is and kamala harris and donald trump are continuing their last minute appeal to voters in swing states with just two days to go until america goes to the polls. now on bbc news newscast. newscast. newscast from the bbc. hello, it's laura in the studio and simon jacques in the studio with laura. and it'sjames in glasgow. so undoubtedly this has been, as you said, simon, an absolute whopper of a budget. the government is well aware they still need to explain it. they are still making the argument, as they would say. and rachel reeves has been on lots of visits already. she was with us this morning, and that central question that keeps coming back and still hasn't gone away is what the impact of this

national insurance change for employers is going to be. notjust because it is going to be hard for a lot of businesses to swallow it, but also because in the election, they were not explicit that this was their plan. and rachel reeves is really dancing on a pin trying to say she didn't break her promise. yeah. i mean, having to go back with real kind of semantics about the labour manifesto, which you've talked about a lot of times about we're not going to touch national insurance. well, we are going to touch national insurance, just not the one that you as an employee will see in your pay slip. a nevertheless, the office for budget responsibility, who are the final, if you like, but it's the acid test of this budget, have said that ultimately, this massive burden they've placed on business will be borne three quarters by employees in the form of lower real wages, because they think the spending is going to push up inflation a bit. it's going to mean that

your wages, your wage rises don't go that far. and also the obr said that they think that it's going to push interest rates up a little bit further than they would have been otherwise. and that, you know, matters to the bank of england and matters to everyone who's got borrowings, whether it be mortgages or whatever. are the bank of england going to cut rates and make them cheaper as quickly as they previously thought? so that's the real world impact. and the law of unintended consequences, right, might be absolutely enormous. so it gives the chancellor a huge chunk of change to put into public services to spend on all sorts of different things. but there might be all sorts of things that happen, potentially even job cuts. actually, one business leader was saying to me, they might have to look at their headcount. and actually, if you end up with lower wages and people losing theirjobs, that can be traced to her decision, that might end up feeling pretty awkward. but this was how she defended it this morning. it's not possible to raise i £40 billion worth of taxes to bring stability backi to our public finances. you could have done it elsewhere and you've put it on business. we've made our choice. we made commitments in our manifesto not to increase - the key taxes that . working people pay, income tax, employee -

national insurance and vat. and we stuck to those i manifesto commitments, as well as not raising fuel duty and not freezing - the threshold... we'll come to that in a second, whether that was a promise you kept. well, her defence is pretty simple, isn't it? her defence is, i did not know the real extent of the public finances, which were hidden from me and from the public and from parliament before i got into office. it's a charge that the conservatives continue to reject and say is inherently unfair, and there is a dispute about the extent to which there was an uncosted spending in the promises of the previous government. but if we roll back a few minutes, what we have to think about here is that the chancellor made a political decision to try to get elected, along with the prime minister, now, keir starmer to say, i will rule out the vast chunk of taxes going up, whatever i find when

i come into power. and that was at a point when everybody was saying that the new government will have to fund the public services, will have to find some money somewhere to fund the public services. if you're an economist and you're not interested in politics at all, if all you care about is pure economics, you might well look at that and say, this is mad to tie your hands in such a way, to bind your hands, to say there will be no income tax rises, there will be no corporation tax rises. corporation tax rises, there will be no national insurance rises. what's the fourth one? there's a fourth. what's the fourth? vat. no vat rises. that is what, three quarters of the entire tax take of the country. and that any chancellor who says that that is the level of restriction they're going to place themselves under before they get in, is sort of creating trouble for themselves. now, the flip side of that is you could blame the public and say, well, maybe they thought, well, we wouldn't get elected if we didn't say that. ijust think it's interesting that when they talk about the black hole, the £22 billion, we already know that 9 billion of that was self—inflicted, if you like, because

they agreed to higher than inflation pay rises for some public sectors. and what they also said, was that and the obr and others have said, that the national insurance cuts that we saw from jeremy hunt in the last days of the conservative election were irresponsible. so in a way that would have given them a bit of political cover to sort of reverse that, rather than do this kind of slight—of—hand move on businesses. and what businesses say to me is that they say, listen, governments don't grow economies. we grow economies. if you hit me, hit this hard, you're tying my hands behind my back. i'm going to reduce headcount, reduce investment, and that will reduce my growth. it's interesting you say there that the might have been easier to reverse that, cut to national insurance. treasury officials suggested that to rachel reeves. they put that on the table and said, do this, chancellor. you get loads of money and potentially...|�*m speculating about this bit, but potentially they were saying you could make it a political sale and just say you're writing a mistake of the last lot.

