Budget 2024: Jeremy Hunt To Cut National Insurance Again In Bid To Avoid Tory Wipeout

Jeremy Hunt will cut another 2p off national insurance as he mounts a last-ditch attempt to prevent a Tory meltdown at the general election.

The chancellor will unveil the move as part of a “Budget for long-term growth” that he hopes will turn around the Conservative’s miserable poll numbers with speculation mounting the voters could go to the polls in May.

But he has ruled out the cuts to income tax demanded by Tory MPs and thought to be favoured by Rishi Sunak.

Hunt announced an identical cut to to national insurance in last November’s autumn statement, but that did nothing to close the huge opinion poll gap with Labour.

Treasury officials say that taken together, the two reductions in national insurance will leave an average earner around £900 better off.

The chancellor will tell MPs: “In recent times the UK economy has dealt with a financial crisis, a pandemic and an energy shock caused by a war on the European continent.

“Yet despite the most challenging economic headwinds in modern history, under Conservative governments since 2010 growth has been higher than every large European economy.

“Unemployment has halved, absolute poverty has gone down, and there are 800 more people in jobs for every single day we’ve been in office.

“Of course, interest rates remain high as we bring down inflation. But because of the progress we’ve made because we are delivering on the prime minister’s economic priorities we can now help families with permanent cuts in taxation.

“We do this not just to give help where it is needed in challenging times. But because Conservatives know lower tax means higher growth. And higher growth means more opportunity and more prosperity.”

Hunt will add: “Our plans mean more investment, more jobs, more productive public services and lower taxes – sticking to our plan in a Budget for long term growth.”

The latest cutting national insurance by 2p in the pound will cost the Treasury around £10 billion a year, paid for by a combination of tax rises and spending cuts.

Hunt is expected to scrap the “non-dom” tax status enjoyed by wealthy foreigners living in the UK in a move which could raise up to £3.2 billion, while he is also set to extend the windfall tax on the profits of oil and gas firms.

A tax on vaping products is also expected to raise much-needed cash for the Treasury.

Hunt is expected to extend the 5p cut in fuel duty, first announced by Sunak in 2022 when he was still chancellor, at a cost of £5bn to the Treasury.

The chancellor is also set to usher in a new wave of austerity by slowing down the rate at which public spending goes up in future from 1% a year in real terms to 0.75%. That would save the government around £5 billion.

However, Hunt will defend this approach by insisting: “An economy based on sound money does not pass on its bills to the next generation.”

He will say Labour have “opposed our plans to reduce the deficit every step of the way”.

The chancellor will add: “With the pandemic behind us, we must once again be responsible and increase our resilience to future shocks. That means bringing down borrowing so we can start to reduce our debt.”

But shadow chancellor Rachel Reeves accused the Tories of presiding over “fourteen years of economic failure”.

“The Conservatives promised to fix the nation’s roof, but instead they have smashed the windows, kicked the door in and are now burning the house down,” she said.

“Taxes are rising, prices are still going up in the shops and we have been hit by recession. Nothing the chancellor says or does can undo the economic vandalism of the Conservatives over the past decade.

“The country needs change, not another failed Budget or the risk of five more years of Conservative chaos.”

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House Of Lords Inflicts 5 Defeats On Rishi Sunak’s Rwanda Bill

The House of Lords has inflicted five defeats on the government over its controversial Rwanda scheme.

In another headache for Rishi Sunak, the unelected upper chamber voted by a majority of 102 to back a move to ensure the proposed legislation is fully compliant with domestic and international law.

The first defeat on the Safety of Rwanda Bill was followed by four more – including insisting parliament cannot declare Rwanda to be a safe country until the treaty with its promised safeguards is fully implemented, and a vote in favour of establishing a monitoring mechanism for the UK-Rwanda pact.

It paves the way for a back-and-forth between the elected Commons and the Lords, which is often referred to as parliamentary “ping-pong”, meaning MPs can overturn the changes at later stages in the process.

The Safety of Rwanda Bill is designed to overcome legal challenges to past attempts to send asylum seekers with a one-way ticket to the east African country.

The bill would compel judges to regard Rwanda as safe, and give ministers the power to ignore emergency injunctions.

