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The chancellor has announced the budget for 2023.

The UK will now not enter a technical recession this year, the independent forecasters, the Office for Budget Responsibility (OBR) has said.

Inflation will more than halve and reduce to 2.9% by the end of the year, the OBR expects.

Budget live:
The announcements as they happen

Here are the key points:

Parents – working 16 hours a week – of children aged nine months to five years will get 15 hours free childcare to encourage caregivers to enter the workforce.

This will be staggered from April 2024 to ensure enough places. Children up to two years old will get 15 hours free from April 2024, children from nine months up will benefit from September 2024, and from September 2025 every single working parent of a child under five will have access to 30 hours free childcare per week.

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The lifetime allowance – the total amount workers can accumulate in their pension savings before paying extra tax – has been abolished. Mr Hunt hopes it will stop 80% of NHS doctors from receiving a tax charge.

The pensions annual tax-free allowance will rise by 50% from £40,000 to £60,000.

Tax relief of 11p has been announced on draft drinks served in pubs from 1 August.

An extension of the 5p cut in fuel duty, at a cost of £6bn, has been announced for a year. Fuel duty will also be frozen for the next 12 months.

The government will abolish the work capability assessment for disabled people and separate benefit entitlement from an individual’s ability to work. The aim is to enable disabled people to seek work without fear of losing their benefits.

A new programme called universal support will also fund extra support for disabled people to find work.

A new apprenticeship, called a returnership, will be created for those aged 50 and older wanting to return to work. Mr Hunt said it will makes existing skills programmes more appealing for older workers and focus on previous experience.

An extra £400m will increase mental health and musculoskeletal workplace support to stop people being forced to leave work due to sickness.

As corporation tax on profits over £250,000 is due to rise from 19% to 25% in April, businesses will be able to offset 100% of UK investments against their profits to bring down tax bills. The OBR said it will increase business investment by 3% for every year. Mr Hunt announced the measure for the next three years but intends to make it permanent “as soon as we can responsibly do so”.

An “enhanced credit” has been introduced for small and medium-sized businesses if they spend 40% or more of their total expenditure on research and development. They can claim credit worth £27 for every £100 spent.

As expected, the government is extending the energy price guarantee (EPG) which keeps the average household bill at £2,500 until the end of June by capping the unit price of electricity. The typical bill was due to rise to £3,000 from 1 April. Under the EPG the government effectively caps household costs and reimburses energy companies for the difference between that, and the cost of buying power on wholesale markets.

The energy rebate scheme – paid direct to customers in six instalments of £66 and £67 a month – has not been extended and will end this month.

The so-called “prepayment premium”, whereby those using prepayment meters are charged more for their gas and electricity, will be scrapped from July, enabling four million families to save £45 a year on their bills.

Investment zones

Twelve new investment zones or “potential Canary Wharfs” will be eligible for £80m in funding to boost business there, with at least one each in Scotland, Wales and Northern Ireland.

There will also be £200m extra funding for local regeneration projects.

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An extra £200m a year – in addition to the £500m already allocated – will be made available to tackle “the curse” of potholes.

Public leisure centres and pools will share a £63m fund to help with costs.

From next year medicines and technologies approved by other trusted global regulators will be eligible for “near automatic” sign-off.

defence

Defence spending will rise to £11bn over the next five years.

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Families of British couple killed in Lisbon funicular crash say they are ‘heartbroken’

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British couple killed in Lisbon funicular crash named

The families of the British couple killed in the Lisbon funicular crash have said they are “heartbroken” as they paid tribute to them.

Kayleigh Smith, 36, and William Nelson, 44, died alongside 14 others in Wednesday’s incident, including another British victim who has not yet been named.

Ms Smith graduated from the Arden School of Theatre in Manchester, where Mr Nelson ran the master’s degree in directing.

In a statement shared by Cheshire Police, Ms Smith’s family said: “Kayleigh was loved by family and friends for her wit and humour, her kind and caring nature came to the fore in her work as a funeral operative.