she, however, refused to do that because they wanted to protect, guess what? those working people, whoever they may be. we might have a much clearer idea if they are, but that was a choice that they could have made. the other and a decision that they didn't take. but it was interesting this morning, as well. the pollster was with us, who's been doing since the budget in downing street, labour's focus groups, they are saying, oh, we think we've got the public on board. we think we've pretty people understanding what they're doing. there's no outrage. it's all pretty much 0k, although there is some anxiousness around the edges. but he told us this morning one word that had been used by people a lot about the budget was sneaky. now, people don't like politicians being sneaky, especially when it's a group of politicians who spent two years saying, we're not like that lot, we're squeaky clean. we're going to tell you the truth, we're

always going to be honest. and ijust wonder, james, if this mightjust, this early in a parliament, give this kind of impression that they're not being quite straight with people? i think it's a real problem. it's a real problem for the government, and it's a real problem for any future labour party campaigning in any future general election, because any time labour now stands up and says we are guaranteeing you we will not raise taxes on a, b and c, this will be brought up by the opposition, by the conservatives and by others. and i think the other side to this, of course, let's not forget is we're just talking here about raising the money, about tax. there is a decision that is a choice on the other side from the government as well, about how big the state should be, and we've seen a real move in that direction in the last few weeks, haven't we? i think that we are seeing labour committing to a, in theirview, i imagine, permanently larger state than we have had for some time, perhaps a move towards a more european model. you've written about this, laura, this week, about the potential reset. i'm glad someone read it!

it was very interesting, and if you haven't been lucky enough to read my piece on the website, it's, you know, forfor a long time in this country, politicians of almost all stripes actually said, look, we can sort of have lower taxes or we can move towards lower taxes, but we can have public services that are as good as they are in every other european country. there was this kind of we can have a bit of the low tax dynamism of america, and we can have the high quality of public services that you see in some european countries. i think this week, actually, politicians on both sides have said, you know what? we can't have it all. if you want great public services, that means big taxes, big spending, big borrowing. if you want norway, denmark—style public services, you need norway, denmark, french or oilfields. not that we're quite there, simon. no, no. but even after this, i think it's a really important point, because, you know, there's a structural shift here in terms of the size of the state, and that may be

dictated by the fact that we have an ageing population, we've got a sicker population. and if you want that to be catered for in a kind of european—style way, you need european style taxes. and even after these tax rises, it puts us kind of middle of the pack, in terms of oecd countries, we've gone from, you know, sort of 16th to 14th in terms of higher taxes, something along those lines. and i think there's another interesting structural shift here, which is that if you look at the kind of things that were taxed in this budget, things like shares, capital gains, things like property, whether it be intergenerational farmland transfers, which maybe we'll get into. if you look at the fact that pension pots are now being put within the orbit of inheritance tax, those are generally taxes on older people, the boomers, who've got all the money, all the property, all the pensions, all the wealth. there's going to be this migration of that wealth to the younger generation as they begin to enter the twilight or end of their lives. and it seems to me that the government wants to be, if you like, the crocodiles in that river, as the wildebeests go across the plain and in their great migration, and they want to pick them off as they go through and use that money to give the younger people a better start in life with big increases

in national living wage. but there is a profound, very...there are two real economic and political risks to that. the economic risk is that businesses will say, i'll take on fewer people, cut their hours, invest less, grow less, just not try and grow as much as i wanted to. and the political risk is that when you start tampering with people's pensions and and their inheritance and all that kind of stuff, you start wondering whether people who are 65 and older, who may or may not have voted labour this time around, will vote labour next time round. so there are some big risks about this approach. definitely. and rachel reeves did not want to touch this with a bargepole, but i suggested that she was a lot about this budget that hinted at class. harder to to pass on property, harder to pass on your pension, charging people more to go to private school, putting a tax on private jets. now, rightly or wrongly, some newscasters think might think, absolutely. damn right, that's what i voted for. some people might say that's an attack on aspiration. but it is there whether or not

labour will actually say yes, it's a class—based budget. of course, they're not going to say that, but the signs are there. and one of the areas where i think they are vulnerable is the move that they've made to make it harderfor some farmers to pass on their land to their children. and we've had a voice note from an edinburgh farmer from your part of the world, james, john, who's been in touch. he farms venison... 0h, delicious and cheap too. let's listen to him. hi. as an industry, we're losing historical levels of public. financial support whilst trying to switch to a food _ production model that is more environmentally. and economically sustainable. so the removal of apr relief against this - backdrop is so devastating, i because farmers will now have to hold back investment in the land to prepare . for an iht bill that - threatens the very viability of the enterprise. james, do you want to take that on? well, yes, but that involves explaining the acronyms, doesn't it?

