The chancellor has confirmed a 2p cut to national insurance and increased child benefit thresholds.
In the budget, Jeremy Hunt said “permanent cuts in taxation” were possible because of the progress made in bringing down inflation – with forecasts suggesting it will fall to the target level of 2% within months.
More parents will be paid child benefit after the £60,000 threshold, beyond which no payment is currently made, will be extended to £80,000 from next month.
At present if one parent earns £50,000 a year child benefit payments are reduced. Following Mr Hunt’s announcement such payments won’t be tapered off until a parent is paid £60,000 annually.
The policy change will help 170,000 families with children under 16, or under 20 if they are in full-time education or training, Mr Hunt said.
Eligible parents receive £24 a week for their first child and £15.90 for other each of their other children. These sums will rise to £25.60 and £16.95 a week next month.
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Also due to change is the way child benefit is assessed.
It will move away from the present system, where just one parent earning £50,000 means the entitlement is tapered off, to whole household eligibility, whereby the income of parents is looked at together.
But this new joint assessment is won’t take effect until April 2026.
Average savings of around £1,300 will be made by nearly half a million families next year of the changes, Mr Hunt said.
Mr Hunt indicated plans to completely scrap national insurance contributions, branding it “double taxation”. National insurance brought in around £177bn in the 2022-23 period in tax.
Mr Hunt spoke about cutting taxes to increase growth, and the official Office for Budget Responsibility (OBR) forecast predicted that living standards will grow faster than expected.
But real disposable household income is not expected to recover to pre-pandemic levels until the 2025-26 period, after the next election.
And the tax burden is also set to continue to rise – albeit at a slightly reduced level when compared to last autumn’s forecast.
In total, the government will take £19.7bn more in tax by 2029 than forecasted in March 2021, even when the cuts to national insurance are included, due to fiscal drag.
Scrapping the “non-doms” regime, which allowed certain wealthy individuals to avoid paying tax on their foreign income, is expected to raise £2.7bn a year.
WHAT IS THE NON-DOM TAX STATUS
Removing the non-dom tax regime is a move that could be seen as being straight out of Labour’s playbook, although the chancellor suggested the Opposition got the idea from his predecessor Nigel Lawson in the late 1980s.
Potentially designed to take the wind out of Labour’s sails, it removes a clear dividing line between the parties’ policies.
A non-dom is someone who lives in the UK but whose permanent home is abroad.
The term is short for non-domiciled individual.
Under the UK’s current regime they only pay tax on money earned in the UK, their income and wealth from outside the UK isn’t taxed.
As a result, rich people make considerable savings if they choose to be tax domiciled abroad.
Non-doms can benefit from the tax arrangement for up to 15 years.
But that’s to change.
Labour wanted this to be cut just to four years. And that’s just what Chancellor Jeremy Hunt has done.
For those currently using the non-dom tax system “transitional arrangements” will be made, Mr Hunt said, including a two-year period in which individuals will be encouraged to bring wealth earned overseas to the UK.
This measure will attract an additional £15bn of foreign income and gains and generate more than £1bn of extra tax, he said.
Rishi Sunak was recused from the decision on non-dom tax to avoid any perceived or potential conflicts of interest.
In terms of spending, Mr Hunt earmarked almost £6bn for the NHS – with artificial intelligence set to be used to “cut form-filling for doctors” in a digitisation drive.
A 5p cut to fuel duty will be extended for another 12 months – with the government “backing the Great British pub” by holding the price of beer, wine and spirits steady until February 2025.
Meanwhile, Britons will be able to invest up to £5,000 in UK companies tax-free – in addition to their current ISA allowance – through a new “British ISA”.
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1:57
Chancellor cuts national insurance in budget
He also announced:
• The High Income Child Benefit Charge threshold will increase from £50,000 to £60,000
• A new excise duty on vaping, as well as a one-off increase to tobacco duty
• The higher capital gains tax rate on property will fall from 28% to 24%
• The VAT registration threshold will rise from £85,000 to £90,000 from 1 April – the first increase in seven years
• A fund aimed at supporting vulnerable households with the cost of living will be extended by a further six months
• The UK economy is expected to grow by 0.8% this year – and 1.9% in 2025
• Hundreds of millions of pounds to tackle “historic underinvestment in our nations and regions”
The 2p cut to national insurance was widely trailed – and follows a previous 2p cut announced in the autumn statement. Combined, this could save the average worker up to £900 a year.
But the chancellor had faced calls from Tory MPs to cut income tax or unfreeze tax thresholds to prevent Britons from being dragged into higher bands when they get pay rises.
