Afternoon summary
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Dan Thomas, the leader of Reform UK in Wales, is standing down after he was arrested and bailed on suspicion of assault. The news came as another Reform UK member of the Senedd defected to Plaid Cymru, saying she could not support its policy of scapegoating and dehumanising vulnerable people. (See 4.59pm.)
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Shabana Mahmood, the home secretary, has told MPs that she is still finalising proposals to extend the amount of time foreign nationals in the UK have to wait until they can apply for indefinite leave to remain (ILR) and citizenship. Currently, people normally have to wait five years for ILR. Mahmood wants to make 10 years the norm, and foreign care workers would have to wait 15 years. But Andy Burnham has repeatedly made it clear that he thinks foreign care workers deserve better treatment (see here and here) and today Mahmood signalled that, in response to pressure from her boss, she is revising her plans. She told the Commons home affairs committee she expected to announce her final plans later this year. She said:
We’re trying to strike the right balance between our responsibilities to people who have come here to work, our recognition of the failures we inherited as a government, and also our need to do right by the people who are already here, who pay for the systems that we all rely on.
For a full list of all the stories covered on the blog today, do scroll through the list of key event headlines near the top of the blog.
Updated
Welsh Labour claims resignation of Reform UK's leader in Wales raises questions about Farage's judgment
Ken Skates, the Welsh Labour leader, has said that Dan Thomas’s resignation as Reform UK’s leader in Wales raises questions about Nigel Farage’s decision to appoint him in the first place.
Skates told the Press Association:
This is quite incredible news and many questions will need to be answered.
Dan Thomas was a personal pick by Nigel Farage and this will surely demonstrate the appalling judgment of the Reform UK leader.
Plaid welcomes MS's defection from Reform UK, saying it shows power of its vision for Wales
And this is from Marc Jones, the Plaid Cymru Senedd group chair, explaining why his party decided to admit Sarah Cooper-Lesadd as a member after they campaigned so ferociously against Reform UK at the election. He says his members believe that Cooper-Lesadd is sincere about realising that Reform UK did not match her values.
Jones says:
The Senedd group and Plaid Cymru’s National Executive have today taken the decision to allow Sarah Cooper-Lesadd MS to join the party as our 44th member of the Senedd.
A decision to allow a member to cross the floor, particularly from Reform UK, is not taken lightly. This follows a period of reflection, discussion and a proper internal process in line with our party’s constitution.
It has been clear for some time to many of us that Sarah is sincerely motivated by a desire to make a positive difference, particularly for some of the most vulnerable people in our society. It has also become clear that she is uncomfortable with Reform UK’s politics, rhetoric and values.
She has been honest about her political journey and has acknowledged that she was wrong to believe Reform was the right political home for her …
I and so many Plaid members fought the election in May on a platform and values opposed to Reform. But May also showed that people from many different backgrounds and political starting points can be persuaded by our vision for Wales. Building our movement means reaching out, having conversations and persuading people and allowing people to change their minds.
Reform UK 'has no interest in Wales', says Senedd member who has defected to Plaid Cymru
Sarah Cooper-Lesadd, the member of the Senedd who has today defected from Reform UK to Plaid Cyrmu, has said she left in part because of Reform’s hostile approach to vulnerable groups. (See 4.59am.) She also said Nigel Farage’s party had no interest in Wales.
Here is another extract from her statement explaining her defection.
The party centrally has no interest in Wales. Their Senedd group is a staging post in the effort to get Nigel Farage into Downing Street, and that was glaringly obvious at its conference this week.
To everyone who voted Reform in May: I have not stopped listening to you. You told me you felt ignored and let down. Those concerns are real, and they will be answered by delivery, not division.
Wales is a small country with enormous potential. Devolution is how that potential is realised, with decisions made closer to the people they affect.
I believe in a Wales that is confident, compassionate and ambitious. A Wales that uses the powers it has to improve people’s lives and seeks the powers it still needs.
Plaid is serious about governing, serious about delivery and serious about Wales. It is a party that believes in our communities and believes Wales can do more when decisions are made closer to the people they affect.
I know what I am asking of Plaid members who spent May campaigning against the party I stood for, and I will work to earn their trust.
I came into politics to give people a voice, improve lives and get things done, including for every child growing up in care in Wales today. Plaid Cymru is the best place for me to do that, and I am ready to get to work.
Leader of Reform UK in Wales stands down after arrest on suspicion of assault
Dan Thomas is standing down as leader of Reform UK in Wales after being he was arrested and bailed on suspicion of assault, Ben Quinn and Bethan McKernan report.
Reform UK hit by fresh blow in Wales as Senedd member defects to Plaid Cymru
It is not a good day for Reform UK in the Welsh Senedd. Just as the party’s leader announced he was standing down, a Reform UK MS (member of the Senedd) announced she is defecting to Plaid Cymru.
Sarah Cooper-Lesadd, who represents Pen-y-Bont Bro Morgannwg (Bridgend and Vale of Glamorgan), said in a statement:
Today I have left Reform UK and joined Plaid Cymru and its Senedd group.