“She was also a talented theatre director and had just completed a Master’s Degree. They both leave family and friends heartbroken.”

Mr Nelson’s younger brother, who was not named in the statement, added: “Words cannot begin to describe how our family and friends are feeling right now but here is the best attempt. This week, due to a tragic accident in Lisbon, Portugal, we lost Will Nelson, who was not just my big brother but everyone’s.

“He was always kind, selfless, and protective, and the world does not feel right or normal without him. He was and has always been my hero, and we will miss you always. Love you, rest in peace you legend.”

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‘We felt no brakes anymore’

MADS theatre in Macclesfield, Cheshire, said Ms Smith was a “valued member of our society” who will be “greatly missed”.

It said she was an award-winning director and actress, who had also done multiple crew and front-of-house roles.

Macclesfield MP Tim Roca paid tribute to Ms Smith, saying she was a “hugely talented theatre director” who “poured her creativity, energy and kindness into every production”.

Mr Nelson was “equally dedicated to nurturing creativity and inspiring the next generation” and “his loss will be felt deeply by colleagues and students alike”, the MP added.

Hours before the crash, Ms Smith posted pictures on Instagram of their first day in Lisbon with the caption: “Churches and castles, tiles and trams.”

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Lisbon crash: What happened?

Five Portuguese citizens died when the packed carriage plummeted out of control – four of them workers at a charity on the hill – but most victims were foreigners.

Police said the other fatalities were two Canadians, two South Koreans, one American, one French citizen, one Swiss and one Ukrainian.

All but one were declared dead at the scene – and 21 others in the packed carriage were injured.

The yellow carriages of the Gloria funicular are a big draw for tourists, as well as a proud symbol of the Portuguese capital.

The journey is just 265m (870ft) up a steep hill and takes three minutes, with two carriages travelling in opposite directions on a linked cable.

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Witnesses reported seeing one of the carriages hurtle down the hill before derailing and crashing 30m from the bottom.

The aftermath shows it crumpled and twisted against the side of a building.

People who were in the bottom carriage said they were a few metres into the climb when it started going backwards.

When they saw the other car speeding towards them, many jumped through the windows to escape.

The crash happened around 6pm on Wednesday. Pic: Reuters
Image:
The crash happened around 6pm on Wednesday. Pic: Reuters

Prime Minister Luis Montenegro called the crash “one of the biggest tragedies of our recent past” and authorities are under intense pressure to quickly identifying the cause.

One witness who was in the lower carriage told Sky’s Europe correspondent Alistair Bunkall that the brakes appeared to fail.

The carriage’s brakeman, Andre Marques, has also been confirmed among the dead.

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‘I screamed, we’re all going to die’

Officials said the streetcar, which has been running since 1914, had a half-hour visual inspection every day and underwent full maintenance last year.

The line links the downtown area near Restauradores Square with Lisbon’s Bairro Alto neighbourhood.

A preliminary technical report due on Friday has now been delayed until Saturday. Another report with a broader scope is expected within 45 days.

Three other funicular lines in Lisbon have been suspended.

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Farage confirms he wants to deport women asylum seekers back to Taliban in Afghanistan

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Farage confirms he wants to deport women asylum seekers back to Taliban in Afghanistan

Nigel Farage has confirmed he wants to deport women asylum seekers back to the Taliban in Afghanistan if he becomes prime minister.

The Reform UK leader’s position on the topic has not been clear, with him previously saying he wouldn’t send women back to the fundamentalist regime that took over after western militaries withdrew, before now saying he would.

Mr Farage was speaking to Sky News’ political editor Beth Rigby at the Reform UK party conference in Birmingham.

Politics live: Govt responds to Farage wanting early election

When asked if he would “detain” women and children and “send them back”, the Clacton MP said “yes”.

