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Sunday newspaper round-up: Autumn budget, Jonathan Powell, China tariffs, BMW, Lower Thames crossing, Israel ceasefire

Sun 12 October 2025 16:07 | A A A

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(Sharecast News) - Rachel Reeves has signalled the better off will be forced to "contribute more" as she prepares to raise taxes at the Budget. Treasury sources have said that the Chancellor will not cut spending on public services or significantly increase borrowing, as she looks to plug a 20-30bn black hole in the public finances. It will leave her with no option but to increase taxes substantially. Ms Reeves will argue that growth boosting reforms, such as a further loosening of planning rules, can avoid the need for tax rises on "working families". She will instead target those with higher incomes or more wealth, The Telegraph understands. Sources close to the Chancellor said: "She will be fair when asking those to contribute more to rebuild our public services." - Telegraph

Jonathan Powell did advise on matters surrounding the collapsed China spying case, a Cabinet minister has admitted. Bridget Phillipson, the Education Secretary, said in interviews on Sunday morning that the national security adviser "will be" advising Downing Street as part of his role in Government. While she insisted Mr Powell was not involved in discussions about the "substance or the evidence" of the spying case before its collapse, her comments mark the first time Labour has admitted that he advised ministers on the issue. Christopher Cash, who worked for Tory MPs, and Christopher Berry, a teacher, were charged with passing intelligence to Beijing after being arrested in March 2023. The case was dropped last month amid claims from the Crown Prosecution Service (CPS) that the Government failed to hand over enough evidence that China was a "threat to national security" for the case to continue to trial. Last week, Sir Keir Starmer insisted that none of his ministers were involved in the decision to drop the Chinese spying case. But Mr Powell, as an adviser rather than a minister, continues to face scrutiny over his own involvement. - Telegraph

China has hit out at Donald Trump's threat to hit the country with sweeping new tariffs and promised retaliation in another escalation of the trade tensions between the world's two largest economies. Beijing's commerce ministry said on Sunday: "China's position on tariff wars has been consistent: we do not want to fight, but we are not afraid to fight." This was after Trump said on Friday that he was ready to hit China with a 100 per cent tariff on all goods and export controls from November 1. The Chinese Communist Party hit back at the weekend, claiming that the US had "continuously introduced a series of new restrictions against China" after the two sides have been engaged in talks over raw materials export licences and broader goods levies since the summer. - Times

Executives at BMW are seeking to hold talks with the chancellor about the car loans scandal amid a mounting industry backlash against the City regulator's plan to force motor finance providers into an 11 billion consumer compensation scheme. It is understood that the carmaker, which faces a potential hit of more than 200 million from the mis-selling controversy, has requested a meeting with Rachel Reeves to discuss the implications of an industrywide redress programme proposed by the Financial Conduct Authority last week. Millions of motorists are set to receive payouts under the regulator's scheme, with compensation expected to total about 8.2 billion. The programme will cost lenders a further 2.8 billion to run, according to estimates by the authority, which is now consulting on its proposals. The City regulator believes 44 per cent of all motor finance agreements between April 2007 and the start of last November, or some 14.2 million deals, will be deemed unfair by its scheme criteria. Yet it faces growing criticism of its proposals from the industry, with the Finance & Leasing Association, which represents car loan providers, arguing on Friday that 44 per cent was "implausibly high". - Times

Ministers have stripped the government's road-building agency of responsibility for a 10bn tunnel under the River Thames amid a drive by Keir Starmer's cabinet to take tight control over important infrastructure projects for fear of cost overruns and delays. Oversight of the Lower Thames Crossing - the UK's largest planned infrastructure project - has been taken away from National Highways and handed to the Department for Transport (DfT). Internal consultation documents, seen by the Guardian, said the costs of the Lower Thames Crossing would be overseen by the DfT, leaving National Highways to "focus on managing, maintaining and renewing the network". However, campaigners warned that the move could in fact lead to HS2-levels of overspending and ministers approving developments behind closed doors that would harm the environment. Treasury officials are thought to be behind the shift to centralise the management of large infrastructure projects after the chancellor, Rachel Reeves, made clear her frustration at "bats and newts" delaying major schemes and adding to the final costs. The consultation documents showed that the "Tier 1" project - which is considered by the DfT to be "one of the largest, highest risk, novel and/or contentious" schemes now being undertaken - would be overseen by the transport secretary, Heidi Alexander. - Guardian

Authorities in Israel and Gaza are preparing for the release of Israeli hostages and Palestinian prisoners ahead of a Monday deadline for the swap stipulated in the ceasefire deal that could end the two-year war in Gaza. Hamas is meant to release all living hostages from Gaza within 72 hours of the signing of the deal - a deadline that ends at noon local time (10am UK time). The militant group holds 48 hostages, 20 of whom are believed to be alive. A spokesperson for the Israeli prime minister's office said they expected all of the living hostages to be released at the same time early on Monday morning. An unnamed Hamas official told Al Jazeera that living hostages had been gathered in Gaza and that the militant group would meet on Sunday night to agree on the logistics of their release. An international taskforce will work on finding the remains of hostages not released on Monday, with many believed to be buried under the rubble somewhere in the devastated Gaza Strip. Israel will also release nearly 2,000 Palestinian detainees, the vast majority of whom will be sent to Gaza or exiled to neighbouring countries, once Israeli hostages are back on Israeli soil. - Guardian

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