I grew up in the care system. I stood for the Senedd to be a voice for care-experienced people, who are still badly under-represented in our politics. I want to improve people’s lives, stand up for people who are overlooked and get things done. My approach is evidence-led and rooted in what works for our communities.
Reform has no interest in the work I came here to do. They are not serious about governing Wales. They are far more interested in division, opposition and headlines than in finding solutions. There is a real appetite in the group to want the government to fail, and no interest in what that failure would mean for the people we represent.
They oppose measures without any coherent explanation. I wanted to vote for the supplementary budget, which every party should have supported, and I argued against tabling the Nation of Sanctuary debate [a debate organised by Reform attacking the Welsh government policy on support for asylum seekers], and I was criticised for sitting it out. Having just spoken about my own childhood trauma, I could not in good conscience sit through it.
I cannot support Reform’s attacks on people seeking sanctuary or other vulnerable groups. I particularly reject the way minorities have too often been used as political targets. I do not believe anyone should be scapegoated or dehumanised to win votes, and I will not be part of a politics that does that.
In the May election, Plaid Cymru won 43 of the 96 seats in the Senedd and for the first time formed a government, albeit a minority one. Reform UK were in second place with 34 seats.
Cooper-Lesadd’s defection means Plaid now have 44 MSs.
Updated
Reform UK's leader in Wales, Dan Thomas, says he is stepping down after referral to police - but has done nothing wrong
Dan Thomas, the Reform UK leader in Wales, says he is stepping down having been reported to the police. He says he has done nothing wrong, but has not given further details in the statement he has released.
He says:
It has been the honour of my life to have been the leader of Reform Wales and see this party go from zero to 34 elected members and become the largest opposition group in Welsh history. With deep regret, I am now standing down from this position due to personal reasons.
Over the weekend, I was reported to the police and was released without charge. I stress that I have done nothing wrong, but I do not want the coming headlines to be a distraction from the fantastic work our Senedd team is doing in holding this government to account.
I will continue to serve my constituents in Casnewydd Islwyn and will fully back whoever the group selects as its next leader.
Haigh says there's 'no way' AI can replace need for quality teachers in schools
Q: Do you agree the unions should have a role in developing AI policy, particularly as it is introduced in schools?
Haigh says AI can never replace the role of teachers.
There’s no way that AI can ever, could ever, overtake the need for quality teachers and teaching assistants in schools.
I’m sure nearly everyone in this room can point back to a teacher or someone in their school that had a profound impact on their life and their life choices. So we need to make sure that those interactions and that relationship is 100% protected.
As we go forward in all the reform around AI, working people need to be at the heart of the I debate. And we’re committed again to working with trade unions and employers in this.
Where our AI makes work more productive, then the benefits should be felt by workers, not just shareholders or tech bros.
Paul Nowak, the TUC general secretary, thanks Haigh for her time. He says it has been refreshing to hear a minister talking about working with the unions in this way.
Q: What are you doing to promote apprenticeships?
Haigh says the government views young people’s apprenticeships as “incredibly important”.
Q: What is your response to the Next equal pay court judgment?
That is a reference to this.
Haigh says the Tories and Reform UK has shown what they stand for in their opposition to the Equal Pay Act.
The government will make the right to equal pay effective, not just for women and but ethnic minorities and disabled people too.
And it will ensure that outsources cannot be used by people to evade equal pay obligations, she says.
Q: What are you going to do on re-industrialisation? And will you give a commitment to buying British?
Haigh says only yesterday the government announced it was working towards buying Safeguarding Steel, saving 1,400 jobs.
And she says there is a strong commitment to buying British in public procurement. The social value measure in public procurement will focus on creating and protecting jobs.
Q: Will you pause cuts to UKRI [UK Research and Innovation]?
Haigh says the government is spending £68bn on R&D.
Q: [From a firefighter] Do you agree firefighters need more resources to fight wildfires?
Haigh says her grandfather was a firefighter. She thanks them for all they did this summer. The government is holding an extreme weather soon. It will be in partnership with the FBU, the fire brigades union.
Q: How will you ensure shop workers get guaranteed hours?
Haigh says she once worked on a zero-hours contract herself. She says the government has just finished a consultation on guaranteed hours.
Q: [From Mariana, an RMT rep] Will you work with unions to deliver the biggest wave of insourcing for generation?
Haigh says the Labour manifesto promised the biggest wave of insourcing for a generation.
From April next year, all government bodies will have to apply a public interest test when deciding if services can be insourced.
Haigh is now taking questions.
Q: [From Kelvin, a Unison member, chair of Unison’s national social care committee] Do you agree with Unison on the need to take profit out of the care sector.
Haigh says the care sector has been undervalued for far too long. That is what underpins the PM’s personal commitment to tackling social care.
A strong national care service will be underpined by its workforce, she says.
She says the Louise Casey review is specifically looking at the role of private equity in this sector.
Alexandra Topping is a Guardian political correspondent.
Speaking about AI, Haigh says that the UK must “heed the warnings” from industry leaders about the threat posed by AI as the government looks to capitalise on the technology.
