Connect with us

Published

on

After the debacle of Liz Truss’s September mini-budget, with all its mega ramifications, and an autumn statement eight weeks later that performed an about-turn so big that the country’s tax burden hit a 70-year-high, Wednesday’s budget will be all about stability and sticking to the plan.

“No big bangs in this budget,” is how one senior government insider put it to me last week. “It’s got to be a growth budget.

“We’re fighting to be competitive again with Labour. If we can get to next summer and the economy is ticking up, and we can narrow the gap to five to eight points behind in the polls, there’s a chance in an election campaign we can shift the dial.”

Tax cuts, I’m told, will have to wait.

Politics live: Date confirmed for Johnson to face partygate inquiry

What the chancellor and prime minister want to project this week is the sense that they are getting the economy back on track, and working towards Rishi Sunak’s pledges to halve inflation, get debt down and get the UK economy growing again.

Do that, argue his allies, and the tax cuts will come – just in time for a general election.

More on Budget

But there is pressure, and lots of it, from voters and from the Tory backbenchers to do more on tax cuts and cost-of-living now, not tomorrow.

And that pressure is all the more palpable after the chancellor received a £30bn windfall in the public finances last month, after it emerged that in the year to January, the public sector had borrowed less than forecast in November by the UK’s official fiscal watchdog.

Budget promo tomorrow

Floating voters we spoke to in a focus group in one Tory shire seat last week told us that struggling with the cost-of-living and a buckling NHS were top of their concerns, and they expressed scepticism that the government was up to the job.

One voter in the Wycombe constituency in Buckinghamshire described the government as “stale”, with another telling us: “The current crisis emphasises that our government is fairly broken.”

On the cost-of-living, our group of floating voters spoke of their anxiety around energy bills, food prices and childcare.

Charlotte, a working mum, told us she had to change her working hours because she couldn’t afford childcare costs.

“I can’t afford to work full time anymore,” she told us. “It’s not feasible for our family, so I’ve had to rope my mum in to do childcare.

“I wouldn’t say we’re a low earning family. That’s just the way it is now.”

Please use Chrome browser for a more accessible video player

Voters talk about their priorities with our political editor Beth Rigby.

Food bills were also a concern, with voters saying they’d switched to cheaper supermarkets and cut back in the face of galloping food price inflation.

Ashley, who in the past has voted Conservative but is now undecided, told us he’d switched his weekly shop from Tesco and M&S to Aldi, while energy bills were a problem all round.

“I’ve voted Conservative a long time,” the father-of-two told us. “And then I got a bit tired of, you know, Boris and the promises.

“We need to have some results and I want to see some improvement, not the deflection bit around immigration, [but] some real positive on the cost of living. For me, that’s the most key…it’s what’s important to people.”

Short and long term plans

The Treasury is alive to the pressure, with insiders telling me there will be two parts to Mr Hunt’s budget on Wednesday: a short-term support plan to provide immediate relief on the cost-of-living crisis and then the long-term plan for growth.

On the first part of that, the government is expected to extend the £2,500 energy price guarantee for another three months from April (where there had been a planned rise to £3,000) to give people support on their bills.

The chancellor is also under pressure to again freeze fuel taxes in this budget, at a cost of £6bn.

When it comes to childcare, the chancellor is expected to change rules so that parents on Universal Credit are given more money for childcare and given the funding upfront.

The Treasury is also believed to be planning a cash injection of hundreds of millions into increasing the availability of the 30 hours of free childcare to three to four-year-olds.

Mr Hunt also plans to loosen staff-to-child ratios for two-year-olds, which could make the cost of childcare a little cheaper.

But anything really big bang on childcare, such as extending 30 hours of free childcare to one-and two-year-olds, is unlikely – that policy would cost around £6bn.

Please use Chrome browser for a more accessible video player

These are some predictions for the budget.

And when it comes to the most obvious way of helping people manage their bills – wage packets – the government is standing firm, with Treasury insiders insisting there will be no above inflation pay sector awards.

Neither is the chancellor expected to offer voters any cuts to personal taxes.

“We haven’t got £30bn to cut taxes,” is how one government insider put it to me, in a nod to the boost from revised public finances.

“What we’ve got to do is get people back into work, be that through better childcare support or incentives to get those in their 50s back into work.

“That is where we have to focus policy, and that could amount to say £5bn and that comes out of the [£30bn] headroom.”

Because beyond the short-term support measures, the focus for this budget will be on trying to get the economy moving and getting people back to work post-pandemic, with a package of measures to try to shift parents, the sick, disabled and older workers back into jobs.

To that end, the chancellor is expected to raise the lifetime allowance for pension savings from £1m to an expected £1.8m – a record level – in order to try to incentivise doctors and other professionals out of retirement and back into work.

