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Sunak reiterates call for ‘humanitarian pause’

The FCDO said the establishment of an international humanitarian maritime corridor from Cyprus to Gaza, supported by partner governments and the United Nations, is expected to be operational in early May…reports Asian Lite News

The government on Sunday marked six months since the Israel-Hamas conflict with a new package of military and civilian support to set up a maritime aid corridor to Gaza, as Prime Minister Rishi Sunak reiterated his call for a “humanitarian pause” for the sake of the innocent children of the region.

The Foreign, Commonwealth and Development Office (FCDO) announced the deployment of a Royal Navy ship to the Eastern Mediterranean and committed up to 9.7 million pounds for aid deliveries; logistical expertise and equipment support to the corridor, such as forklift trucks and storage units; and expertise, to maximise the levels of aid reaching those people who desperately need it.

“Today marks six months since the terrorist outrage of 7th October – the most appalling attack in Israel’s history, the worst loss of Jewish life since the Second World War. Six months later, Israeli wounds are still unhealed. Families still mourn and hostages are still held by Hamas,” said Sunak in a statement from Downing Street.

“And after six months of war in Gaza, the toll on civilians continues to grow – hunger, desperation, loss of life on an awful scale…The children of Gaza need a humanitarian pause immediately, leading to a long-term sustainable ceasefire. That is the fastest way to get hostages out and aid in, and to stop the fighting and loss of life,” he said.

The FCDO said the establishment of an international humanitarian maritime corridor from Cyprus to Gaza, supported by partner governments and the United Nations, is expected to be operational in early May. Writing in ‘The Sunday Times’, Foreign Secretary David Cameron said Britain’s support for Israel is “not unconditional”.

It follows three British aid workers among seven killed while delivering crucial supplies on behalf of the World Central Kitchen organisation, described by Israel as a “grave accident” before it sacked two senior military officials.

The UK Hydrographic Office has also shared an analysis of the Gazan shore with US planners to help establish the temporary aid pier.

In the meantime, the UK government said it is doing “everything possible” to get more aid into Gaza by land, air and sea. In recent weeks, the Royal Air Force (RAF) is said to have conducted five airdrops along the coastline of Gaza, delivering over 40 tonnes of food supplies, including water, flour and baby formula.

ALSO READ-Sunak expands free childcare as ‘improving’ sign before polls

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Sunak expands free childcare as ‘improving’ sign before polls

The Department for Education (DfE) said the childcare rollout is part of the Sunak-led government’s plan to help families, freeing thousands of couples from having to choose between having a family and a career…reports Asian Lite News

Prime Minister Rishi Sunak on Tuesday marked the expansion of free government-funded childcare to cover two-year-olds as a sign of things “improving” for the economy ahead of a general election expected later this year.

During a round of local radio interviews in north-east England, the PM was again asked when he plans to call an election and reiterated his previous indication of a timeline in the second half of the year.

While he came under some criticism for laughing off the question during one such exchange, Sunak insisted that the government was heading to a place where the electorate would be able to see a “brighter future” ahead.

“Last year we promised the biggest-ever expansion in childcare provision this country has ever seen, and today we are delivering on our plan with 15 hours of free childcare for parents with two-year-olds,” said Sunak.

“We want to give working families the peace of mind that they will be supported and our full expansion will save parents 6,900 pounds a year – helping to build a brighter future for families and help to grow our economy,” he said.

The Department for Education (DfE) said the childcare rollout is part of the Sunak-led government’s plan to help families, freeing thousands of couples from having to choose between having a family and a career.

“This is a landmark moment, and I am extremely proud to see we’re on track for more than 150,000 children to take up government-funded places under our new offer. This will be a lifeline for working parents, building up to this government’s plan for the most comprehensive childcare support in this country’s history by 2025,” said Education Secretary Gillian Keegan.

“Support with childcare costs has an enormous ripple effect, freeing up parents to increase their hours at work and put more money in their pockets, or giving them the security to try out a new career or passion. It also contributes to economic growth and opens up new career opportunities in a hugely rewarding sector,” she said.

The government claims it is the “largest ever expansion in childcare” which is being delivered by increasing the number of staff and places, introducing measures to boost the recruitment and retention of childminders, launching a major national recruitment campaign and providing over 400 million pounds of additional investment to uplift funding rates in 2024-25.

