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In your briefing today:

• Rachel Reeves has ditched plans to raise UK income taxes.

• Scotland’s football team is limbering up for a defining double header that could seal qualification for next year’s World Cup

• The sleep habits of Japan’s prime minister are sparking concerns

• A review of the weekly magazines - the state of the BBC, Keir Starmer’s unpopularity among his own MPs, and the odds of a recession

📣 Chancellor Rachel Reeves has ditched its plan to increase income tax in the forthcoming budget, according to officials briefed on the plans. She is now exploring alternative ways to raise £30 billion to fill the UK’s fiscal hole, according to the Financial Times.

The climbdown has come because of fears the move, which would break manifesto promises made only last year, would anger voters and lead to a mutiny from backbench Labour MPs. The decision was communicated to the Office for Budget Responsibility on Wednesday.

Taxes may still go up, in other ways. Alternative ways to increase revenue could include cutting the thresholds at which people pay levels of tax. And Reeves could also introduce what’s been dubbed the “smorgasbord” approach to raise money across a range of smaller taxes.

That would explain the array of tax plan leaks, from gambling to a per-mile tax on electric vehicles, which have appeared in news pages in recent weeks. (The FT has the exclusive £) (Sky News)

📣 The BBC has apologised to Donald Trump over the editing of one of his speeches, but “strongly disagrees” with there being a basis for his threatened $1 billion defamation claim, and has refused to pay any compensation.

The BBC chair Samir Shah sent a personal letter to the White House with an apology, and an undertaking not to broadcast the Panorama episode which sparked the row which cost Director General Tim Davie, and BBC News CEO Deborah Turness, their jobs. (Independent) (Guardian)

📣 The chief executives of Scotland’s four smallest councils will get big pay rises next year, with the minimum salary for the role set at £165,755. That will mean a £32,000 jump in salary for the chief executive of Orkney. (BBC)

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AROUND SCOTLAND

📣 The SNP is urging the UK Government to increase funding for renewable energy, as industry bodies warn that the UK risks missing out on big offshore wind projects. (Herald £)

• Jeremy Grant: Scotland’s floating wind turbine ambitions, and the hurdles to overcome (Scotsman £)

📣 Deputy first minister Kate Forbes has acknowledged Scotland will have to pay a borrowing premium as it embarks on a £1.5 trillion debt issuance programme, but said establishing a foothold in bond markets made the extra costs worthwhile. (FT £)

📣 A hitman has admitted killing mobster Marc Wesley outside a pub in Granton, Edinburgh, just before the bells on Hogmanay 2023. (Daily Record)

📣 The UK government’s decision to throw out gender reforms in Scotland, and block a second independence referendum, shows why the country needs independence, actor Alan Cumming has said. He told Westminster to “get your boots off our necks”. (The Times £)

• Alan Cumming - the pied piper bringing stars to Pitlochry (BBC)

AROUND THE UK & WORLD

📣 Japan’s prime minister, Sanae Takaichi, is sparking concern about her commitment to improving her nation’s poor work-life balance after she claimed she is getting by on two to four hours’ sleep a night. She also alarmed aides by summoning them to her office for a 3am meeting. (Guardian)

• A group of lawyers representing victims of “karoshi”, or death from overwork, had previously demanded Takaichi retract remarks that people should “work like a workhorse”, and a promise that she would “abandon the idea of work-life balance” and “work, work, work, work and work”. (The Mainichi)

📣 Russia has unleashed a huge attack on Kiev overnight, hitting “every district” of the city and sparking huge fires. (Guardian)

📣 Doctors in England have begun a five-day strike over pay. But NHS England says patients should still attend appointments, unless told otherwise. (BBC) 

📣 Investors have been dumping tech shares after relief about the end of the US government shutdown gave way to concern about a flood of delayed economic data, and the huge valuations of technology giants. (🎁 WSJ - gift link)

📣 Fossil fuel lobbyists outnumber all but one of the national COP30 delegations, according to anti-pollution campaigners. (Guardian)

SPORT

⚽️ Scotland’s players can write themselves into the history books in the days ahead: we are two games away from our first World Cup finals in 27 years.