The policy is central to the prime minister’s hopes of convincing voters he can “stop the boats” crossing the English channel.

The government hopes once the bill passes flights will be able to take off by the spring, but that timetable now looks in disarray.

Dick Newby, Liberal Democrat leader in the Lords, said: “For months this Conservative government has been pushing this policy that does nothing to solve the asylum backlog.

“This bill has cost hundreds of millions of pounds, and doesn’t combat dangerous Channel crossings or create safe, legal routes.

“By declaring Rwanda safe when it is clearly anything but, and excluding the courts, the bill also undermines the rule of law. It is the product of a morally and politically bankrupt government.”

Speaking in the Lords, Conservative grandee Lord Tugendhat, whose nephew is security minister Tom Tugendhat, accused the government of behaving like the ruling party in George Orwell’s dystopian novel 1984.

“This country is no dictatorship, it is a democracy,” he said. “If this bill goes onto the statute book in its present form, Rwanda will be a safe country regardless of reality until the statute is repealed.”

This is a breaking news story and will be updated. Follow HuffPost UK on Twitter, Facebook and Instagram.

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Labour Peer Slams Rishi Sunak’s ‘Sinister’ Speech On Mob Rule: ‘Bit Of A Cheek’

Labour peer Shami Chakrabarti described Rishi Sunak’s recent claims about extremism in the UK as “sinister” during an interview on Sunday.

Over the last week, the prime minister has condemned supposed extremists for “trying to tear us apart”, alleged “our democracy itself is a target” amid rising “mob rule” and called for the police to do more to protect the UK.

But, speaking to Sky News at the weekend, Chakrabarti said: “I don’t like his theatre, quite frankly.”

“The thing I find most sinister about it is that he’s almost suggesting that he has read the riot act to the police,” she added.

“He’s called them in, he’s told them that he wants the protests not to be managed, but to be policed.

“I think, in a liberal democracy – and he’s now claiming to be a liberal patriot, that was the language he used – we don’t have prime ministers interfering with operational policing.

“And this has been happening every so often under his government – there will be a summit where the police chiefs have been called to No.10,” she said. “And then there’s a press release about what they’ve been told by the prime minister or the home secretary, and I really don’t like it.

“I don’t think people in Britain want their politicians to be deciding how particular a police operation should be conducted.”

Host Trevor Phillips asked: “Sinister is quite a strong word for this, isn’t it?”

“It really is and I’m using it,” the peer said, adding: “It’s also a bit of a cheek for the prime minister to be talking about these things when so many of his ministers and senior Conservatives have been pouring fuel on the flames of polarisation, on culture war division in our country.”

She continued: “The language of Lee Anderson and Suella Braverman has been a real problem for me.”

Anderson, a backbench MP, lost the Tory whip after refusing to apologise for attacking London mayor Sadiq Khan, claiming the “islamists” had got “control” of the Labour politician.

Braverman, previously the home secretary and now a Tory backbencher, separately claimed “islamists” run Britain. She has not lost the party whip.

Chakrabarti continued: “It’s a bit of a cheek for the prime minister to then come and try and look statesmanlike with his reading the riot act to the police about how they should do their very difficult job.”

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Rishi Sunak And Jeremy Hunt In The Last Chance Saloon As Tories Demand ‘Game-Changing’ Budget

Just after 12.30 on Wednesday afternoon, Rishi Sunak will step aside from the Despatch Box and make way for Jeremy Hunt.

With the prime minister sitting just behind him on the government frontbench, the chancellor will then deliver a Budget which will make the political, as well as the economic, weather for the months leading up to the general election.

It is not overstating things to suggest that the contents of Hunt’s red box will determine whether or not the Tories have any chance at all of a record-breaking fifth term in office.

Many Conservative MPs already believe that the game is up, the party is heading for opposition and there is nothing the chancellor can announce to change that fundamental truth.

“I don’t think he can do anything now to change the game because the game cannot be changed,” one gloomy former Tory minister told HuffPost UK.

“The Budget won’t really make any significant difference now to our chances of winning, therefore he should do some things that are attractive to Conservative voters, like reform inheritance tax, boost home ownership and help small businesses. I don’t think cuts to income tax would make any difference.”

