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Council tax bills are set to rise to pay for a 3.5% real terms increase in funding for police forces next year, the government has announced.

Council taxpayers in England and Wales will be asked to collectively pay an extra £329.8m to help pay for the funding increase, policing minister Dame Diana Johnson told MPs in a written statement.

The 2025-26 police force settlement will amount to £17.4bn, an increase of up to £986.9m on the current year.

Police and crime commissioners will be expected to make full use of their ability to raise the council tax precept to deliver the full increase in police budgets.

This will add £14 a year to the tax bill for the average Band D house, Dame Diana said.

Politics latest: Cow takes part in latest farm tax protest

She added increasing the cost of council tax to fund the increase “strikes the balance between protecting taxpayers and providing funding for police forces”.

Sir Keir Starmer’s spokesman said it is up to councils to decide if they raise taxes or not.

The additional funding will cover the costs of the pay rises given to officers by the government earlier this year, as well as the increase in employers’ national insurance contributions brought in by the budget.

It will also pay for recruitment to help meet the government’s neighbourhood policing promises.

File photo dated 02/03/17 of a Metropolitan Police Service (MPS) officer outside the Royal Courts of Justice in central London. According to a report by Metropolitan Police Commissioner Sir Mark Rowley, Britain's biggest police force is heading for its lowest staffing levels in a decade by March next year, partly due to inadequate funding and low recruitment. Issue date: Tuesday June 4, 2024.
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Dame Diana Johnson has said councils will need to increase the tax they receive for policing. File pic: PA

There will be a £1bn increase to £19.5bn for the total amount going into policing, which is an overall 3% real terms rise.

Weeks after Labour won the election, Chancellor Rachel Reeves agreed a 4.75% pay increase for police officers.

In the October budget, she announced the amount employers contribute to national insurance would increase from 13.8% to 15% from April 2015.

Home Secretary Yvette Cooper said in November police forces would be “compensated” for the increase.

She also announced an extra £500m of additional funding will be given to neighbourhood policing, with that funding included in the funding increase.

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Dame Diana said: “Of the £986.9m of additional funding for police forces, I can confirm that £657.1m of this is an increase to government grants, which includes an increase in the core grants of £339m to ensure police forces are fully equipped to deliver our safer streets mission.

“This also includes £230.3m to compensate territorial forces for the costs of the change to the employer national insurance contributions from 2025-26, and an additional £100m to kickstart the first phase of 13,000 additional police officers, PCSOs and special constables into neighbourhood policing roles.

“This will provide policing with the funding required to tackle crime and keep communities safe.”

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US regulators release joint statement teasing 24/7 capital markets

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US regulators release joint statement teasing 24/7 capital markets

US regulators release joint statement teasing 24/7 capital markets

A 24/7 trading cycle would create new opportunities and risks for traditional financial markets that do not operate on nights and weekends.

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Cabinet reshuffle: Who’s on Keir Starmer’s new team and who’s out?

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Cabinet reshuffle: Who's on Keir Starmer's new team and who's out?

Sir Keir Starmer is reshuffling his cabinet following Angela Rayner’s resignation after admitting she had not paid enough stamp duty on the purchase of a new home.

The prime minister’s former right-hand woman stepped down as deputy prime minister, housing secretary and deputy leader of the Labour Party after standards adviser Sir Laurie Magnus found she had breached the ministerial code.

Politics latest: Reshuffle after Rayner quits

She paid standard stamp duty on a flat she bought in Hove, East Sussex, in May after taking advice that it counted as her only home due to her disabled son’s trust owning the family home in Ashton-under-Lyne – but it was established she should have paid more.

Her resignation has left a hole around the cabinet table, which Sir Keir is now filling.

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The rise and fall of Angela Rayner

It was stressed early on Chancellor Rachel Reeves would remain as chancellor, in an attempt to stop the markets moving.

Read more: The working class mum who left school at 16 and became deputy PM

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This is who is moving and where to:

David Lammy – foreign secretary to justice secretary and deputy PM

After flexing his diplomatic muscles with Donald Trump and his deputy JD Vance over the past year, Mr Lammy will now move to the justice brief.

The move is likely to be a blow as the PM had promised, most recently in November, he would be foreign secretary for the whole parliament until 2029.

Although he is no longer holding one of the four great offices of state, he has also been made deputy prime minister, presumably to soften the blow.

Mr Lammy is close to Sir Keir, both as a friend and in his next door constituency, and was seen grinning as he went into Number 10 after being appointed.

David Lammy is now justice secretary and deputy PM. Pic: Reuters
Image:
David Lammy is now justice secretary and deputy PM. Pic: Reuters

Yvette Cooper – home secretary to foreign secretary

The Labour stalwart had made tackling illegal migration a priority, so the move could be seen as a disappointment for her.

However, she remains in one of the four great offices of state – PM, chancellor, foreign and home.

Yvette Cooper is now foreign secretary
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Yvette Cooper is now foreign secretary

Shabana Mahmood – justice secretary to home secretary

A big promotion, the straight-talking Labour MP will be tasked with tackling the small boats crisis and asylum seeker hotel protests.