He could also lift the annual tax-free allowance for pensions from £40,000 to £60,000.

It’s a package that could cost £2bn a year and would be much welcomed by higher earners, but also opens the chancellor up to criticism that he is giving a tax break to the rich while offering nothing to basic rate taxpayers.

Read more:
What to look out for in Hunt’s first budget

And when it comes to the other group of voters the chancellor and PM need to placate, his backbenchers, there is disquiet over the high level of tax burden, with many Tory MPs keen for tax cuts.

One former cabinet minister told me last week that they wanted to see the £30bn windfall in the public finances used to reverse the planned increase in corporation tax from 19p to 25p in April.

It is a pretty popular refrain.

But Treasury insiders insist the tax hike will go ahead and instead the chancellor will offer business tax breaks to try to encourage growth.

When Mr Sunak was chancellor back in March 2021, he created the £25bn “super-deduction” tax allowance for capital investment – a two-year measure offering 130% tax relief on companies’ purchases of equipment – in order to try to boost investment and growth.

Mr Hunt is coming up with a new set of plans to try to support business and could give firms much more generous capital allowances to incentivise investment.

Watch too for policies and reforms targeting certain industries and sectors, from artificial intelligence to green energy and advanced manufacturing: all of it will be framed as the government’s long-term plan for growth.

 Prime Minister Rishi Sunak (left) and Chancellor of the Exchequer Jeremy Hunt during Prime Minister's Questions in the House of Commons
Image:
Rishi Sunak and Jeremy Hunt will be hoping to reassure people they are making the right choices for the UK economy.

Wednesday will be, if you like, the third act of the prime minister’s performance over the past few weeks to try and win a jaded public back around by trying to convince them he will stick to his plan and deliver on promises.

On the international stage, he has rehabilitated the UK with allies after the bumpy years of Prime Minister Johnson and then Prime Minister Truss, symbolised most strongly in a deal with the EU over post-Brexit trading arrangements in Northern Ireland – where even his foes conceded Mr Sunak had got more than they expected.

At home, the PM has put forward his plan to “stop the boats” – a key priority of many of the voters he needs to keep onside or win back in 2024.

Whether the plan, surrounded in legal and practical controversies, will come off remains to be seen.

But Mr Sunak will at least be able, to quote one of his allies, “build a narrative” that blames the failure of the policy around France and the EU refusing to grant the UK a returns agreement and the international courts blocking his plans.

“At least he can then make the argument it wasn’t his fault,” they said.

Narrow path back

On Wednesday, the focus will be on the PM’s three economic targets – halving inflation, cutting debt and growing the economy – as the chancellor tries to lay down the best conditions he can for the Conservatives’ run into the general election in 2024.

Mr Sunak’s allies tell me they think there is a way back to victory for this government at the ballot box once again, but the “path is very narrow”.

A budget then building the foundations rather than lighting the fireworks, all of this the groundwork for the pre-election showstopper next year.

But with the cost-of-living squeeze so acute, the promise of jam tomorrow is unlikely to satisfy the public, particularly if those being given some of the spoils this time around look to be business and the wealthy.

Mr Hunt may be charged with steadying the ship, but he’ll have to be skilful on Wednesday not to lose more ground.

Continue Reading

World

West Bank prisoner releases expose deeper wounds

Published

on

By

West Bank prisoner releases expose deeper wounds

When the bus came into view, there was a surge of expectation and a rush of people.

Everyone wanted to get a view, to see through the windows, to see if they could spot a familiar face, or a relative, or a friend.

Gaza deal signed – as it happened

These were the people being sent back to the West Bank as part of the ceasefire deal – the people exchanged for the hostages.

The welcome they got was chaotic and joyful, just like previous prisoner releases. But there was something different this time – a changed, charged atmosphere and a heavier police presence.

Palestinians in Ramallah greet relatives released from Israeli prisons. Pic: AP
Image:
Palestinians in Ramallah greet relatives released from Israeli prisons. Pic: AP

And as the minutes passed by, the sense of joy was also pockmarked by pockets of utter sadness.

At first, it was a mistake. We saw a woman in floods of tears watching as prisoners filed off the two buses, showing victory signs at the waiting crowds. She had come to meet a cousin, but was sure that somehow he had been missed out and left behind. Her tears flowed until, some time later, she found him.

But others were not so fortunate. Overnight, the Israeli authorities had decided to increase the number of prisoners deemed dangerous enough to be denied a return to the West Bank.

Instead, this group, which makes up the majority of the 250 released prisoners, was taken to Gaza and released. Then they get the choice of whether to stay in Gaza or to be deported to another country – possibly Egypt or Turkey.

