Tories accused of ‘picking pockets of entire country’ as budget leaves more than half of households worse off
Jeremy Hunt has been accused of “picking the pockets of working people” after announcing billions worth of tax hikes in his Autumn Statement – as Britons face the biggest fall in disposable income on record.
The Office for Budget Responsibility (OBR), which checks the government’s fiscal plans and provides economic forecasts to go alongside them, has given a bleak assessment of the UK’s economic outlook.
The country is now in a recession, with more than half a million people forecast to lose their jobs while living standards crash as a result of rising prices.
Politics live: Britons face ‘staggering’ fall in disposable income
The spiralling cost of living will erode real wages and reduce living standards by 7% in total over the next two years, the OBR’s assessment said, wiping out the previous eight years’ growth, despite over £100bn of additional government support.
Paul Johnson, the head of the Institute for Fiscal Studies, said the figures were “simply staggering”.
“Simply staggering numbers in OBR report,” he said on Twitter.
“Real Household Disposable Income per person to fall more than 7% over next two years. Biggest fall on record. Taking incomes down to 2013 levels.”
In his Autumn statement, Mr Hunt set out a package of around £30bn of spending cuts and £24bn in tax rises over the next five years.
The measures will see around 55% of households worse off, according to the Treasury’s own analysis.
Among the “difficult decisions” Mr Hunt said he was forced to make to curb inflation, he announced the cap on average household energy bills would increase from £2,500 to £3,000 from April.
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Sky’s economics and data editor Ed Conway takes a look at the key figures from the chancellor’s autumn statement.
But Mr Hunt said “this still means an average of £500 support for every household”, while there would also be additional cost-of-living payments for people on means-tested benefits, pensioner households and those on disability benefits.
In addition to rising energy bills, millions more Britons will pay more tax due to a freeze on income tax personal allowance, national insurance and inheritance tax thresholds.
Sometimes known as a “stealth tax”, the measure will drag more people into higher tax brackets, so is effectively a tax rise.
The Federation of Small Businesses (FSB) slammed the move, calling the budget “high on stealth-creation and low on wealth-creation”.
Some of the other main announcements from the Autumn Statement include:
- The higher rate of tax threshold reduced to £125,140
- Benefits and state pension to rise in line with inflation
- Windfall tax extended until March 2028 and increased to 35%
- Electric cars no longer exempt from car tax from April 2025
- An extra £2.4bn per year on schools
- NHS to get £3.3bn and adult social care £1bn next year and £1.7bn in 2024
- Government spending will continue to increase in real terms every year for the next five years, but at a slower rate than previously planned.
- Freeze on income tax personal allowance, national insurance and inheritance tax thresholds
A former Labour economist and policymaker, Torsten Bell, who was in the Treasury during the last financial crisis, has said the autumn statement could have been announced by the opposition.
But Labour branded it an “invoice to the economic carnage the government has created”.
Hunt a ‘scrooge who has not cancelled Bankers’ Christmas’
Shadow chancellor Rachel Reeves questioned the fairness of not abolishing nom-dom status, which she called a “tax-free income for millionaires”, and of lifting the cap on bankers’ bonuses while “urging wage restraint for everybody else”.
“He’s asking working people to take the hit with less money in their pockets in the run-up to Christmas, but also for years to come,” she said.
“But if you’re a banker, a non-dom, or a private equity manager, don’t worry – Scrooge hasn’t cancelled your Christmas.
“In the last hour, the Conservatives have picked the pockets of purses and wallets of the entire country as the chancellor has deployed a raft of stealth taxes taking billions of pounds from ordinary working people.
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Rachel Reeves said all the country got today was an invoice to the ‘carnage’ created by the government
“The country is sick of being ripped off by the Tories, we want our money back.”
Mr Hunt sought to blame Russia’s invasion of Ukraine for the “global energy crisis, a global inflation crisis and a global economic crisis” and said “we have risen to bigger challenges before”.
“We aren’t immune to these headwinds, but with this plan for stability, growth and public services, we will face into the storm,” he said.
But Green Party MP Caroline Lucas said the chancellor did not acknowledge the “elephant in the room”, which she said was “the economic catastrophe of Brexit”.
SNP Treasury spokeswoman Alison Thewlis also told MPs: “This is a UK so weak that no one would wish to join it. Scotland cannot be forced to stay in broke, broken, Brexit Britain.”
The OBR said in its forecast that the withdrawal from the EU had a “significant adverse impact” on UK trade, while a former Bank of England economist said this week that it had “permanently damaged” the economy and was the ultimate reason for many of the austerity measures announced today.
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The assessments from the OBR have been long awaited after the official forecasting body was not used during the tax-slashing September mini-budget, which spooked the markets, pushed up the cost of borrowing, sent the pound falling and forced the Bank of England to intervene to stop pension funds from collapsing.