The DfE says the government will increase rates over the next two years by an estimated 500 million pounds, as confirmed in the Spring Budget last month.

PM squirms over poll date  

Rishi Sunak ran the local radio gauntlet Tuesday — and didn’t exactly help himself by chuckling through it.

The embattled prime minister is on a media blitz ahead of local elections a month today, and faced a tough grilling from local radio stations in the North East of England as he tried to talk up Conservative achievements.

But Sunak was repeatedly pressed by BBC Radio Tees on the question obsessing British politics-watchers: when exactly a general election will be held.

Sunak burst into laughter when asked to name the date by presenter Amy Oakden, and insisted he had “answered that question many times in the last few weeks” and was “unfortunately not” able to disclose the precise date to local radio.

An unimpressed Oakden asked Sunak: “Why is that funny? Sorry. Why are you laughing about that?”

Sunak said he’d been chuckling “because there’s a way that we’d announce general elections and it would be done in the formal and official way.”

Sunak — whose party is trailing in the polls after 14 years in office — has already ruled out a May election, but said only that his “working assumption” is that there’ll be a vote in the second half of 2024.

He told BBC Radio Newcastle Tuesday that there had been “no change” to this position. Under British rules, Sunak must call an election no later than January 28 next year, but the precise timing before then is in his gift.

Sunak is not the first prime minister to struggle with the scrutiny of local radio broadcasters, who often ask questions that stray from the usual Westminster talking points. Sunak’s predecessor Liz Truss famously came under fire in a bruising local media round during her own short-lived premiership.

ALSO READ-Situation in Gaza intolerable, Sunak tells Bibi

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Situation in Gaza intolerable, Sunak tells Bibi

Israeli Prime Minister Benjamin Netanyahu expressed regret over the incident, acknowledging that the military “unintentionally struck innocent people”…reports Asian Lite News

In a conversation with Israeli Prime Minister Benjamin Netanyahu, UK Prime Minister Rishi Sunak conveyed his deep concern regarding an Israeli strike on an aid convoy in Gaza.

The attack resulted in the loss of seven aid workers from the World Central Kitchen, including three British nationals. In an official statement from Downing Street, Sunak emphasised the urgent need for a comprehensive and impartial investigation into the incident.

“The Prime Minister said far too many aid workers and ordinary civilians have lost their lives in Gaza and the situation is increasingly intolerable,” the statement said.

“The UK expects to see immediate action by Israel to end restrictions on humanitarian aid, deconflict with the UN and aid agencies, protect civilians and repair vital infrastructure like hospitals and water networks,” it added.

Israeli Prime Minister Benjamin Netanyahu expressed regret over the incident, acknowledging that the military “unintentionally struck innocent people.” The Israel Defence Forces have pledged to conduct an investigation “at the highest levels” in response to the tragic event.

Summons for Israeli envoy

Meanwhile, the government summoned the Israeli ambassador to London for a decisive discussion. British Minister for Development and Africa, Andrew Mitchell, summoned the Israel’s ambassador to set out the government’s “unequivocal condemnation of the appalling killing of seven World Central Kitchen aid workers, including three British nationals,” he said in a Foreign Office press release.

“I requested a quick and transparent investigation, shared with the international community, and full accountability,” Mitchell said, adding, “I reiterated the need for Israel to put in place an effective deconfliction mechanism immediately and urgently to scale up humanitarian access. We need to see an immediate humanitarian pause, to get aid in and the hostages out, then progress towards a sustainable ceasefire.”

Earlier reports revealed that seven members of the World Central Kitchen team were killed in an Israeli strike in Gaza, prompting the organisation to halt its operations in the region with immediate effect.

Israeli Prime Minister Benjamin Netanyahu expressed regret over the incident, acknowledging that the military “unintentionally struck innocent people.” The Israel Defence Forces have pledged to conduct an investigation “at the highest levels” in response to the tragic event.

A US-Canadian dual citizen was among the casualties of the strike, confirmed by a US official, adding to the international outcry over the loss of life.

