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In your briefing today:

• A company linked to Michelle Mone faces a £122 million bill - and there are demands she be stripped of her peerage

• Chancellor Rachel Reeves also faces an unwelcome bill - and difficult choices in the forthcoming budget

• Scottish clubs are back in Europe tonight, with Celtic fans cancelling their planned protests… and Rangers manager Russell Martin dropping hints he thinks fan criticism is going too far

👋 Good morning Early Liners! Things look slightly different today, although all the usual elements of your morning newsletter are all here.

Two things are different.

First, the boxy design has gone. The reason for this is simple: the code used to draw the boxes made the email too large, and some email services, especially Gmail, were refusing to deliver the full message. I know that irritated a lot of people.

Second, I’ve changed the running order. The ideas section - the longer piece - is now at the end, after the UK, World and Sport highlights, which I know many of you scroll down to. I hope it’ll make for a more logical lineup.

There’s a survey at the end to get your view of the new email. Or you can, as ever, hit reply and let me know what you think. I’m always happy to hear from you.

Best wishes, Neil

📣 The company linked to Conservative peer Michelle Mone has been given two weeks to cough up £122 million it took for substandard PPE equipment it supplied during the pandemic.

That verdict has sparked outrage aimed at Mone - with calls for her to be stripped of her peerage - and ministers have promised to “ruthlessly pursue” every penny. But experts say the odds of recovering the cash are poor.

• Mone-linked company ordered to pay £122 million over PPE contract (BBC) (Mail)

• UK’s PPE Medpro win unlikely to guarantee recovery, lawyers warn (FT £)

• Mone should be booted out of the House of Lords, the SNP says (Daily Record)

• A self-created fairy story: The rise and fall of Michelle Mone (BBC)

📣 A £18 billion hole could be blown in Britain’s public finances tomorrow, when the Office of Budget Responsibility provides new economic forecasts to the UK Treasury. The OBR is expected to dramatically downgrade its estimates of Britain’s productivity, which will, at a stroke, increase the “fiscal hole” to be filled by Rachel Reeves’ budget next month to a total of £30 billion.

The news will spark a big political row, with Reeves’ team attempting to pin the blame on previous Conservative administrations. It will also increase pressure on the Chancellor to increase one of the “big” taxes in her budget next month. (FT £)

• Rachel Reeves’ difficult choices start to emerge ahead of budget - below ⬇️

📣 Scottish colleges are on “the brink” of financial collapse, the Scottish Government has been warned, after a 20% real-terms cut in their budget over the last five years.

A report by Audit Scotland, out today, says without more support they will have to offer less teaching to fewer students, at a time when demand from students and employers is not being met.

There’s also a chance colleges will prioritise courses that are less expensive to deliver, over those that actually meet local need. (Daily Record) (Read the Audit Scotland report)

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AROUND SCOTLAND

📣 The NHS has been rebuked by the Scottish Information Commissioner, and ordered to release more details on how much the Sandy Peggie employment tribunal is costing. The commissioner “rejected every argument put forward by the health service” - including claims sharing the costs could provoke violence. (The Herald has the exclusive)

📣 An engineer at Leonardo UK started using a “secret toilet” at work after encountering a transgender colleague in the female bathrooms, an employment tribunal has heard. (BBC)

📣 The Scottish Government agrees that mobile phones should be banned in classrooms - but will leave it to headteachers to make the decision on whether or not to implement the ban. (The Scotsman)

📣 A shocking machete attack on a drinker in a Glasgow pub was captured on video - as a karaoke singer continued to belt out John Denver’s 1971 hit, Country Roads, a few metres from the attack. Police are searching for the attacker. (Daily Record)

AROUND THE UK & WORLD

📣 The US Government shutdown is turning into DOGE mark II: President Donald Trump has seized the opportunity to further reshape the US federal workforce, punish detractors and scrap projects important to Democrats, including a multi-billion investment in New York’s subway. (AP)

📣 Secret BBC filming inside the Met Police has uncovered a shocking culture of misogyny and racism, with officers heard to call for immigrants to be shot and dismiss claims of rape. It flies in the face of claims, made by the Met, that it has tackled “toxic behaviours” in the force after the murder of Sarah Everard by a police officer. (BBC)

