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A recruitment and retention crisis in the armed forces will grow unless the government exempts military families from paying VAT on private school fees, insiders have warned.

Sky News understands that more and more families are raising concerns internally about the “damaging” policy after the chancellor failed to offer sufficient protections in her budget.

They say a promise to increase an allowance funded by the Ministry of Defence (MoD) that helps to cover the cost of school fees does not go far enough, and that highly experienced personnel – officers and other ranks – will quit if Rachel Reeves does not perform a U-turn.

Such a loss in skills would weaken UK defences at a time of rising threats, the insiders say.

A soldier with a child at boarding school, who asked to remain anonymous, said: “I will have to leave military service, as I will not inflict another school move on my child.”

He said: “On one side, the chancellor wore a poppy during her budget announcement, and then proceeded to deal a damaging blow to members of His Majesty’s Armed Forces by not including a simple exemption.”

Defence Secretary John Healey joins serving military personnel to hand out poppies and collect donations for the Royal British Legion Appeal at Victoria Station, during London Poppy Day. Picture date: Thursday October 31, 2024.
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Defence Secretary John Healey joins serving military personnel to hand out poppies. Pic: PA

An army spouse, who asked for her identity to be protected because her husband is serving, said: “This is people’s children. This is people’s money in their pocket.”

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She told Sky News: “If there is a nice job offer outside the military… that is going to look way, way more attractive than it did a few months ago. The army is in a recruitment and retention crisis, so why would you do something like this?”

Offering a sense of the scale of the potential impact, the Army Families Federation, an independent charity, said nearly 70% of families that shared evidence with it about the policy said without protection from the full cost of the VAT they would consider quitting the service.

The mobile nature of military life – with postings around the UK and overseas – often requires service personnel to move every few years, with any children they have forced to relocate with them, transiting in and out of different schools.

To protect against this disruption some parents decide to send their kids to private school – often to board.

More than 2,000 of these personnel – the majority of them in the army – claim money from the MoD to help cover the cost of private school fees.

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The Continuity of Education Allowance (CEA) funds up to 90% of tuition fees but families must pay a minimum of 10%.

Many of those who take this option will have agonised over the affordability of the portion they will still pay, which can amount to tens of thousands of pounds per year.

They will now have to pay more to cover the VAT on this portion of the bill – or else pull their children out of school, a nightmare option, especially for those serving abroad.

In addition, some other military families that do not qualify for the education allowance – which is only allocated under a very strict criteria – still opt to put their children into boarding school to ensure the continuity of their education at a single location.

They will have no protection from any of the VAT burden.

James Cartlidge. Pic: PA
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James Cartlidge. Pic: PA

James Cartlidge, the shadow defence secretary, said he has received a lot of messages from impacted families and is urging the government to give them an exemption.

“The emails I’ve had are saying: I’ve got to choose between my child and serving my country,” said Mr Cartlidge, who previously served as a Conservative defence minister.

“The government really needs to respond to this quickly.”

An MoD spokesperson said: “We greatly value the contribution of our serving personnel and we provide the Continuity of Education Allowance to ensure that the need for the mobility of service personnel does not interfere with the education of their children.

“In line with how the allowance normally operates, the MoD will continue to pay up to 90% of private school fees following the VAT changes on 1 January by uprating the current cap rates to take into account any increases in private school fees.”

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Sir Keir Starmer to unveil ‘plan for change’ – what is it and why now?

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Sir Keir Starmer to unveil 'plan for change' - what is it and why now?

After five months in power, even the most loyal cabinet members would quietly admit it’s been a rocky run for Sir Keir Starmer and Labour.

The prime minister’s personal polling ratings have tumbled from a +7 in the post-election honeymoon to -29 now.

Many pensioners, business owners, entrepreneurs and farmers are angry, and between the Downing Street power struggles that became front page news, rows over freebies and the first cabinet resignation, it can at times be hard to pinpoint what this government is about and trying to achieve.

