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The amount employers pay in national insurance is set to rise in next week’s budget to raise money for public services, Sky News understands.

Reports have suggested it could be increased by up to two percentage points and will – in part – be used to help fund the NHS.

A government source told Sky News: “There is a universal consensus that the NHS needs more money.

“That means asking businesses to help out.

“The choice is investment versus decline. She [Rachel Reeves] is choosing not to ask working people to pay the price for their [Conservatives’] failures.”

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According to The Times newspaper, Chancellor Rachel Reeves is also expected to make a ­significant cut to the earnings ­thresholds at which employers start making national insurance contributions.

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The combined measures are expected to raise about £20bn and will represent the ­biggest tax rise in the budget.

The burden will reportedly fall entirely on the private sector, with public sector ­employers such as government departments and the NHS being reimbursed by the Treasury to avoid cuts.

On Friday, much of the budget chat focused on Labour’s definition of a “working person”.

The party’s manifesto said it would not increase taxes on working people, including VAT, national insurance, and income tax.

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This has prompted repeated questions about who the government considers to fall under that umbrella and therefore would not impose tax rises on.

During a broadcast interview at a Commonwealth summit in Samoa, Sir Keir Starmer told Sky News he does not consider people who have an income from assets such as shares of property to be working people.

“They wouldn’t come within my definition,” he said.

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Reacting to questions from journalists, Ms Reeves said the prime minister is a “working person”.

Speaking to LBC, she said: “The prime minister gets his income from going out to work and working for our country.

“He’s a working person. He goes out to work.”

Treasury minister James Murray told Sky News that “a working person is someone who goes out to work and who gets their income from work”.

Pushed further on whether a working person could also get income from shares or property, Mr Murray added: “We’re talking about where people get their money from, and so working people get their money from going out to work.

“And it’s that money that we’re talking about in terms of those commitments we made around income tax, around national insurance.

“That’s what’s important to focus on, where people are getting their money from, getting their money from going out to work.”

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US eyes quantum computing investments amid rising national security stakes

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US eyes quantum computing investments amid rising national security stakes

US eyes quantum computing investments amid rising national security stakes

Washington is considering direct investments in US quantum computing companies as it seeks to keep pace with China’s tech capabilities.

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Despite gov’t shutdown, crypto market structure bill ‘90% there’ — Coinbase CEO

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Despite gov’t shutdown, crypto market structure bill ‘90% there’ — Coinbase CEO

Despite gov’t shutdown, crypto market structure bill ‘90% there’ — Coinbase CEO

The remaining “10%” of issues center mainly on DeFi, which Brian Armstrong says lawmakers are addressing carefully to preserve innovation.

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PM has ‘confidence’ in Jess Phillips after grooming survivors demanded her resignation

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PM has 'confidence' in Jess Phillips after grooming survivors demanded her resignation

Sir Keir Starmer has backed his under-fire safeguarding minister to continue leading the government’s efforts to set up a national inquiry into grooming gangs after four survivors demanded her resignation.

The prime minister said on Thursday that Jess Phillips has “devoted vast parts of her life and career” to tackling violence against women and girls, and has “confidence in her”, despite the turmoil that has beset the process.

All four survivors who quit the government’s grooming gangs inquiry panel said they will consider returning to the process if Ms Phillips resigns.

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However, five other survivors on the panel have written to Sir Keir to say they will only stay if Ms Phillips remains.

They said she had remained impartial, had listened to feedback and her previous experience to reduce violence against women and girls and her “clear passion and commitment is important to us”.

In contrast to the four who have quit, who accused Ms Phillips of trying to expand the inquiry’s scope beyond grooming gangs, the five said it needs to be widened to focus on child sexual exploitation as a whole to ensure survivors who do not fit “the generalised stereotype” are not excluded.

More on Grooming Gangs

In response to the demand for Ms Phillips to quit, Sir Keir said: “The safeguarding minister has huge experience in issues relating to violence against women and girls. She’s devoted vast parts of her life and career to that, and so I do have confidence in her and Louise Casey in leading this project.”