Steve Clarke’s men need to avoid defeat in Greece tomorrow to set up a winner-takes-all clash with Denmark next Tuesday at Hampden.

But the Scotland manager will be looking for a win: “The best way to get something out of the game is to go for the three points," he said. (BBC) (Scotsman) (Mail)

⚽️ England eased to a 2-0 win over Serbia to maintain their perfect World Cup qualifying record. (Guardian)

IDEAS
From the weekly magazines: How do you fix the BBC? The depth of Starmer’s trouble. The odds of a recession.

🗣️ How do you fix the BBC? That’s the headline on a piece by Rod Liddle, former editor of Radio 4’s Today programme and now noisy critic of much of the BBC’s output. But really he only diagnoses the problem. And the scale of that problem was confirmed, he said, on Monday - the day after Tim Davie and Deborah Turness resigned.

“This was an organisation in utter denial,” he writes. “It began with Nick Robinson, puffed up with even more pompous self-regard than normal, treating Today listeners to a psychedelic monologue in which he disappeared down several capacious rabbit holes, jabbering about a sort of palace coup at the BBC, an assault by sinister right-wing forces."

“In doing this, Nick handily confirmed the case for the prosecution […] the BBC is a tad partisan.”

The two big problems, says Liddle, is that - first - the BBC “has been captured by the identitarian left and on every issue in the culture wars is firmly in that camp,” and a workforce “which is almost monocultural, incapable of seeing that their worldview is political”.

Second, BBC bosses “have become immune to all criticism and simply ignore it. They hunker down and continue doing exactly the same thing, dismissing all objection as mischief-making and repeating the mantra: we are not biased.”

Not, one thinks, any more. (The Spectator £)

🗣️Does Keir Starmer realise how much trouble he’s in? That’s the question posed by The New Statesman, and the answer, it strongly suggests, is “no”.

“If contempt is the single biggest predictor of a relationship doomed to fail – to borrow from American marriage psychologists – then Keir Starmer is in trouble,” writes Ailbhe Rea, the magazine’s new political editor.

“Behind the Prime Minister’s back in the Parliamentary Labour Party, there is now widespread mockery, sarcasm, name-calling and the darkest of gallows humour. As one despairing MP put it to me, if this is a marriage, the two sides have reached the “staying together for the kids” stage.”

Rea also sheds light on the workings of Number 10. The Prime Minister, it is said, has brought his previous experience of running a huge organisation to the work of leading the country.

It means he doesn’t want to get lost in the weeds of policy, or adjudicate between officals. He wants them to reach a consensus before bringing him a decision to sign off.

Insiders tell Rea “the decision-making process can end up ‘infantilising’ the premier.” (The New Statesman £)

🗣️ “If America’s stock market crashes,” says The Economist in a leader, “it will be one of the most predicted financial implosions in history.” And, it adds, it looks ready to crash.

But what will that actually do to the world? A big fall in stock markets would not bring about a broad financial crash, it says, because the AI boom which is underpinning the current stock bubble is not funded by complex financial engineering. “Today’s AI euphoria has been mostly equity-financed,” it says.

But that does mean any losses will hit American consumers hard, because around 21% of the country’s household wealth is tied up in stocks. That fall in stock markets would cause a recession in the US that would spill over “to low-growth Europe and deflationary China”.

Of acute interest to Rachel Reeves, perhaps: “A recession would also put indebted governments everywhere to a stern fiscal test,” says the newspaper. “It is hard to imagine markets affording France or Britain, say, much space for stimulus.”

Whatever Rachel Reeves announces in her budget later this month, you can be sure this is a scenario that’s been discussed as her speech is pieced together. (The Economist £)

👍 That’s your Early Line for the day

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