Politics latest: Starmer comes under attack over ‘convicted fraudster’ ex-minister

Starmer won big in the summer but is struggling to punch through.

Thursday is a serious attempt to change that. Because this is when Sir Keir will give you, the voter, the nuts and bolts of what to expect in the first half of the ‘decade of renewal’ he has long talked about.

You will be getting a series of “mission milestones” from the prime minister to give you clear markers on which to measure this government and Whitehall – a sharp navigation tool for a government that has been somewhat buffeted by side winds since taking office.

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From Thursday onwards the “plan for change” will be, as one person in the top team puts it, the Northern Star of Starmer’s first term in office.

What it looks like will be a checklist of what the government wants to achieve and when it comes to the next election day, you will be able to judge whether Labour have delivered or not.

Sir Keir Starmer. File pic: PA
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Pic: PA

The pledges will be hung around the missions for government that Sir Keir set out in opposition in February 2023 which then formed the backbone of his manifesto.

In a nutshell, these five missions (a sixth, to tackle small boats was introduced in May 2024) were to turn the UK into the fastest growing economy in the G7, improve the NHS and cut NHS waiting lists, launch a new border security command to drive down small boat crossings, make Britain a clean energy power, safer streets and improve opportunities for all through improvements in childcare, schools and further education.

Turning missions into milestones

On Thursday, those missions will be turned into a set of milestones for this parliament.

The PM hopes it will help voters better understand what he wants to achieve to improve their lives, while giving us all a checklist to hold the government to account.

👉 Click here to listen to Electoral Dysfunction on your podcast app 👈

Number 10 also wants these “measurable milestones” to galvanise delivery in Whitehall and force reform, be it through the use of artificial intelligence and tech, re-organisation, and efficiency savings.

I’m told there will be two elements to this.

The first part of what the PM will outline is about fixing the foundations – economic stability, secure borders and national security. Within that, the prime minister will make a clear commitment to reduce net migration and reduce small boat crossings.

The second part will be the mission milestones: For the NHS, there will be a pledge to carry out 92% of routine operations and appointments within 18 weeks by March 2029, a target that has not been hit for almost and decade and will require the current 6.7 million waiting list to be halved in the next five years.

Pledge for thousands more police officers

There will be a new promise for 13,000 police officers on the streets with every neighbourhood having a named, contactable police officer in their community, dealing with local issues.

There will be pledges too on early years education and recommitment that all electricity will come from renewables and nuclear by 2030.

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On the economy, the prime minister will pledge to improve living standards, as the more abstract mission to have the fastest growing economy in the G7 is made, to quote one government figure, “real for people around the kitchen table”.

Labour know all too well what happened to their US sister party the Democrats when they talked in broad terms about growth rather than telling voters what it really meant for their pocket, so you can expect the ‘growth commitment’ to be turned into some sort of disposable income target.

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Immigration: Starmer blames Tories

No migration mission milestone

As I understand it, there will not be a “mission milestone” on migration, which could well raise eyebrows on Thursday given that the prime minister explicitly added tackling small boats to his missions in the run-up to the election.

Five missions became six first steps in the general election campaign as Labour put tackling small boats on the same footing as the other long-term mission with a pledge to set up a new border command to drive down illegal crossings.

At the time, it was seen as an admission from the Labour opposition that they needed to give voters an offer on small boats and illegal migration. To not include it in the “milestones” on which Starmer is prepared to be measured by the public may well raise questions.

For its part, the prime minister’s team has been at pains to stress these new milestones are not an attempt at a reset, but rather a continuation of the mission-led government Sir Keir has been talking about for over 18 months, from opposition into power.

PM unbothered by critics

Insiders say the milestones are the “obvious next step” which Sir Keir and his team were always going to take and follow the processes that have characterised his ascent to the leadership and style of opposition: logical, methodical follow through of ideas he’s been working on.

Those who work with Sir Keir say he tends to be unbothered by the criticism and views it as the rough and tumble of getting on with it as he ploughs ahead with this plan.