The best thing Hunt can do, some Tories believe, is produce a Budget that appeals to the Tory base and ensures that as many of their MPs as possible survive when voters deliver their verdict later this year.

One veteran MP said: “What they should be thinking about is maxing the number of Tory MPs who come back after the election so we at least have a chance of getting back into government after one parliament.

“Labour have shown you can do that with 200 MPs, but with 150 it’s impossible.”

Other Tories are more optimistic, but warn that Rishi Sunak must not allow Hunt to waste this opportunity to change the political weather.

One senior Tory MP told HuffPost UK: “Rishi needs to own this Budget, not Hunt. The prime minister has more of a political instinct than the chancellor.

“This Budget is the last chance to start to reverse Labour’s dominance in the polls. The Budget must not be hijacked by an over-cautious Treasury.

“Number 10 needs to make sure the Budget is politically smart – not just economically smart.”

Rishi Sunak and Jeremy Hunt sre under pressure to deliver.
Rishi Sunak and Jeremy Hunt sre under pressure to deliver.

IAN FORSYTH via Getty Images

Former cabinet minister Damian Green, now chair of the One Nation group of moderate Tories, said: “The chancellor must seize the opportunity he has at the Budget to cut taxes, drive growth and put more money back into hardworking, ordinary people’s pockets.

“This is our chance to demonstrate to voters that we are on their side and that we are taking steps to alleviate pressures they face in all aspects of everyday lives. If we fail to do so, we risk the damaging consequences of a Labour government.”

In January, Hunt sought to compare himself with the Thatcher-era chancellor Nigel Lawson, suggesting that big tax cuts were coming.

Since then, however, the mood music coming out of the Treasury has changed, with sources confirming that there is less money available than previously hoped to pay for pre-election giveaways.

Hunt could even be forced to steal two of Labour’s flagship policies – scrapping non-dom tax status for wealthy foreigners and increasing the windfall tax on energy firms – to raise the money needed to cut either national insurance or income tax.

One Tory MP suggested that Hunt “cut and run” by producing a voter-friendly Budget before a May general election.

This would, though, fly in the face of Sunak’s previous declaration that the election would come in the second of the year.

Nevertheless, Labour campaign chiefs Morgan McSweeney and Pat McFadden this week gave a presentation to the shadow cabinet setting out why they believe a May poll is still “in play”.

One source said: “If they deliver a tax-cutting Budget and the economy looks like it’s starting to pick up, May could be the optimum time for the Tories to go to the country and still have some control over events.

“If Sunak leaves it till the end of the year it looks as if they are holding on till the bitter end, and as we saw with John Major in 1997 and Gordon Brown in 2010, that doesn’t usually end well for the government.”

Voters will see a lot more of Angela Rayner during the election campaign.
Voters will see a lot more of Angela Rayner during the election campaign.

Ian Forsyth via Getty Images

HuffPost UK has also been told that deputy leader Angela Rayner will play “a central role” in the Labour election campaign.

Relations between Rayner and Keir Starmer are professional rather than warm, with the leader being closer both personally and ideologically to shadow chancellor Rachel Reeves.

But one senior Labour insider said: “Angela appeals to certain voters in a way that Keir doesn’t, so she will be a key figure when the campaign gets underway.

“We want the public to see Keir, Rachel and Angela out there together making the case for a Labour government after 14 years of the Tories.”

Whenever the election takes place, next Wednesday’s Budget will go a long way to determining whether it’s nearly time to call last orders on Sunak’s time in Downing Street.

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Rishi Sunak Addressed The Nation Outside No.10 – And Said Very Little

Rishi Sunak has used a “lectern speech” outside the doors of No.10 Downing Street to condemn extremists “trying to tear us apart” – but offered little by way of a policy solution.

Westminster was buzzing as the prime minister announced he would make an unexpected Friday night address – with the prospect he was about to call a general election swiftly ruled out.

Instead, Sunak’s addressed the nation on tackling the unrest in Britain in the aftermath of the October 7 attacks by Hamas against Israel – a situation the PM had likened to “mob rule” in a statement earlier in the week.

