John Healey used his first conference speech as Chancellor to sell a message of “hope”, promising a “new age of industrialisation” for Britain.
But he warned delegates in Liverpool that hope had to be paid for carefully. The money New Labour had in the nineties was “simply not there now”, he said, and hope was “earned through fiscal discipline”.
He pledged to stick to Labour’s borrowing rules, courted business with £300m of extra Rolls-Royce investment and £6bn of shipyard contracts, and said the benefits bill was too big as he announced £100m for apprenticeships funded by welfare savings.
Avanti West Coast trains to be nationalised
The Transport Secretary said the operator has been underperforming “for years” as it becomes the latest service to be brought back into public ownership.
Andy Burnham said the service had failed people “time and time again” with cancellations and overcrowding.
What you need to know
- Avanti West Coast train services will be nationalised from March 2027, when its contract ends.
- Its London hub is Euston station, with services running to Wales, Manchester, Liverpool, Blackpool and Scotland.
- All train services under Department for Transport contracts, including Avanti, are in the process of being transferred to public ownership.
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Reactions from the sector
“For years, we’ve heard stories of Avanti underperforming, with passengers left paying the price. Enough is enough,” Transport Secretary Heidi Alexander said.
Conversely, Andy Mellors, managing director at Avanti West Coast, said: “We’re proud of what we’ve achieved over the last six years – from refurbishing our Pendolino fleet and introducing our new Evero trains to running more services than ever before.”
The results for customers
- Labour claims nationalisation will mean fewer delays and cancellations.
- This is thanks to a £10m investment in power and signalling maintenance, faster and more reliable services, upgraded facilities at Euston, and more stable internet connection on board trains.
Several rail firms around the country are already publicly owned, including Great Anglia and South Western Railway.
Chess prodigy, 11, becomes youngest woman grandmaster
A London schoolgirl has made history while representing England at the 46th Chess Olympiad in Uzbekistan.
Former chancellor, Rachel Reeves, called the young player “a chess superstar”.
Play by play account
Bodhana Sivanandan scored eight points across 11 games, qualifying for the title of woman grandmaster.
The International Chess Federation confirmed this performance made her the youngest person to gain the lifelong title.
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What makes a champion?
Neither of Sivanandan’s parents are good at chess. She taught herself to play during lockdown using YouTube tutorials.
She entered her first tournament at Harrow Chess Club in 2021.
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After she won the British Women’s Championship earlier this year, she said: “I want to become a [full] grandmaster as soon as possible.”
- She now has two of the three “norms” required to become an International Master, the next rank up on the path to becoming a grandmaster.
Women and child die attempting to cross Channel
A 10-year-old child and two women in their 30s have died just off the coast of France, near Calais.
Andy Burnham’s spokesman said the tragedy was a “stark reminder of the dangers posed by criminal gangs”.
What you need to know
- French authorities rescued 102 people from a dinghy which had left Bleriot Plage.
- At least 17 people, including children, have now died attempting to cross the Channel this year.
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The timeline of events
What happened this morning and when:
- The dinghy pushed off from Bleriot Plage, near Calais, on Monday morning.
- French maritime police received a distress call after the boat got into trouble in the water.
- A rescue ship and Navy helicopter were sent to the scene with a medical team.
- The emergency responders were unable to save the child and two women.
- French officials said the deaths were likely due to crushing rather than drowning, due to overcrowding on the boat.
The official response
The Prime Minister’s official spokesperson said: “We’re deeply saddened to hear about the deaths in France today.
“It is a stark reminder of the dangers posed by the criminal gangs who exploit vulnerable people for profit, and we will continue to work relentlessly.”
An investigation has been opened into the incident.
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What we know so far about RAF Fairford ‘bomb plot’
Five men were arrested on terror charges and villagers evacuated from their homes after a major incident was declared near the RAF Fairford airbase used by the US Air Force.
Aerial footage showed a bomb disposal robot inspecting three white vans in the area.
What are they accused of?
- The men were initially arrested on suspicion of Explosives Act offences.
- Police were called out to three suspicious vans heading towards the airbase in Gloucestershire at 12.45am on Sunday.
- The five men were later further arrested on suspicion of the preparation of a terrorist act, with counter-terrorism policing officers now leading the investigation.
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How were they caught?
A local farmer spotted the seemingly abandoned white vans blocking a quiet country road a few hundred metres from RAF Fairford when driving home from a party.
The farmer told she saw a group of “young” men, some wearing “masks or balaclavas”, running into the trees and across fields towards the airbase. She called the police and warned neighbours to lock their doors.
RAF Fairford’s links to Iran war
A senior Western intelligence source told The i Paper the assumption is that those involved in this incident are likely to be proxies for a hostile state. Iran is understood to be the leading suspect.
- The US Air Force has used RAF Fairford to carry out bombing missions against Iran in a bid to protect ships in the Strait of Hormuz.
- In July, Iran’s Revolutionary Guards (IRGC) warned against allowing US bombers to fly from British bases, saying such sites would be legitimate targets.