Challenged on when he said in August that he was not “discussing” women and children, Mr Farage claimed this was a reference to his desire to see men detained on arrival in the UK.

At the time, he said he was “very, very clear” on the “deportation of illegal immigrants”, adding: “We are not even discussing women and children at this stage – there are so many illegal males in Britain, and the news reports that said that after my conference yesterday were wrong”.

Speaking today, Mr Farage claimed that the UK has a “duty of care” to a child if, for example, a four-year-old arrives in a dinghy – but not to women and men.

“For clarity, those that cross the English Channel will be detained and deported, men and women,” Mr Farage went on.

“Children, we’ll have to think about.”

Read more:
Is Reform really now a government in waiting?
Fact-checking Farage: Are foreigners more likely than Britons to commit sexual offences?

Nigel Farage speaks to Beth Rigby at Reform's 2025 conference
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Nigel Farage speaks to Beth Rigby at Reform’s 2025 conference

‘No one’ can prevent small boats crossing the Channel

The Reform leader also rowed back on his pledge to stop all boats within two weeks if he is elected prime minister.

Speaking to the conference yesterday, Mr Farage said: “You cannot come here illegally and stay – we will stop the boats within two weeks of winning government.”

But speaking to Beth Rigby today, he changed tack – saying “the passing of legislation” would be required.

He said only then would the boats be stopped within two weeks, or sooner In the interview with Rigby, Mr Farage tried to claim he did not say he would end the boats within two weeks of “winning government”.

But the video of his speech, as well as the transcript released by Reform UK, clearly show him saying: “We will stop the boats within two weeks of winning government.”

When asked why he wouldn’t be able to follow through with his initial claim, Mr Farage said it was impossible and that “no one” can prevent them crossing the Channel.

The Reform UK leader said the law he wants to introduce will be called the Illegal Migration Act once it is passed by parliament.

He confirmed his agenda includes leaving the European Convention on Human Rights, shutting down asylum hotels and housing people at RAF bases instead, as well as deporting Channel migrants.

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Watch Farage face questions on his tax affairs

Read more on Sky News:
Flares thrown at migrant hotel
Labour plans to overhaul ‘broken’ asylum system

Mr Farage also claimed that deportation flights would also begin within two weeks of the law changing, and this combination of factors would stop people from wanting to travel from France.

Reform doesn’t seem bothered about detail amongst their fireworks

Nigel Farage insists his policy on mass deportations is clear when it comes to women and girls.

But I’ve watched every Reform speech since they unveiled their flagship policy – and I was there in the room to ask him when he announced what he will do with women and children who come here via small boats if he was in power – and I still can’t work it out.

That’s because he’s said three different things since, including in an interview today.

Originally he said everyone would be detained: “Yes, women and children, everybody on arrival will be detained. And I’ve accepted already that how we deal with children is a much more complicated and difficult issue.”

A day later he said Reform is “not even discussing women and children at this stage” implying women and children would not be deported.

He also said it was “not true” that’s he had committed to sending women and girls back to countries where they can be raped, tortured and killed.

But today at their conference he told Sky News that women who arrive by boat will be deported to Afghanistan “if necessary”.

Considering Reform UK say they are willing to make deals with Afghanistan and Syria, this question is an important one. The UK has not recognised the Taliban as a legitimate government of Afghanistan since the group seized Kabul in 2021 and first established a regime based on an extreme interpretation of Islamic law.

Reform’s deputy leader Richard Tice has defended those plans, saying: “Sometimes you do deals with people you may not want to go down the pub with.”

Farage clarified that “children, of course, we’ll have to know that we’re sending them off somewhere sensible”.

He has also previously said asylum seekers were a threat to national security and to British women.

The broader political issue though, is that Reform’s immigration plan was meant to be a detailed and considered policy on an issue they’ve been ahead of other politicians on for years.

So why aren’t they more forthcoming with their answers on what they would do with women and children?

If they had hoped to truly embody their conference slogan of “next steps” to professionalise the party, they need to urgently address this.