Experts analysing the aftermath of the airstrike have raised concerns about the nature of the attack. Chris Cobb-Smith, an explosive weapons expert, suggested that the heavy damage inflicted on the vehicles, as depicted in video and images from the scene, was consistent with the use of “highly accurate drone-fired missiles.” He emphasised the significant level of destruction witnessed and expressed scepticism about the incident being accidental.

Cobb-Smith’s observations were supported by Patrick Senft, a research coordinator at Armament Research Services (ARES), who noted that the aftermath of the strike appeared to align with the deployment of munitions by unmanned aerial vehicles (UAVs).

“Without munition fragments, I can’t say anything for certain, but the damage to the vehicles appears consistent with precision-guided munitions with a small explosive payload,” Senft said.

Herzog speaks with World Central Kitchen founder

President of Israel Isaac Herzog spoke Tuesday evening with World Central Kitchen (WCK) founder Chef Jose Andres.

President Herzog expressed his “deep sorrow and sincere apologies” over the tragic deaths of Seven WCK staff in the Gaza Strip Monday night and sent his condolences to their families and loved ones.

The President reiterated Israel’s commitment to ensuring a thorough investigation of the tragedy, which occurred amidst the ongoing war against the terrorist organisation Hamas.

He also affirmed Israel’s commitment to delivering and upgrading humanitarian aid to the people of Gaza, and said that efforts must continue to bring about the immediate release of all the hostages held by Hamas.

President Herzog thanked Chef Andres and the WCK for their commitment to the wellbeing of Israelis and Palestinians, and to the values of humanity.

IDF chief apologises

Meanwhile, the Israel Defense Forces (IDF) has apologised for the airstrike on an aid convoy in Gaza that led to the death of seven workers of World Control Kitchen (WCK).

In a statement late Tuesday, IDF chief Herzi Halevi said that seven employees of the World Central Kitchen were killed on Monday night. The mishap occurred due to “misidentification” and an investigation has been launched.

Halevi further said that WCK is an important organisation that worked in conflict areas and the IDF had worked closely with it in the past.

He also said that the IDF has already completed its preliminary probe into the strike and the findings were shared with him.

There were “no intentions” for harming the WCK aid workers, added the IDF chief.

ALSO READ-US President Calls WCK Workers’ Deaths in Gaza ‘Tragedy

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Tory rebels warn Sunak on poll date

Downing Street sources have moved to play down speculation that a summer election could be on the cards, stressing that going to the ballot box in the autumn remains the aim…reports Asian Lite News

Tory rebels have warned Rishi Sunak off holding a June general election, claiming they would launch a fresh move to oust him as leader if that month was picked.

Downing Street sources have moved to play down speculation that a summer election could be on the cards, stressing that going to the ballot box in the autumn remains the aim.

Central to that argument is the improving economic picture, with inflation and possibly interest rates likely to be lower and economic growth higher at the end of the year than now.

But the idea of a June election, which would have to be called by early May if it is to happen, has spooked some critics of the Prime Minister on the Tory backbench.

One Conservative MP told The Telegraph of a June election: “If he does that, the letters will go in before he gets to see the King.

“Colleagues don’t want an election yet. They’re trying to be as loyal as they can, but they think it will be political suicide. Someone’s clearly floating a June election to stop the plotters. He would obviously prefer to be ousted by the election than fellow MPs.”

Another said: “It would be disastrous. It would cause a move against the PM. There is an increasing view that he’s just not up to it. People are thinking ‘we are not having you lead us into the next election’.”

Since the start of the year, the Prime Minister has been saying publicly that he expects the vote to be held in the second half of the year, though he has avoided being categorical. He did earlier in March say that the general election would not be held on May 2, the same day as the local elections.

That comment was widely seen as a sign that a spring election was being ruled out, since sending voters back to the polls a few weeks after the local elections could risk a backlash.

But focus has now turned on whether a surprise summer general election, perhaps in June or early July, could be on the cards. Sunak’s allies accept that if Tory MPs try to force him from office that could trigger an early vote, but otherwise autumn remains the working assumption.

The argument for calling the election in the summer is that the Tory vote share, which has been ticking downwards this year, could fall even further if Number 10 waits until the autumn.

Politicians usually avoid calling elections at the height of summer since Britons often head away for their holidays, making turnout hard to predict.

But on Thursday figures at the top of the party moved to play down the idea of a June election.