so agricultural property relief. and a higher inheritance tax bill. that's what we're talking about. and this is this has been a pretty controversial area of the budget. farmers, some farmers at least are up in arms. there's a protest planned in a couple of weeks' time outside westminster, where the farmers are coming. i don't know if they'll be bringing tractors or what that will look like. but i'm sure they will. the national farmers' union knows a thing or two about a photocall. there'll be cute baby lambs, as well. exactly. there'll be all of that, presumably, because some farmers are very unhappy about this imposition on some farms of inheritance tax at 20%, half the rate that applies to some other people, 40% at death. now, the chancellor, i thought, struggled somewhat to explain the mitigations that she says she has put in place when you challenged her on it. the £1 million allowance that a couple has before

agricultural property relief will exist for her family. . in addition to that, the individual claim - for agricultural property relief is £1 million now. | but if the farm is- owned by two people. then of course you could then transfer that allowance - to the other person. so you can pass on- without paying any tax, for most cases, a farm worth £3 million. - after that, the tax rate for inheritance tax - for agricultural property. is 20%, compared to 40% that everyone else pays. and you can pay that over a . ten—year period interest free. interesting this one, because there's been a lot of to—and—fro on this issue. dan needle, tax expert guru, very useful man, he does a lot of number crunching so i don't have to" he says that actually a lot of farms won't end up paying this.

but i talked to a senior official at the nfu at the end of last week, and it was quite interesting what she said. she said that this policy has all the hallmarks of the dead hand of an urbanised civil service. a service who doesn't understand how the countryside works and the reason there were these inheritance tax breaks which is a very old one, which is that you don't want to have to start parcelling up land in a divvying up, you know, into parcels, into field sizes that become uneconomic. and so in that sense, that being able to pass on a farm in whole is good for the future of food, food security. and that was one of the things they talk about. the point that i didn't think the chancellor made effectively there is, as simon says, as i understand it, from reading various bits of analysis, around two—thirds of the uk's 209,000 farms will not be affected by this. as she said, in some circumstances, the level at which it kicks in will not be £1 million worth of assets, £3 million of assets, and you can pay it

back over ten years. she did make that point. i mean, the otherthing she didn't mention, though, is that this only applies if you pass on the farm at death. there's some discussion that if with more prudent estate management that if you pass your farms on to your children when you're younger, that's a very... it's taking a bet on when you're going to die. that basically boils down. to, to be fair, if you die within seven years of passing it on. iht can be managed with your apr. very good acronym acronym salad. but also there are there is talk about and you'll know this better than me laura, that at the moment that you know, any gifts you give...seven years before you die are not eligible for inheritance tax. but there's talk about extending that to ten years. and actually, you know, who knows? i mean, there's a rather grim thought. we get run over by a bus

when we leave the studio today. goodness me. let's hope not. i mean, it's very nice having you two of you with me on sunday newscast. i don't want it to be the last time that we three are together. what's interesting to me, though, about it is from a political point of view, you know, this is not a massive unravelling of the central part of the budget, but it does seem to be something to me where they've slightly dropped the ball politically. not because i think they would have made a different decision. i think that the treasury team is actually very confident in the decisions and the choices that they've made, but the kind of political sell on this, james, which you were hinting at, this could have been sold very hard politically. like, look, this is a basically a loophole that a tiny group of very wealthy people use. and we were going to be really clear that we're protecting the vast majority of people. they've actually ended up with, oh, this is a bit of a kind of surprise row, but i think what's really clear, and i think it was clear from rachel reeves, she kept using the phrase today, "we made our choices." and part of what they're doing here is overtly wanting to shout about the people they have picked to protect, which would be

the word they would use. other people might feel differently, and that they believe, is what they think they've made the right choices, but they also think they've set up lots of traps for the conservative party, because who is a brand new conservative leader is going to say, oh, well, i want to protect the wealthy, restore tax. restore tax breaks for the wealthy. make it easier for people to buy second homes, make it cheaper for people who are wealthy people to pass on thousands of acres. so they've been doing so many things this week. massive budget, massive measures, lots for the economy, lots for the politics. but part of it is setting traps for their opponents too. because talking of traps, you were putting some of those traps to to her. and this was that her first ever proper interview since she took over the leadership? it is, it is. i mean, it's not even 2a hours ago that she got the job. so i think it was fair that it was her first interview. but yeah, so herfirst interview on her first full day in the job as the brand new opposition leader. so what does that mean then? you say we have to think about