Mr Hunt’s package is in stark contrast to his predecessor’s ill-fated plan, which analysis released on Monday found cost the UK £30bn – doubling the sum the Treasury said would have to be raised to plug the “black hole”.
But the pound has still dropped sharply against the US dollar as financial markets fret over warnings the UK is already in recession.
The Lib Dems blamed the problems on government incompetence, calling today’s announcement a “cost of chaos budget (that) will cause untold pain for everyone”.
But some of the measures announced have been welcomed.
Martin Lewis, the money saving expert, said: “I am very pleased that both benefits and the state pension are being increased by the 10.1% September inflation rate.
“It only happens from next April, and it will still be hard for many, but if it was less than this it would’ve been devastating.”
World
Brutal murder on ‘date’ exposes robbery gang suspected of targeting dozens of women in South Africa
Thirty-year-old Olorato Mongale made sure to take all the measures necessary for a safe first date in South Africa’s biggest city, Johannesburg.
She had agreed to meet ‘John’ in the daytime. She sent her friends her phone location after leaving her house and promptly texted them “on the road” at 2.47pm.
They replied “enjoy!”, hoping she would find love.
An hour later, their friend had gone silent and her phone location was showing up in dangerous areas of the city.
A search party of seven friends set off to trace Olorato’s digital footsteps.
It’s believed Olorato’s killers were part of a gang robbing young women at gunpoint
“It didn’t make sense. Where is she? Why is she missing?” says Karabo Mokoena, as we drove to the locations involved in their search.
“Every place we went to looked dodgier and dodgier. It made me panic – I was very scared.”
After finding her bag on a pile of bricks off the side of a main road, they filed a missing person report at a police station.
“I thought there was no way we were not going to find her. We did end up finding her but not in the way we would have hoped,” says Karabo.
Olorato’s body had been dumped at the dirt entrance of a random house less than 100m from where her friends were searching into the night.
Her face was swollen and her eyes black-blue from violent impact. Her top was ripped open to expose her breasts.
Police told Sky News that her post-mortem showed signs of blunt force trauma. She was likely beaten to death.
Olorato’s body was dumped outside this gate – she was likely beaten to death
“It was like I was dreaming, seeing her body like that with those bruises and blood everywhere,” says Olorato’s mother, Keabetswe Poppy Mongale, describing the moment she had to identify her only child at the morgue.
“I don’t think what I saw will ever go away,” she adds.
“It was very painful. I don’t wish that on any parent because my beautiful little girl looked different because someone chose to do that to her.”
Olorato’s mother says the image of her daughter in the morgue will never go away
CCTV from the driveway of Olorato’s building shows the last time she was seen alive, leaving her home to meet ‘John’.
In the video, she walks towards a white Volkswagen Polo and hesitates as she reaches the left back door. John had come with a friend.
Four days after Olorato was killed, police found the car in a different province with traces of her blood splattered across the back seat.
CCTV showed Olorato walking to a car for what she thought was a date
One suspect was shot dead but the second man is still on the run
Philangenkosi Sibongokuhle Makanya – ‘John’ – was shot dead by police in KwaZulu-Natal shortly after they found the vehicle.
The second man in the car, Bongani Mthimkhulu, is still on the run.
The two men have since been identified as part of a dangerous criminal syndicate that lure young women out on dates and rob them at gunpoint.
“Within the four days, the investigating officers received 94 calls from women who were raising concerns and identifying the suspects as those they once met,” South African Police Service deputy national commissioner Lieutenant General Tebello Mosikili told Sky News.
“It was unfortunate about Olorato, but others were released after being robbed.”
Olorato’s friends say she ‘ticked all the boxes when it came to being careful’
A 24-year-old student who survived an armed robbery at the hands of Olorato’s suspected killers says she was happy to see Philangenkosi killed but she’s still scared for her life.
“As women, we are not even safe anymore – we can’t even walk freely,” she says.
“The moment you leave your house you wonder if you will make it back alive. I don’t feel comfortable walking around the street. I leave the house and then turn back.
“Even when I’m home, I still don’t feel safe and always want to keep myself locked indoors,” she says with a shaky voice – choosing to remain anonymous.
After meeting other victims of the syndicate, she was shocked to hear details of almost identical abductions.
“This other girl was surprised because we went through the exact same situation. They also approached her with the same tactic – let me take you out to lunch to get to know you – only for her to be robbed.”
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South Africa has one of the highest femicide rates in the world – an average 15 women are killed a day, many by their intimate partners.
According to police statistics, more than 5,500 women were murdered in South Africa last year. An increase of 33.8% compared with the previous year.
“South Africa has six times the average rate of femicide – hundreds of women have already been killed since Olorato’s murder,” says Cameron Kasambala from Women for Change.
The advocacy group raises awareness of rising cases of femicide and gender-based violence across South Africa.