It is one thing to be taken back to Gaza if you are Gazan. But for the prisoners who come from the West Bank, and who are confronted by the apocalyptic wasteland left behind by war, it is a ticket to deportation, and the knowledge they can never return to their homeland.

You can only get to the West Bank by going through Israeli checkpoints or passport checks. And, clearly, having been deported, you won’t be allowed back in.

And so it is that we see Ghadeer in floods of tears. She is a police officer, in her uniform, and she runs back to the sanctuary of her car, to cry.

A crowd gathers around a bus carrying released Palestinian prisoners. Pic: AP
Image:
A crowd gathers around a bus carrying released Palestinian prisoners. Pic: AP

‘Psychological terror’

Her sister Abeer is also here, and also distraught. Their brother, who they expected to collect, has been taken to Gaza. They did not know until they got here, and realised he had not emerged from the bus.

Her cousin, Yahya, is also here: “We got a call from my cousin last night, and then we got a written warning taped on our door saying that we weren’t allowed to celebrate.

“At midnight, they moved him south, and then to Gaza, all without our knowledge. We came here to see him, and we were shocked that he wasn’t on the bus.

“It is part of their playbook – psychological terror, playing with our emotions, and those of the prisoners.”

To Israel, the release of these prisoners has been a cause of soul-searching, criticised by some as a reckless action that frees terrorists. But for Palestinians, these prisoners are a blend of freedom fighters and political prisoners, some of whom have spent years in detention despite never facing criminal trial.

The prisoners have been told not to celebrate after their release, and these are warnings they take seriously. One man tells us: “I can’t talk, but I am happy.” Another simply says” “I can’t say anything today – come back tomorrow.”

Read more:
UK played ‘vital role’ in Gaza deal
Drones capture images of Gaza devastation

Please use Chrome browser for a more accessible video player

Could recognition of Palestine change the West Bank?

‘They are taking our soul’

But another tells us he is “ashamed” that it could have taken the death of so many people in Gaza to secure his release. Emotions run high.

Among the crowds, we see Aman Nafa. Her husband is Nael Barghouti, who has spent 45 years in prison – more than any other Palestinian prisoner – and is now in exile in Turkey. He’s banned from returning, she’s banned from visiting him.

I ask her about the ceasefire, and the chances of a new beginning between Israel and the Palestinians. She bristles.

“They don’t want any peace with us,” she says. “They just want to take the land. It’s like our soul – they are taking our soul. They are torturing us.”

I ask her about her emotions on a day when the focus of the world is on the return of the hostages.

“Double standards,” she says, “but the people around the world – they know what is happening in Palestine. We are not against Jewish people. We are against the Zionists who want to empty our land and take it.”

Acrimony, mistrust, and the fear of tomorrow are endemic among many in the West Bank. A ceasefire in Gaza has soothed some nerves, but, so far at least, it hasn’t addressed the fundamental problems.

And so the anxiety ripples onwards.

Continue Reading

World

Chants of frustration turn into songs of celebration in Tel Aviv as crowds greet hostages

Published

on

By

Chants of frustration turn into songs of celebration in Tel Aviv as crowds greet hostages

For two years, they have gathered in Hostages Square – parents, brothers, sisters, extended family and friends clutching photographs and signs reading “bring them home”.

They have campaigned, protested and prayed for the return of loved ones taken in the 7 October attacks.

But now the mood has shifted.

The chants of frustration have turned into songs of celebration.

Please use Chrome browser for a more accessible video player

Sky’s Alex Rossi reports from Hostages Square in Tel Aviv, where thousands gathered to witness the return of all living Israeli captives.

The tears that once fell in despair are now tears of relief.

The square, normally a site of weekly demonstrations, has transformed into a sea of flags.

Gaza: Follow the latest updates

Crowds gather in Hostages Square in Tel Aviv. Pic: AP
Image:
Crowds gather in Hostages Square in Tel Aviv. Pic: AP

We watched as tens of thousands packed into this area of Tel Aviv to witness a moment many feared might never come – the homecoming of the remaining hostages.

Every few minutes, the massive video screens behind the stage beamed new images – exhausted but smiling hostages embracing their families.

Each clip is met with a roar of applause – the atmosphere is one of sheer elation, it is electric.

When helicopters pass overhead, ferrying freed captives to nearby hospitals, the crowd erupts again and again, looking upwards to the sky in awe at the impossible that’s now been made possible.

Pic: Reuters
Image:
Pic: Reuters

The sense of catharsis here is palpable – at last some closure after a nightmare two years and a chance for the healing process of a nation to begin.

But beneath the jubilation, there’s a deep well of sorrow – and reckoning.

The 7 October massacre was the deadliest single-day attack on Israel since the nation’s founding in 1948 – an event that upended the country’s sense of safety and unity.