the economy in a different way. what might that mean? what might that look like? so thinking about the economy in a different way, in my view, | is going to be completely the opposite of what - rachel reeves is doing. so we start with principles, l notjust throwing out policy. when we start off with how much i are we going to take off income | tax or employee - insurance or put on, i think that people - don't understand what we're trying to do. start with principles. so one of them is that it is not the government l that creates growth, it is that business i creates growth. it's business that - creates those realjobs. and how do we make life easier for business so that they can i help grow the economy so that people can invest, _ so that people can take those risks that help us to be more productive? is it clear, do you think, simon, to business, what a kemi badenoch conservative party might mean for them? i don't think it is yet. i think we haven't heard much about policy detail. quite deliberately shied away from giving detail. yeah. i mean, i think what they would have loved is to see the wobble

in the financial markets that we saw at the end of last week continue. and it may yet still do that. you saw government borrowing costs, the rate at which they can borrow money, edge up quite sharply after the budget, but nowhere near as much as it did after the liz truss mini budget. but i think financial markets are sensitive. you're borrowing and spending a lot more than we initially thought. the office for budget responsibility says that could actually keep interest rates at least a quarter of a point higher than they otherwise would have been. and that has an upward pressure on government borrowing costs. and bear in mind, this is upward pressure on borrowing costs when they're borrowing a lot more. so both the amount and the rate is going up. so i think that's going to be a big watch. and i thought it was interesting that both rachel reeves did an interview with bloomberg, keir starmer, wrote in the financial times. they're definitely, you know, sensitive to that audience

because things can unravel pretty quickly if the financial markets lose confidence in you. i don't think we're there yet, but i think, you know, they realise they had to sell this deal. and in terms of you watching kemi badenoch's first big interview this morning, james, what did you think... what stood out to you because you know, we covered quite a lot of ground? but what did what stood out to you from watching it? she looked relaxed. i thought, in contrast to rachel reeves, who i mean, that might be just their characters. i mean, rachel reeves is a very sort of upright poker straight, you know, boom, boom, boom serious. and i'm not saying kemi badenoch is not serious, but she seemed much more relaxed and at ease in that environment. i suppose she's less to defend at this stage as well. so in that sense, you know, it's arguably easier. i do think, though, that it was intriguing that she had... you started by saying to her, look, you set out yesterday and that we that things mistakes had been made, that things had gone wrong, that you'd taken, that the party had had got things wrong. let's explore some of that. and she started to engage

until she realised that you were going to go through a whole load of mistakes and a whole load of prime ministers and a whole load of problems. and then she very quickly retreated. and i thought her relaxed, convivial manner didn't really last very long when she decided she was actually going to object to the line of questioning. relaxed and convivial are two words i don't usually hear about kemi badenoch. i have to say, a senior civil servant told me that she could...not an original line, but an interesting one, she could start a fight in an empty house and is well known as being pugnacious. and i suppose you know, laura, the real question is, can she unite the right? yeah, that's her biggest, you know...both unite the right by bringing the splinter group, which is reform at the same time, stop the leaking of the votes they lost to the lib dems and labour. and it really is an open question. so so far the diagnosis that she will say is that they, you know, talked from the right but governed from the left, except the country just voted for a lot more from the left. thank you very much. so while that message went down with conservative party members, is that a message that the public wants to hear right at this moment in time?

so who knows. but it was interesting. you know, she stood on the platform yesterday and said, it's time to tell the truth lots of times. and then this morning she would not... and i said, well, you know, what was the truth about what went wrong with liz truss? and she just wouldn't engage at all, although she would engage on boris johnson. and she said, well, partygate was overblown, which i think some newscasters might find an interesting suggestion, and then she said there wasn't proper honesty around the chris pincher scandal. butjohn, newscast listener in devon, hello, john. thank you for listening. he says, thank you for grilling the new leader. as a lifelong conservative supporter, i'm saddened she didn't want to answer questions on what went wrong for the conservatives. defensive and arrogant, frankly, and i won't be supporting them again. so, you know, it's interesting. some politicians believe actually, if they kind of turn a question or try to turn an interview on the person in the opposite chair and say, well, i'm not going to get into that because i want to talk about something else, they think actually that plays well for the audience sometimes, because we're all well aware that sometimes our viewers and listeners are throwing things at the telly and saying, oh, you shut up,