A senior Tory source said, “I think everyone needs to enjoy a long weekend and have a cold shower. We have been working on the assumption of Oct/Nov for over a year and I’ve not seen anything to suggest that’s changed.”

Only a small number of advisers and trusted figures are expected to be in the loop about Mr Sunak’s real thinking about when to call the election.

With there being a political incentive to retain an element of surprise and keep the Labour Party guessing, it is difficult to say with confidence exactly what date is being planned.

But the widespread expectation within Westminster among government insiders and MPs of all political stripes is that the election will be called for either October or November.

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Penny Mordaunt rubbishes talk of challenging Sunak

On Wednesday, the Prime Minister issued a call to arms to Tory MPs at a closed-doors meeting in Parliament following speculation of a backbench plot to oust him…reports Asian Lite News

Penny Mordaunt has said talk of her challenging Rishi Sunak’s leadership is “nonsense” after speculation about Tory plots against him.

The Commons Leader insisted she was “focused on doing her current job” and branded the rumours “bollocks”. The Prime Minister earlier this week battled to assert his authority in an address to the Conservative backbench 1922 Committee following ongoing disquiet over his position.

Tory rebels are said to have talked up the prospect of Ms Mordaunt as a “unity” leadership candidate who could bridge divides between the Tory right and moderates.

But speaking to BBC Politics South, the Commons Leader said: “This is nonsense, although that’s not the adjective I used in the green room, and I think the public are fed up of this story.”

Asked if she had now missed her chance to be prime minister, the MP for Portsmouth North replied: “I have put my hat in the ring, and I’m not prime minister. I’m leader of the House of Commons. I’m doing my job and encouraging others to get on with theirs.” Mordaunt, who came third behind Sunak in the leadership contest won by Liz Truss in 2022, added that he was now in “full campaign mode” and “does pass the battle bus test”.

On Wednesday, the Prime Minister issued a call to arms to Tory MPs at a closed-doors meeting in Parliament following speculation of a backbench plot to oust him.

Conservative backbenchers filing out of the session after his rallying speech sought to stress broad support for the leader and dismiss reports of dissent amid dire poll ratings.

However, it is understood Sunak was challenged by former party chairman Sir Jake Berry at the meeting over media briefings against him which he alleged had originated from No 10.

Sir Jake stressed he had not submitted a letter of no confidence in the Prime Minister but said he had raised the issue with the whips and received no reply.

Government figures have denied the Conservatives are deeply divided but suggested there are “one or two” plotters seeking to split the party.

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Obama ‘drops in’ for informal meet with Sunak

The prime minister’s official spokesperson said Obama had made “an informal courtesy drop-in as part of his trip to London”…reports Asian Lite News

Barack Obama has held talks with Rishi Sunak as the former US president paid a “courtesy visit” to Downing Street during a trip to London.

The pair are understood to have discussed a range of subjects during an hour-long meeting, including one of the prime minister’s favourite topics, artificial intelligence.

Obama, who served two terms in the White House from 2009 to 2017 before he was succeeded by Donald Trump, was in London as part of work with his Obama Foundation, which oversees a scholarship programme and other initiatives.

The prime minister’s official spokesperson said Obama had made “an informal courtesy drop-in as part of his trip to London”.

He added: “I think President Obama’s team made contact and obviously the prime minister was very happy to meet with him and discuss the work of the Obama Foundation.”

The two held what were understood to be largely one-to-one discussions in the prime minister’s study. Obama briefly paused at the door of No 10 to wave to the cameras but no photos were released from what Downing Street said was a private meeting.

As Obama left Downing Street in the company of the US ambassador to the UK, Jane D Hartley, he was asked by the media for his opinion on the state of Russian democracy and replied: “I’m tempted!”

The former president later met the Labour leader, Keir Starmer. Obama previously visited Downing Street in April 2016 when David Cameron was prime minister.

Lord Cameron, the foreign secretary, is understood not to have been present at Monday’s discussions. Despite early suggestions of a “bromance” when both men were in power, their public utterances about each other have been mixed.

Obama suggested in 2016 that Cameron was distracted by domestic priorities as Libya descended into a “mess”. He also said he warned his British counterpart that the “special relationship” would be at risk if the UK did not commit to spending 2% of national income on defence, in line with Nato targets.

