Category Archives: Tax and spending

Nadhim Zahawi: is new chancellor going to change direction on economy?

Posted on by

Analysis: Rishi Sunak’s successor treading tightrope between spending to keep PM in power and dealing with economic crisis

Should he remain in the job for longer than some political commentators expect, Nadhim Zahawi faces a balancing act as chancellor. He must walk the line between doing what it takes to prevent the political implosion of Boris Johnson’s government, and dealing with the worst succession of economic shocks to hit Britain since at least the 1970s.

As the fourth Conservative chancellor in as many years, parachuted in after Rishi Sunak resigned with a stinging critique of Johnson’s devil-may-care attitude towards tax and spending, Zahawi is expected to face heavy pressure from the prime minister to cut taxes to revive the economy.

Continue reading...

Boris Johnson seeks to defuse row over abandoning defence spending pledge

Posted on by

PM insists manifesto promise of above-inflation increase will be kept despite Downing Street ‘reality check’ briefing

Boris Johnson faces a potential rift with senior ministers and generals at the start of a vital Nato summit in Madrid, after Downing Street indicated it would ditch a key manifesto commitment on defence spending.

In a chaotic sequence of events, a senior government source said there needed to be “a reality check” on the pledge to increase the defence budget each year by 0.5% above inflation, only for Johnson to try to argue it would be achieved.

Continue reading...

Fracking firms could share in UK fossil fuel tax breaks worth billions

Posted on by

Exclusive: Campaigners say funding may provide incentive to restart fracking if moratorium is lifted

Fracking companies are likely to be eligible for tax breaks, potentially worth billions, that the government is extending to oil and gas companies to encourage new exploration of fossil fuel resources.

Combined with high gas prices, the extra funding – which amounts to a subsidy, according to campaigners – could provide a strong incentive to restart fracking operations if a moratorium in the UK is lifted, which could happen as early as this week.

Continue reading...

Queen’s ‘seabed rights’ swell to value of £5bn after auction of plots

Posted on by

British crown estate portfolio rises in value by 8.3% to £15.6bn

The value of rights owned by the Queen’s property company to exploit the seabed around Britain’s coastline has swelled to £5bn after a record-breaking auction of plots for offshore windfarms.

Profits for the crown estate, which generates money for the Treasury and the royal family, jumped by £43.4m to £312.7m in the year to the end of March.

Continue reading...

Covid fraud: how bounce back loans paid for cars, watches and even porn

Posted on by

As details emerge, concerns grow about Treasury’s efforts to recover almost £5bn wrongly claimed

When Keith Hamblett, a fruit and vegetable seller from Tyne and Wear, asked his bank for a government-backed loan in the autumn of 2020, the economy was still in trouble after lockdowns, and coronavirus cases were rising.

The Covid bounce back loan scheme was a welcome relief for many smaller companies, and Hamblett received £28,000.

Continue reading...

Loophole could let North Sea oil and gas giants slash UK windfall tax bill

Posted on by

Critics warn chancellor Rishi Sunak will raise only a fraction of planned £5bn if firms offset new investment against profits

North Sea oil and gas companies that already benefit from huge tax breaks could use fresh rules to slash how much they pay under a new windfall tax announced by Rishi Sunak as part of his £15bn cost of living package, according to a thinktank.

The chancellor risks raising a fraction of the £5bn he expects from the complex scheme – which allows the cost of new investments to be offset against profits – should oil and gas companies take the opportunity to dramatically reduce their contribution to the exchequer, said the left of centre Common Wealth.

Continue reading...

Top Tories say Boris Johnson is ‘plunging party into an identity crisis’

Posted on by

Partygate and U-turns on tax are ‘undermining message’, say Conservative MPs as more call for him to quit

Boris Johnson has plunged the Conservative party into an acute identity crisis as a result of Partygate and U-turns over tax policy, senior Tories warned last night, as more MPs called for him to resign as prime minister.

Former Tory leader Iain Duncan-Smith told the Observer his party had been left with an “enormous identity problem” because it had raised taxes instead of cutting them under Johnson and the chancellor, Rishi Sunak, undermining a core Tory message that had helped win it successive general elections.

Continue reading...

Sunak U-turns on ‘energy profits levy’ in £15bn cost of living package

Posted on by

Chancellor’s measures, including tax on oil and gas companies, criticised as too late and a ‘drop in the ocean’

Rishi Sunak bowed to months of pressure over the cost of living crisis with a £15bn package of support, part-funded by executing a remarkable U-turn to impose a windfall tax on energy companies.

Announcing the measures on Thursday, in a bruising week for the government, the chancellor said his “significant set of interventions” would help the poorest in society – with a one-off £650 payment for 8 million families on means-tested benefits, alongside an extra £200 for all energy bill payers that will not have to be repaid.

Continue reading...

Millionaires join Davos protests, demanding ‘tax us now’

Posted on by

Group call for fresh taxation of wealthy to tackle cost of living crisis and gulf between rich and poor

A group of millionaires have joined protests against the World Economic Forum gathering of the business and political elite in Davos, Switzerland, demanding that governments “tax us now” to tackle the burgeoning gulf between rich and poor.

The unlikely protesters, who describe themselves as “patriotic millionaires”, called on world leaders attending the annual conference on Sunday to immediately introduce fresh taxes on the wealthy in order to tackle the “cost of living scandal playing out in multiple nations around the world”.

Continue reading...

Helping cash-strapped Britons won’t add to inflation, says CBI

Posted on by

Chief of business association calls for stimulus that aids ‘hardest hit’ with rising food and fuel bills

Tackling rising food and fuel bills will not add to inflation and people who are “the hardest hit” need help now, the head of the UK’s biggest business association has warned.

