Category Archives: Tax and spending

Rachel Reeves due to appear at gambling lobbyist’s event amid tax review

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Chancellor’s invitation criticised as ‘strange timing’ with Treasury looking at whether to raise duties on £12bn sector

The chancellor, Rachel Reeves, has been urged to cancel plans to be the guest of honour at an event hosted by the chief lobbyist of the gambling industry while the Treasury is in the midst of a review of taxes on the £12bn sector.

Reeves is slated to appear at a “private reception” for business leaders, organised by the corporate communications company Brunswick, at the forthcoming Labour party conference in Liverpool.

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Taxpayers lose £400m as result of investment fund set up by Rishi Sunak

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Report shows 334 companies backed by Future Fund, set up in May 2020 by then chancellor, have since gone under

UK taxpayers have lost £400m following the collapse of hundreds of startups backed by a heavily criticised Covid-era investment fund launched by Rishi Sunak when he was chancellor.

The Future Fund spent £1.14bn backing 1,190 companies, some of them of types not usually associated with government portfolios such as the sex party organiser Killing Kittens and the now defunct festival tickets business Pollen.

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Business rates rise would put hundreds of big shops at risk, say UK retailers

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Concern for ‘anchor tenants’ as trade body warns that stores could put up prices or cut jobs to protect profits

Up to 400 large shops are at risk of closure with as many as 100,000 jobs at risk if the government goes ahead with plans to hit stores with higher business rates, retailers have warned.

Some of the UK’s largest retail premises, including supermarkets and department stores, would face higher property tax charges under new rules being considered by the government before November’s budget.

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Greece announces €1.6bn relief package to tackle population decline

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Government to use tax breaks and other financial incentives to encourage people to have more children

Greece has announced drastic measures, including tax breaks and other financial incentives, to address a population decline that is on course to make it the oldest nation in Europe.

The prime minister said the €1.6bn (£1.4bn) relief package had been dictated by one of the biggest challenges facing the Mediterranean nation : a demographic crisis of unprecedented scale.

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UK chasing £90m in taxes from temp staffing firm rescued from insolvency

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The £18m deal to acquire Challenge Recruitment Group assets from administration repaid private funders in full

The UK exchequer is chasing about £90m in unpaid taxes after a temporary staffing business was rescued from insolvency proceedings in an £18m deal that reimbursed private funders in full.

The main assets of Challenge Recruitment Group, which counted Tesco, Sainsbury’s and Co-op among its top customers, were acquired from administration in July by the US website swipejobs, in what appears to be the second time the British staffing business has emerged from insolvency while owing tens of millions of pounds to the exchequer.

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UK bank shares tumble after call for windfall tax on lenders in budget

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Investor jitters follow report by IPPR, with stock market value of sector cut by almost £8bn in morning trading

UK bank shares tumbled on Friday, cutting the stock market value of the sector by almost £8bn in morning trading, as fresh calls for a windfall tax on large lenders in the autumn budget spooked investors.

Calls for a tax grab, in a paper written by the Institute for Public Policy Research (IPPR) thinktank, took a toll on some of the UK’s biggest high street banks. NatWest Group suffered the biggest drop on Friday morning, registering a decline of as much as 5% in its share price, while Lloyds Banking Group and Barclays followed close behind, falling 4.5% and 3.6% respectively. HSBC dropped more than 1%.

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Treasury targeting inheritance tax reforms to help plug UK deficit

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Exclusive: Chancellor also looking at tweaks to capital gains tax to try to bridge £40bn-plus spending gap before budget

The Treasury is looking at ways to raise more money from inheritance tax amid growing pressure on the country’s finances ahead of the autumn budget, sources have told the Guardian.

Officials have been tasked with examining whether tightening rules on the gifting of money and assets could be one way of addressing a gap between revenue and spending that is estimated to reach more than £40bn.

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UK politics live: Gordon Brown calls for extra defence spending to be exempt from fiscal rules

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Former PM says ‘exceptional’ aim to spend 5% of GDP should be a joint Nato and European initiative financed via bonds or a defence fund

This is what Gordon Brown said in his Today programme interview when asked to give more details of his plan to exempt from extra defence spending from the fiscal rules. He said other European countries were already looking at this, and that having a European-wide initiative would persuade the bond markets that in this case the rise in borrowing was justified. He said:

If you look around Europe at the moment, you’ll see that the Germans are looking at what they can do outside the fiscal rules. The European stability and growth pact is exempting a lot of defence money from the normal fiscal rules. The French are looking at other ways of doing it. The Polish have already done that.