Cameron was withering of Obama in his autobiography, accusing him of “dithering” on Libya and of being “clearly frustrated he had been sucked in”.

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Sunak rules out polls on May 2

There had been feverish speculation in Westminster that Sunak was preparing to dissolve parliament before the end of March and announce a general election for May 2…reports Asian Lite News

Rishi Sunak has ruled out holding a general election on 2 May, when voters are to go to the polls in local elections.

Asked by ITV News West Country whether he was preparing to call a snap election to coincide with the local elections, the prime minister said: “There won’t be a general election on that day.”

There had been feverish speculation in Westminster that Sunak was preparing to dissolve parliament before the end of March and announce a general election for May 2.

Before this week Sunak repeatedly refused to rule out the possibility, even though he said in January his “working assumption” was there would be an election in the second half of the year.

He said on Thursday: “In several weeks’ time we’ve got elections for police and crime commissioners, for local councils, for mayors across the country – they’re important elections.”

‘We’re stuffed’: have Conservatives given up on winning the next general election? Asked whether there would be a general election on the same day, he said: “There won’t be an election on that day.”

He did not rule out an early election in the spring or summer more broadly. Labour has talked up the prospect of a snap election this spring. Jonathan Ashworth, the shadow paymaster general, made a £10 bet live on Sky News that the election would take place in May.

Some Labour and Conservative figures think an early election would largely avoid fallout from a potentially bruising set of local elections and a difficult summer when small boat crossings across the Channel could damage the Tories’ record on immigration further.

Isaac Levido, who is running the Conservatives’ election campaign, wants it to be focused on the government’s record of delivery. Tory strategists believe that by waiting until later in the year Sunak will have more to show from his time in No 10 and the economic picture will have improved.

Pat McFadden MP, Labour’s national campaign coordinator, said: “After 14 years of Tory failure, the British public have the right to expect an election to be called by 26 March and held on 2 May.

“Until the day to call it has passed, we are prepared for the election to take place on the usual day in the election cycle. Rishi Sunak should stop squatting in Downing Street and give the country what it desperately needs – a chance for change with a Labour government.”

The latest Sunak could wait to hold the election is January 2025. Insiders think Labour is talking up the prospect of an earlier election so as to accuse Sunak of cowardice should he decide against one.

This month Keir Starmer urged Sunak to call the election for 2 May. Responding to the budget, the Labour leader said: “It is time to break the habit of 14 years. Stop the dithering, stop the delay, stop the uncertainty and confirm 2 May as the date of the next general election. Because Britain deserves better and Labour are ready.”

When asked earlier on Thursday about the date of the election, the prime minister told reporters: “I said at the start of this year, my working assumption was we’d have an election in the second half of this year. And nothing has changed since I said that.”

Tories fear losing half their seats

Senior Tories are braced for a catastrophic set of local elections that will see a collapse in council seats won at the peak of the “vaccine bounce” enjoyed by Boris Johnson.

Rishi Sunak’s allies regard the results as the most dangerous moment remaining for the prime minister before the general election. While many of Sunak’s Tory critics have little appetite for removing him, some said they were asking themselves: “What is there to lose?” after a pre-election budget that has failed to increase Conservative support.

Sunak, under pressure to explain how he would pay for his pledge to abolish national insurance contributions by the end of the next parliament, has expanded on the measures in the budget by announcing that he is preparing a new benefits squeeze to fund it.

Thousands of council seats across England will be up for grabs this May, with most of them last returning councillors in 2021. At that point, Johnson’s government was enjoying a boost in popularity as a result of the Covid vaccine rollout, while Keir Starmer was on the verge of resigning after losing the Hartlepool byelection. On the morning after the results, one newspaper front page said Johnson was now eyeing a “decade in power”.

According to an Opinium poll for the Observer, the Tory share of the vote has fallen from 42% then to 25% today. The poll slump means that May’s results are likely to be dire for the Tories, with some experts predicting the party could lose as many as half of its councillors up for re-election.

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Sunak warned not to deport Afghan allies to Rwanda

Lord Carlile, a former terrorism legislation reviewer, called the amendments “just, fair and required.”…reports Asian Lite News

The government has been warned against letting Afghans who worked and fought alongside British and coalition forces be deported to Rwanda.

