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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
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?

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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.

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).

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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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Man, 53, charged over Liverpool parade incident

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Man, 53, charged over Liverpool parade incident

A 53-year-old man has been charged after a car was driven into a crowd at Liverpool FC’s trophy parade.

Paul Doyle, from the West Derby area of Liverpool, has been charged with seven offences, Merseyside Police said.

The businessman, who is a father-of-three, is accused of two counts of unlawful and malicious wounding with intent to cause grievous bodily harm, and two counts of causing unlawful and malicious grievous bodily harm with intent to cause grievous bodily harm.

Paul Doyle
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Paul Doyle

Doyle is also accused of two counts of attempted unlawful and malicious grievous bodily harm with intent to cause grievous bodily harm, and one count of dangerous driving.

He is due to appear before Liverpool Magistrates Court on Friday.

The charges relate to six people, including two children. A wounding charge and an attempted grievous bodily harm charge relate to a child.

A police car was outside Doyle’s four-bedroom detached family home in the West Derby area on Thursday morning.

According to his social media, he has travelled extensively including Japan, Fiji, India and Australia. Doyle has posted pictures of himself competing in triathlons, and climbing Mount Kilimanjaro.

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New Liverpool incident footage

Thousands of fans were gathered in Liverpool city centre on Monday to celebrate the Premier League champions’ title win when a car struck a crowd on Water Street.

Police said a total of 79 people were injured in the incident, with the youngest aged nine, and the oldest being a 78-year-old.

Seven people remain in hospital in a stable condition.

Forensic officers at the scene in Water Street. Pic: PA
Image:
Forensic officers at the scene in Water Street. Pic: PA

‘Huge volume of evidence’

Chief crown prosecutor for the CPS Mersey-Cheshire, Sarah Hammond, told a news conference on Thursday that the investigation was at an early stage and a “huge volume of evidence” was being reviewed.

“This includes multiple pieces of video footage and numerous witness statements. It is important to ensure that every victim gets the justice they deserve.

“The charges will be kept under review as the investigation progresses.”

Police ‘working tirelessly’

Also at the briefing where the charges were announced was Assistant Chief Constable of Merseyside Police, Jenny Sims, who said: “I fully understand how this incident has left us all shocked and saddened, and I know many will continue to have concerns and questions.

“Our detectives are working tirelessly, with diligence and professionalism, to seek the answer to all of those questions. When we are able to, we will provide further information.”

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Body found in search for missing teenage girl who fell into reservoir

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Body found in search for missing teenage girl who fell into reservoir

A body has been found in the search for a missing teenage girl who fell into a reservoir, police have said.

West Yorkshire Police confirmed they recovered a body from the Baitings Reservoir, near Ripponden, on Thursday afternoon.

A formal identification is yet to take place, but police believe the body to be that of the missing teenage girl.

The girl’s family have been informed.

Emergency services were called to the reservoir at 1.17pm on Wednesday following reports that a teenage girl had fallen into the water from Baitings Dam.

Police, fire and ambulance crews, as well as an underwater search team, were deployed to the scene for the search, which continued on Thursday until a body was found.

Read more from Sky News:
Age range of Liverpool crash victims released
Drought declared in North West England

Detective Inspector Laura Hall of Calderdale’s Safeguarding Team said: “While formal identification is yet to take place, the girl’s family have been informed and are being supported by specially-trained officers.

“My thoughts go out to her family and friends at this very sad time.

“Our enquiries are continuing into the death in order to establish exactly what happened yesterday, but we do not believe it to be suspicious.”

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Ages of youngest and oldest Liverpool crash victims released

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Ages of youngest and oldest Liverpool crash victims released

The youngest victim injured in the Liverpool parade crash on Monday is nine years old, police have said.

They added that the oldest is 78, with all 79 people injured understood to be British. Seven remain in hospital in a stable condition.

Merseyside Police declined to say what drug the 53-year-old man arrested over the incident is alleged to have taken.

“We wouldn’t go into this detail at this stage of the investigation,” the force said.

Police guards the site where a 53-year-old British man plowed a minivan into a crowd of Liverpool soccer fans who were celebrating the city's Premier League championship Monday, injuring more than 45 people in Liverpool, England, Tuesday, May 27, 2025.(AP Photo/Jon Super)
Image:
Police at the scene in Liverpool. Pic: AP

Forensic officers at the scene in Water Street.
Pic: PA
Image:
Forensic officers in Water Street. Pic: PA

Police are still questioning the driver and were granted further time to do so on Wednesday.

Officers have until Thursday evening to question the man from West Derby.

He is in custody on suspicion of attempted murder, dangerous driving and drug driving.

Police believe the car which struck pedestrians was able to follow an ambulance crew attending to someone suffering a heart attack after a road block was temporarily lifted.

Hundreds of thousands of Liverpool fans had turned out to celebrate their team’s Premier League title when the incident unfolded on Water Street just after 6pm on Monday.

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‘My boy in his pram, got bounced’

‘The best day of my life turned into worst’

Sky News interviewed a lifelong Liverpool fan who said his five-month-old son was “bounced” 15ft (4.6m) in his pram after they were hit by the vehicle.

The child was not counted in the police’s injury tally.

Daniel Eveson, 36, also said his partner had been driven over.

“The best day of my life turned into [the] worst,” Mr Eveson said.

He added: “Me and my partner were flat on the roof, on the bonnet… we were just both trying to hold on for dear life with Ted next to us.

“And my partner went under the wheels of the car, of the front of the car, and it rolled over her leg, and I just bounced off to the side, but my boy and his pram got bounced totally in the opposite direction – about 15ft down the road.”

Read more:
How the parade crash unfolded
Police given more time to question Liverpool suspect
Why police released ‘unprecedented’ details

Prime Minister Sir Keir Starmer travelled to Liverpool to meet with police chiefs and the local metro mayor.

He said he was being kept informed of developments, adding: “The scenes on Monday were just awful, to see how incredible joy at an amazing achievement turned to horror in a moment.”

Messages of support have been sent to the people of Liverpool, including from the King who said: “I know that the strength of community spirit for which your city is renowned will be a comfort and support to those in need.”

The Prince and Princess of Wales said they were “deeply saddened” by the incident.

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