Against the backdrop of the No.10 front door, Sunak warned “our democracy itself is a target” for extremists.

He continued: “In recent weeks and months, we have seen a shocking increase in extremist disruption and criminality.

“What started as protests on our streets have descended into intimidation, threats and planned acts of violence.

“Jewish children, fearful to wear their school uniform lest it reveals their identity. Muslim women abused in the street for the actions of a terrorist group they have no connection with.

“Now our democracy itself is a target. Council meetings and local events have been stormed. MPs do not feel safe in their homes. Long-standing parliamentary conventions have been upended because of safety concerns.

“And it’s beyond alarming that last night, the Rochdale by-election returned a candidate that dismisses the horror of what happened on October 7, who glorifies Hezbollah and is endorsed by Nick Griffin, the racist former leader of the BNP.”

The latter part of the statement alludes to the victory of George Galloway in the Rochdale by-election.

Sunak was vague, however, on how his government would take action to deal with the problem, alluding only to a “new robust framework” to tackle the “root causes” of extremism and “asking more of the police”.

The speech came at the end of another rancorous week for British politics.

On Wednesday, Sunak claimed that there is a “growing consensus that mob rule is replacing democratic rule” in the UK, but Downing Street failed to provide any evidence for the extraordinary allegation.

In another controversy, Lee Anderson, the former Tory party chairman, claimed policing of the largely peaceful demonstrations showed that “Islamists” had “control” over London’s mayor, Sadiq Khan, who is Muslim. Anderson had the Tory whip removed last weekend after he chose not to apologise for the comments, and spent this week rowing back from his original “little bit of contrition”.

On Friday, Galloway, the former Labour MP, claimed a stunning victory in the Rochdale by-election on the back of a pro-Palestine ticket and a disastrous Labour campaign that saw the party drop support for their candidate after he made comments branded anti-Semitic.

Following the speech, Liberal Democrat leader Ed Davey said: “The British people will take no lessons from a prime minister and Conservative party who have sowed the seeds of division for years.

“This is the same prime minister who made Suella Braverman his home secretary and Lee Anderson his party’s deputy chairman.

“If the prime minister is serious about bringing people together, he would call a general election now, so that the British public can decide the future of our country.”

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Rishi Sunak Says There’s A ‘Growing Consensus’ Britain Is Descending Into ‘Mob Rule’

Rishi Sunak has suggested the UK is descending into “mob rule”, and has urged police to do more to protect Britain’s democracy.

His comment comes amid pro-Palestinian protests that have been held most weekends, drawing hundreds of thousands of demonstrators, and growing concern in recent months over MPs’ safety since the outbreak of the war in Gaza.

Last week, parliament descended into chaos as tensions flared over a vote on the Israel-Hamas conflict, with the House of Commons speaker citing “frightening” threats against MPs for a decision to break with usual parliamentary procedure.

But the Conservatives have been accused of deliberately raising tensions.

Ex-Conservative deputy chairman Lee Anderson had the Tory whip removed over the weekend after he chose not to apologise for saying “Islamists” had “control” over London’s mayor, Sadiq Khan, who is Muslim.

Khan accused the Tories of adopting a strategy to “weaponise anti-Muslim prejudice for electoral gain”.

Former home secretary Suella Braverman called the protests “hate marches” and accused police of being too lenient with them.

The prime minister said a new “democratic policing protocol” would commit to extra patrols and make clear that protests targetting MPs at their homes should be treated as intimidatory.

Speaking to police leaders about the issues around MPs’ safety at a roundtable meeting in Downing Street on Wednesday, Sunak said: “There is a growing consensus that mob rule is replacing democratic rule. And we’ve got to collectively, all of us, change that urgently.”

The Tory leader continued: “We also need to demonstrate more broadly to the public that (the police) will use the powers you already have, the laws that you have.

“I am going to do whatever it requires to protect our democracy and our values that we all hold dear.

“That is what the public expect. It is fundamental to our democratic system. And also it is vital for maintaining public confidence in the police.”

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Rishi Sunak Criticises Lindsay Hoyle Over Commons Gaza Vote Chaos

Rishi Sunak has criticised Lindsay Hoyle for how he handled the chaotic Gaza ceasefire vote as pressure grows on the Speaker to resign.

