Category Archives: Public finance

Autumn statement: Jeremy Hunt looks to cut UK taxes and ‘turbo-charge growth’

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Amid less gloomy OBR forecasts the chancellor is expected to take first steps towards cutting personal taxes

Jeremy Hunt will announce 110 measures to boost Britain’s stagnant economy and bow to demands from anxious Tory MPs for tax cuts when he delivers his second autumn statement on Wednesday.

In one of the last set-piece economic events before the general election, the chancellor will pledge to “turbo charge” growth while taking the first steps to cut personal taxes after recent sharp increases.

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Hunt urged to invest £30bn a year in infrastructure or risk ‘decade in doldrums’

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Thinktank says stronger than expected tax revenues have given chancellor scope for bold package in autumn statement

Jeremy Hunt risks condemning Britain to a decade in the doldrums unless he uses this month’s autumn statement to announce a £30bn-a-year investment plan to upgrade public infrastructure, a leading thinktank has warned.

The National Institute for Economic and Social Research (NIESR) said the chancellor should ignore calls by Tory MPs for pre-election tax cuts and instead focus on measures to boost growth through improvements to transport, digital networks, skills and housing.

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Councils ‘on their knees’ as they face record £3.5bn funding shortfall

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Research finds 114 councils in England, Scotland and Wales facing budget gaps of more than £10m

Councils are facing a record cash shortfall of more than £3.5bn in the coming year with jobs and services facing cuts, according to analysis.

Data compiled by Unison, the trade union, found that there were 114 councils in England, Scotland and Wales – almost a third – facing shortfalls of more than £10m. It said 15 councils were likely to be in the red by more than £40m next year.

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‘It’s going to cost billions’: UK councils face huge bills over equal pay claims

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GMB union is supporting 3,000 claims in Birmingham – and is gathering evidence from 20 other councils

Councils in the UK are facing compensation bills running into billions of pounds over equal pay claims, campaigners have warned, as they called on the government to intervene.

The GMB union is supporting more than 3,000 equal pay claims against Birmingham city council, and has disputes against councils in Coventry, Westmorland, Cumberland, Glasgow, Dundee and Fife.

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Councils in England in crisis as Birmingham ‘declares itself bankrupt’

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With Birmingham indicating it cannot balance its books, experts warn of others living ‘hand to mouth’

The crisis in local authorities was laid bare on Tuesday as Birmingham city council in effect declared itself bankrupt, with experts warning that others across the UK were now living “hand to mouth”.

The council’s head of finance took the dramatic decision on Tuesday to issue a section 114 notice, indicating that it did not have the resources to balance its books.

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Row growing after third historic rail bridge filled in with concrete

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National Highways faces third intervention by a local authority over infilling, after burying Congham bridge in Norfolk in tonnes of concrete

A controversial practice by the government’s roads agency of burying historic railway bridges in concrete has been dealt a fresh blow after a third council intervened over another infilled structure.

King’s Lynn and West Norfolk council has told National Highways it must apply for retrospective planning permission if it wants to retain hundreds of tonnes of aggregate and concrete it used to submerge Congham bridge, a few miles east of King’s Lynn.

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Sunak strives to be reassuring but is five-point plan all sleight of hand?

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PM plans a ‘no tricks’ reset but with an inflation fall already expected this is more about hanging on at an election

In his first big speech since taking over at No 10, Rishi Sunak promised “no tricks, no ambiguity” as he announced his five promises to reset the government after a difficult year.

The prime minister said he would be focusing on halving inflation, growing the economy, reducing debt, cutting NHS waiting lists, and stopping small-boat crossings to the UK.

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Michelle Mone accused of trying to ‘bully’ ministers over PPE contracts

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Whitehall sources reportedly say ‘rude’ peer lobbied Michael Gove and Lord Agnew to secure business for PPE Medpro

Michelle Mone has been accused of attempting to “bully and hector” ministers into awarding public PPE contracts worth more than £200m to a company that she appeared to profit from.

The Guardian revealed last month that the Conservative peer and her children secretly received £29m originating from the profits of a PPE business that was awarded large government contracts after she recommended it to ministers.

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English councils warn of ‘existential crisis’ caused by funding shortfall

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Local Government Association says any attempt to patch up budgets by raising council tax is doomed to fail

Local authorities have warned they face an “existential crisis” caused by massive funding shortfalls and any attempt by ministers to patch up budgets by allowing increased council tax is doomed to failure.

The multibillion “black hole” in England’s municipal finances – which has pushed a number of councils to the brink of bankruptcy – could not be fixed by local ratepayers alone, who would face unrealistic council tax increases of up to 20%, the Local Government Association (LGA) said.

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Non-dom tax breaks being reviewed by the Treasury in effort to raise revenue

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Officials are also looking at incorporating cut in tax-free allowance for dividends into autumn statement

Treasury officials are examining whether the autumn statement could include changes to non-dom status and moves to raise taxes on dividends by cutting tax-free allowances.

No final decisions have been taken but Whitehall sources said options were being examined by the Treasury’s high net worth individuals policy team.

