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Before Rachel Reeves, the Chancellor of the Exchequer, delivered the Budget, the Office for Budget Responsibility accidentally released its contents. She will increase the tax take to an all-time high of 38 per cent of GDP in 2030-31. She froze tax thresholds until the end of 2030-31 and introduced a council tax surcharge on properties worth over £2 million from 2028. She scrapped the two-child benefit cap. She froze fuel duty for only another five months but brought in a tax of 3p per mile on electric vehicles. The amount that can be added annually tax-free to a cash Isa was reduced from £20,000 to £12,000 (except for over-65s) and salary sacrifice schemes will be capped at £2,000 from 2029. Online betting tax will rise to 25 per cent. The minimum wage for over-21s will rise by 50p to £12.71 an hour; workers aged 18-20 will get an 85p rise to £10.85. The government approved a plan for a third runway at Heathrow, to be in operation by 2035. Regulated rail fares in England are to be frozen until March 2027.
Sir Keir Starmer, the Prime Minister, responded to an American plan for Ukraine by saying: ‘Ukraine has been ready to negotiate for months, while Russia has stalled and continued its murderous rampage.’ He wanted British peacekeepers to be sent to Ukraine. A Russian spy ship, the Yantar, used lasers to disrupt RAF pilots tracking its activity, John Healey, the Defence Secretary, said. Nathan Gill, the former leader of Reform in Wales, was jailed for ten-and-a-half years for taking bribes from Russia. Several London councils were hit by cyberattacks. A man was arrested over a pile of rubbish 160 yards long and 20ft deep between the river Cherwell and the A34 in Oxfordshire.
David Lammy, the Justice Secretary, proposed changing the law to deny a jury trial to anyone facing fewer than five years in prison. The publisher of the Daily Mail offered £500 million to buy the Telegraph. Iqbal Mohamed MP left Your party a week after Adnan Hussain MP, reducing it to three MPs. About 220 children under 16 will be given puberty blockers in a clinical trial by researchers from King’s College, London. Graham Linehan was cleared of harassing Sophia Brooks, a trans activist, on social media but fined £500 for damaging a phone belonging to the campaigner. An 800-page report by the Covid Inquiry – the second of ten – said that, had restrictions been introduced sooner, the first lockdown ‘might have been shorter or not necessary at all’, but with an earlier lockdown ‘there would have been approximately 23,000 fewer deaths in the first wave’; it did not suggest the overall British death toll of 227,000 would have been reduced. A court heard that a policeman charged with stealing Mr Kipling Bakewell tarts from a supermarket in Great Yarmouth had been temporarily insane.
Abroad
Under 28 proposals that the United States demanded Ukraine accept, Crimea, Luhansk and Donetsk (including territory under Ukraine’s control) would be recognised as de facto Russian. Ukraine’s forces would be reduced to 600,000; it would be eligible to join the EU, but Nato members could not station troops in Ukraine. Russia would be invited to rejoin the G8 and America would profit from reconstruction in Ukraine. Marco Rubio, the US Secretary of State, insisted that the plan was written by the United States, not by Russia. Ursula von der Leyen, the President of the European Commission, said: ‘Ukraine’s borders cannot be changed by force.’ America and Ukraine held talks in Geneva, discussing a new 19-point plan, and US officials then met Russian and Ukrainian representatives in Abu Dhabi. President Donald Trump’s special envoy Steve Witkoff was to meet President Vladimir Putin in Moscow.
Air traffic over the Dutch city of Eindhoven was suspended after unidentified drones were spotted near the airport. Marjorie Taylor Greene, the Republican congresswoman from Georgia who fell out with President Trump, announced she would leave Congress on 5 January. Doge, the US government cost-cutting agency associated with Elon Musk, was wound up. Jimmy Cliff, the Jamaican reggae singer, died aged 81.
Israel killed Haitham Ali Tabatabai, Hezbollah’s chief of staff, in an air strike on the southern suburbs of Beirut. Gunmen abducted 303 students and 12 teachers from St Mary’s Catholic School in Papiri, Nigeria; 50 were reported to have escaped. In Vietnam, floods swept away more than three million livestock. CSH
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