On the one hand, Keir Starmervowed 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.
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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2:49
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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10:04
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”.
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.
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.”
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.
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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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.
The families of the British couple killed in the Lisbon funicular crash have said they are “heartbroken” as they paid tribute to them.
Kayleigh Smith, 36, and William Nelson, 44, died alongside 14 others in Wednesday’s incident, including another British victim who has not yet been named.
Ms Smith graduated from the Arden School of Theatre in Manchester, where Mr Nelson ran the master’s degree in directing.
In a statement shared by Cheshire Police, Ms Smith’s family said: “Kayleigh was loved by family and friends for her wit and humour, her kind and caring nature came to the fore in her work as a funeral operative.
“She was also a talented theatre director and had just completed a Master’s Degree. They both leave family and friends heartbroken.”
Mr Nelson’s younger brother, who was not named in the statement, added: “Words cannot begin to describe how our family and friends are feeling right now but here is the best attempt. This week, due to a tragic accident in Lisbon, Portugal, we lost Will Nelson, who was not just my big brother but everyone’s.
“He was always kind, selfless, and protective, and the world does not feel right or normal without him. He was and has always been my hero, and we will miss you always. Love you, rest in peace you legend.”
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2:50
‘We felt no brakes anymore’
MADS theatre in Macclesfield, Cheshire, said Ms Smith was a “valued member of our society” who will be “greatly missed”.
It said she was an award-winning director and actress, who had also done multiple crew and front-of-house roles.
Macclesfield MP Tim Roca paid tribute to Ms Smith, saying she was a “hugely talented theatre director” who “poured her creativity, energy and kindness into every production”.
Mr Nelson was “equally dedicated to nurturing creativity and inspiring the next generation” and “his loss will be felt deeply by colleagues and students alike”, the MP added.
Hours before the crash, Ms Smith posted pictures on Instagram of their first day in Lisbon with the caption: “Churches and castles, tiles and trams.”
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3:53
Lisbon crash: What happened?
Five Portuguese citizens died when the packed carriage plummeted out of control – four of them workers at a charity on the hill – but most victims were foreigners.
Police said the other fatalities were two Canadians, two South Koreans, one American, one French citizen, one Swiss and one Ukrainian.
All but one were declared dead at the scene – and 21 others in the packed carriage were injured.
The yellow carriages of the Gloria funicular are a big draw for tourists, as well as a proud symbol of the Portuguese capital.
The journey is just 265m (870ft) up a steep hill and takes three minutes, with two carriages travelling in opposite directions on a linked cable.
Witnesses reported seeing one of the carriages hurtle down the hill before derailing and crashing 30m from the bottom.
The aftermath shows it crumpled and twisted against the side of a building.
People who were in the bottom carriage said they were a few metres into the climb when it started going backwards.
When they saw the other car speeding towards them, many jumped through the windows to escape.
Image: The crash happened around 6pm on Wednesday. Pic: Reuters
Prime Minister Luis Montenegro called the crash “one of the biggest tragedies of our recent past” and authorities are under intense pressure to quickly identifying the cause.
Nigel Farage has confirmed he wants to deport women asylum seekers back to the Taliban in Afghanistan if he becomes prime minister.
The Reform UK leader’s position on the topic has not been clear, with him previously saying he wouldn’t send women back to the fundamentalist regime that took over after western militaries withdrew, before now saying he would.
Mr Farage was speaking to Sky News’ political editor Beth Rigby at the Reform UK party conference in Birmingham.
When asked if he would “detain” women and children and “send them back”, the Clacton MP said “yes”.
Challenged on when he said in August that he was not “discussing” women and children, Mr Farage claimed this was a reference to his desire to see men detained on arrival in the UK.
At the time, he said he was “very, very clear” on the “deportation of illegal immigrants”, adding: “We are not even discussing women and children at this stage – there are so many illegal males in Britain, and the news reports that said that after my conference yesterday were wrong”.
Speaking today, Mr Farage claimed that the UK has a “duty of care” to a child if, for example, a four-year-old arrives in a dinghy – but not to women and men.
“For clarity, those that cross the English Channel will be detained and deported, men and women,” Mr Farage went on.
Image: Nigel Farage speaks to Beth Rigby at Reform’s 2025 conference
‘No one’ can prevent small boats crossing the Channel
The Reform leader also rowed back on his pledge to stop all boats within two weeks if he is elected prime minister.
Speaking to the conference yesterday, Mr Farage said: “You cannot come here illegally and stay – we will stop the boats within two weeks of winning government.”
But speaking to Beth Rigby today, he changed tack – saying “the passing of legislation” would be required.
He said only then would the boats be stopped within two weeks, or sooner In the interview with Rigby, Mr Farage tried to claim he did not say he would end the boats within two weeks of “winning government”.
But the video of his speech, as well as the transcript released by Reform UK, clearly show him saying: “We will stop the boats within two weeks of winning government.”
When asked why he wouldn’t be able to follow through with his initial claim, Mr Farage said it was impossible and that “no one” can prevent them crossing the Channel.
The Reform UK leader said the law he wants to introduce will be called the Illegal Migration Act once it is passed by parliament.
He confirmed his agenda includes leaving the European Convention on Human Rights, shutting down asylum hotels and housing people at RAF bases instead, as well as deporting Channel migrants.
