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.
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.
At least eight convictions predating the Horizon Post Office scandal are being looked at by the body investigating potential miscarriages of justice, Sky News has learned.
The Criminal Cases Review Commission (CCRC) has confirmed it is examining multiple cases of former sub-postmasters affected by Capture software.
The computer accounting system was used in the early 1990s, prior to Horizon being introduced to Post Office branches from 1999 onwards.
Horizon was at the centre of the Post Office scandal and saw hundreds of sub-postmasters wrongly convicted of stealing from their branches.
The Kroll report, commissioned by the government earlier this year, found that Capture had bugs and glitches and there was a reasonable likelihood it had caused cash shortfalls too.
Lord Beamish, the former Labour MP Kevan Jones, has been supporting victims and is calling for the government to extend current legislation to automatically quash convictions.
The Post Office (Horizon System) Offences Act was passed in May but does not include Capture victims.
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Lord Beamish told Sky News he has raised the issue with the Justice Secretary and called for a House of Lords debate.
“The government are going to have to take this seriously,” he said. “We can’t have a situation where we have a two-tier system where people get exonerated from Horizon and the Capture cases are either forgotten or have to go through a very lengthy legal process to get their names cleared.”
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He added he had “little faith” in the CCRC’s “ability to deal with cases”, after multiple Horizon cases were referred to the body years ago.
“The problem with these cases is the lack of evidence… that has been destroyed or lost so actually proving some of these cases through that process will be very difficult.
“Therefore I think a blanket exoneration like we had with Horizon I think has got to be discussed and considered for these cases.”
The CCRC told Sky News it has five cases under review “in which the Capture IT system could be a factor”.
It also said it is “seeking further information” on eight cases referenced in the Kroll report.
The CCRC added that the time taken for a case review to be completed was dependent on the “complexity” of each case “and how readily available information about it is”. In a statement, it admitted: “The availability of information can be a particular hurdle in older cases.”
Chris Roberts’ mother, Liz Roberts, was convicted in 1999 of stealing £46,000 from the Post Office and spent 13 months behind bars.
Liz, who was in the advanced stages of Alzheimer’s disease, passed away earlier this year.
Chris said she was jailed four days before he turned 17, and he used to have “nightmares” that she was “going to die in there”.
“There was no evidence of any financial gain because they went through everything. And obviously the money wasn’t in our accounts because it didn’t exist,” he added.
Despite being offered “three deals” by the Post Office to plead guilty, Liz refused and was sent to prison.
Chris believes that the 2019 High Court win by Horizon victims was a missed opportunity for the Post Office to look back at Capture cases.
“It would have been worth something then because my mum would have died knowing that everybody else knew she was innocent,” he said.
“My dad would have died knowing that the love of his life wasn’t vilified as a criminal.”
Chris wants his mother exonerated and “those actively responsible” to “stand up in court… and justify themselves”.
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6:19
Sky’s Adele Robinson examines Britain’s biggest miscarriages of justice
A Department for Business and Trade spokesperson said: “We were horrified to learn about the issues with the Capture system and are working closely across government to thoroughly examine Kroll’s independent report and consider what action should be taken.
“We continue to listen to postmasters and others who have been sharing their views on the report’s findings since its publication last month.”
Too many neighbourhoods are “plagued by anti-social behaviour”, Home Secretary Yvette Cooper said, which “can have a devastating impact on victims”.
“This cannot be allowed to continue,” she added.
If the plans – part of a Crime and Policing Bill – pass, councils and police will have the power to ban persistent offenders from town centres, with officers free to arrest anyone breaching their order.
To address the root causes of their behaviour, perpetrators could also be told to attend anger management classes or receive drug and alcohol treatment.
Officers would not need to give a warning before seizing vehicles, a move the Home Office said will help police tackle the “scourge” of off-road bikes in parks and e-scooters on pavements.
The measures will be trialled if the bill passes, before the rules are enforced across England and Wales.
Harvinder Saimbhi, chief executive of victim support charity ASB Help, said the group welcomes “the approach of addressing the root causes of the anti-social behaviour”.
“We are keen to see how the respect orders will be implemented,” he added.
In the year to September 2023, about a million anti-social behaviour incidents were reported to police.
Deputy Chief Constable Andy Prophet, who leads the National Police Chiefs’ Council’s work on anti-social behaviour, said respect orders will “give the police and councils the ability to crack down on those who persistently make our streets and public spaces feel unsafe”.
Official accounts have revealed for the first time how much the King’s 2023 coronation cost UK taxpayers.
According to the accounts, the government spent £72m on the coronation – the first in Britain since Queen Elizabeth II’s in 1953.
The figure includes £50.3m of costs attributed to the Department for Culture, Media and Sport (DCMS), which coordinated the coronation, and £21.7m in costs for the Home Office for the policing of the event.
By comparison, Queen Elizabeth II’s funeral and events during the period of national mourning cost the government an estimated £162m – £74m for the Home Office and £57m for the DCMS as well as costs to the devolved governments.
The figures come from the culture department’s recently released annual report and accounts.
The department said it had “successfully delivered on the central weekend of His Majesty King Charles III’s Coronation, enjoyed by many millions both in the UK and across the globe”.
It described the event as a “once-in-a-generation moment” which provided an occasion for the “entire country to come together in celebration”.
Both the King and Queen were crowned at Westminster Abbey in May last year, in a ceremony attended by dignitaries from around the world.
A star-studded concert at Windsor Castle, featuring Take That and stars such as Olly Murs, Katy Perry and Lionel Richie, took place the following night.
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It had been described ahead of the event as being a “slimmed-down affair” – with the country still in the grips of the cost-of-living crisis – and accounts show an “underspend” related to the coronation of around £2.8m.
Did coronation boost the economy?
Despite talk of a coronation boost, the UK’s economy actually contracted in the month of May 2023.
However, experts said that was mostly due to the cost of the additional public holiday for the event, which weighed on output.
Each bank holiday costs the UK economy around £2.3bn, with the extra bank holiday for the late Queen’s funeral estimated to have cost around £2.4bn, according to government figures.
With the extra coronation bank holiday, data from the Office for National Statistics (ONS) showed negative growth of 0.1% during May 2023.
However, that was slightly better than economists had predicted ahead of the event.
Prior to the event, economic forecasters, the Centre for Economics and Business Research (CEBR), had predicted a boost of £337m for the UK’s economy due to the coronation – including £104m in extra pub spending and an estimated £223m spend from tourism to the UK during the period.
Hotel revenue was also said to be up by 54% compared to the same point in the previous year, while bookings for UK-bound flights for the coronation weekend jumped by 149% within 24 hours of the day being announced, according to TravelPort.