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Chancellor set to raise National Insurance for employers to fund public services

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THE Chancellor is poised to announce a significant increase in National Insurance contributions for employers, aiming to generate £20 billion in additional funding for public services, including the NHS in England.

The Budget, set for Wednesday, will likely feature a lowered threshold for employer contributions to National Insurance, allowing these combined measures to become the largest revenue drivers in the upcoming Budget. However, Chancellor Rachel Reeves is not expected to apply the increase to employers’ pension contributions.

Currently, employers pay 13.8% on earnings over £175 a week. A two-point hike to 15.8% would yield an estimated £18 billion annually, though the threshold adjustment may push that figure higher.

A government source commented: “There is a universal consensus that the NHS needs more money. That means asking businesses to help out. The choice is investment versus decline.”

Tough choices for NHS funding

Speaking at a news conference during the Commonwealth Heads of Government Meeting in Samoa, Prime Minister Sir Keir Starmer remarked that the government is prepared to make “tough decisions” to support the NHS. However, he declined to provide further Budget details.

National Insurance represents the UK’s second-largest revenue stream after income tax, encompassing contributions from employees, the self-employed, and employers. The Chancellor has signaled that while the Labour manifesto promised not to increase National Insurance for “working people,” this was intended to shield employee contributions, not those of employers.

Wider budget implications and business concerns

As Labour prepares for its first Budget in nearly 15 years, concerns are rising about the potential for further tax changes, including a freeze on income tax thresholds, a possible hike in taxes on asset sales, and revisions to inheritance tax.

In a recent International Monetary Fund meeting, Reeves underscored the need for responsible spending, hinting that a return to austerity is off the table. Instead, she emphasized that day-to-day expenses must align with tax receipts, given the current state of critical services like the NHS and prisons.

Yet the potential impact of these changes has sparked concerns among businesses, who argue that a National Insurance hike could dampen job creation and wage growth, ultimately hampering economic expansion. The government, however, maintains that these funds are essential to rescue the NHS, even as critics argue the increase is a “tax on jobs” and breaches the Labour manifesto.

Addressing the housing crisis

In addition to healthcare funding, the Chancellor is expected to unveil a £500 million initiative to build up to 5,000 affordable homes in England, aimed at addressing the national housing crisis. This will be accompanied by a consultation to limit Right to Buy, protecting council housing stock for future generations.

Meanwhile, the Fire Brigades Union has called on Reeves to deliver a Budget that ends what they describe as the “catastrophic austerity era.” In a letter to the Chancellor, Union leader Matt Wrack warned of potential strike action if the Budget does not provide substantial funding, citing severe hardship among firefighters due to prolonged real-term pay cuts.

As Wednesday approaches, Labour faces the task of balancing its commitment to economic growth with the urgent demands of public services. The Conservatives, however, have criticized the impending National Insurance hike, accusing Labour of redefining the term “working people” as the Budget deadline looms.

 

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Data watchdog probes Musk’s AI firms over deepfake fears

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Investigation launched into Grok chatbot after reports of explicit images created using people’s likeness without consent

THE UK’s data protection regulator has opened formal investigations into X and artificial intelligence company xAI amid growing concerns that their chatbot Grok may have been used to create sexualised “deepfake” images without people’s knowledge.

The action has been taken by the Information Commissioner’s Office, which enforces Britain’s data protection laws, following complaints that the AI tool could generate intimate or explicit images using real individuals’ faces or personal data.

Such images, often referred to as deepfakes, are digitally altered or AI-generated pictures that make it appear someone has posed for photographs or videos they never took.

Regulators fear the technology could be exploited for harassment, blackmail or abuse.

The probe follows a separate investigation by Ofcom, which began examining the platform earlier this year over wider online safety concerns.

Mounting pressure

Both investigations come amid mounting scrutiny of services linked to tech billionaire Elon Musk, whose companies have rapidly expanded the use of generative AI tools capable of producing realistic text and images in seconds.

While such tools are marketed for creative and commercial use, campaigners say safeguards have not kept pace with the risks.

Privacy experts warn that if AI systems are trained on, or can access, personal images or data without clear consent, they may breach UK data protection law.

The ICO said it is now examining how Grok was built, what data may have been used in its development, and whether sufficient protections were put in place to stop misuse.

William Malcolm, the watchdog’s executive director for regulatory risk and innovation, said reports surrounding the chatbot were “deeply troubling”.

He said losing control of personal information in this way could cause “immediate and significant harm”, particularly where children or vulnerable people are targeted.

