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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
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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?

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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.

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‘Stability in Middle East is priority,’ says Starmer – as world reacts to strikes

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'Stability in Middle East is priority,' says Starmer - as world reacts to strikes

Sir Keir Starmer has said stability in the Middle East is “a priority” following US strikes on Iran’s nuclear facilities, as the world has reacted to the attack.

The prime minister also called on Iran to “return to the negotiating table” to “reach a diplomatic solution to end this crisis”.

Follow latest: Iran considering ‘all options’ after US strikes

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US strikes on Iran explained

In a statement, Sir Keir said: “Iran’s nuclear programme is a grave threat to international security.

“Iran can never be allowed to develop a nuclear weapon, and the US has taken action to alleviate that threat.

“The situation in the Middle East remains volatile and stability in the region is a priority.

“We call on Iran to return to the negotiating table and reach a diplomatic solution to end this crisis.”

The UK was not involved in the strikes but was informed about them in advance by the US, Business Minister Jonathan Reynolds told Sky News’ Sunday Morning with Trevor Phillips.

Sir Keir and Foreign Secretary David Lammy had been pushing for a diplomatic solution. On Thursday, the prime minister warned of a “real risk of escalation” in the conflict.

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Trump: Iran strikes ‘spectacular success’

The US struck three sites in Iran early on Sunday morning, with Donald Trump boasting the country’s key nuclear sites were “completely and fully obliterated” in an address to the nation from the White House and warned there could be further strikes if Iran retaliates.

Read more:
What we know so far about US strikes
What happens next is largely in Iran’s control

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‘Trump’s bold decision will change history’

Netanyahu praises Trump

Israel‘s Prime Minister Benjamin Netanyahu praised Mr Trump for the strikes, saying: “Your bold decision to target Iran’s nuclear facilities with the awesome and righteous might of the United States will change history…

“History will record that President Trump acted to deny the world’s most dangerous regime the world’s most dangerous weapons.”

UN secretary-general ‘gravely alarmed’ by US attack

But UN secretary general Antonio Guterres said he was “gravely alarmed by the use of force” by the US against Iran.

“This is a dangerous escalation in a region already on the edge – and a direct threat to international peace and security. There is a growing risk that this conflict could rapidly get out of control – with catastrophic consequences for civilians, the region, and the world.”

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European Union foreign policy chief Kaja Kallas urged all sides to step back and return to the negotiating table. “Iran must not be allowed to develop a nuclear weapon,” she said in a post on X.

“I urge all sides to step back, return to the negotiating table and prevent further escalation,” she said, adding that EU foreign ministers will discuss the situation tomorrow.

Cuba's President Miguel Diaz-Canel. Pic: Reuters
Image:
Cuba’s President Miguel Diaz-Canel. Pic: Reuters

How the world reacted to the strikes

Cuba’s President Miguel Diaz-Canel said on X: “We strongly condemn the US bombing of Iran’s nuclear facilities, which constitutes a dangerous escalation of the conflict in the Middle East.

“The aggression seriously violates the UN Charter and international law and plunges humanity into a crisis with irreversible consequences.”

Venezuela’s foreign minister Yvan Gil said his country’s government “condemns US military aggression” and “demands an immediate cessation of hostilities”.

In a statement, an Australian government spokesperson said Iran’s nuclear and ballistic missile programme “has been a threat to international peace and security”.

Japan's Prime Minister Shigeru Isiba. Pic: Reuters
Image:
Japan’s Prime Minister Shigeru Isiba. Pic: Reuters

Japan’s Prime Minister Shigeru Ishiba said it is “crucial that there be a quick de-escalation of the conflict”.

Italy’s foreign minister Antonio Tajani said after the attack that his country’s government hopes “a de-escalation can begin and Iran can sit down at the negotiating table”.

The US attack came after more than a week of strikes by Israel, which have significantly degraded Iran’s air defences and offensive missile capabilities, and damaged its nuclear enrichment facilities.

Israel’s strikes on Iran have killed at least 865 people and wounded 3,396 others, according to the Washington-based group Human Rights Activists. The group said of those killed, 365 were civilians and 215 were security force personnel.

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Latest polling says if an election was held tomorrow Reform UK would win a majority

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Latest polling says if an election was held tomorrow Reform UK would win a majority

Since the local elections Reform UK has had no shortage of good polls.

But a new one suggests Nigel Farage‘s party has a chance not only of winning the next election, but of claiming a decent Commons majority, too.

In February, Reform topped a Sky News/YouGov poll for the first time, with Nigel Farage’s party edging in front on 25%, Labour pushed into second on 24%, with the Tories on 21%.

But a fresh one from Ipsos puts Reform on 34%, nine points ahead of Labour on 25%, with the Conservatives a distant third on 15%.

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Zia Yusuf: I sent a tweet I regretted

While the other parties are flatlining, Reform appears to be pushing boundaries.

Were these figures to be replicated across the country at a general election, with every constituency behaving the same way, then Reform could win as many as 340 seats, giving it a majority of 30, Sky News analysis suggests.

Labour could be reduced to 176 seats, down 236 on last year’s election, while the Tories would hit a record low of 12 seats.