- A UK Government spokesperson said at the time: “Our armed forces are ready to keep the United Kingdom safe from any kind of attacks, whether it’s on our soil or from abroad.”
- Inquiries have yet to rule out Russia or even domestic activity.
What did the police say?
I can’t go into details, but I can give reassurance that we believe the matter to be contained and as a set of agencies working together across Gloucestershire, we are gathering and responding to local intelligence all the time.
Gloucestershire Police temporary Chief Constable, Maggie Blyth.
How puzzles may ‘reduce age-related cognitive decline’
Researchers found memory, logic and reasoning puzzles with advice on diet and exercise, can help improve thinking and memory problems.
How the study works
- The study examined people aged 60-85 with low cognitive scores.
- They were split into three groups. One group was given evidence-based advice on diet.
- The second used a website called Active Brains, which provides cognitive exercises in the form of puzzles.
- The third group were directed to the same website and also given “brief support” with a nurse.
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The study’s findings
- After 12 months, all groups showed improvement in their cognitive scores and a significant proportion no longer met the criteria for age-related cognitive decline.
- 28 per cent of people who were given simple lifestyle advice were no longer deemed to have cognitive decline.
- This increased to 33 per cent of those directed to the website and 32 per cent of those directed to the website and given additional support.
- Among those directed to the website and given additional support, there was an 18 per cent reduction in severe cognitive impairment compared to those who were just given advice, researchers found.
Hear from the researchers
Professor Paul Little, co-lead of the study, said: “These are really exciting findings that people can easily take on board.
“Simple messages and simple things that people can do really make a difference – and the NHS does not need to spend a lot of money.”
He added the research team was “surprised” by the cognitive improvement seen among people just given “brief advice”.
What do the experts say?
Experts said the study was “encouraging”, but added some caveats.
Dr Richard Oakley from the Alzheimer’s Society said: “People should not take this study to mean that doing puzzles can reverse dementia or improve symptoms for everyone living with memory problems.”
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Sycamore Gap stump shows new shoots three years after felling
Three years after it was illegally felled, photos show a thick ring of new shoots around the stump of the sycamore tree made famous by 1991’s Robin Hood Prince of Thieves.
What happened to it?
The tree, which was planted in the late 1800s in Northumberland, was illegally felled in September 2023 by Daniel Graham and Adam Carruthers, causing national outcry.
In 2025, the pair were jailed for four years and three months for criminal damage for cutting down the iconic tree with a chainsaw.
Slow recovery starts to show
Now, the National Trust, which operates the site at Hadrian’s Wall, has revealed the stump has shown new growth.
Since it was felled, the remaining stump has been protected by a barrier, allowing nature to take its course and new green shoots to spring up.
Promising signs
These flourishing shoots are really encouraging and show that the special measures we’ve taken, including reducing soil compaction around the roots and limiting human disturbance, are paying off.
Andrew Poad, general manager for the National Trust at Hadrian’s Wall
How triple lock could be axed to pay for national care service
Andy Burnham’s plan to put free social care in Labour’s next general election manifesto could be part of a grand bargain to drop the state pension triple lock, Labour MPs believe.
What you need to know
- A Labour MP told The i Paper that introducing the NHS-style care service would be a “politically smart” way to “sugar the pill” of finally scrapping the lock
- On Sunday, the PM kicked off Labour’s conference in Liverpool by vowing to put forward a plan to voters at the next election in which “everyone contributes, everyone is covered” for social care.
- In private, many MPs across the political spectrum confide that the lock is fundamentally unsustainable over the long term.
Figures chime in
The think-tank said an Australian-style system would deliver savings of about £650m by 2030.
The ex-cabinet minister said getting rid of the triple lock is “an option that the Government should consider”.
The junior minister suggested tax rises would be needed to fund the policy, saying it “isn’t going to be cheap”.
A word of warning
A backbencher cautioned that Burnham would have to tread carefully. “We will need to try and secure a cross-party consensus on adult social care,” they said.
Back in 2017, Theresa May proposed replacing the triple lock with a “double lock”. The policy was dubbed a “dementia tax” and the Tories subsequently lost their majority.
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The Chancellor gave no details of his 28 October Budget, nor would we expect him to. But reading between the lines, there’s a lot that can be gathered about the Treasury’s direction of travel.
Tax rises could be necessary
Healey had previously pledged to stick to the fiscal rules set by his predecessor Rachel Reeves. These require day-to-day spending to be covered by tax income – and for debt to fall as a share of the economy.
He also needs a buffer in the public finances – or fiscal headroom – to protect against shocks such as war or market volatility. Fiscal headroom is the gap between what the Government is forecast to spend and the maximum amount it can spend under the fiscal rules.
It stood at £23.6bn at Rachel Reeves’s spring statement in March. KPMG now estimate it has halved to roughly £12bn, mostly due to market turmoil following the conflict in Iran.
Healey said on Monday that he was committed to “balancing the books, with a buffer against uncertainty” and that fiscal discipline “underwrites every promise this Government makes”.