Safeguards questioned

Investigators will look at whether the companies properly assessed risks, limited the use of personal data and introduced effective barriers to prevent the creation of explicit or abusive content.

Under UK law, organisations found to have mishandled personal data can face enforcement action, including large fines or orders to change how their systems operate.

The ICO confirmed it is working closely with Ofcom and overseas regulators as concerns about AI-generated content increasingly cross international borders.

In response to criticism, X has said it has introduced additional moderation tools and technical measures aimed at preventing the creation of harmful or non-consensual images.

However, regulators say they will continue to examine whether those steps go far enough.

The ICO said it would take action if it finds that legal obligations have not been met.

 

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Man caught in hotel sting after trying to meet girl, 13

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Laugharne defendant confronted by paedophile hunters at St Clears Travelodge before suspended jail term at Swansea Crown Court

A LAUGHARNE man who turned up at a Carmarthenshire hotel believing he was meeting a thirteen-year-old girl instead found himself confronted by paedophile hunters and later sentenced at Swansea Crown Court.

William John Williams, fifty-nine, had been communicating online with what he thought was a schoolgirl. The profile was in fact a decoy set up by a vigilante group.

When he arrived at the Travelodge St Clears for a pre-arranged meeting, members of the group were waiting and contacted police, handing over screenshots of his messages.

Prosecutor Matt Murphy told the court that Williams first made contact with the fake Facebook profile in October 2021. The supposed age of thirteen was made clear from the outset.

Despite this, the defendant sent repeated sexual messages, spoke about masturbating, requested photographs and told the “girl” on several occasions that his penis was erect. He also sent topless photographs of himself.

The court heard Williams urged the account holder to delete the messages, acknowledging he knew he should not be sending them because of her age.

Second fake profile

Members of the group later created another false account, posing as a businesswoman from Swansea, and arranged a date with Williams at the hotel in St Clears. They then liaised with another group to attend the rendezvous.

When Williams arrived, he was challenged and police were called.

During interview he answered “no comment”. In a later interview in February 2023, he claimed he did not believe the child was real and said he thought he was exposing scammers.

The court rejected that explanation.

Williams, of Orchard Park, Laugharne, pleaded guilty to attempting to engage in sexual communication with a child. He had no previous convictions.

Defence barrister Ian Ibrahim said more than four years had passed since the offending and highlighted delays of more than two years between arrest and court proceedings. He said the defendant, formerly employed in hospitality and construction, was now in poor health and had lost his good character.

Internet ‘unsafe for children’

Sentencing, Judge Catherine Richards told Williams it was the actions of “grown men like you” that made the internet feel unsafe for children and caused parents and carers real concern.

After credit for his guilty plea, Williams was sentenced to twelve months’ imprisonment, suspended for twelve months, and ordered to complete a rehabilitation programme.

He was also placed on the sex offenders register for ten years and made subject to a Sexual Harm Prevention Order for the same period.

 

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Princess of Wales visits historic Pembrokeshire woollen mill

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Catherine the Princess of Wales visited Melin Tregwynt, a historic family-owned woollen mill, today, highlighting the enduring traditions and skills of the British textile industry.

Nestled in a secluded, wooded valley near Castlemorris, close to Haverfordwest, Melin Tregwynt has been in continuous operation since at least 1841. The mill, which employs over 40 local people, produces blankets, throws, scarves, cushions and clothing, blending traditional patterns with vibrant colours and contemporary design. Its products are admired globally, from Tenby to Tokyo.

During her visit, the Princess met Melin Tregwynt’s director, Louise Clarke, to learn how the mill preserves traditional craft skills. The company draws on generations of expertise among its staff to mentor young apprentices, ensuring the survival of this historic craft.

Her Royal Highness also spent time with weavers at the loom, observing the intricate process of Welsh double cloth weaving for which Melin Tregwynt is renowned. This traditional technique produces thick, reversible blankets with inverted patterns on each side. The Princess followed the journey of a blanket from initial design to the finished product, seeing the weaving loom in action and meeting the teams responsible for cutting, sewing and finishing the textiles.

The Princess, a long-standing advocate of the British textile industry, has personal connections to the trade: her paternal ancestors were owners of the Leeds-based woollen manufacturer and merchant William Lupton & Co. This visit continues a series of engagements celebrating British textiles, including a tartan-weaving studio in Stirling, Scotland, in January, and visits in 2025 to manufacturers in Carmarthenshire, Suffolk, Kent, and County Tyrone.

After her visit to Melin Tregwynt, the princess went on to visit Huit Denim in Cardigan.

MORE TO FOLLOW INCLUDING OFFICIAL PICTURES

 

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