She says:
AI has enormous potential to improve lives. To transform our public services, make our businesses stronger and deliver new scientific breakthroughs. We must work to make the most of the opportunities that AI can bring. But I know people are also worried about what it already means for their jobs. What it means for the world their kids are growing up in and of course their safety. We should heed the warnings of those who are at the forefront of developing this technology.
There are clearly huge risks to our national security and society if the right guardrails are not put in place. This is an issue that goes beyond our borders and we are ready to work with our international partners to make sure we get this right. AI will reshape our lives and the lives of our children. We have a duty to mitigate the risks and ensure that it’s for the benefit - not the detriment - of our society.
Updated
Louise Haigh tells TUC Burnham knows that Labour's strength 'drawn from roots in trade unions'
Alexandra Topping is a Guardian political correspondent.
Louise Haigh, the first secretary, is giving a speech at the TUC annual congress in Brighton in the place of Andy Burnham. The prime minister was not able to give the speech after the death of his father yesterday.
Haigh is calling on the delegates at the conference to come together as a family, striking a remarkably different tone than ministers often used with unions under Keir Starmer.
Haigh says:
The prime minister understands that the strength of our movement is drawn from our roots in the trade unions. And that moments like these are such a valuable opportunity to come together. To remind ourselves of our common endeavour, of what binds us and unites us in our daily fight to improve the lives of working people.
Like all families, we have and will always have our differences … Our disagreements, big and small. But on days like today, we should come together and remind ourselves of all that we have in common and everything that we have achieved, together.
She continues with a quick run through what she credits Labour with doing since it came to power including, new rights for renters, the end of the two child benefit cap and - perhaps a little preemptively refers to “bringing our buses back under public control” and “renationalising our railways”.
Continuing her overtures to union delegates she adds:
We need to go further and faster to deliver the scale of change the country expect. But never be in any doubt whose side we are on. Whether it was standing up for workers illegally sacked by P&O … Or changing public procurement to create more good jobs here in Britain. We are proudly on the side of working people. And congress, I can promise you now, under this government, there will never be any doubt about whose side we are on.
Reform UK launched network for women in party, claiming it will put them 'at heart' of its agenda
Reform UK has launched a network for women in the party. At a launch event, Sarah Pochin MP, the group’s parliamentary chair, said:
Women for Reform is giving a platform to the great talent and ability within our ranks. Now is the time to get things done. This new group within Reform UK will become a powerful vehicle for shaping our future policy, with women and women’s safety at the very heart of our agenda.
Pochin and her colleagues have their work cut out, because Reform UK is a very male-orientated party. The latest poll from YouGov has Reform UK neck and neck with Labour, with both parties on 23%.
But, while Reform UK polls 28% with men, with women it is at just 19%. No other party has a gender gap that large.
And in the Commons just 25% of Reform UK MPs are women. The equivalent figures for other main parties are: Greens – 80%; Labour – 47%; Lib Dems – 45%; and the Conservatives 24%. Immediately after the 2024 election, Reform were at 0%. The numbers went up because Pochin won a byelection, and Suella Braverman defected.
Irish PM claims Sinn Féin may have set back cause of Irish unity by alliance with SNP and Plaid Cymru
Micheál Martin, the Irish PM (taoiseach) has suggested Sinn Féin may set back the cause of Irish unity by aligning itself with Scottish and Welsh pro-independence parties.
As the Press Association reports, Martin, who is leader of Fianna Fáil, questioned whether Sinn Féin was on the right strategic track after the party signed a memorandum of understanding with the SNP and Plaid Cymru to put pressure on the UK government to call unity referendums in Scotland, Northern Ireland and Wales.
Speaking to the media today, Martin was asked about Michelle O’Neill, the Sinn Féin leader in Northern Ireland, saying at yesterday’s event that he was not doing enough to advance the cause of Irish unification. He replied:
Fundamentally, I would disagree.
I’m not into campaigning, but I would make the point that strategically we have never embroiled Northern Ireland in British politics.
We’ve always identified the north as exceptional, as being an issue in terms of the partition of Ireland.
And I think strategically I’m not clear that Sinn Féin is on the right track at all, and may even set back unity by that move that they’ve made.
Martin said Fianna Fáil was a party that believes in Irish unity. But he said his current focus is on progressing new mechanisms to deal with the legacy of the Troubles and on examining reforms to the institutions established under the Good Friday agreement.
No 10 insists that government planning 'enhanced residency' test for donors before Reform UK got its £72m
Downing Street is pointing out that the government was talking about an “enhanced residency” test for Britons newly arrived in the UK who donate to political parties back in August. At the lobby briefing earlier, the PM’s spokesperson faced claims that ministers are only talking about this now in response to the recent news about Ben Delo and Christopher Harborne giving Reform UK £72m. Part of the reason why this allegation sounded plausible is that the spokesperson was unable to clearly show that this was something on the government’s agenda before the £72m story broke. (See 1.41pm.)