Campaigner Cameron Kasambala says many femicide cases take a long time to be resolved
In the hours after her murder, Olorato’s friends contacted Women for Change to share her missing poster after receiving little immediate help from the local police station.
“I think her friends were the real heroes in that moment,” says Cameron.
“Two police stations that were 10 minutes apart, one finds a body and one has a missing case, don’t make a connection for hours. It’s not the most reassuring police work. And if the friends had not come forward, how long would it have taken?
“Unfortunately, Olorato’s case is an exception. Most cases are not handled that quickly.”
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Olorato’s friends say she would be ‘proud to know that her name has not gone in vain’
Olorato’s friends are still contending with the violence of her death – what it means for their daily lives and how they navigate their safety as women in South Africa.
“It is difficult to process and difficult to believe. This is somebody who ticked all the boxes when it came to being careful – being meticulous, checking her surroundings and leaving clues,” says Olorato’s friend, Koketso Sejosengoe.
“It shows it can happen to anybody no matter how safe you are. It is happening to the average girl. They are being targeted. These men know what they are doing and who they are looking for.”
“In the purest sense, Olorato wanted women to be safe and wanted women to be protected,” adds Koketso.
“I think she would be very proud to know that her name has not gone in vain and that her death is standing for something – that there will be change that comes with this.”
Major heatwaves across southern Europe have left Spain, Portugal, Italy, and Greece in sweltering conditions of more than 40C (104F).
Two-thirds of Portugal was on high alert for extreme heat and risk of wildfires on Sunday, with temperatures in Lisbon expected to exceed 42C (107F).
In parts of southern Spain, temperatures are well above average, with 42C also expected in Seville and other cities.
The country’s meteorological service says June is likely to be the hottest Spain has experienced since records began.
In several Italian regions, including Lazio, Tuscany, Calabria, Puglia, and Umbria, outdoor work was banned during peak hours of sun on Sunday, with trade unions pushing for the measures to be extended and rolled out nationwide.
Twenty-one out of 27 cities were under the highest possible heat alert, including Rome, Milan, and Naples.
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Greece has already been plagued by wildfires this summer, with one breaking out south of Athens on Thursday, and several on the island of Chios last Sunday.
Near Athens, authorities deployed 130 firefighters, 12 helicopters, and 12 planes, with 40 people evacuated from the highest-risk areas.
A woman was arrested on suspicion of unintentional arson after wildfires spread across brush and pastureland for three days on Chios.
Flames rise above Thymari, near Athens, after wildfires broke out on Friday. Pic: Reuters
Tourists battle scorching temperatures at the Parthenon in Greece on Friday. Pic: Reuters
Scientists link increasing frequencies of extreme weather events such as heatwaves, wildfires, and storms to climate change.
In France and Germany, at least three people died amid stormy conditions.
A ridge of high pressure above central and western Europe is driving the scorching conditions, says Sky News meteorologist Chris England.
Hotter-than-normal sea temperatures, dry land, and surface winds are also partly to blame, he added.
Tourists in Retiro Park in Madrid on Saturday. Pic: AP
Locals fan themselves in Lisbon on Saturday. Pic: AP
UK heatwave also likely
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UK heatwaves explained
The UK is halfway through a four-day amber heat health alert, with temperatures expected to peak in the mid-30s (86F) on Tuesday.
Heat health alerts are not public weather warnings – but are instead designed to prepare health and social care bodies for the potential impact on their infrastructure and vulnerable groups.
Heatwave thresholds are likely to be met on Monday and Tuesday, which vary between 28C (82F) in the south of England and 25C (77F) across the rest of the country.
A British-Israeli soldier has been killed while fighting in Gaza, Israeli media reports said.
He was named locally as Sergeant Yisrael Natan Rosenfeld, 20, from the city of Ra’anana.
The Foreign, Commonwealth and Development Office said it is “looking into reports that an IDF soldier who died in combat in Gaza is a British national”.
The IDF soldier, who served in the 601st Combat Engineering Battalion, was killed by an explosive device on Sunday, the Times of Israel reported.
The paper said Mr Rosenfeld moved to Israel from London with his family 11 years ago.
More than 860 Israeli soldiers have been killed since Israel’s war against Hamas began on 7 October 2023, more than 400 of them during the fighting in Gaza.
The war began when the militant group launched an attack on Israel, killing 1,200 people and taking around 250 hostage.
Israel’s offensive in Gaza has devastated the enclave and killed more than 56,000 people, according to the Hamas-run health ministry, which does not differentiate between civilians and combatants in its count, but says more than half of the dead are women and children.
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It came as Donald Trump called for progress in ceasefire talks in the war between Israel and Hamas.
“MAKE THE DEAL IN GAZA. GET THE HOSTAGES BACK!!!” the US president wrote on social media on Sunday.
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On Friday Mr Trump raised expectations by claiming there could be an agreement within the next week.
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