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1:15
Awkward wait for chancellor outside No 11
Drab fiscal statement will cool May election rumours
We were promised a tax cutting budget, and we got a tax cutting budget.
The budget this year was a bit more straightforward than usual – with big announcements pre-briefed ahead of time, and no big standout measures held back to surprise voters with.
The chancellor cut national insurance by the expected two percentage points in a move that impacts 27 million people, worth £450 per year for the average person.
Capital gains tax will also be reduced, but the slightly more flamboyant move was stealing Labour’s proposals to scrap the non-dom tax status loophole and replace it with a new residency based system.
It means that an extra £2.7 billion a year will be used to fund tax breaks elsewhere in the budget.
There was a lot of pressure riding on Jeremy Hunt today among swirling chatter in Westminster of a May election, but this rather drab fiscal statement may have cooled those rumours.
But both parties could still be accused of electioneering today.
Mr Hunt thanked a list of Conservative MPs for their lobbying and campaigning as he announced certain measures, and even sometimes name checked the constituencies they represent.
Labour were much louder in their disagreement than usual, heckling the chancellor barely two minutes in.
The chancellor even started his speech at the despatch box with a bizarre, unrelated reference to Israel and Gaza, in a striking example of just how much the conflict has impacted UK politics since 7 October.
In terms of the immediate offerings, Jeremy Hunt confirmed the 5p fuel duty cut will continue, after it was due to expire at the end of March and confirmed a continuation of the alcohol duty freeze.
The Household Support Fund has also been extended for another six months.
There were elements in there for savers too, a new British ISA was announced allowing another £5,000 on top of existing ISA offerings and further tax relief for creative industries.
There was also a noticeable pivot back to more traditional Conservatism.
With the Conservatives 20 points behind in the polls, the chancellor must have been hoping that his budget can turn around Tory fortunes.
But today showed that for him this mission is clearly more of a marathon, not a sprint.
Mr Hunt is already facing anger from Scottish Conservatives, after he announced an extension of the windfall tax on profits made by energy companies in the North Sea.
The leader of the Scottish Tories, Douglas Ross, said he would not vote with the legislation – implying he would either oppose or abstain on the motion to introduce the measure.
Andrew Bowie, a Tory minister, said the will be “working with” Mr Ross to “resolve” the matter.
This budget is set to be the last before the election – with Mr Hunt under pressure to revive economic growth and the government’s prospects at the ballot box.
The UK economy slipped into a technical recession at the end of last year, and the Tories are about 20 points behind in the opinion polls.
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0:59
Why don’t we know when the UK election is?
Before the budget was announced, shadow chancellor Rachel Reeves said: “The Conservatives promised to fix the nation’s roof, but instead they have smashed the windows, kicked the door in and are now burning the house down.
“Taxes are rising, prices are still going up in the shops and we have been hit by recession. Nothing the chancellor says or does can undo the economic vandalism of the Conservatives over the past decade.”
The son of an Air India plane crash victim, who was sitting one row behind the man who survived, has told Sky News he will relive “her last moments” until the day he dies.
Manju Mahesh Patel, 79, was on the London Gatwick-bound plane when it crashed in Ahmedabad shortly after take-off on Thursday.
In an interview with Sky News, Chirag Mahesh Patel, Manju’s son, said he hopes his mother’s death was “instant” and “painless”.
“To the day I die I will think, ‘what were her last moments?’,” he said.
Pointing to a framed family photograph of Ms Patel at the family home, he added: “I want to remember mum like this.
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“I don’t want to have to go and identify a burnt corpse, your own parent. How does someone, how do you ever get over that? That will be with me, that’s with me for life.”
Ms Patel had been staying in Ahmedabad for the past few months doing charity work at a temple. She was due to be picked up by her son at Gatwick on Thursday night.
Image: A family photo of Chirag Mahesh Patel with his mother
In tears, Mr Patel described his mother as “very strong” and a woman “who really loved her family”.
“The thing about my mum,” he said, “is her bond with her faith. It’s unbreakable.
“She had ultimate faith… and in times of stress she would always say God’s name… So, I know that upon take-off, I know that she was saying his name.”
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1:57
What could have caused the India plane crash?
Mr Patel said that when he realised his mother was on the flight it was just “a normal day” and “it didn’t seem real”.
He said the last time he had spoken to her he had reminded her to take her diabetes medicine and had then missed a call from her at 4am to say she had arrived at the airport.
He described “the most heartbreaking thing” was how much Ms Patel was looking forward to seeing her grandchildren, saying “it was everything to her”.
She had told him she packed her suitcase with lollipops for her six-year-old grandson, and special crisps for her 15-year-old older grandchild.