What I’m actually asking for is a European-wide initiative where individual countries will come together and say, Look, we all have to do this. We all have to find, let’s say, an extra 1%, because 5% of course is building on some of what’s already been spent.

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Starmer declines to rule out election pledge-breaking tax rises in budget after claim Treasury must fill £40bn deficit – as it happened

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Prime minister defends government’s handling of economy but will not give assurances over not raising income tax, employee NI or VAT

Ed Davey, the Liberal Democrat leader, has urged Keir Starmer to call Donald Trump to encourage him to use his influence to block Israel’s plans for a “full occupation” of Gaza.

In a statement, Davey said:

[Israeli PM Benjamin] Netanyahu’s latest proposals for the occupation of all of Gaza are utterly horrifying.

If realised, they will only wreak yet more destruction on Gazans - while gravely endangering the lives of the hostages still held in Hamas’ captivity.

I see NIESR is talking today about a £41.2bn hole in the UK public finances

Two things are newsworthy:

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Rachel Reeves needs to put up taxes to cover £40bn deficit, thinktank says

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NIESR suggests a rise of 5p in the pound on basic and higher rate of income tax would fill the budget gap

Rachel Reeves will need to raise taxes to close a government spending gap that is on course to reach more than £40bn after a slowdown in economic growth and higher-than-expected inflation, according to a leading thinktank.

In a blow to Labour’s hopes of balancing the books without breaking manifesto commitments ruling out personal tax rises, the National Institute of Economic and Social Research (NIESR) said a number of factors would knock off course the chancellor’s plans to stay within Whitehall spending limits.

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Starmer and Reeves should consider wealth tax, says former shadow chancellor

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Anneliese Dodds urges government not to duck ‘big decisions’ in autumn budget

The Treasury should consider a wealth tax to close the growing gap in the public finances, according to a Labour former shadow chancellor.

Anneliese Dodds, who held the role under Keir Starmer in opposition, said ministers must have a “full and frank discussion” with the public about the “really big decisions” they had to take at this autumn’s budget.

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HSBC boss says Rachel Reeves putting up bank taxes would harm UK growth

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Georges Elhedery’s comments come amid speculation the chancellor could make such a move in autumn budget

The boss of HSBC has joined a growing chorus of bankers cautioning Rachel Reeves against increasing taxes on banks in her autumn budget, warning it risked “eroding” investment and ultimately harming UK growth.

Georges Elhedery, its chief executive, said banks in the UK were already subject to the highest level of taxes on profits compared with other sectors, and paid more than in most other countries. He said placing further financial pressures on lenders could spell trouble for the UK economy.

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Treasury minister says ‘headline’ rate of income tax won’t go up, in hint thresholds might be frozen in budget – UK politics live

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Darren Jones also declines to rule out wealth tax when questioned about government plans

In an interview with the Times, Andrew Bailey, governor of the Bank of England, says firms are “adjusting employment and hours” in the light of last year’s rise in employer NICs. That sounds like a euphemism for cutting jobs. But he says, if the labour market slow down, the Bank may respond by cutting interest rates more aggressively.

Asked about this comment in an interview on the Today programme, Darren Jones, chief secretary to the Treasury, played down the impact of the budget. He said:

There’ve also been hundreds of thousands of new jobs created across the economy, and in the first quarter of the year [we had] the fastest growing economy in the G7, so we’re doing everything we can to create conditions for businesses to be profitable and to be able to grow.

Of course, we had that particular tax decision in the budget last year, because our commitment was to protect working people in their pay slips. And I recognise the independence of the bank governor.

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Labour should raise national insurance in autumn budget, says Ed Balls – UK politics live

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Former chancellor says employees’ contributions should rise to help address a £6bn shortfall caused by recent U-turns

The Unite union has voted to re-examine its relationship with the Labour party in the light of the government’s failure to support its members in the Birmingham bin strike.