In his first public comments on the row, the prime minister said Hoyle should not have upended the “usual processes” of parliament in the face of “intimidation or aggressive behaviour”.

Hoyle has faced accusations of bias after up-ending parliamentary procedure by selecting a Labour amendment to an SNP motion calling for an “immediate ceasefire” in Gaza.

That had the effect of preventing what was expected to be a major rebellion by Labour MPs who had planned to vote with the SNP.

Stephen Flynn, the SNP leader in Westminster, has accused the Speaker of pro-Labour bias and said his party no longer has confidence in him remaining in post.

Hoyle has said one of the reasons he allowed Labour’s amendment was to protect MPs who faced a backlash from pro-Palestine campaigners if they failed to vote for a ceasefire

He said: “I have a duty of care, and if my mistake is looking after members, I am guilty.”

But Sunak said today: “What happened in the House of Commons last night is very concerning.

“It seems that the usual processes and the way that the House of Commons works were changed.

“Now my understanding is that the Speaker has apologised for that and is going to reflect on what happened.”

The prime minister added: “I think the important point here is that we should never let extremists intimidate us into changing the way in which parliament works.

“Parliament is an important place for us to have these debates. And just because some people may want to stifle that with intimidation or aggressive behaviour, we should not bend to that and change how parliament works. That’s a very slippery slope.”

Some 66 Tory and SNP MPs have so far signed a motion of no confidence in the Speaker as he continues to fight to save his job.

One former cabinet minister told HuffPost UK: “MPs are very divided on what should happen, but Lindsay does have enough Conservative support to win a vote of confidence if it comes to that.”

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BBC Radio Audience Bursts Out Laughing After Esther McVey Says Sunak Has ‘Turned Economy Round’

A Tory minister was openly laughed at after she claimed Rishi Sunak has “turned the economy round”.

Appearing on BBC Radio 4′s ‘Any Questions’ programme on Friday night, McVey said Tory MPs must rally round the prime minister despite the party’s latest humiliating by-election defeats.

She said: “People need to now get behind Rishi Sunak, who actually inherited a difficult set of circumstances and say ‘yes, he has turned the economy round – that is turning round now’.”

As the studio audience burst into laughter, presenter Alex Forsyth said: “Is it? The UK’s just gone into a recession.”

McVey replied: “Yeah, OK. Those figures were from the end of last year, and you’re right it was a technical recession and it’s a shallow recession.”

Figures released by the Office for National Statistics on Thursday showed that the economy shrank by 0.3% in the final three months of 2023.

With gross domestic product (GDP) also contracting by 0.1% between July and September, that meant the economy was officially in recession.

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How A Recession And By-Election Misery Sent Rishi Sunak Back To Square One

For three days, it looked as though Rishi Sunak was having the rarest of things for him – a good week.

Keir Starmer was under the cosh over Labour’s woes in Rochdale and, despite predictions to the contrary by economists, inflation did not go up again when the latest figures were published on Wednesday.

But all that changed at 7am the next day.

That was when the Office for National Statistics (ONS) confirmed that the UK economy had shrunk by 0.3% in the final quarter of last year.

Added to the 0.1% contraction in the three months before, it means the country was officially in recession – the very thing the prime minister had promised would not happen.

Then, in the early hours of Friday morning, the Tories lost two by-elections to Labour in previously-safe seats.

And while that was not wholly unexpected, the scale of the defeats – especially in Wellingborough – confirmed the party’s worst fears.

“This has been the position for 18 months and it’s showing no sign of changing,” one former Tory cabinet member told HuffPost UK then.

“The by-election results have just confirmed how bad things are, but maybe more people will now realise it.”

Election expert Sir John Curtice said the Tories were “staring defeat in the face at the general election”, not least because the party is leaking voters to both Labour and Reform UK.

The right-wing party secured 10% of the vote in Kingswood and 13% in Wellingborough – numbers to send a chill down the spine of many Conservative MPs nervously eyeing their own majorities.

Reform UK now have begun to put votes in the ballot box,” Curtice said.

“The problem that means for the Conservatives is that for every one voter who is switching to Labour, there’s now another one who’s switching to Reform.