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Cost of living crisis: Stop the Squeeze calls for wealthiest to ‘pay proper share’ of tax

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Coalition of 40-plus charities and groups launches amid fears of spending cuts to plug public finances

Pressure is building on the leaders of Britain’s two biggest political parties to support higher taxes on wealth amid growing fears over the impact that a renewed austerity drive would have amid the cost of living crisis.

In an intervention which comes as the new prime minister, Rishi Sunak, considers options for filling a £35bn black hole in the public finances, a new coalition of 40 charities and campaign groups – including Oxfam, Save the Children and Christians Against Poverty – said Britain’s tax system was broken and those who paid the most should “pay their proper share”.

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Bank of England left in the dark ahead of new interest rate decision

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With fiscal statement deferred and mixed government messaging on tax and spending the BoE has little to go on

The Bank of England will next week consider how much to raise interest rates without having received any guidance from the government about its tax and spending policies, after Jeremy Hunt pushed back the date for this year’s “autumn statement”.

Its policymakers meet on 3 November to decide the increase in the cost of borrowing required to tackle a rate of inflation that climbed above 10% in September.

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Another U-turn looms – how much will it save and what else could the chancellor ditch?

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Corporation tax plans likely to be latest to be dropped – bad news for Kwarteng’s credibility, but good for his balance sheet

Liz Truss is on the verge of reversing one of the last major pillars of her chancellor’s disastrous September mini-budget.

While Kwasi Kwarteng mingles with finance ministers at the International Monetary Fund gathering in Washington DC, discussions are taking place in London that would see the promise to freeze corporation tax rates binned. There is also speculation about dropping smaller measures including a more generous tax treatment of share dividends. These U-turns would come hard on the heels of the humiliating climbdown on Kwarteng’s promise to scrap the 45p top rate of tax.

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Liz Truss insists tax cuts will go ahead despite public spending promise

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PM suggests borrowing will rise as she surprises MPs by saying she has no plans to cut public spending

Liz Truss has said the Conservatives will push ahead with tax cuts without cutting public spending, instead allowing borrowing to rise over the next few years.

Senior economists had warned on Wednesday that such a strategy, if set out by Kwasi Kwarteng in the chancellor’s fiscal plan at the end of this month, would be likely to spook investors, creating renewed market turmoil.

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Public sector job losses could pass 100,000 if government refuses pay rises, says IFS

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Chancellor must top up budgets or face industrial action and further recruitment issues, thinktank warns

More than 100,000 public sector workers would lose their jobs this year if the government refuses to fund higher than expected pay awards for nurses, doctors, teachers and care workers, according to the Institute for Fiscal Studies.

The IFS said the chancellor, Kwasi Kwarteng, faced a choice of either topping up public sector budgets or accepting the likelihood of industrial action, further problems recruiting and retaining staff, and a decline in quality of services already under extreme strain.

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Pupil numbers in England set to shrink by almost 1 million in 10 years

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Government forecast anticipates 12% decline, mainly due to fewer births, with surplus school places in years ahead

England’s school population is set to shrink by almost a million children over the next 10 years, according to the government’s latest data, raising the prospect of surplus places and school closures in some areas of the country in the years ahead.

Department for Education figures reveal that predicted pupil numbers, already in marked decline according to earlier modelling, have had to be revised down further in line with projections of fewer births than expected.

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Soaring inflation pushes UK borrowing to £14bn in May

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Interest on debt payment leaps 70% on a year ago to £7.6bn, a monthly record

Government borrowing was higher than expected in May at £14bn as soaring inflation sent interest payments on the UK’s debt to a monthly record.

The Office for National Statistics (ONS) said debt interest payments leapt 70% on a year ago to £7.6bn, the third highest debt interest payment made by central government in any single month and the highest payment in May on record.

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Schools and libraries face huge cuts after soaring costs create £1.7bn shortfall

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Exclusive: Emergency council cuts feared across England caused by inflation and higher energy costs

School-building projects, swimming pools and libraries have been earmarked for emergency funding cuts because town halls have been hit by an unexpected £1.7bn hole in their budgets, the Guardian can reveal.

Rampant inflation and soaring energy bills mean that council leaders have been forced to rip up financial plans from a few months ago, with higher than anticipated staff pay bills also contributing to their newfound deficits. Without help from Whitehall, it will leave them no option but to cut services and put up council tax next April.

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Covid support schemes left ‘open goal’ to fraudsters, says watchdog

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Public Accounts Committee report says business department efforts to identify fraud came after trails had ‘long ago gone cold’

The business department’s handling of Covid support schemes left an “open goal” to fraudsters and embezzlers that has added “billions to taxpayer woes”, parliament’s spending watchdog has found.

In its review of the annual report of the Department for Business, Energy and Industrial Strategy (BEIS), the Public Accounts Committee (PAC) said it recognised that the government offered crucial support to businesses at the height of the pandemic.

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England’s crumbling schools are a ‘risk to life’, officials warn No 10

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Leak reveals that the education department is battling with the Treasury for £13bn needed for rebuilding projects

Many school buildings in England are now in such disrepair they are a “risk to life”, according to internal government documents leaked to the Observer.

Emails sent by senior officials working for education secretary Nadhim Zahawi to Downing Street show them raising the alarm on two occasions within the last six weeks.

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