It has also said it was suspending Angela Rayner’s membership, given her role as minister in charge of the department that oversees local government. The union is in dispute with Birmingham city council over proposals to reorganise waste disposal services in the city, and Unite has repeatedly said the government should step in and force the Labour-led council to settle.

Unite is crystal clear it will call out bad employers regardless of the colour of their rosette. Angela Rayner has had every opportunity to intervene and resolve this dispute but has instead backed a rogue council that has peddled lies and smeared its workers fighting huge pay cuts.

The disgraceful actions of the government and a so-called Labour council, is essentially fire and rehire and makes a joke of the Employment Relations Act promises.

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Minister won’t rule out support cuts for children with EHCPs amid Send overhaul – UK politics live

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Stephen Morgan, the early education minister, would not confirm every child who has an EHCP would continue to keep the same provisions

The Conservatives will try to change the government’s welfare Bill to tighten up access to personal independence payments (Pip) and universal credit, PA Media reports. PA says:

Kemi Badenoch will pledge that the Tories are “now the only party committed to serious welfare reform” after Keir Starmer shelved plans to restrict eligibility for Pip in the face of a backbench revolt this week.

The Tories will look to lay amendments to the legislation – set to be renamed the universal credit bill – and party leader Badenoch is due to deliver a speech on welfare on Thursday.

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Keir Starmer should be bold and consider a wealth tax, Neil Kinnock says

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Former Labour leader says government needs a better narrative and risks being bogged down by ‘imposed limitations’

Keir Starmer’s government is suffering from a “lack of narrative” about what it is trying to achieve and should be more fiscally bold and consider a tax on wealth, Neil Kinnock has said.

The former Labour leader said too many of the government’s achievements were being overshadowed. A year after a landslide election win, the party is struggling in the polls and has U-turned on policies including cuts to winter fuel payments and welfare.

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Trump’s big bill achieved what conservatives have been trying to do for decades

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The Republican fantasy of lower taxes and hard-to-access social safety net programs will now be a reality

For decades, Republicans have argued that the US would be better off if taxes were low, and programs to help low-income Americans were harder to access. With Donald Trump’s marquee tax and spending bill now set to become law, the country will find out what it’s like to live under that sort of system.

The massive legislation that Trump plans to sign Friday will make his campaign promises a reality by extending tax cuts enacted during his first term, and creating new deductions aimed at the working-class voters who backed his re-election.

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Minister declines to rule out tax rises after welfare concessions – UK politics live

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Pat McFadden says there will be ‘financial consequences’ to Keir Starmer’s climbdown amid renewed speculation over Labour’s budget plans

Helen Miller, the new head of the Institute for Fiscal Studies thinktank, said the lack of savings from the personal independence payments (Pip) changes made tax rises “increasingly likely” at the budget and that the chancellor, Rachel Reeves, now had “very little wriggle room”.

The welfare bill as it stood would now not create any savings, she told Today:

By the end of this parliament the government will save nothing.

After govt’s 11th hour 59th minute climbdown over Pip it’s time for Reeves to go back to the drawing board and look for fairer and more sensible ways to raise money – like a wealth tax on multimillionaires and billionaires to raise up to £24bn a year.

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Welfare bill climbdown will have ‘a cost’ at budget, says senior minister

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Pat McFadden says U-turn will change calculations, as IFS says tax rises in autumn look increasingly likely

There will be “a cost” to the government’s climbdown on welfare changes at the budget, one of Keir Starmer’s senior ministers has said, as a leading fiscal thinktank said new tax rises appeared increasingly likely.

Pat McFadden, the chancellor of the Duchy of Lancaster, defended Starmer and the work and pensions secretary, Liz Kendall, after the second reading of the government’s main welfare bill passed its first Commons test only after a central element was removed.

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UK borrowing rises to £17.7bn, adding to pressure on Rachel Reeves

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May figure second highest for month on record amid fears chancellor is struggling to keep within spending rules

Higher tax receipts were unable to prevent a rise in public sector borrowing in May to £17.7bn, up from £17bn a year earlier and the second highest for the month on record.

A poll of City economists had forecast public sector net borrowing – the difference between public spending and income – would be £17.1bn.

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