp

Keep up with all the latest news from the UK and around the world by following Sky News

Tap here

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.

Read more:
Labour MP punching video ‘shocking’, says Starmer
Budget 2024: What’s likely to be in it – and what isn’t?

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).

Please use Chrome browser for a more accessible video player

Will there be ‘budget nasties?’

👉 Listen to Politics At Jack And Sam’s on your podcast app👈

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.

Continue Reading

UK

The Wargame: Inside the decades-long saga that’s left UK shockingly unprepared for war

Published

on

By

The Wargame: Inside the decades-long saga that's left UK shockingly unprepared for war

The UK is “really unprepared” to fight a war and has been living on a “mirage” of military strength that was shocking to discover, interviews with almost every defence secretary since the end of the Cold War have revealed.

With Sir Keir Starmer under pressure to accelerate plans to reverse the decline, two new episodes of Sky News and Tortoise’s podcast series The Wargame uncover what happened behind the scenes as Britain switched funding away from warfare and into peacetime priorities such as health and welfare after the Soviet Union collapsed.

👉Search for The Wargame on your podcast app👈

This decades-long saga, spanning multiple Labour, Conservative and coalition governments, includes heated rows between the Ministry of Defence (MoD) and the Treasury, threats to resign, and dire warnings of weakness.

It also exposes a failure by the military and civil service to spend Britain’s still-significant defence budget effectively, further compounding the erosion of fighting power.

Please use Chrome browser for a more accessible video player

The Wargame: Behind the scenes

‘Russia knew’ about UK’s weaknesses

Now, with the threat from Russia returning, there is a concern the UK has been left to bluff about its ability to respond, rather than pivot decisively back to a war footing.

“We’ve been living on a sort of mirage for so long,” says Sir Ben Wallace, a Conservative defence secretary from 2019 until 2023.

“As long as Trooping the Colour was happening, and the Red Arrows flew, and prime ministers could pose at NATO, everything was fine.

“But it wasn’t fine. And the people who knew it wasn’t fine were actually the Americans, but also the Russians.”

Not enough troops, medics, or ammo

Lord George Robertson, a Labour defence secretary from 1997 to 1999 and the lead author of a major defence review this year, says when he most recently “lifted the bonnet” to look at the state of the Army, Royal Navy and Royal Air Force, he found “we were really unprepared”.

“We don’t have enough ammunition, we don’t have enough logistics, we don’t have enough trained soldiers, the training is not right, and we don’t have enough medics to take the casualties that would be involved in a full-scale war.”

Asked if the situation was worse than he had imagined, Lord Robertson says: “Much worse.”

Robertson meets the PM after last year's election. Pic: Reuters
Image:
Robertson meets the PM after last year’s election. Pic: Reuters

‘I was shocked,’ says ex-defence secretary

Sir Gavin Williamson, a former Conservative defence secretary, says he too had been “quite shocked as to how thin things were” when he was in charge at the MoD between 2017 and 2019.

“There was this sort of sense of: ‘Oh, the MoD is always good for a billion [pounds] from Treasury – you can always take a billion out of the MoD and nothing will really change.’

“And maybe that had been the case in the past, but the cupboards were really bare.

“You were just taking the cupboards.”

Please use Chrome browser for a more accessible video player

Ben Wallace on role as PM in ‘The Wargame’

But Lord Philip Hammond, a Conservative defence secretary from 2011 to 2014 and chancellor from 2016 until 2019, appears less sympathetic to the cries for increased cash.

“Gavin Williamson came in [to the Ministry of Defence], the military polished up their bleeding stumps as best they could and convinced him that the UK’s defence capability was about to collapse,” he says.

“He came scuttling across the road to Downing Street to say, I need billions of pounds more money… To be honest, I didn’t think that he had sufficiently interrogated the military begging bowls that had been presented to him.”

Hammond at a 2014 NATO meeting. Pic: Reuters
Image:
Hammond at a 2014 NATO meeting. Pic: Reuters

What to expect from The Wargame’s return

Episodes one to five of The Wargame simulate a Russian attack on the UK and imagine what might happen, with former politicians and military chiefs back in the hot seat.

The drama reveals how vulnerable the country has really become to an attack on the home front.

The two new episodes seek to find out why.

The story of the UK’s hollowed-out defences starts in a different era when an Iron Curtain divided Europe, Ronald Reagan was president of the US, and an Iron Lady was in power in Britain.