Image: Ms Patel with her six-year-old grandson
“It’s unimaginable even in my worst nightmare,” he said. “And the thing that kills me… is she was so looking forward to seeing us… she kept saying I bought this for you, I bought that, I bought the things for the kids.”
Mr Patel and his wife are due to fly to India on Saturday night to provide a DNA sample to help identify his mother’s remains.
He expressed his anger at what he called a “disgusting” and “appalling” lack of communication from Air India – which he said passed his details to a hospital but never contacted him personally.
He described feeling “neglected” by the airline, which he said would only offer him an Air India flight – and no help organising accommodation.
Mr Patel said he refused to get on the Gatwick flight back to Ahmedabad and has booked with another provider to travel to India instead.
Image: Ms Patel with her elder grandchild
“I said [to the airline] all of this happened on Thursday, you’re telling me on Friday afternoon, do you want that flight this evening? That one crashed? The one coming back where 172 goes out? They asked do you want Air India 172? I said how can you ask me that. My mum just died on Air India.”
Mr Patel said he wanted “answers” and transparency in any air accident investigation.
Air India said in a statement: “Air India stands in solidarity with the families of the passengers who tragically lost their lives in the recent accident. Our teams on the ground are doing everything possible to extend care and support during this incredibly difficult time.
“As part of our continued efforts, Air India will be providing an interim payment of ₹25 lakh or approximately £21,000 each to the families of the deceased and to the survivor, to help address immediate financial needs. This is in addition to the ₹1 crore or approximately £85,000 support already announced by Tata Sons.
“All of us at Air India are deeply saddened by this loss. We mourn with the families, loved ones, and everyone affected.”
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3:24
Families in India wait for bodies of relatives
The company’s chief executive and managing director Campbell Wilson said in a video message posted on social media that over 200 “trained caregivers” were now in place to offer dedicated assistance to families, along with counselling and other services.
He said Air India was in the process of completing precautionary safety checks on Boeing 787 aircraft as directed by regulator the Directorate General of Civil Aviation (DGCA), which would “be completed within the timelines prescribed by the regulator”.
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Mr Wilson said he had also visited the crash site and said other members of the management team would remain present “for as long as it takes”.
The aircraft’s data recorder, often referred to as a black box, has been recovered and will form part of the investigation into the worst aviation crash in a decade.
‘He was too young’: Families grieve those lost in Air India crash
It was an emotional service at Derby’s Geeta Bhawan Hindu temple, as dozens of friends, colleagues and neighbours gathered to remember Dr Prateek Joshi, his wife Komi, their daughter Miraya, and twin sons Nakul and Pradyut.
Some wiped tears from their eyes, as a colleague was asked spontaneously to pay tribute to Dr Joshi, who had been bringing his family to live in the city, when the Air India flight they were on crashed seconds after take-off.
“He was too young, too much still to give, too much still to be done, too much to offer,” his friend told worshippers.
“He was taken from us in a very cruel and abrupt way, and his family as well, and we all think about his family back in India who is missing a son, missing a daughter-in-law and missing all their grandchildren who they’ll never see growing up.”
Derby South MP Catherine Atkinson said Dr Joshi, who was a radiologist at the Royal Derby hospital, had been “contributing to our NHS and the health of so many in our city and beyond”.
She said his wife was a pathologist who had resigned from her job in India.
“I won’t forget the photograph of them on the plane, full of optimism about their new adventure,” she said, as her voice broke.
“The losses make us all hug our families and loved ones a little closer and remind us how precious our time together is.”
Dr Joshi was described as a “warm, smiling man, full of joy” who enjoyed walking in the Peak District and who had discovered “a love of fish and chips”.
His neighbour and colleague Manoj Ramtohal told Sky News Dr Joshi always had time for people.
“He was very caring and very polite, very friendly, you couldn’t meet a better man than Prateek,” he said.
Sir Keir Starmer is to launch a new national inquiry into grooming gangs.
It comes after a government-requested audit into the scale of grooming gangs across the country concluded a nationwide probe was necessary.
The prime minister previously argued a national inquiry was not necessary, but has changed his view following an audit into group-based child sexual abuse led by Baroness Casey, which is set to be published next week.
“[Baroness Casey’s] position when she started the audit was that there was not a real need for a national inquiry over and above what was going on,” he told reporters travelling with him to the G7 summit in Canada.
“She has looked at the material… and she has come to the view that there should be a national inquiry on the basis of what she has seen.
“I have read every single word of her report, and I am going to accept her recommendation. That is the right thing to do on the basis of what she has put in her audit.
“I asked her to do that job to double check on this; she has done that job for me, and having read her report… I shall now implement her recommendations.”
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3:07
Grooming gangs: What happened?