More than 1,000 were killed that day, and hundreds were taken into Gaza.

Please use Chrome browser for a more accessible video player

‘Israel is committed to peace’

For the families who never stopped fighting for their return, this is both an ending and a beginning.

Now that the living hostages are home, attention turns to those who did not survive.

Officials say the process of identifying and repatriating remains will take time – and for some families, closure still remains heartbreakingly out of reach.

But the questions that linger extend far beyond grief.

Read more:
Drones capture staggering images of Gaza devastation
Hostages released under Gaza ceasefire deal

Thousands of people celebrate the release of the hostages. Pic: AP
Image:
Thousands of people celebrate the release of the hostages. Pic: AP

In the days and weeks ahead, the Israeli government faces intense scrutiny.

How could the country’s fabled intelligence and defence apparatus fail so catastrophically?

And what accountability, if any, will fall on Prime Minister Benjamin Netanyahu, who has faced mounting criticism over both the failures leading up to the attack and the protracted efforts to secure the hostages’ release?

This is a nation rejoicing, but also searching for answers.

For now, though, the families in this square are holding tight to one immutable positive – after more than two long years, the living hostages, at least, are finally home.

Continue Reading

World

Drones capture staggering images of Gaza devastation – as people find nothing left

Published

on

By

Drones capture staggering images of Gaza devastation - as people find nothing left

Drones have been a common sight in Gaza for a long time, but they have always been military.

The whine of a drone is enough to trigger fear in many within the enclave.

But now, drones are delivering something different – long, lingering footage of the devastation that has been wreaked on Gaza. And the images are quite staggering.

Gaza latest: Chants of ‘thank you Trump’ in Hostages Square

Whole city blocks reduced to rubble. Streets destroyed. Towns where the landscape has been wholly redesigned.

Whole city blocks reduced to rubble
Image:
Whole city blocks reduced to rubble

Decapitated tower blocks and whole areas turned into black and white photographs, where there is no colour but only a palette of greys – from the dark hues of scorched walls to the lightest grey of the dust that floats through the air.

And everywhere, the indistinct dull grey of rubble – the debris of things that are no longer there.

Gaza is full of people returning to their homes
Image:
Gaza is full of people returning to their homes

The joy that met the ceasefire has now changed into degrees of anxiety and shock.

Gaza is full of people who are returning to their homes and hoping for good news. For a lucky few, fortune is kind, but for most, the news is bad.

Umm Firas has been displaced from her home in Khan Younis for the past five months. She returned today to the district she knew so well. And what she found was nothing.

Umm Firas returned to find nothing
Image:
Umm Firas returned to find nothing

“This morning we returned to our land, to see our homes, the neighbourhoods where we once lived,” she says.

“But we found no trace of any houses, no streets, no neighbourhoods, no trees. Even the crops, even the trees – all of them had been bulldozed. The entire area has been destroyed.

“There used to be more than 1,750 houses in the block where we lived, but now not a single one remains standing. Every neighbourhood is destroyed, every home is destroyed, every school is destroyed, every tree is destroyed. The area is unliveable.

“There’s no infrastructure, no place where we can even set up a tent to sit in. Our area, in downtown Khan Younis used to be densely populated. Our homes were built right next to each other. Now there is literally nowhere to go.

“Where can we go? We can’t even find an empty spot to pitch our tent over the ruins of our own homes. So we are going to have to stay homeless and displaced.”

Read more from Sky News:
Nova festival survivor dies two years after girlfriend killed
Could the Gaza deal lead to something even bigger?

It is a story that comes up again and again. One man says that he cannot even reach his house because it is still too near the Israeli military officers stationed in the area.

Another, an older man whose bright pink glasses obscure weary eyes, says there is “nothing left” of his home “so we are leaving it to God”.

“I’m glad we survived and are in good health,” he says, “and now we can return there even if it means we need to eat sand!”

A man says there is 'nothing left'
Image:
A man says there is ‘nothing left’

A bulldozer moves rubble
Image:
A bulldozer moves rubble

The bulldozers have already started work across the strip, trying to clear roads and allow access. Debris is being piled into huge piles, but this is a tiny sticking plaster on a huge wound.

The more you see of Gaza, the more impossible the task seems of rebuilding this place. The devastation is so utterly overwhelming.

Bodies are being found in the rubble while towns are full of buildings that have been so badly damaged they will have to be pulled down.

Humanitarian aid is needed urgently, but, for the moment, the entry points remain closed. Charities are pleading for access.

It is, of course, better for people to live without war than with it. Peace in Gaza gifts the ability to sleep a little better and worry a little less. But when people do wake up, what they see is an apocalyptic landscape of catastrophic destruction.

Continue Reading

Trending