Major infrastructure projects could be axed in bid to fix £50bn black hole

As Rishi Sunak's government balances various commitments while clawing back money, here's what could be in the upcoming budget, ITV News' Harry Horton reports.

A major high-speed rail line in northern England is reportedly being reviewed and capital gains tax could rise as the prime minister tries to find £50 billion in savings and tax hikes.

It follows earlier reports the construction of the Sizewell C nuclear plant in Suffolk could be reviewed or delayed, but Downing Street has dismissed this, insisting plans for the site are not being reviewed.

On Friday Business Secretary Grant Shapps hinted spending commitments such as Northern Powerhouse Rail were likely to be scaled back.

Meanwhile, the chancellor is reportedly looking at raising taxes on the sale of assets such as shares and property as he weighs up “difficult decisions” to address a £50 billion black hole in the public finances. He is also considering an increase in dividend tax, in a move that would come as a blow to entrepreneurs.

When asked about the reported potential capital gains tax rise, Minister Chris Philp told ITV News he did not know what the Treasury's plans are, and said we "will have to wait to find out" what is in the autumn statement on November 17.

He said the chancellor will "do what is necessary to keep our country's finances in order" and added that the UK is navigating "globally very difficult conditions".

'We are in, globally, very challenging times,' Chris Philp told ITV News

The reports come as the country has been struck by more bleak economic news, with the Bank of England hiking interest rates for the eighth time in a row and the UK heading into what could prove the longest recession in at least a century.

As the government looks to limit spending, there were reports on Friday morning the Sizewell C nuclear power plant in Suffolk would come under review, but these reports have since been dismissed by the prime minister's spokesperson.

The spokesman said: “It’s not accurate to say we are scrapping it.”

Boris Johnson previously promising £700 million of taxpayers’ money to the project in his final policy speech in early September, but a government official later told the BBC: “We are reviewing every major project – including Sizewell C.”

Sizewell nuclear power stations. Credit: PA

The manifesto the Conservatives won the 2019 election on promised Northern Powerhouse Rail between Leeds and Manchester. Liz Truss backed the line while prime minister, and Boris Johnson boasted of its achievement in his farewell speech from Downing Street.

Northern Powerhouse Rail. Credit: PA

But Mr Shapps told the BBC: “The line itself can deliver a 33-minute journey from Manchester to Leeds, quadruple nearly the capacity of that line, and do so without having to wait an extra 20 years beyond the delivery of what the upgrade can do. “There wasn’t really much point in going and blasting new tunnels through the Pennines. “It’s not true to say we’re not delivering on what we said we would do on levelling up the north.”

Downing Street has said it is committed to the Integrated Rail Plan but that Transport Secretary Mark Harper is reviewing how high-speed services are accomplished. The prime minister’s official spokesman said: “We are committed to the Integrated Rail Plan which delivers a high-speed line and transport improvements across the north, and the Government is of the view that this approach will deliver those benefits sooner than under alternative plans. “There are a number of options on how we deliver those high-speed services to Leeds, for example, and the Transport Secretary is looking at those closely.”

'We weren't talking about spending cuts until that mini-budget,' Labour MP Jonathan Reynolds said

The potential sweeping cuts ahead of the November 17 budget follows the Bank of England's warning of the longest recession on record.

And the government’s job has only been made harder by the disastrous £45 billion tax giveaway unleashed by Ms Truss and Kwasi Kwarteng, when they were prime minister and chancellor.Questions remain for individuals in Mr Sunak’s government, with his policing minister Chris Philp having been chief secretary to the Treasury under Mr Kwarteng.

On Friday Mr Philp denied that what Labour has dubbed a "Tory premium on people’s mortgages" in the wake of the Bank's interest rates is down to government mismanagement.

Mr Philp says the prime minister and chancellor have had a 'positive effect' on the economy

He said the dollar-pound exchange rate and the government bond yields bounced back after suffering in the wake of the mini-budget. Although the Bank of England raised interest rates yesterday, Mr Philp said the US has also had to raise interest rates, adding: "What we are seeing is a global set of circumstances".

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