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Mr Farage also claimed that deportation flights would also begin within two weeks of the law changing, and this combination of factors would stop people from wanting to travel from France.
Reform doesn’t seem bothered about detail amongst their fireworks
Nigel Farage insists his policy on mass deportations is clear when it comes to women and girls.
But I’ve watched every Reform speech since they unveiled their flagship policy – and I was there in the room to ask him when he announced what he will do with women and children who come here via small boats if he was in power – and I still can’t work it out.
That’s because he’s said three different things since, including in an interview today.
Originally he said everyone would be detained: “Yes, women and children, everybody on arrival will be detained. And I’ve accepted already that how we deal with children is a much more complicated and difficult issue.”
A day later he said Reform is “not even discussing women and children at this stage” implying women and children would not be deported.
He also said it was “not true” that’s he had committed to sending women and girls back to countries where they can be raped, tortured and killed.
But today at their conference he told Sky News that women who arrive by boat will be deported to Afghanistan “if necessary”.
Considering Reform UK say they are willing to make deals with Afghanistan and Syria, this question is an important one. The UK has not recognised the Taliban as a legitimate government of Afghanistan since the group seized Kabul in 2021 and first established a regime based on an extreme interpretation of Islamic law.
Reform’s deputy leader Richard Tice has defended those plans, saying: “Sometimes you do deals with people you may not want to go down the pub with.”
Farage clarified that “children, of course, we’ll have to know that we’re sending them off somewhere sensible”.
He has also previously said asylum seekers were a threat to national security and to British women.
The broader political issue though, is that Reform’s immigration plan was meant to be a detailed and considered policy on an issue they’ve been ahead of other politicians on for years.
So why aren’t they more forthcoming with their answers on what they would do with women and children?
If they had hoped to truly embody their conference slogan of “next steps” to professionalise the party, they need to urgently address this.
But party members here don’t seem to be bothered by this detail amongst the fireworks, the enthusiasm and the energy here.
It turns out that years of banging on about this single issue for decades is Nigel Farage’s greatest strength – and the public are willing to give him the grace to work out the details later down the line.
This strategy all depends on Reform UK winning the next general election – which Labour does not have to call until 2029.
However, the Reform leader says he believes the government will collapse in 2027 due to economic pressure and other factors.
Reform are currently well clear of Labour and the Conservatives in the polling, and are targeting next year’s Welsh, Scottish and English local elections to try and win more power in councils and national assemblies.
Clashes have broken out at a protest for Palestine Action in London as police reveal they have made around 150 arrests.
The Metropolitan Police said officers had been “subjected to an exceptional level of abuse” at the Westminster protest, including “punches, kicks, spitting and objects being thrown”.
It added some protesters had been both physically and verbally abusive in a “coordinated effort to prevent officers carrying out their duties”, and that a number of the arrests were made for assault.
Officers were seen drawing their batons while demonstrators took action in support of the proscribed terror organisation.
One man was seen with blood streaming down his face behind a barrier after being arrested, while the crowd was heard chanting “shame on you” and “you’re supporting genocide”.
Image: Pic: PA
Image: Pic: PA
Tense scenes on the western side of Parliament Square saw several protesters fall over in a crush while water was thrown at officers.
The Met Police announced the first arrests of the day on X just 12 minutes after the protest’s official start time.
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1:24
Watch moment police carry several protesters away
The protest’s organiser, Defend Our Juries, said it estimated 1,500 had gathered for the rally, where many of them held signs saying: “I oppose genocide. I support Palestine Action.”
In an update early on Saturday evening, the Met said: “Any assaults against officers will not be tolerated and arrests have already been made. We will identify all those responsible and prosecute to the full extent of the law.”
It had warned before the protest that “expressing support for a proscribed organisation is a criminal offence under the Terrorism Act”.
“Where our officers see offences, we will make arrests,” it said.
Image: A protester is carried away by police in Parliament Square. Pic: PA
Image: Pic: PA
A spokesperson for Defend Our Juries claimed the rally had been “the picture of peaceful protest” and that the Met Police’s statement about its officers being abused was an “astonishing claim”.
“I’ve been here all day and I haven’t seen any violence or aggression from anyone,” they said. “I’ve only seen aggression and violence from the police.”
Palestine Action has been banned as a terror group since 5 July after MPs voted overwhelmingly in favour of the move proposed by then-home secretary Yvette Cooper, making it illegal to express support for the group.
The ban on the group came shortly after two Voyager aircraft suffered around £7m worth of damage at RAF Brize Norton in Oxfordshire on 20 June.
More than 530 people were arrested at the last major demonstration against Palestine Action being banned as a terror group. However, the Met Police used “street bail” to avoid having to process them all in custody.
Street bail allows officers to release suspects on bail before they are taken to a police station. The suspect receives a bail notice requiring them to return to a station at a future date instead.
The organisers encouraged protesters not to accept street bail during today’s demonstration, writing in a briefing document before they started: “It will not be practically possible for the police to arrest 1,000 non-compliant people on the same day, and that is the strategic rationale behind non-compliance. It increases pressure on the state.”
In a reference to the advice in the briefing document, a Metropolitan Police spokesperson told Sky News the move would be “misguided”.
It faces a legal challenge in November after the High Court granted a full judicial review to Palestine Action co-founder Huda Ammori.