“It means that that coalition of pro-Brexit voters that took Boris Johnson to victory in 2019 is just fragmenting further as Reform threatens to take more votes away from the Conservatives.”

The end result, Curtice said, is that “Sir Keir Starmer looks as likely to be the next prime minister as he did 24 hours ago, if not more so”.

That is despite the Labour leader enduring one of his worst weeks since taking on the job nearly four years ago.

With the U-turn on the party’s pledge to spend £28 billion a year on green energy projects still fresh in the memory, its campaign in the upcoming Rochdale by-election went up in smoke.

A recording of Labour candidate Azhar Ali accusing Israel of allowing the October 7 attack by Hamas to take place as a pretext to invading Gaza was leaked to the Mail on Sunday.

Ali issued a full apology and, initially, the party opted to stand by him.

But as Starmer swithered over what to do, more audio from the same event emerged in which Ali referred to Jewish people working in the media. Within hours, Labour had withdrawn their support for him, although it is too late to remove him from the ballot paper.

HuffPost UK has been told that the party was initially urged not to axe Ali by Jewish groups, who feared it would hand an open goal to George Galloway, who is also standing in Rochdale for his British Workers Party.

“They don’t want Galloway in the Commons spreading his poison,” said one source.

The Labour leadership considered announcing that their candidate would not take the party whip if he won, and would also not stand at the general election. However, the emergence of the second recording made his position untenable.

If George Galloway was not a candidate then it would have been a much easier decision,” said one senior Labour insider.

“But showing that we’re serious about tackling anti-Semitism and prioritising that above a by-election victory is a good message for us to get out there.”

One senior Tory MP said there was no chance of his party benefiting from the controversy.

“Rochdale is a bubble issue – it just doesn’t resonate outside Westminster,” he said.

The last 48 hours also appear to have put paid to any lingering chance that Sunak might opt for a May election, the reasoning being that by going long there is always the chance of something coming up to get the Tories back in the race.

But one veteran backbencher said: “I’ve always been in favour of a May election as it’s our best chance of getting a decent number of Tory MPs back.”

The Conservatives have now been reduced to warning their former supporters that a vote for Reform simply increases the chances of a Labour government by splitting the right-wing vote.

That has led to Labour attacking Reform by insisting the party failed to meet expectations in the by-elections.

One insider said: “13% in Wellingborough is an under-performance for them. Ukip came second there in 2015 with 19.6%.”

But a Reform source told HuffPost UK: “We doubled our best ever result twice in one night, did better than our national polling average from a standing start, and without the clout, people, money, national recognition or local knowledge that Labour have.

“If that’s underperformed, they better watch out for when we get into our stride.”

For Sunak, however, the prospect of the Tories getting into their stride this side of the general election seems like a distant one.

The PM is fond of warning that a Labour government would take the country “back to square one”.

Ironically, at the end of a week which initially seemed to be going well, that is precisely where he has ended up.

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Valentine’s Day More Expensive Thanks To Tory ‘Cost Of Loving Crisis’, Says Labour

Rishi Sunak’s “cost of loving crisis” has made it more expensive to be romantic on Valentine’s Day, Labour has warned.

Flowers, wine, chocolate, ice cream, meals out and hotel stays have all soared in price since 2018.

Labour said official figures revealed people are paying “l’amour for less”, with the average cost of several classic gifts and treats having increased by 30%.

Shadow Treasury minister James Murray said: “Whether it’s flowers or chocolates, a meal out or a night in, even Valentine’s Day is being hit by the Tories’ failure on the economy.

“It’s no wonder people have fallen out of love with the Conservatives.”

Office for National Statistics (ONS) figures showed cut flowers and chocolate are 14% more expensive.

The price of a bottle of wine is now 38% higher – now costing £22.

And the cost of a main course in a restaurant has increased by 36%, with a pudding now 30% more expensive.

But staying at home still costs more, with chilled pot deserts increasing in price by a 41% and ice cream up by 15%.

A hotel stay is now more than £110 on average – 45% more expensive than in 2018.

The figures also revealed a trip to the theatre has increased in price by 42% and popcorn at the cinema is 24% more expensive than in 2018 at nearly £6.

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