Members of the House of Lords are debating new legislation proposed to allow asylum-seekers who arrive in the UK illegally to be removed to the East African state for processing.

On Monday, peers rejected the government’s attempts to have Rwanda declared a safe country until certain safeguards are met.

In 2023, the UK Supreme Court ruled the Rwanda plan unlawful, but Prime Minister Rishi Sunak has pressed ahead, including trying to assert that the country is safe via legislation so as not to “frustrate the will of the (British) people.”

The Lords are also discussing changes to the legislation, proposed by former Defence Secretary Lord Browne of Ladyton, to exempt Afghans with a history of service alongside UK counterparts. Peers are due to vote on the amendments on Wednesday.

The Illegal Migration Act, given assent on July 20, 2023, states that illegal migrants who entered the UK after that date must be removed, and that asylum cannot be given to anyone who entered the country illegally on or after March 7 that year.

Lord Browne’s changes would mean foreign nationals who helped the UK Armed Forces overseas in an “exposed or meaningful manner,” or were “employed by or indirectly contracted to provide services to the UK government in an exposed or meaningful manner,” would be exempt, along with their families.

Lord Carlile, a former terrorism legislation reviewer, called the amendments “just, fair and required.”

He told The Independent: “If it is put to the vote, there will be a lot of support for not sending people who worked with Britain in Afghanistan to Rwanda — provided peers are satisfied it is drawn in a way which would not allow for people to use the system illegitimately.

“Obviously, we want to help genuine Afghans who would be in real trouble if, via Rwanda, they were returned to Afghanistan.”

He added: “We have to understand that the House of Lords cannot simply wreck government legislation, we are not trying to do that. But if there is something that is just and fair and required, then we will say to the government, ‘this is not acceptable.’”

The former chief of the UK’s general staff, Gen. Lord Dannatt, has also said he supports the proposed amendments, alongside former diplomat Tim Willasey-Wilsey, who told The Independent: “It is imperative that the House of Commons should accept Lord Browne’s amendment.”

Conservative MP Julian Lewis, former chair of the House of Commons Defence Select Committee, told The Independent: “I’m very sympathetic to rescuing Afghans at risk for having helped the UK Nato/Isaf forces to fight the Taliban.

“Provided that their specific service background can be verified by our MoD (Ministry of Defence) and/or individual veterans, it ought to be possible for them to apply to come here from the first safe country they reach, and it should not be necessary for them to make a risky and illegal Channel crossing.”

ALSO READ-Economy is on the right track, claims Sunak

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Economy is on the right track, claims Sunak

With Chancellor Jeremy Hunt to deliver his pre-election Budget on Wednesday, Mr Sunak said: “I think that’s a huge vote of confidence in the UK, and it shows that the work we’re doing to get the economy on the right track is paying off…reports Asian Lite News

Rishi Sunak claimed the UK economy is getting “on the right track” as he visited the site of the former Honda car factory.

The Japanese car giant’s plant in Swindon, Wiltshire, shut in 2021 with the loss of thousands of jobs and the site was sold to developer Panattoni to turn into a logistics hub.

Addressing Panattoni staff working on the demolition and reconstruction of the site, the Prime Minister said in the last five years the firm has begun developing more than 25 million square feet of industrial space.

With Chancellor Jeremy Hunt to deliver his pre-election Budget on Wednesday, Mr Sunak said: “I think that’s a huge vote of confidence in the UK, and it shows that the work we’re doing to get the economy on the right track is paying off.

“Now, I’m determined, as Prime Minister, to make sure that the UK is the best place in the world to invest and grow a business like this.

“And that’s why we’ve been taking ambitious steps, like making full-expensing permanent, which is the biggest business tax cut in modern British history.

“It’s all about supporting businesses like this to invest in local areas and create jobs and opportunity for the future.”

On Monday, Hunt reiterated his desire to move towards a “lower tax economy” but in a “responsible” way, ruling out borrowing to pay for a pre-election giveaway. He dodged questions on whether the Tory Government is “pinching Labour’s policies” as it is thought he is considering abolishing the non-dom tax status as a way of raising revenue – a long-standing pledge made by Sir Keir Starmer’s party.