She is no stranger to making difficult decisions, deciding to free criminals early to reduce prison overcrowding as justice secretary.

Her move makes it the first time all three great offices of state, after the prime minister, are held by women.

Shabana Mahmood is now home secretary. Pic: PA
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Shabana Mahmood is now home secretary. Pic: PA

Pat McFadden – chancellor of the Duchy of Lancaster and intergovernmental minister to work and pensions secretary and head of “super ministry”

Often seen as Sir Keir’s “number two”, Mr McFadden will take over a newly formed “super ministry”.

It will include the department for work and pensions and the skills remit of the department for education – taking a large part of Education Secretary Bridget Phillipson’s brief and taking over from Liz Kendall as work and pensions secretary.

While it is not a promotion at first glance, it is a much wider role than he has had as chancellor of the Duchy of Lancaster – the highest-ranking Cabinet Office minister after the PM.

Pat McFadden is work and pensions secretary and head of the 'super ministry'. Pic: PA
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Pat McFadden is work and pensions secretary and head of the ‘super ministry’. Pic: PA

Darren Jones – chancellor of the Duchy of Lancaster

It is the second new job in the space of one week for the new chancellor of the Duchy of Lancaster. The close ally of the prime minister was promoted from chief secretary to the Treasury on Monday to chief secretary to the prime minister. And now he gets another new job.

Darren Jones is the new chancellor of the Duchy of Lancaster
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Darren Jones is the new chancellor of the Duchy of Lancaster

Steve Reed – environment secretary to housing secretary

A promotion for the man who has consistently defended the government lifting inheritance tax relief on farmers.

He takes over one of the two major vacancies left by Ms Rayner and will have the massive task of building 1.5 million new homes during this parliament, as promised by the government.

Steve Reed is now housing secretary
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Steve Reed is now housing secretary

Jonathan Reynolds – business and trade secretary to chief whip

A slightly odd move for the MP seen as a steady pair of hands in his business secretary role.

He takes over from Sir Alan Campbell and will now have to hustle Labour MPs to vote with the government – something that has sometimes proved difficult with the current cohort.

Mr Reynolds will also attend cabinet, as is necessary so he can liaise between the party and No 10.

Jonathan Reynolds is the new chief whip
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Jonathan Reynolds is the new chief whip

Peter Kyle – science secretary to business and trade secretary

A promotion for Mr Kyle, who is taking over from Jonathan Reynolds.

He is seen as a rising star and impressed Labour MPs when he refused to stand down after suggesting Nigel Farage was on the side of people like Jimmy Savile by opposing the government’s online safety law.

Mr Kyle will be in charge of getting trade deals with other countries over the line.

Peter Kyle is now business and trade secretary
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Peter Kyle is now business and trade secretary

Emma Reynolds – economic secretary to the Treasury to environment secretary

Probably the biggest promotion of the reshuffle, Ms Reynolds is taking on Mr Reed’s role after serving as a junior minister in the Treasury.

She will have to take on farmers and deal with the water companies – a big undertaking.

Emma Reynolds is now environment secretary
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Emma Reynolds is now environment secretary

Liz Kendall – work and pensions secretary to science, innovation and technology secretary

Pat McFadden has taken her role as work and pensions secretary, while Ms Kendall takes over Peter Kyle’s brief.

He has made AI a major facet of his role so we will wait to see which direction Ms Kendall takes the job in.

Liz Kendall is the new science secretary. Pic: PA
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Liz Kendall is the new science secretary. Pic: PA

Douglas Alexander – trade policy minister to Scotland secretary

A promotion for the Blair/Brown minister who returned to politics last year after being ousted in 2015 by then 20-year-old SNP MP Mhairi Black.

He takes over from Ian Murray, who has been removed from the cabinet.

Douglas Alexander is the new Scotland secretary
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Douglas Alexander is the new Scotland secretary


Sir Alan Campbell – Chief whip to Lord President of the Council and leader of the House of Commons

An MP since 1997 and part of Tony Blair and Gordon Brown’s frontbench, Sir Alan is taking over Lucy Powell’s role.

He will be in charge of organising government business in the Commons – a sizeable job.

Who is out?

Lucy Powell has been sacked as leader of the House of Commons.

Ian Murray has been sacked as Scotland secretary.

Bridget Phillipson remains as education secretary but her brief has narrowed as Mr McFadden has taken over the skills part of her job.

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Angela Rayner: The working-class mum who left school at 16 and became deputy PM

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Angela Rayner: The working-class mum who went from union rep to Labour big-hitter

Leaving school aged 16, pregnant and with no qualifications, Angela Rayner has had a meteoric rise to the second-highest office in the UK – and a spectacular fall from grace.

Sir Keir Starmer’s right-hand woman has now resigned after she admitted to Sky News political editor Beth Rigby she had not paid enough stamp duty on a second home she bought in Hove, East Sussex, earlier this year.