📣 Keir Starmer has promised to end the “golden ticket” of migrants who are granted asylum in the UK then getting automatic rights to settle here, or bring family members with them. (Independent)

📣 An old piece of electrical equipment found in thousands of UK homes poses a safety risk, with some versions at risk of overheating and causing fires. (BBC)

SPORT

⚽️ In the Champions League last night, a 2-0 win for Arsenal against Olympiakos, but Manchester City could only manage a 2-2 draw away to Monaco after a controversial late penalty. PSG sank Barcelona 2-1 in Spain. (🎥 Highlights on TNT Sports)

⚽️ Celtic fans have called off their planned protest during their side’s game against Braga tonight, after the Parkhead board agreed to a meeting with fan representatives. (Daily Record)

⚽️ Rangers manager Russell Martin is dropping heavy hints he thinks fan criticism has gone too far, after they gave him abuse even after his side’s win on Sunday. Rangers play Sturm Graz in Austria tonight. (The Sun)

IDEAS
Who’d be Chancellor? Reeves’ difficult choices start to emerge ahead of her make-or-break budget

🗣️ There’s one big political event hanging over UK politics this year, and it has nothing to do with the Labour Party conference in Liverpool, now ended, or the Conservative equivalent kicking off in Manchester this Sunday.

Rachel Reeves’ budget, to be delivered on 26 November, may be almost two months away. But we’re already seeing heavy trails - and a great deal of advice - in the press.

The heavy trails: the biggest is that Reeves will lift the two-child child benefit limit, a big demand of Labour MPs and child poverty campaigners. The Guardian reported yesterday that, instead, a taped system of benefits is being explored instead. They could also end up creating a three or four child limit, or a variety of other constraints.

If that comes to pass - and all the suggestions are it will - that’ll be one of the crowd pleasures. There will be some pain too, and those less popular measures have been getting trailed this week too.

Reeves herself has hinted strongly that taxes will go up. In her speech to the Labour Party conference this week, she insisted she would not take chances with public finances.

She issued a rebuke to “Labour figures” who were suggesting she break her own (entirely voluntary) fiscal rules. Those “Labour figures” were taken to mean ambitious Andy Burnham, but there were plenty of others who see the rules as being an unnecessary act of self harm. But it does look like they’ll remain.

The BBC’s Faisal Islam reckons the Chancellor was, instead, floating a pre-emptive argument for raising taxes next month. Her reference to “harsh global headwinds and long-term damage to the economy” is an act of preparation, he writes, for further tax rises, “even significant ones”.

But it does appear that election promises not to increase the main tax rates are still in place - “The manifesto commitments stand”, she said. But it would be wise to note those commitments relate to the rate of tax, not its scope. The government had to deny, yesterday, that it was planning to put VAT on private healthcare.

The City of London, metaphorically lurking over Reeves shoulder as she makes these decisions, has already decided she’ll put taxes up, according to Juliet Samuel in today’s Times (£). A “senior City economist” she spoke to thought it obvious they’d go up: “He didn’t just mean little fiddling taxes,” she writes. “He meant one of the big ones.

“There are only three taxes that count when it comes to filling big fiscal holes. Income tax, VAT and national insurance account for two thirds of government revenue. You cannot move the dial without tapping one of them. They are also the three taxes Labour promised not to raise.”

Samuel suggests the Chancellor “go big” and take measures to bring in enough cash to avoid coming back for more, creating winners as well as some losers. Put income tax up, but also tax high-value property, she suggests. “Use that cash to cut taxes in other areas like stamp duty, especially for downsizers, or to reduce tax on productive activity like corporate profits, workplace training, capital gains and dividends.”

Those may not sound like electoral winners, mind you. Over at Bloomberg (🎁Gift link), they also see a tax raising budget coming up. But they think “higher levies on gambling companies, a potential freeze on income tax thresholds and a renewed push to curb welfare spending” are more likely.

All this will take a much sharper focus from tomorrow, when the Office for Budget Responsibility delivers those first fiscal forecasts to the Treasury, reported earlier in today’s newsletter.

Expect a row over that… and then more communication about the tax rises needed to plug Britain’s ever-growing fiscal hole.

👍 That’s your Early Line for the day

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