but it's sometimes it's counterproductive. and john here is saying, actually, i'm not impressed by that at all. interesting. very interesting. and i'm sure other newscasters take a different view. and we'd be delighted to hear from you. but whether or not she wants to answer the specific questions line—by—line from you right now, though, laura, she is going to have to answer them in terms of how she moulds the shape of her party, isn't she? that will provide an answer to those questions. what went wrong by defining how she thinks it should go right, and so she'll have to answer them in the end if she's to, as she says, she is going to be, frank. if she's going to be frank as she says, she will be with the public. and that also applies, as you, again, were drilling into with her this morning, to what she does and doesn't oppose specifically in the budget. i mean, she was ultimately... she pretty much said that all opposition parties vote against budgets. and therefore, you know,

she didn't say the actual words, we will vote against the budget. but it was clear that's what she meant. but if you want to have a smaller state, you need to explain to the public which bits of it they're not getting any more. and that is tricky. but a big few days here is about to be followed by a couple of absolutely blockbuster days, maybe a couple of blockbuster weeks in america. adam is in london tomorrow for the monday episode of newscast. but lucky him, he's going off to dc. he's making me feel very nostalgic for american elections in days gone by that i was lucky enough to cover. me too. you too. but anyway, adam will be there on tuesday in dc. huge week, 48 hours to the polls open in the united states. so wow, what a week it's going to be for newscast, and of course, our friends at americast. so, you know, treats for your ears, news for your eyes. huge headlines on the way. but thank you, simon and james. it's been lovely having you. what a nice duet to spend my sunday afternoon with. well, it's such a pleasure as always.

you and i are back next weekend, and i wonder if we'll have a result in that presidential election by then. if it's as tight as some people say. who knows, we might be picking our way through the encyclopaedia of obscure us counties, maricopa county, you know, we'll be testing each other on our... i don't believe you. you're making that up. isn't it phoenix? there you go. maricopa, phoenix, arizona. amazing. you've earned your stripes more than. what a campaign it's been. we've had a change in personnel and assassination attempt. and right the way through, it's been neck and neck. it's gripping. really, really gripping and enormously important. ok, i think that's more than enough from us. thank you for being with us, newscasters. you know you can send your questions in. don't miss adam and our chums at americast in the next few days. and asjames said, he and i will be back next weekend.

but of course, there's tonnes and tonnes in your feed for you to listen to and enjoy. newscast from the bbc. sunshine has been limited for part two of the weekend and this high pressure which will persist with some patchy fog in some area and a bit of drizzle and it will be turning milder towards the end of the week as we get air from the azores. this will come from all across europe so any spells that we have had a gust north will continue tonight as you could see mist and fog here, as well. it will be cloudy elsewhere. temperatures around seven to 10 degrees but some cold spots in the northeast of scotland where skies are clearest. into monday this is probably where we will see the best of the sunshine in sheltered spots of northern scotland and maybe

wales but it will mainly be cloudy and grey with mist and fog in places. a bit of drizzle, too. temperatures around 12 to 14 degrees. that will feel cold because of the damp and cloudy weather. the monday night there is very little change. winds picking up a bit out west but most winds remain light with grey skies and six to 10 degrees temperatures. as we head into tuesday, we start to see winds, from the south with low pressure trying to push on and off of the atlantic. a bit of rain in western areas towards the end of the week. tuesday promises to be a bit dry and winds from the south and we could see some sunshine in north wales. the northern half of scotland could do well in terms of sunshine. may be north—east england but i think for most it is going to be rather cloudy once again. as we head into the middle of the week we could see rain heading up. there will be air coming up from the azores so it

will be milder in the mid to high teens so we could get some sunshine. brightness on wednesday could be in the north—east of scotland and england but otherwise cloudy once again. temperatures creeping up a degree or so maybe 15 or 16 degrees. a similar picture as we head into thursday and friday, probably the best of the sunshine in northern scotland but otherwise it is meant to be cloudy.

live from london, this is bbc news. chants of "murderer, murderer", as spain's monarchs and prime minister visit the flood—ravaged valencia region, where mud is thrown at the king and queen. spain's national weather agency has issued a red weather alert for parts of southern valencia for the next few hours — officials say at least 217 people have died. health officials in gaza say fresh israeli air strikes have killed at least 31 people. the attacks come as unicef condemned the killing of 50 children in the past 48 hours in the territory.

and kamala harris and donald trump are continuing their last minute appeal to voters in swing states, with just two days to go until america goes to the polls. iam i am helena iam helena humphrey i am helena humphrey in the battleground state of north carolina. i will be bringing you all the latest from here on the ground. hello, i'm rajini vaidyanathan. welcome to this our. we begin in spain, where there is a warning of more heavy rain for valencia — the region already suffering after heavy flooding, which officials now say killed 217 people. the country's weather agency has issued a red weather warning, meaning up to 90 millimetres of rain is possible injust one hour.