“You’ll have to see on Wednesday precisely what I’m going to announce,” the Chancellor told broacasters. “But let me be clear, there is a plan for growth compared to the Labour Party that has just had to abandon the central plan that they had for growth – this 28 billion number that one day they were supporting, the next day they were not.”

The closure of the Honda plant was announced in 2019 in the wake of Brexit – although the firm insisted that was not the reason, instead blaming unprecedented changes in the global car industry.

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Tories explore scrapping non-dom tax status

Issue personally sensitive for the prime minister, whose wife Akshata Murty previously benefited from non-dom status…reports Asian Lite News

Jeremy Hunt is considering ending or reducing “non-dom” tax breaks that allow wealthy individuals to live in the UK while their wealth is considered as residing overseas.

The measure is on a list of potential revenue raising measures being assessed ahead of next week’s budget, and could be enacted to give the chancellor room to cut universal taxes.

The move, first reported by the Financial Times, could raise more than £3bn for the exchequer and would be politically eye-catching given Hunt and successive Conservative governments have resisted calls to abandon it – arguing it makes the UK more attractive to foreign wealth creators.

It is also personally sensitive for the prime minister, whose wife Akshata Murty, daughter of the billionaire founder of the Indian software giant Infosys, previously benefited from non-dom status.

“Non-dom” is short for “non-domiciled individual” and refers specifically to the tax status of a person who is a UK resident but whose permanent home is abroad.

Non-doms only have to pay tax on money earned in the UK, while their overseas income and wealth are not subject to UK tax – and they can benefit from the status for up to 15 years.

This allows wealthy individuals to make significant and entirely legal tax savings if they choose to be domiciled for tax purposes in a lower-tax jurisdiction.

Labour has long supported ditching non-dom status and has proposed cutting the duration of benefits to just four years in a concession to what they call genuinely temporary UK residents.

That similar measures are now being considered by Hunt demonstrates both the tightness of the public finances, and the political imperatives of an election year budget.

Hunt is attempting to find money to fund personal tax cuts he and the prime minister believe are potential vote winners, but is constrained by his own fiscal rules, an arbitrary set of restraints intended to demonstrate responsible economic management.

These require that debt falls as a proportion of GDP in the fifth year of economic forecast prepared by the Office for Budget Responsibility (OBR).

These forecasts include a figure for headroom, the amount of “spare” cash notionally available to stay within the rules, and this effectively sets the chancellor’s room for manoeuvre.

The OBR prepares multiple forecasts in the run up to a budget, the most recent of which was delivered on Wednesday with the final version due to be handed over on Friday.

Other measures reportedly under consideration are a tax on vapes and cuts to departmental spending, though many economists believe these are already inevitable on the government’s current economic plans.

Adopting a popular Labour proposal that affects only the very richest would create a little more headroom and little controversy other than the charge of hypocrisy, but it might be a headache for the Opposition, who have said they will stick to the same fiscal rules.

With one of their few distinct revenue sources already used up, Conservative strategists believe Keir Starmer and Rachel Reeves would be forced to explain how they will raise money already committed to spending plans without raising the taxes Hunt hopes to cut. The Treasury declined to comment.

‘Spend money on schools, NHS’

Meanwhile, Labour has said it would spend the money generated from scrapping non-dom status on schools and the NHS. But if the government used it to fund tax cuts this would pose a dilemma for the party if it wins power in this year’s general election.

If Labour backs any tax cuts the chancellor announced, which they are expected to do, this would leave questions over how some of their spending pledges would be funded.

Labour’s shadow chancellor Rachel Reeves has claimed whichever party wins the next election will inherit “the worst set of economic circumstances since the Second World War”.

She said that after former Chancellor George Osborne’s promise to “fix the roof” while the sun was shining, “the Conservatives have broken the windows, kicked the door in and now they’re burning the house down”.

This is a reference to the expectation that in next week’s Budget the chancellor will use up almost all the room for manoeuvre within his self-imposed borrowing rules.

Labour has said it will stick to the key rule that the national debt should in five year’s time fall as a share of the national economy.

The government might choose to use up most of what is known as “fiscal headroom”, and then suggest Labour would have to raise taxes.

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