Politics latest: Angela Rayner resigns

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Rayner admits she didn’t pay enough tax

Growing up in poverty on a council estate in Stockport, Greater Manchester, Angela Bowen (her maiden name) and her two siblings were brought up by her grandmother, as her mother had bipolar disorder. She has said they had no books because her mother could not read or write.

She left school at the age of 16, without any qualifications, after becoming pregnant and has said her son, Ryan, “saved me from where I could have been, because I had a little person to look after”.

The teenage mother, now 45, studied part-time and gained a qualification in social care, working for Stockport Council as a care worker.

She entered politics when she was elected as a Unison trade union representative and then convenor of Unison North West – the region’s most senior official, becoming a Labour Party member during her time there.

Angela Rayner in 2016, a year after becoming an MP
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Angela Rayner in 2016, a year after becoming an MP

She married Unison official Mark Rayner in 2010 and they had two sons, Charlie and Jimmy. Charlie, now 17, was born at 23 weeks old and is disabled. It is the trust set up for him that meant she believed the Hove flat was not a secondary home so she did not have to pay more stamp duty on it.

In 2017, her eldest son Ryan had a son, making Ms Rayner a grandmother at the age of 37. She gave herself the nickname “Grangela”.

She and her husband separated in 2020 and their divorce was completed in 2023. Since 2022, she has been in a relationship with former Labour MP Sam Tarry, with a break in 2023.

Pic: PA
Image:
Pic: PA

NHS compensation and a trust

Days before her resignation, she revealed compensation was paid to Charlie by the NHS due to the circumstances around his birth, which left him with “life-long disabilities”.

A trust was set up to manage the compensation and to ensure her son was properly looked after, and so that he and his brother could remain living in their family home in Ashton-under-Lyne as part of a “nesting arrangement”, where children of divorced parents live in one house while parents take it in turn to stay there.

She said she sold her stake in that home to the trust in January this year and used that money as a deposit on the Hove flat.

The Labour MP said she was given legal advice that the coastal flat did not have to be considered as a second home for stamp duty but sought further legal counsel after media reports claimed she avoided £40,000 in stamp duty.

Her initial lawyers said they never gave her tax advice and said they were being made “scapegoats”.

Ms Rayner gave a tearful interview to Sky’s Beth Rigby before her resignation, telling the Electoral Dysfunction podcast she had spoken to her family about “packing it all in”.

MP to Labour deputy in five years

Ms Rayner rose up the Labour ranks quickly after becoming an MP for Ashton-under-Lyne in 2015.

She was made deputy Labour Party leader in 2020 and was made deputy prime minister and housing, communities and local government secretary after last summer’s general election.

A self-described socialist, “but not a Corbynite” (in her own words), she became well known for calling the Conservatives “scum”, for which she eventually apologised after initially refusing to.

Pic: Reuters
Image:
Pic: Reuters

Council house and donor controversies

During last summer’s election campaign, Ms Rayner was investigated by Greater Manchester Police over allegations she misled tax officials in the sale of her council house in 2015 under the right to buy scheme.

She was cleared of any wrongdoing and HMRC concluded she did not owe any capital gains tax. She accused the Tories of using “desperate tactics” against her and went on to win her seat with a 19.1% majority.

Not long after becoming deputy PM and housing secretary, she was embroiled in another scandal in which she was accused of failing to properly register her use of Labour peer Lord Waheed Alli’s $2.5m New York apartment and being given clothes worth £3,550 by him.

She later announced she would no longer accept clothes from donors.

Sir Keir Starmer and Angela Rayner during a visit to a construction site in Cambridge. Pic: PA
Image:
Sir Keir Starmer and Angela Rayner during a visit to a construction site in Cambridge. Pic: PA

Building pledge

One of the Labour government’s biggest pledges was to build 1.5m new homes in this parliament and, as housing secretary, this came under Ms Rayner’s remit.

Sir Keir admitted in December the pledge might be “a little too ambitious”.

Ms Rayner was warned by some of the UK’s biggest developers there was not enough skilled labour to get anywhere near that target, but she has insisted it will happen.

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‘House building target is achievable’

She also led the charge to overhaul planning rules, announcing planning officers would be able to rubberstamp development proposals without permission from council committees if they complied with locally agreed plans.

The changes will be made through the planning and infrastructure bill, which was introduced to parliament in March and is making its way through the Commons.

It also promises to unblock 150 infrastructure projects, such as gigafactories, windfarms and railways, while protecting the environment and nature by setting up a fund to help builders meet their environmental obligations faster by pooling contributions to fund larger nature protections

Right to buy

In February, somewhat controversially given she bought the council house she grew up in, Ms Rayner announced it would be harder for tenants to buy their own council homes to help reverse the housing stock shortage.

She also announced “Awaab’s Law” – introduced by the Conservatives in 2023 and named after two-year-old Awaab Ishak, who died from damp and mould – would come into force in October 2025, forcing social housing landlords to fix dangerous damp and mould in a set amount of time and emergency hazards within 24 hours.

In her role as deputy PM, Ms Rayner occasionally stood in for Sir Keir at Prime Minister’s Questions, one time facing Tory Oliver Dowden and saying it was the “battle of the gingers”.

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