It now emerges that, on a Saturday at the end of August, the Ministry for Housing, Communities and Local Government sent out a press release that mentioned a proposal for “enhanced UK residency requirements for donors seeking to give more than £100,000”. It was not published online. But on Tuesday 1 September MHCLG sent out a briefing note to journalists saying:
We’re planning a new test to stop wealthy people living overseas giving huge donations to political parties despite not living in the country. This will make sure donors have a genuine connection to the UK, rather than simply appearing to live here.
In the Commons Yvette Cooper, the health secretary, is making a statement about the Lucy Letby inquiry report. Tom Ambrose is covering that on a seperate live blog.
Nandy to raise online abuse of RNLI volunteers in talks with social media firms
Lisa Nandy, the culture secretary, has told RNLI volunteers she will raise online abuse and so-called doxxing in talks with social media platforms as she looks into taking further action to target it, the Press Association reports. PA says:
Nandy has written to RNLI staff and volunteers to express her support and tell them she was “shocked and saddened” to see them targeted during anti-migrant protests in Portsmouth and Dover earlier this month.
The head of the RNLI has said that recent protests generated “deliberate misinformation” about the charity after footage posted on social media showed volunteers labelled as “traitors” after helping a dinghy to safety in Portsmouth.
Nandy told the Commons last week she was “personally concerned” about doxxing, when a person’s private information is shared online without their consent, and had already held an initial discussion with some tech companies about the practice.
She will convene a roundtable this afternoon with social media companies to discuss harmful online content.
In the letter she wrote: “I was shocked and saddened to see RNLI staff and volunteers targeted during the unacceptable intimidation that took place during the weekend of 5-6 September in Portsmouth and Dover, both in-person and online.
“This behaviour is not acceptable and we will not tolerate it.
“I know that the police are working with you to ensure that your staff and volunteers are safe.
“They have my backing, and I am keen to explore with you what more we can do to protect staff and volunteers from targeting and abuse.”
A Labour MP has attacked government plans for a levy on overnight tourism, describing it as the “wrong tax at the worst time”.
Speaking in the Commons during an urgent question on the visitor levy, Emma Lewell warned that introducing the tax would place an extra burden on businesses in her South Shields, Tyne and Wear constituency, which could “tip my local industry over”.
She said:
South Shields tourism is largely made up of families from neighbouring regions who have saved hard all year round to spend a few days at the seaside – they will not come, even if the increase is marginal.
My constituents, family-run B&Bs, caravan parks, hotels and the wider hospitality industry have been unequivocal with me that they do not want this. It is the wrong tax at the worst time.
This extra burden on their business will tip my local industry over. Devolution only works when it reflects what communities want.
In response, Jim McMahon, the local government minister, said it would be up to local leaders to decide whether or not to impose the tax. The tax could provide revenue to improve communities, he said.
No 10 rejects claim new 'enhanced residency test' for donors just ploy to stop Reform UK getting its £72m
Downing Street has rejected claims that the government is toughening up its restrictions on parties getting donations from Britons who recently lived abroad as a direct response to the £72m being donated to Reform.
The money has come from Ben Delo and Christopher Harborne, who are both cryptocurrency billionaires who have been living overseas but who have returned to the UK.
At the morning lobby briefing, the PM’s spokesperson confirmed that, in addition to the restrictions already announced, tighter residency rules will be introduced.
But he insisted this was not related to the Reform UK donations – even though plans for the tighter residency rules have only been made public in recent days.
Confirming that the government will toughen the rules, the spokesperson said:
Eligibility to make donations over £100,000 will be based on donors being registered to vote as a resident in the UK, not overseas.
Under the overseas elector donation cap, this means that in order to make a donation, an individual must be registered to vote as a resident in the UK for a minimum residency period. That period is the remainder of the calendar year in which they moved, and then a further full calendar year.
We’re also looking to introduce an enhanced residency test for political donors. These enhanced rules will mean you also have to demonstrate an ongoing presence in the UK, details of which will be set out shortly.
And that’s because, as the business secretary set out this morning, we firmly believe it’s right that those contributing to politics in the UK reside in this country, and that foreign money shouldn’t be used to interfere in UK elections and politics.
The spokesperson did not say whether this “enhanced residency test” would be introduced through amendments to the representation of the people bill as it goes through the Lords, or whether it would come in separately.
Asked if the test would be based on people paying taxes in full in the UK, the spokesperson just said details would be set out shortly.
When it was put to the spokesperson that the government had not mentioned an enhanced residency test before the weekend, the spokesperson declined to say when the government started working on this aspect of the plan to block large donations from Britons living abroad.
When it was put to the spokesperson that this looked like a move just intended to stop Reform UK getting the £72m offered by Harborne and Delo, the spokesperson replied:
No, I completely reject that. As the business secretary set out [in interviews this morning], this isn’t about political parties. He said it’s reasonable that people who contribute vast sums to political parties in the UK should have a stake in the UK.
The spokesperson also dismissed claims that the legislation was unfair because it was retrospective (in the sense that it will apply from when the plan was announced, in March, not from when the bill actually becomes law, later this year or next year).
The spokesperson said:
Retrospective legislation isn’t a new concept. We’re clear on why these moves are required, and that was in order to make sure that people couldn’t pre-empt the legislation between the date the plans were announced and then coming into force here.