Official figures published on Wednesday revealed UK inflation soared to 9% in April – its highest level for more than 40 years – as the rising cost of gas and electricity pushed household energy bills to record levels.

Continue reading...

Rishi Sunak: windfall tax an option if oil firms fail to invest in UK

Posted on by

Chancellor says he is ‘pragmatic’ about introducing a levy on energy companies to ease cost of living crisis

Rishi Sunak has insisted he is “pragmatic” about the idea of a windfall tax on energy companies, claiming “no options are off the table” in the clearest sign yet that the government is planning measures to tackle the cost of living crisis.

Labour has been calling for a windfall tax on oil firms, which have benefited from rocketing global prices, with the shadow chancellor, Rachel Reeves, suggesting the proceeds be used to cut domestic energy bills.

Continue reading...

Boris Johnson says windfall tax ‘not the right thing’ but refuses to rule out U-turn

Posted on by

The prime minister claimed ‘these kinds of taxes’ deterred investment, contrary to BP boss saying it would not

Boris Johnson has refused to rule out the introduction of a windfall tax which would help to relieve pressure on the cost of living crisis.

Speaking to LBC’s Nick Ferrari, Johnson said that while he believed a disadvantage of windfall tax would be the impact it would have on investment, the prospect of such a taxwas still something to be looked at.

Continue reading...

Revealed: betting giants lobbied UK government over proposed crackdown

Posted on by

Documents show gambling firms warned Treasury officials against tightening up industry laws

Some of Britain’s betting giants are revealed to have quietly lobbied Treasury officials against a proposed industry crackdown, claiming it will cost millions of pounds in lost tax receipts.

Executives representing Bet365, Paddy Power and Ladbrokes met officials from the Treasury and Revenue and Customs, warning a radical overhaul of the industry could drive gamblers to the black market. The meeting was with tax officials rather than ministers and was therefore not required to be automatically disclosed.

Continue reading...

Local election leaflets show Tory candidates are ‘ashamed’ to be associated with Boris Johnson, Labour says – as it happened

Posted on by

Angela Rayner says Tory candidates at the local elections ‘are trying to hide from their own government’s record’. This live blog is closed – please follow this one for updates on the war in Ukraine

Savanta ComRes has published some new polling on voting intention in Scottish parliaement elections. Here are the figures for the constituency section.

And here are the figures for the list section.

Continue reading...

Local government in England ‘hollowed out’ under Conservatives

Posted on by

Major report finds poorer areas worst affected by deep cuts in government funding

Poorer areas have been hit disproportionally by a combination of cuts to neighbourhood services such as parks, libraries, refuse collection and children’s centres that have left English councils “hollowed out” since 2010, a major report into local government has concluded.

The study by the Institute for Government thinktank found that while some councils coped better than others, and reduced spending did not necessarily mean worse results, a lack of information made it difficult to learn lessons.

Continue reading...

Kwarteng and Sunak at odds over windfall tax on oil and gas profits

Posted on by

Government sources play down idea of cabinet split as business secretary quashes idea recently mooted by chancellor

Government sources have played down the idea of a cabinet split over a possible windfall tax on energy companies as the business secretary, Kwasi Kwarteng, firmly quashed the idea, days after it was mooted by the chancellor.

In a search for solutions to a crisis over energy prices, and the cost of living more widely, Rishi Sunak said a windfall tax, as advocated by Labour, was possible if energy companies did not properly reinvest bumper profits.

Continue reading...

UK politics: Starmer accuses Sunak of taxation ‘hypocrisy’ – as it happened

Posted on by

This live blog is now closed. You can see some of our latest politics stories below:

At the Downing Street lobby briefing the No 10 spokesperson confirmed that Lord Geidt, the independent adviser on ministerial standards, would be conducting an inquiry into Rishi Sunak’s declarations of interest. Sunak requested one last night – but Geidt is only allowed to launch an inquiry with the permission of the PM, which has now been given.

But the spokesperson was unable to confirm that the inquiry would cover Sunak’s decision to retain his US green card after he became a minister, and even while he was chancellor. It is reported that he only gave it up last October.

Continue reading...

Sunak asks PM for investigation into his own financial affairs

Posted on by

Entry on the list of ministers’ interests does not mention his wife’s £690m stake in Infosys – which has UK government contracts

Rishi Sunak has written to the prime minister to ask for an investigation into his own affairs after days of criticism over his wife’s “non dom” tax status and lack of transparency over their financial affairs.

The chancellor wrote to Boris Johnson asking him for a referral to Lord Geidt, the independent adviser, requesting a review of all his declarations since becoming a minister in 2018.

Continue reading...

Labour accuses Sunak family of avoiding tens of millions in taxes

Posted on by

Chancellor obfuscated while imposing steep tax rises on ordinary Britons, says shadow minister

Rishi Sunak and his family potentially avoided paying tens of millions of pounds in taxes through his wife’s “non-dom” status while the chancellor imposed tax rises on the public, Labour has said.

The chancellor’s wife, Akshata Murty, gave in to mounting pressure on Friday, announcing she would pay UK taxes as Sunak’s position began to appear increasingly tenuous.

Continue reading...

Five key questions Rishi Sunak and Akshata Murty have yet to answer

Posted on by

Analysis: While the chancellor says his wife paid all UK taxes due, pressure is building over what he hasn’t said about their finances

Rishi Sunak is under huge pressure over his financial affairs and those of his wife, Akshata Murty, the daughter of an Indian billionaire who made his money in IT. These are the key unanswered questions:

Continue reading...