Sir Malcolm Rifkind, who went on to serve as defence secretary between 1992 and 1995 under John Major, recalls his time as minister for state at the Foreign Office in 1984.

In December of that year, then prime minister Margaret Thatcher agreed to host a relatively unknown member of the Soviet Communist Party Politburo called Mikhail Gorbachev, who subsequently became the last leader of the Soviet Union.

Sir Malcolm remembers how Mrs Thatcher emerged from the meeting to say: “I think Mr Gorbachev is a man with whom we can do business.”

Gorbachev was hosted at Chequers in 1984. Pic: Reuters
Image:
Gorbachev was hosted at Chequers in 1984. Pic: Reuters

It was an opinion she shared with her close ally, the US president.

Sir Malcolm says: “Reagan would have said, ‘I’m not going to speak to some unknown communist in the Politburo’. But if the Iron Lady, who Reagan thought very highly of, says he’s worth talking to, he must be worth it. We’d better get in touch with this guy. Which they did.

“And I’m oversimplifying it, but that led to the Cold War ending without a shot being fired.”

Read more from Sky News:
Courts in ‘calamitous’ state
Reeves faces rural Labour rebellion

In the years that followed, the UK and  much of the rest of Europe reaped a so-called peace dividend, cutting defence budgets, shrinking militaries and reducing wider readiness for war.

Into this different era stepped Tony Blair as Labour’s first post-Cold War prime minister, with Lord Robertson as his defence secretary.

Robertson and Blair in 1998. Pic: Reuters
Image:
Robertson and Blair in 1998. Pic: Reuters

Lord Robertson reveals the threat he and his ministerial team secretly made to protect their budget from then chancellor Gordon Brown amid a sweeping review of defence, which was meant to be shaped by foreign policy, not financial envelopes.

“I don’t think I’ve ever said this in public before, but John Reid, who was the minister for the Armed Forces, and John Speller, who was one of the junior ministers in the department, the three of us went to see Tony Blair late at night – he was wearing a tracksuit, we always remember – and we said that if the money was taken out of our budget, the budget that was based on the foreign policy baseline, then we would have to resign,” Lord Robertson says.

“We obviously didn’t resign – but we kept the money.”

The podcast hears from three other Labour defence secretaries: Geoff Hoon, Lord John Hutton and the current incumbent, John Healey.

John Healey, the current defence secretary. Pic: PA
Image:
John Healey, the current defence secretary. Pic: PA

For the Conservatives, as well as Rifkind, Hammond, Williamson and Wallace, there are interviews with Liam Fox, Sir Michael Fallon, Dame Penny Mordaunt and Sir Grant Shapps.

In addition, military commanders have their say, with recollections from Field Marshal Lord David Richards, who was chief of the defence staff from 2010 until 2013, General Sir Nick Carter, who led the armed forces from 2018 until 2021, and Vice Admiral Sir Nick Hine, who was second in charge of the navy from 2019 until 2022.

‘We cut too far’

At one point, Sir Grant, who held a variety of cabinet roles, including defence secretary, is asked whether he regrets the decisions the Conservative government took when in power.

He says: “Yes, I think it did cut defence too far. I mean, I’ll just be completely black and white about it.”

Lord Robertson says Labour too shares some responsibility: “Everyone took the peace dividend right through.”

Continue Reading

UK

‘Death, prison or the loss of your sanity’: A decade of county lines leaves its scars on children

Published

on

By

'Death, prison or the loss of your sanity': A decade of county lines leaves its scars on children

A decade on from when authorities identified the emergence of “county lines” drug dealing, children exploited by the trade are now often either dead, in prison or have been sectioned with mental health problems caused by the trauma.

Sky News has spoken to parents and former child runners who say the long-term impact is devastating, as new figures show the problem shows no sign of abating.

In the last 12 months, police referred 3,200 vulnerable people, mostly children, to support services – in the latest crackdown on child exploitation within country lines gangs. Some 1,200 gang members were arrested in the same period.

Please use Chrome browser for a more accessible video player

‘Death, prison or loss of your sanity’

“Lucy” was a drug runner featured in a Sky News film in 2018 on the exploitation of children used as drug runners.