UPDATE: After lobby No 10 told journalists that on 29 August the Ministry of Housing, Communities and Local Government issued a press releasing that mentioned “enhanced UK residency requirements for donors seeking to give more than £100,000”. But many lobby journalists are saying they never saw it, and it does not seem to have been posted online.
FURTHER UPDATE: See 2.57pm for more on this. Journalists were told about this at the end of August. But it was a bank holiday weekend, and many of us did not notice.
Updated
No 10 says government still committed to ensuring pensioners only just above tax threshold next year won't pay income tax
The wage growth figures out today mean that the state pension is likely to rise by 3.9% next year. That is because, under the triple lock, the state pensions rises in line with earnings, prices or 2.5%, whichever is higher. Today’s figures are the ones for the earnings benchmark, and it is unlikely that the relevant inflation figure will be higher when it comes out. So next year the state pension should rise in line with earnings – by 3.9%.
As a result, pensioners should get an increase of £488 next year, taking the annual payment over £13,000. That means they will be above the £12,570 tax-free personal allowance.
Rachel Reeves anticipated this when she was chancellor and, in her budget last year, which confirmed a freeze in the personal allowance, she said that anyone who receives the state pension but no other income will not have to pay income tax before 2030.
In interviews this morning, Jonathan Reynolds, the business secretary, repeatedly refused to confirm that the government would commit to this promise. He just said it was a matter for the chancellor.
At the Downing Street lobby briefing this morning, No 10 said the Reeves promise still held.
The PM’s spokesperson said:
In line with the commitment made at the budget in 2025, pensioners who only just the personal allowance will not have the administrative burden of paying small amounts of tax in this parliament.
The chancellor will set out further details on how that commitment will be delivered at the budget shortly.
And work is already underway to ensure anyone whose only income is the full new or basic state pension, without any increments, will not pay income tax in this parliament. We’ll set out further details in due course.
The spokesperson did not say how the Treasury would decide if pensioners “only just” passed the income tax threshold.
Asked if this pledge would only apply to people relying entirely on the state pension, or whether it might include pensioners with a small private pension income, the spokesperson just said further details would be issued in due course.
DWP figures show claims for Pip disability benefit at record high
The number of people in England and Wales entitled to personal independence payments, known as Pip, has climbed to a record high, the Press Association reports. In its report on Department for Work and Pensions figures released today, PA says:
Pip is the main benefit paid to someone who has a long-term physical or mental health condition or disability, and is intended to help with everyday tasks and extra living costs.
The figures come ahead of the publication later this autumn of a government-commissioned review, led by Stephen Timms, into the costs and operation of the disability benefits system.
A total of 4.09 million people were entitled to claim Pip as of July 31 2026, according to data published today by DWP.
This is up from 3.83 million a year earlier – a rise of 262,045, or 7%.
The number of claimants has roughly doubled since comparable figures began in January 2019, when the total stood at 2.05 million.
Of the 4.09 million claimants, 3.4 million (83%) are of working age and 690,000 (17%) are state pension age.
People aged 50 and over account for more than half of those entitled to claim Pip, at 55% of the total, while 30-49 year-olds make up nearly 29% and 16-29 year-olds almost 17%.
Spending on Pip stood at £16.3 billion in 2019-20, when adjusted for inflation to today’s prices, and had increased to £27.3 billion by 2024-25, DWP figures show.
It is currently forecast to rise to £41.5 billion by 2030-31.
The DWP has said the Timms review will ensure Pip is “fit and fair for the future”.
Of the 4.09 million Pip claimants at the end of July, 1.60 million were listed as having psychiatric disorders, or 39% – the highest proportion for any type of disability.
Some 268,965 claimants were classed as having autistic spectrum disorders, more than three times the 79,395 in January 2019 when data began, according to Press Association analysis.
A further 442,666 claimants had mixed anxiety and depressive disorders, up from 171,833 in January 2019, while 106,087 had the hyperkinetic disorders ADHD or ADD, up from 23,741.
The second most common type of disability among claimants was general musculoskeletal diseases, which applied to 764,305 people in July this year, or 19% of the total.
Just over a third (35.8%) of new Pip claims in July were granted, while 61.4% were disallowed and 2.8% were withdrawn.
The grant rate for new claims has been on a downward trend for the past two years, having stood at 41.1% in July 2025 and 46.4% in July 2024.
This chart, from the DWP report, highlights the trend.
The chart implies there has been a sudden drop in claims recently.
But that is because it shows figures for claims for Pip and DLA, a seperate disability benefit. Pip is the new benefit replacing DLA and over time people are migrating from DLA to Pip.
The chart shows Pip figures going up to July 2026 (the dark blue and light blue lines). But the DLA figures only go up to March 2026.
Updated
Badenoch confirms Tories looking at 'fiscally responsible' ways of cutting inheritance tax
Kemi Badenoch has confirmed that the Conservatives are looking at “fiscally responsible” ways of cutting inheritance tax. In a post on social media yesterday, prompted by reports saying she will make an announcement about this at Tory conference, Badenoch said:
Reform says abolishing inheritance tax is “morally wrong”. I think it is morally wrong to punish people for doing the right thing - spending a lifetime working, saving, building up a business or a home to pass on to the next generation.