But there is an acknowledgement in all of this that to have any hope of holding his fragile and shallow coalition of support together, then Starmer needs to take on, as one government figure put it, “the tsunami of cynicism”.

This cynicism has imbibed our politics in recent years on the back of broken promises around migration, NHS waiting lists, compounded by partygate and the Truss mini-budget that did for the Tories and for any residual trust in politics too, they said.

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Is Starmer the right leader to take on Farage?

Tackling Farage and Reform

Sir Keir’s election strategists Pat McFadden, who now runs the cabinet office at the heart of government, and Morgan McSweeney, who now runs Downing Street as the PM’s chief of staff, know that deliverables are their route to being able to answer the populist and insurgency politics driving the rise of Nigel Farage and Reform.

Former cabinet minister Harriet Harman pointed out in our Electoral Dysfunction podcast that if the story of the 2024 election was Reform eating into the Conservative vote, the battle of the next one will also be driven on whether Labour can hold off the party in strongholds such as Wales, Scotland and parts of the Red Wall where Reform came in second in dozens of seats.

If you look at council by-elections since the general election, argues Baroness Harman, Reform have gained 10 points, while Labour have lost 10 points and the Conservative party has stayed put.

Nigel Farage has made no secret of his desire to start taking votes off the new ‘establishment’, the Labour government.

Sir Keir is clearly alive to the threat, as just days after Donald Trump’s victory in the US election the prime minister said the economy and borders were his two top priorities in government.

These are the battlegrounds on which the Tories and Reform will try to fight them, with the former badly damaged on both and the latter now trying to take lumps out of Labour.

Risk in setting milestones

“There’s more at stake than losing the next election,” one senior Labour figure opined to me the other week. “People thinking we cannot fix problems is the real risk for all progressives. If people don’t believe politics can improve things it will only feed more into the politics of division and hate.”

There is also a risk in setting milestones. Too soft and they become meaningless, too ambitious without a concrete plan to deliver them, and you set yourself up to fail. “We have to prioritise and know the route map,’ explained one government figure. “We might not hit it,” they added, acknowledging the jeopardy.

What about Sunak’s targets?

You might remember Rishi Sunak’s five targets – halve inflation, grow the economy, reduce debt, cut waiting lists and stop the boats.

At the time of the general election campaign, we went through these line-by-line in the Sky News Battle for No 10 leadership interviews, and Mr Sunak had to tell a live audience that on NHS waiting lists, stopping small boats and falling debt, he had failed.

He promised the public “no tricks, no ambiguity” and owned those failures before being given the verdict at the ballot box a few weeks later.

When I asked Sir Keir in Rio at the G7 summit what the essence of his leadership was, he said: “I want working people to be better off. I want people to feel the impact of our policies in their pocket so that they can enjoy life in the way they want to, with themselves and their family.

“The basic security is that working people want a decent wage that provides for them in their family. Education allows their children to go as far as their talent will take them, a health service that’s there when they need it. But in a nutshell, it’s about making working people feel better off, and I am determined that that will remain my focus.”

Thursday’s milestones will be built around that central goal to make people better off, in their pockets, and in their lives – be it better schooling for their kids or better access to the local GP or hospital, or cleaner energy.

Tangible pledges on which the prime minister can be measured. It may not be a reset but, if Number 10 gets it right, it has the potential to be a fresh start for a prime minister who has failed to make his mark with the electorate since he won that election.

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Missouri bill would ban CBDCs, make gold and silver legal tender

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Missouri bill would ban CBDCs, make gold and silver legal tender

Missouri lawmakers have been trying hard to pass an anti-CBDC bill, and one of these days they may succeed.

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IcomTech promoter sentenced to 10 years in prison

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IcomTech promoter sentenced to 10 years in prison

The judge ordered David Brend to report to a federal prison in Florida by Dec. 16 to serve his 120-month sentence.

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