Speaking to ITV Meridian, the prime minister also sought to reassure the victims of grooming, saying: “It’s really important that the national inquiry gets to the truth. All survivors deserve answers to their questions.”

“It is very important that I say to all survivors that I give my personal assurance that this inquiry will go wherever it needs to go, the scope will not be changed.”

It is understood Downing Street has reached out to the four survivors who quit the government’s process this week.

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Starmer defended Phillips at PMQs on Wednesday

Samantha, one of the survivors who wrote the letter saying they would only stay if Ms Phillips remains, told Sky News: “We shouldn’t be falling apart right now, we should be working together.

“Jess has only ever been fair and honest with us, she’s told us as much as she possibly can within her capacity.

“She’s provided a lot of support over the phone and in-person to a lot of us survivors behind the scenes, which people don’t see about Jess.

“So I do still want her to be part of this inquiry up until the end.”

A government source told Sky News the government will be talking to all survivors on the panel about their concerns and opinions on the type of person they want to chair the inquiry, after the leading candidate dropped out following concerns from survivors over his background as a police officer.

The government will move as fast as possible, they said, but it will likely take months to appoint the right chair.

Why four survivors quit the inquiry

The four women who resigned this week expressed concerns about how the process of selecting a chair and setting the terms of reference of the national inquiry into grooming gangs is being run.

They wrote on Wednesday to Home Secretary Shabana Mahmood, calling for Ms Phillips to step down and all survivors to be consulted on appointing a senior judge as chair with no major conflicts of interest.

Ms Phillips told parliament on Tuesday that suggestions that the scope of the inquiry was to be expanded from just grooming gangs were “categorically untrue”.

But leaked consultation documents and texts between the safeguarding minister and survivor Fiona Goddard show the survivors’ concerns that the scope would be expanded were valid.

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Shadow Housing Secretary Sir James Cleverly told Sky News that he can’t see how Jess Phillips can stay in post

The survivors’ letter says: “Being publicly contradicted and dismissed by a government minister when you are a survivor telling the truth takes you right back to that feeling of not being believed all over again.

“It is a betrayal that has destroyed what little trust remained.”

They have demanded that the scope of the inquiry remain “laser-focused” on grooming gangs and called for victims to be free to speak to support networks without fear of reprisal.

Fiona Goddard and Kemi Badenoch speaking during a press conference earlier this year
Pic PA
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Fiona Goddard and Kemi Badenoch speaking during a press conference earlier this year
Pic PA

The letter to Ms Mahmood says: “Her [Ms Phillips’] conduct over the last week has shown she is unfit to oversee a process that requires survivors to trust the government. Her departure would signal you are serious about accountability and changing direction.”

The survivors describe their demands as “the absolute bare minimum for survivors to trust that this inquiry will be different from every other process that has let us down”.

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Minister for Children and Families, Josh MacAlister told Sky News Jess Phillips will not be resigning

Frontrunner quits over ‘toxicity’

The letter was sent hours after one of the frontrunners to become chair of the inquiry withdrew, blaming “vested interests” and “political opportunism and point-scoring”.

Ex-police chief and child protection specialist Jim Gamble told the home secretary in a letter there was a “highly charged and toxic environment” around the appointment process and victims “deserve better”.

The other, Annie Hudson, a former social worker, said earlier this week she no longer wanted to be considered after intense media coverage.

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‘Everyone should park their interests’

The prime minister launched the inquiry into grooming gangs after an audit by Baroness Louise Casey showed the scale of the problem.

It is understood that the government is exploring a range of other candidates and will provide an update in due course.

A Home Office spokesperson said: “The grooming gang scandal was one of the darkest moments in this country’s history.

“That is why this government is committed to a full, statutory, national inquiry to uncover the truth. It is the very least that the victims of these hideous crimes deserve.

“We are disappointed that candidates to chair that inquiry have withdrawn. This is an extremely sensitive topic, and we have to take the time to appoint the best person suitable for the role.

“The home secretary has been clear – there will be no hiding place for those who abused the most vulnerable in our society.”

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