That’s why I’ve asked my team to explore fiscally responsible ways to do address this burden. The people caught by inheritance tax are mostly home-owning middle-class families due to house price inflation, diligent savers, and small-business owners.
The super-wealthy can afford trusts and sophisticated tax planning or move abroad.
In a report about this for the Financial Times, Lucy Fisher says:
The number of people paying IHT [inheritance tax] in the UK, which is applied to estates above a threshold of £325,000, has been increasing, mainly because of rising property prices, inflation and the threshold having been frozen since 2009. The total more than doubled to 30,400 between 2009-10 and 2023-24, according to HM Revenue & Customs data.
Labour has tightened the inheritance tax regime since coming to power in 2024, including by introducing plans to bring pensions within its scope from next April, a move that will see the number caught by the levy rise further.
In the first year after the changes are introduced, about 10,500 extra estates will have an IHT liability and roughly 38,500 estates will pay more IHT than before, according to government estimates.
Reducing or abolishing the levy would likely cost billions of pounds and come under fierce attack from the left as being a regressive and unfair move.
Robert Jenrick, the Reform UK Treasury spokesperson, has ruled out cutting inheritance tax. He argues that the Tory obsession with inheritance tax shows they are a party for the rich, and he says Reform UK’s decision to prioritise lifting the income tax threshold instead shows it is more interested in the needs of ordinary workers.
According to a story by Steven Swinford in the Times, Reform UK is already starting to spend some of the £72m it has been given – even though legislation going through parliament means some or all of it might have to be given back.
Swinford says:
Reform UK is already using the funding to expand its staff. It is doubling its policy team from ten to 20 staff as well as recruiting 400 field agents. Seventy job adverts are already live.
The party is also expected to announce a new online Reform UK TV channel, which will broadcast content over YouTube. It is investing significantly in the party’s media facilities at its headquarters on Millbank.
Some might argue that Reform UK does not need its own TV channel – because GB News does that job for the party already.
UK state pension set to top £13,000 a year as wage growth slows to 3.9%
Wage growth in the UK has slowed as workers come under pressure from a renewed cost of living squeeze fuelled by the Iran war, highlighting the challenge for the Bank of England as it prepares to set interest rates, Richard Partington reports. He says:
Data from the Office for National Statistics (ONS) shows average growth in total earnings, including bonuses, eased to 3.9% in the three months to July, down from 4.1% in the three months to June, matching the forecasts of City economists.
The figure is expected to dictate the rise in the state pension this year under the triple lock, where the benefit rises by either 2.5%, inflation, or average wage growth, whichever is highest, each year.
If the 3.9% number is used, that would push the annual state pension up by £488 from April to more than £13,000 a year.
The full story is here.
Today is the last day the Commons is sitting before the party conference recess. There are three urgent questions after 12.30pm, followed by a statement. They are (with rough timings):
After 12.30pm: A culture minister responds to a Tory UQ on the overnight visitor levy.
Around 1.15pm: An energy minister responds to a Lib Dem UQ on the implications of the closure of the Saudi East-West oil pipeline.
Around 2pm: An environment minister responds to a Lib Dem UQ on the English whisky geographical indication single malt definition.
Around 2.30pm: Yvette Cooper, the health secretary, gives a statement on the report from the Thirlwall inquiry into how Lucy Letby was able to kill babies at the Countess of Chester hospital. Yohannes Lowe is covering this story on a separate live blog that is already running.
Lib Dems call for cap on political donations, saying 'whack-a-mole' approach to party funding problems not working
The Liberal Democrats have said that they will try to introduce a cap on the amount people donate to political parties by amending the representation of the people bill as it goes through the Lords.
Lisa Smart, the Lib Dem Cabinet Office spokesperson, said:
We can’t keep playing whack-a-mole with each new attempt by Farage to sell out our democracy.
Labour’s residency requirements aren’t good enough and the Conservatives simply sat on their hands whilst in power. For decades governments of both colours have stood by and done nothing.
We must urgently go further and introduce a universal donation cap to stop Trump’s America becoming Farage’s Britain. We’ll be laying amendments in the Lords to institute this donation cap, and tougher rules on what political parties are able to actually spend.
While some Labour peers might vote for an amendment of this kind, the Lib Dems have no chance of winning a vote like this in the Lords without government support. And Andy Burnham is not at this point proposing caps on donations – even though some Labour MPs are in favour, and he personally backed the idea before he became PM.
However, the government has said that it favours further limits on what political parties can spend – which could limit the incentive for parties to seek ever-larger donations.
TUC warns of dangers of 'out of control political spending' - but stops short of backing caps on donations
The TUC has issued the statement from its general council on the funding of political parties. It is not calling for caps on donations, but it does warn of the danger of “out of control” political spending and urges the government “to protect our democracy from being captured by the super-rich”.
Here is the statement.
The scale of donations made to Reform in recent days is unprecedented in British politics and should deeply concern anyone who cares about the health and integrity of our democracy.