But party members here don’t seem to be bothered by this detail amongst the fireworks, the enthusiasm and the energy here.

It turns out that years of banging on about this single issue for decades is Nigel Farage’s greatest strength – and the public are willing to give him the grace to work out the details later down the line.

This strategy all depends on Reform UK winning the next general election – which Labour does not have to call until 2029.

However, the Reform leader says he believes the government will collapse in 2027 due to economic pressure and other factors.

Reform are currently well clear of Labour and the Conservatives in the polling, and are targeting next year’s Welsh, Scottish and English local elections to try and win more power in councils and national assemblies.

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Clashes break out at Palestine Action protest – as police make around 150 arrests

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Clashes break out at Palestine Action protest - as police make around 150 arrests

Clashes have broken out at a protest for Palestine Action in London as police reveal they have made around 150 arrests.

The Metropolitan Police said officers had been “subjected to an exceptional level of abuse” at the Westminster protest, including “punches, kicks, spitting and objects being thrown”.

It added some protesters had been both physically and verbally abusive in a “coordinated effort to prevent officers carrying out their duties”, and that a number of the arrests were made for assault.

Officers were seen drawing their batons while demonstrators took action in support of the proscribed terror organisation.

One man was seen with blood streaming down his face behind a barrier after being arrested, while the crowd was heard chanting “shame on you” and “you’re supporting genocide”.

Pic: PA
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Pic: PA

Pic: PA
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Pic: PA

Tense scenes on the western side of Parliament Square saw several protesters fall over in a crush while water was thrown at officers.

The Met Police announced the first arrests of the day on X just 12 minutes after the protest’s official start time.

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Watch moment police carry several protesters away

The protest’s organiser, Defend Our Juries, said it estimated 1,500 had gathered for the rally, where many of them held signs saying: “I oppose genocide. I support Palestine Action.”

In an update early on Saturday evening, the Met said: “Any assaults against officers will not be tolerated and arrests have already been made. We will identify all those responsible and prosecute to the full extent of the law.”

It had warned before the protest that “expressing support for a proscribed organisation is a criminal offence under the Terrorism Act”.

“Where our officers see offences, we will make arrests,” it said.

A protester is carried away by police in Parliament Square. Pic: PA
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A protester is carried away by police in Parliament Square. Pic: PA

Pic: PA
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Pic: PA

A spokesperson for Defend Our Juries claimed the rally had been “the picture of peaceful protest” and that the Met Police’s statement about its officers being abused was an “astonishing claim”.

“I’ve been here all day and I haven’t seen any violence or aggression from anyone,” they said. “I’ve only seen aggression and violence from the police.”

Palestine Action has been banned as a terror group since 5 July after MPs voted overwhelmingly in favour of the move proposed by then-home secretary Yvette Cooper, making it illegal to express support for the group.

Read more:
Farage wants to deport women asylum seekers back to Taliban
Israel warns Gaza City residents to flee south to ‘humanitarian area’

The ban on the group came shortly after two Voyager aircraft suffered around £7m worth of damage at RAF Brize Norton in Oxfordshire on 20 June.

More than 530 people were arrested at the last major demonstration against Palestine Action being banned as a terror group. However, the Met Police used “street bail” to avoid having to process them all in custody.

Street bail allows officers to release suspects on bail before they are taken to a police station. The suspect receives a bail notice requiring them to return to a station at a future date instead.

The organisers encouraged protesters not to accept street bail during today’s demonstration, writing in a briefing document before they started: “It will not be practically possible for the police to arrest 1,000 non-compliant people on the same day, and that is the strategic rationale behind non-compliance. It increases pressure on the state.”

In a reference to the advice in the briefing document, a Metropolitan Police spokesperson told Sky News the move would be “misguided”.

It faces a legal challenge in November after the High Court granted a full judicial review to Palestine Action co-founder Huda Ammori.

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