But polling should always be taken with a pinch of salt and with the firm acknowledgement that there is not an election coming any time soon.

Conservative backbenchers might also tell you publicly that opinion polls are notoriously difficult to translate into seat numbers because voting percentages in individual constituencies can vary hugely from the overall average.

But the truth is that the symbolism of Reform UK topping another poll is likely to be noticed by MPs from all parties, especially backbench Conservatives who have actively been hoping their leader, Kemi Badenoch, can help them climb the polls and bring the party back into public favour.

Politics is a brutal game and when it comes to toppling underwhelming party leaders, the Tories are more ruthless than most. One wonders how many of these polls Mrs Badenoch’s party will allow her to endure.

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Reeves takes aim at Reform UK

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This poll is also a warning to Labour.

As the party approaches a year since its major victory, it will not have much to celebrate if these numbers are anything to go by.

According to this survey, only 19% are satisfied with the job Sir Keir Starmer is doing as prime minister, with 73% dissatisfied.

And the figure of 25% of voters intending to vote Labour is a level not seen since October 2019.

While abstract to much of the public, polling can often shape not only the chatter inside Westminster but how and when plots by MPs begin.

For Reform UK, this is a much-needed morale boost after a surprise resignation by their former Chairman Zia Yusuf, and then an almost immediate U-turn back into the party.

And Kemi Badenoch – who said during her leadership campaign that the Conservatives needed to go back to first principles and that this would take time – will be wondering, seven-and-a-half months after winning the leadership, how much time she really has left.

Ipsos interviewed a representative probability sample of 1,180 British adults aged 18+, via the Ipsos UK KnowledgePanel. Data was collected between 30 May-4 June 2025.

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Palestine Action: The ‘enemy within’ or non-violent protesters?

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Palestine Action: The 'enemy within' or non-violent protesters?

The impending ban on protest group Palestine Action has divided opinion – described as both “outrageous” and “long overdue”.

Home Secretary Yvette Cooper is expected to take the step after the group broke into RAF Brize Norton in Oxfordshire on e-scooters and sprayed two Voyager planes with red paint.

The prime minister described the attack as “outrageous” and a rapid review of security at MoD bases is under way.

It was the latest protest in a five-year campaign from Palestine Action (PA) that has targeted arms manufacturers, financial institutions, political figures and government buildings.

Red spray paint has become its signature.

Damage to planes at Brize Norton
Image:
Damage to planes at Brize Norton

Damage to planes at Brize Norton

On its website, PA says it is a “direct action movement” committed to ending “global participation” in what it calls Israel’s “genocidal and apartheid regime”.

It adds that it uses “disruptive tactics” to target “corporate enablers of the Israeli military-industrial complex”.

Banning the group would make membership of it illegal. It would be treated as a terrorist organisation.

Saeed Taji Farouky, a spokesman for PA, told Sky News that potential proscription was “unfair”, adding that it was “ludicrous” that a “civil society direct action group” could end up on the same list as ISIS.

He added: “It’s not logical, it’s not even consistent with the British legal definition of terrorism, it’s a reaction that’s been taken overnight, with almost no discussion or debate.

“The whole thing is incredibly worrying, mostly for what it means about British law in general, about undermining the very basis of British democracy and the rule of law.”

There are “no circumstances” under which the two people who breached Brize Norton would be handed over to the police, he said.

Singer-songwriter Paloma Faith, who spoke at a pro-Palestine rally in Whitehall in central London on Saturday, told Sky News she was “devastated” by the move.

Paloma Faith spoke at the pro-Palestine rally
Image:
Paloma Faith spoke at the pro-Palestine rally

“I have met some of the people who have friends in that group. They are young students and they are basically trying to do something because they feel that our government is failing them.”

She added that “everyone” wants to end what she described as a “massacre” in Gaza.

Israel says its military campaign in Gaza is a way of defending itself against Hamas, which killed more than a thousand people in its 7 October attacks and took about 240 people hostage. Hamas-run health authorities claim Israeli attacks have since killed almost 56,000 people in Gaza.

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What’s happening to Palestine Action?

Faith continued: “When you scribble on something, or paint on it, it’s a non-violent protest and it shouldn’t be made at the same level as a violent protest – it is unjust.”

Ben Jamal, director of the Palestine Solidarity Campaign, backed Palestine Action’s use of non-violent protest.

A bank damaged by Palestine Action
Image:
A bank damaged by Palestine Action

He told Sky News: “There has been a place for that in all political movements in history.

“In the struggle for the rights of black people in the US, in the struggle against apartheid in South Africa, in the struggle for women to have the vote, people took forms of non-violent direct action.

“Imagine if we had the current [situation] back in those days – we would have been proscribing the suffragettes, treating them as terrorists.”

There was a pro-Israeli counter-protest
Image:
There was a pro-Israeli counter-protest in London

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Others have welcomed the move. Lord Walney, who served as the government’s independent adviser on political violence, told Sky News the decision was “long overdue”.

“Palestine Action have acted as the enemy within which is why it’s right, now, to crack down on them,” he said.

“They have terrorised working people for a number of years and there’s a number of serious violent charges that are going through the court system at the moment.”

The UK government is expected to announce its decision early next week.

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