The near 200-page report is to be published next week and is expected to warn that white British girls were “institutionally ignored for fear of racism”.
One person familiar with the report said it details the institutional failures in treating young girls and cites a decade of lost action from the Jay Review, set up in 2014 to investigate grooming gangs in Rotherham.
The report is also expected to link illegal immigration with the exploitation of young girls.
The government had initially resisted a new inquiry, insisting that it first wanted to implement recommendations from previous inquiries, such as the Jay Review, into child sexual exploitation.
The prime minister and Ms Phillips hit back, with Sir Keir citing his record of prosecuting abusers as director of public prosecutions, while Ms Phillips has long been a campaigner against domestic violence.
Following the row between the tech billionaire and the UK government, the prime minister asked Baroness Casey to conduct an audit of all the evidence to see if a national inquiry was required.
Kemi Badenoch, the Conservative leader, said: “Keir Starmer doesn’t know what he thinks unless an official report has told him so.
“Just like he dismissed concerns about the winter fuel payment and then had to U-turn, just like he needed the Supreme Court to tell him what a woman is, he had to be led by the nose to make this correct decision here.
“I’ve been repeatedly calling for a full national inquiry since January. It’s about time he recognised he made a mistake and apologise for six wasted months.
“But this must not be the end of the matter. There are many, many more questions that need answering to ensure this inquiry is done properly and quickly.
“Many survivors of the grooming gangs will be relieved that this is finally happening, but they need a resolution soon, not in 10 years’ time. Justice delayed is justice denied.”
Roads have been flooded and a landslip has disrupted trains as the UK was hit by tens of thousands of lightning strikes during thunderstorms – with severe weather warnings in place for large parts of the country.
It follows the hottest day of the year on Friday, which saw a high of 29.4C (84.9F) in Santon Downham in Suffolk.
The Met Office has issued an amber weather warning until 6pm across the South West, North East and North of England, Wales and much of Scotland.
It said there had been more thann 30,000 lightning strikes during the night, with the “vast majority” over the sea.
The Met Office has warned some areas could see 30-50mm of rain in a few hours, while a few locations could reach up to 80mm.
At the same time, strong wind gusts and hail accompanying the storms could potentially bring road flooding, difficult driving conditions, power cuts and flooding of homes and businesses.
The Environment Agency urged the public not to drive through flood water, reminding drivers that “just 30cm of flowing water is enough to move your car.”
A further yellow warning is in force in the eastern half of Northern Ireland from 6am to 6pm on Saturday, while a similar warning has been in place across the South East of England overnight following an amber alert on Friday.
Image: Thunderstorm warnings are in place until Saturday evening. Pic: Met Office
Kent experienced heavy rainfall overnight, with flooded roads in parts of Dover, while a fire in a residential building in St Leonards-on-Sea on Friday night was likely caused by a lightning strike, the East Sussex Fire and Rescue Service say.
Devon received five flood warnings overnight by the Environment Agency, alongside 46 flood alerts in the South West, South East and Midlands.
A further six flood alerts have been put in place by Natural Resources Wales in South Wales.
National Rail said a landslip had stopped all services between Exeter St Davids and Okehampton, with the weather conditions meaning it is not safe for engineers to reach the site. Disruption is expected until around 1pm.
Other rail operators also warned customers to check for updates on services on Saturday morning.
Heathrow Airport apologised to passengers late on Friday night for flights delayed by “adverse weather conditions”.
Sky News weather producer Steff Gaulter said: “The most active thunderstorms are over parts of Wales, Northern Ireland, Northern England and Scotland, and some are still bringing localised downpours and strong winds.
“The storms will continue northwards, becoming largely confined to Northern Ireland and Scotland by the afternoon. Elsewhere will see a mixture of sunshine and showers, with the showers tending to ease during the day.
“Then from tomorrow an area of high pressure will start to stretch towards us, and the weather next week is looking far calmer and quieter.”
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Despite the risk of heavy showers and thunderstorms, not everyone will see rain during the day, with the driest and brightest weather expected in the South East, which will remain very warm.
The UK Health Security Agency (UKHSA) has issued its first yellow heat-health alert of the year, active until 8am on Sunday in the east of England, East Midlands, London, and the South East.
Under the UKHSA and the Met Office’s weather-health alerting system, a yellow alert means there could be an increased use of healthcare services by vulnerable people.
A yellow alert warns of a possible spike in vulnerable people accessing healthcare, and health risks for the over-65s and those with conditions such as respiratory and cardiovascular diseases.
While scientists have not assessed the role of global warming in this short-term event, in general they expect more heavy downpours as the climate changes.
That’s largely because hotter air can hold more moisture and so releases more water when it rains.