Aged 13, she was set up to be robbed by her own gang during a trip from London to Southampton, then stabbed as punishment, and debt-bonded so she would run drugs for free. At the same age she was also made pregnant by one of the gang members.

Now in her early 20s she says the experience traumatised her, and she was sectioned with severe mental health problems.

She says: “My paranoia just overtook me. I was so paranoid all the time, like having to lock the doors, checking the windows, checking behind me walking in the street, not being able to breathe really, just constantly on edge.

“I was afraid of them finding me, or getting attacked again, or them making me work and feeling like a slave.”

Lucy currently lives in a refuge, in hiding from a violent man.

Amanda Stephens' son, Olly, was set up and robbed by his own gang
Image:
Amanda Stephens’ son, Olly, was set up and robbed by his own gang

‘That’s the cruelty of it all’

Amanda Stephens’ son, Olly, had a similar experience to Lucy when he was 13. Olly was set up and robbed by his own gang on a trip to London from Reading.

Amanda says: “It wasn’t until he spoke quite honestly with the social worker, he said, Olly, you were set up. Olly thought they were his friends and that’s the cruelty of it all.”

Read more from Sky News:
Courts in ‘calamitous’ state
Reeves faces rural Labour rebellion

Olly was autistic and vulnerable to influence. Amanda noticed his group of friends changed when he moved to secondary school and his locator on his phone sometimes placed him further away from home than he should be, but he refused to say what was going on.

“We lost control completely of him as our child.”

Olly did warn his father that some children wanted to stab him – and tragically, despite his parents’ efforts to keep him safe, in January 2021, Olly was lured to a field by a 14-year-old girl, where he was stabbed to death by two boys aged 13 and 14.

Pic: iStock
Image:
Pic: iStock

Vulnerable people ‘exploited’

It was August 2015 when a report by the National Crime Agency said the Home Office had “identified a growing body of intelligence… that vulnerable young people are being exploited in order to facilitate the running of street level dealing”.

It added: “‘County Lines’ is a national issue involving the use of mobile phone ‘lines’ by groups to extend their drug dealing business into new locations outside of their home areas.”

This led to a wave of knife crime among young people, and a new law recognising the exploitation of children under the Modern Slavery Act in 2015.

Mother says her son was ‘radicalised’

One parent, “Laura”, told Sky News she felt like her son had been “radicalised” into drug dealing and acted like he was “on remote control”, once jumping out of her car on the school run after one gang member sent him a text.

Like Lucy, Laura’s son ended up being sectioned in his late teens and needing ongoing mental health support.

Sarah says the long-term impact on her son has been devastating.
Image:
Sarah says the long-term impact on her son has been devastating.

Every gift came at a price

Sarah, who doesn’t want us to use her surname, says her son’s involvement in county lines began when he was offered a McDonald’s aged 12, in return for running an errand.

She says every gift came at a price: “So, they would give him the trainers, give him a bike, the coat, and everything they gave him were actually in their benefit, because if he was warm, he wasn’t coming home. If he could get around faster, he could drop more. They would act like it was a gift, but, actually, you had to pay it off in bits.”

Sarah says, 10 years on, the long-term impact has been devastating.

“Currently, he’s serving a custodial sentence for possession with intent to sell. Mentally I think he’s traumatised. Physically, he has scars from knife injuries, fractures. A face that I will never recognise, because people have broken that a couple of times.”

The play CODE by Justice In Motion was inspired by a Sky News report
Image:
The play CODE by Justice In Motion was inspired by a Sky News report

‘The consequences are death, prison, or the loss of your sanity’

A Sky News report in 2018 called Behind County Lines, which included Lucy’s story, was part of the inspiration for a play called CODE by Justice In Motion, which tours schools and town centres.

Both Amanda and Sarah believe every child and parent should watch the production, which tells a story similar to Lucy’s of a child groomed into joining a county lines gang.

Rapper Still Shadey
Image:
Rapper Still Shadey

Lead actor and rapper Still Shadey, who grew up in south London, had friends exploited by county lines gangs. He says: “The outcomes are clear. The consequences are death, prison, or the loss of your sanity.”

The problem has had less publicity recently but continues to be a major focus for police with 2,300 “deal lines” closed by operations in the 12 months since July 2024, the highest annual figures since the government’s County Lines Programme began in 2019.