We cannot afford to see the Americanisation of our politics, with out of control political spending, funded by stratospheric sums of crypto and corporate cash. These donations show clearly whose side Reform are on, with crypto billionaires, foreign and powerful corporate interests lining up to pour in eye-watering sums of money to advance their agendas.
Trade union funding is the cleanest money in politics.
Union donations are made up of the collective subscriptions of care workers, teaching assistants, shop workers and millions of trade union members, democratically controlled and heavily regulated.
Working people deserve – and need – a meaningful stake in how Britain is run.
Trade unions exist to rebalance power in the workplace and society, and ensure that the voices of millions of workers can be heard collectively in our democracy and are not drowned out by those with the deepest pockets.
We will continue to work with policymakers to clean up our politics and strengthen public trust in our democratic system.
We expect our government to protect our democracy from being captured by the super-rich. Unions are committed to ensuring that working people have a strong, collective voice in the decisions that affect their jobs, their communities and their futures.
Most trade unions are not affiliated to the Labour party, but the biggest ones are and they have always been wary of supporting caps on political donations because they worry this could affect their relationship with Labour. There was speculation their position might shift in response to Reform UK getting £72m from two billionaires. While this statement implies some further action is needed, it does not go much beyond what unions have said before.
Reynolds defends asylum seekers being housed in small Oxfordshire village as residents hold symbolic vote
Every part of the country must be prepared to take in asylum seekers, a cabinet minister said as a village held a symbolic independence referendum in protest at plans to house more than 1,000 migrants at a former military base. As the Press Association reports, the proposal, which would mean 1,256 male asylum seekers moving into the base near Piddington in Oxfordshire has sparked anger and fear among many village residents. PA says:
Business secretary Jonathan Reynolds acknowledged “none of this is pleasant” but the disused military site was more suitable than housing asylum seekers in hotels.
There was “no imaginary place these people can go”, he said.
He told ITV’s Good Morning Britain: “Where in the UK would want more of this? We’ve got to share this throughout the entire nation.”
Reynolds said “I think a former military site is a far more suitable location” than a hotel in a town or city centre.
While the asylum seekers are not detained “you can more easily see who’s coming and going from a site like that”.
On July 4, marking the 250th anniversary of American independence, 96% of Piddington voters backed holding the unofficial referendum. It is happening today and will invite residents to express whether their village should become independent from the UK.
How Rayner mocked Streeting's failed bid for Labour leadership in speech at TUC dinner
Wes Streeting enjoys attention, likes a good joke and does not mind ruffling feathers. At the Spectator awards ceremony two years ago, Angela Rayner was the target as he gave a speech. He said:
The deputy prime minister is here. Good to see you Pat.
It was a damning jibe about how, although Rayner was officially deputy PM, Pat McFadden was seen as the person with the real authority as Keir Starmer’s right-hand man.
It has taken her a while to get her revenge, but Rayner – no longer deputy PM but back in cabinet as the housing secretary – used her speech at a TUC dinner to flay Streeting. She focused on how his decision to resign as health secretary earlier this summer, so that he could challenge Starmer for the Labour leadership, came to nothing. Andrew McDonald and Megan McElroy have the details in their London Playbook briefing for Politico.
Jab at Wes I: “Last time [Streeting] gave an after-dinner speech he had a few jokes about us both,” Rayner said, referring to herself and Louise Haigh. “I remember it well. I’d just come back from meeting the pope. I was also introduced to a young ambitious cardinal tipped for the top — or the Vatican’s Wes Streeting as they called him. He didn’t get the votes either.”
Jab at Wes II: “Anyway, Louise and I were delighted Wes joined us back in Cabinet. I think Louise advised the prime minister to make him defense secretary because he’s the one Cabinet member we know can’t organize a coup.”
Jab at Wes III: “He wanted education of course. But unfortunately he can’t count to 81.”
That is a reference to the number of Labour MPs needed to get on the ballot for a leadership challenge. Streeting repeatedly claimed he had the numbers but, after Andy Burnham was back in parliament after the Makerfield byelection, it became clear that Labour MPs wanted Burnham to replace Starmer, not Streeting, and Streeting abandoned his leadership bid.
According to Sky News, Paul Nowak, the TUC general secretary, is going to make a statement to the conference at about 10.30am explaining the TUC’s revised position on how party funding laws should be reformed.
Reynolds says people should not get 'hyperbolic' about risks posed by AI
Jonathan Reynolds has said that people should not get “hyperbolic” about the risks posed by AI. Speaking ahead of Louise Haigh’s speech to the TUC later, which will address the topic (see 9.31am), and in the light of the ongoing concerns expressed by AI experts about the risk of AI models posing a threat to humanity, Reynolds told the Today programme:
This is extremely powerful technology, and I think we should never be complacent or naive about the impact it might have.
People will be worried by some of the things they’ve heard in the last few weeks, and I think we’ve got to be careful not to get hyperbolic about this either.
Of course, there are risks, but let’s be frank: there are some tremendous upsides for people as well. Whether it’s public services, healthcare, the contribution to the economy.