What it shows: His words are likely a signal that the Treasury is unwilling to reconsider the fiscal rules, which prevent borrowing to fund day-to-day spending.
With the cost of government borrowing rising, loosening them risks spooking the markets and pushing costs higher. The interest the Government paid on its debt hit £8.8bn in August, the highest for that month since records began in 1997, according to the Office for National Statistics.
Healey also pre-empted further pressure from within Labour for looser rules, arguing there was “nothing progressive about losing control” because “it’s working people who pay for it”.
It comes after the soft-left Tribune group of Labour MPs published a series of essays in May calling for a redrawing of the fiscal rules to allow more borrowing for investment, along with higher taxes on wealth.
If Healey won’t relax rules on borrowing and wants to build a bigger buffer, then he’s likely left with only one short-term option – tax rises.
Big wealth taxes are unlikely
Campaigners and left-wing Labour MPs have pushed hard to impose a wealth tax to help raise money for the Treasury.
One of the more popular proposals, backed by charities like Oxfam and Tax Justice UK, is for a 2 per cent levy on net wealth above £10m, with supporters estimating it could raise £24bn annually.
Healey, however, appeared to signal on Monday that this form of wealth redistribution was unlikely to be on the table.
The Chancellor told delegates that “Labour isn’t here just to cut the cake in a different way”, and that “we have to bake a bigger cake, and make sure that it’s fairly shared”.
Instead of finding more cash through wealth taxes, Healey said that the “only long-term answer” was to grow the economy.
What it shows: Healey appeared to be telling his own side that taxing the wealthy will not be enough to fund Labour’s ambitions.
His focus was on growing the economy, not on taking a bigger share from those who already have wealth.
It perhaps makes a headline wealth tax, or a sharp rise in taxes on high earners, less likely.
Instead, the phrase “fairly shared” might leave room for smaller, targeted measures.
One option is the high value council tax surcharge, dubbed the “mansion tax”, which Rachel Reeves announced last year for homes worth more than £2m.
The i Paper has reported that the Government is considering lowering the threshold to £1.5m, which analysis by Savills suggests would double the number of homes affected from about 134,000 to 271,000.
Are businesses safe from tax squeeze?
Healey was strongly pro-business throughout his Labour conference speech.
He said he wanted Government decisions and policies to bring “new levels of confidence, investment and profits” to British business. “It’s businesses that will create this country’s jobs, wealth and growth,” he said.
The Chancellor backed his words with announcements. Rolls-Royce will invest an extra £300m in its British factories, and the Government will commit £6bn towards building new docks for Britain’s nuclear submarines, with the work going to British shipyards.
He also promised to use government contracts to “direct more of British taxpayers’ money to British business”.
What it shows: The Chancellor’s warm words to businesses make the prospect of big rises in corporation tax or employer national insurance look unlikely, as they would cut against his pitch to firms.
This will reassure business leaders, many of whom were critical of Reeves’s decision in 2024 to increase employer national insurance.
Steve Rigby, chief executive of the Rigby Group, told BBC Radio 4’s programme before the speech that he wanted a “pretty boring Budget”, with no business tax rises because some sectors were “at their limit”.
Any tax increases, therefore, seem more likely to fall elsewhere or come through smaller, less visible measures.
Cutting the welfare bill could ease the tax burden
The welfare bill is one of the biggest pressures on the public finances, with the Office of Budget Responsibility expecting it will rise from £333bn a year to £407bn over the next five years.
Healey used his speech to signal that the Government still wants to bring it down.
He said it was “not progressive to allow a bigger and bigger benefits bill”, and that for everyone except those “who can never work”, benefits should be “a bridge to work” rather than “a trap that people can’t escape”.
The Chancellor added that “the best thing we can offer a young person isn’t a benefit payment. It’s a first job, with training and a wage.”
But Prime Minister Andy Burnham has ruled out “crude cuts” to benefits, which limits how much the Government can save. Healey did not say how large the savings could be, or where they would come from.
What it shows: All of this matters for tax. The smaller the benefits bill, the less the Chancellor has to raise from taxpayers. If big welfare savings are off the table, more of the money he needs to rebuild his safety margin against the fiscal rules, and to fund his priorities, is likely to come from tax.
Small, targeted tax changes
Healey said that at “the core of the Budget I deliver a month [from] today will be fiscal discipline”.
But he also said he wanted to use it “to give families and businesses a bit of breathing space” in a difficult economic climate.
He pointed to what the Government had already done on the cost of living. “Look at how we acted in Andy’s first week as Prime Minister,” he said. “We cut VAT from electricity bills. We capped bus fares at £2. We reduced business rates on pubs, clubs and music venues.”
What it shows: The Chancellor said he wanted to give that “breathing space” to people next month, and gave examples of some of the small cost of living measures the Government had already taken.
That is a fairly strong hint that more small wins for the public will feature in his upcoming Budget. He did not give any indication of what form they could take but, based on Burnham’s track record so far, measures would likely focus on everyday costs for Britons, like energy and travel.
It is possible these could be prioritised over any major tax changes or spending commitments.