‘Disgusting and cowardly’

Crime and policing minister Sarah Jones said: “The exploitation of children and vulnerable people in this way is disgusting and cowardly. County lines gangs are also driving knife crime in our communities, and I want criminals to know that we will not let them get away with it. We will be relentless in going after these gangs.”

The government has already announced new offences as part of the Crime and Policing Bill, including “criminal exploitation of children”, which seek to increase convictions against exploiters and deter gangs from enlisting children. It will carry a maximum penalty of 10 years in prison.

Continue Reading

UK

Rachel Reeves hit by Labour rural rebellion over inheritance tax on farmers

Published

on

By

Rachel Reeves hit by Labour rural rebellion over inheritance tax on farmers

Chancellor Rachel Reeves has suffered another budget blow with a rebellion by rural Labour MPs over inheritance tax on farmers.

Speaking during the final day of the Commons debate on the budget, Labour backbenchers demanded a U-turn on the controversial proposals.

Plans to introduce a 20% tax on farm estates worth more than £1m from April have drawn protesters to London in their tens of thousands, with many fearing huge tax bills that would force small farms to sell up for good.

Farmers have staged numerous protests against the tax in Westminster. Pic: PA
Image:
Farmers have staged numerous protests against the tax in Westminster. Pic: PA

MPs voted on the so-called “family farms tax” just after 8pm on Tuesday, with dozens of Labour MPs appearing to have abstained, and one backbencher – borders MP Markus Campbell-Savours – voting against, alongside Conservative members.

In the vote, the fifth out of seven at the end of the budget debate, Labour’s vote slumped from 371 in the first vote on tax changes, down by 44 votes to 327.

‘Time to stand up for farmers’

The mini-mutiny followed a plea to Labour MPs from the National Farmers Union to abstain.

“To Labour MPs: We ask you to abstain on Budget Resolution 50,” the NFU urged.

“With your help, we can show the government there is still time to get it right on the family farm tax. A policy with such cruel human costs demands change. Now is the time to stand up for the farmers you represent.”

After the vote, NFU president Tom Bradshaw said: “The MPs who have shown their support are the rural representatives of the Labour Party. They represent the working people of the countryside and have spoken up on behalf of their constituents.

“It is vital that the chancellor and prime minister listen to the clear message they have delivered this evening. The next step in the fight against the family farm tax is removing the impact of this unjust and unfair policy on the most vulnerable members of our community.”

Please use Chrome browser for a more accessible video player

Farmers defy police ban in budget day protest in Westminster.

The government comfortably won the vote by 327-182, a majority of 145. But the mini-mutiny served notice to the chancellor and Sir Keir Starmer that newly elected Labour MPs from the shires are prepared to rebel.

Speaking in the debate earlier, Mr Campbell-Savours said: “There remain deep concerns about the proposed changes to agricultural property relief (APR).

“Changes which leave many, not least elderly farmers, yet to make arrangements to transfer assets, devastated at the impact on their family farms.”

Samantha Niblett, Labour MP for South Derbyshire abstained after telling MPs: “I do plead with the government to look again at APR inheritance tax.

“Most farmers are not wealthy land barons, they live hand to mouth on tiny, sometimes non-existent profit margins. Many were explicitly advised not to hand over their farm to children, (but) now face enormous, unexpected tax bills.

“We must acknowledge a difficult truth: we have lost the trust of our farmers, and they deserve our utmost respect, our honesty and our unwavering support.”

Please use Chrome browser for a more accessible video player

UK ‘criminally’ unprepared to feed itself in crisis, says farmers’ union.

Labour MPs from rural constituencies who did not vote included Tonia Antoniazzi (Gower), Julia Buckley (Shrewsbury), Torquil Crichton (Western Isles), Jonathan Davies (Mid Derbyshire), Maya Ellis (Ribble Valley), and Anna Gelderd (South East Cornwall), Ben Goldsborough (South Norfolk), Alison Hume (Scarborough and Whitby), Terry Jermy (South West Norfolk), Jayne Kirkham (Truro and Falmouth), Noah Law (St Austell and Newquay), Perran Moon, (Camborne and Redruth), Samantha Niblett (South Derbyshire), Jenny Riddell-Carpenter (Suffolk Coastal), Henry Tufnell (Mid and South Pembrokeshire), John Whitby (Derbyshire Dales) and Steve Witherden (Montgomeryshire and Glyndwr).

Continue Reading

Trending