If you regulate it in a way where you’re no longer having access to those frontier developments, that would obviously make us less safe. So I think you’ve got to be proportionate and understanding about this in how we seek to regulate going forward.
Reynolds also stressed that the UK is a world-leader in internet safety because of the reputation of the AI Safety Institute, set up when Rishi Sunak was PM.
When Justin Webb, the presenter, put it to Reynolds that people would not be impressed by ministers talking about the “upsides” of the AI given that the potential downsides, the elimination of humanity, are so much more serious, Reynolds replied:
Because of the power of this technology, I wouldn’t say I wasn’t worried.
What I would say is I’m clear-eyed about the best ways to keep the country safe, and that has to be using British innovation, British expertise, British specialisms in such a way that actually improves the position of the UK in terms of the safety.
Asked about the proposal from Jack Clark, one of the founders of Anthropic, for AI companies to have to install a “kill switch” held by a third party, Reynolds said:
I’ve got to be honest, I don’t think that it’s a particularly helpful way to think about how we manage the risks. I’m not really sure what that would actually mean in practice.
To state the obvious, these frontier models are in the main being developed in the US and in China. So exactly what would that mean? I’m not sure what the proposition is.
Jonathan Reynolds says it's wrong to view union donations to Labour as equivalent to billionaire donations to Reform UK
Jonathan Reynolds, the business secretary, was doing a media round on behalf of the government this morning. Asked about claims that trade unions donations to Labour are similar to single, multi-million pound donations to Reform UK from cryptocurrency billionaires (see 9.09am), Reynolds claimed it was wrong to view them as equivalent. He told Times Radio:
When we talk, or people talk about union donations, that is not one entity. That is tens of thousands of ordinary people choosing to make that donation, and it’s bundled up and given from the union. But it’s very easy to opt out of that. There are rules governing political funds, political ballots.
I honestly think to take these mega, ultra crypto Reform donors and compare them to voluntary associations of working people choosing to give some money to the political system, I don’t think the two things are comparable.
Louise Haigh says UK must heed warnings from AI experts
Ministers must “heed the warnings” from industry leaders about the threat posed by AI as it looks to capitalise on the technology, the first secretary, Louise Haigh, will say in a speech to the TUC later. Jessica Elgot has the story.
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Here is video of Pippa Crerar and Kiran Stacey talking about the £72m donations to Reform UK on our Politics Weekly UK podcast.
Farage says a Reform UK government would stop unions funding Labour if they block £72m donations
Good morning. Ministers already think that the new laws on political donations, as set out in the version of the representation of the people bill which left the Commons earlier this month, will be enough to block some or all of the donations worth £72m to Reform UK announced at the weekend. But they are still planning further amendments to the legislation, when peers debate their own amendments to the bill, to make the restrictions even tighter. Pippa Crerar, Jessica Elgot and Kiran Stacey have the details here in our overnight splash.
Kiran and Henry Dyer also have written a good explainer about the rules.
Nigel Farage, the Reform UK leader, has hit back. In an article for the Daily Telegraph, he claims that the proposed new laws – which are retrospective in the sense that they will apply from March 2026, when ministers first announced their intention to legislate, not from the moment when the bill gets royal assent, later this year or early next year – are unfair. If the crackdown goes ahead, Reform UK will stop Labour getting money from the trade unions if it wins the next election, he says.
The Unite union alone has given the Labour party over £50m over the course of the last few years. They’ve got the Employment Rights Act, not to mention big pay rises for bus drivers. If anybody is giving money to do political bidding, it’s the trade unions.
So I would just warn the Labour party here and now: If you try and ban our donors, we in government would certainly ban funding from the trade unions. I don’t want to go down that route. But it’s something we would be prepared to do.
Once again, let me be clear. Neither Ben Delo nor Christopher Harborne will be getting membership of the House of Lords. They won’t be getting favours, they won’t be influencing policy. It isn’t happening.
Because unlike the uniparty we are not for sale.
Until recently the trade unions were opposed to caps on the amount individuals can donate to political parties because they feared that would lead to a rightwing government limiting what unions can donate to Labour. The £72m donations to Reform UK have prompted a bit of a rethink, and union leaders are expected to issue a statement later.
Here is the agenda for the day.
Morning: Louise Haigh, the first secretary of state, chairs a political cabinet. Andy Burnham has cancelled engagements today following the death of his father.
9.30am: The Department for Work and Pensions publishes figures relating to personal independence payment claims and universal credit health claims.
11.30am: Alex Norris, the justice secretary, takes questions in the Commons.
Noon: Downing Street holds a lobby briefing.
After 12.30pm: Yvette Cooper, the health secretary, is expected to make a Commons statement following the publication of the inquiry report into how the nurse Lucy Letby was able to repeatedly kill babies at the Countess of Chester hospital.
2.45pm: Shabana Mahmood, the home secretary, takes questions from the Commons home affairs committee.
3.45pm: Haigh addresses the TUC conference, standing in for Burnham.
Also today, in Piddlington, a small Oxfordshire village, residents are holding a symbolic independence referendum, as a protest against plans to house more than 1,000 asylum seekers in a former military base nearby.
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