Chancellor expected to give changed address after confirming plan to axe top rate of income tax has been scrapped
Q: Where does this leave your credibility?
Kwarteng says he has been in parliament for 12 years. He says ministers do sometimes change their minds.
I decided, along with the the prime minister, not to proceed [with the policy].
Continue reading...Tax cuts to cost Treasury around £37bn in 2023-24, official figures reveal
There are no urgent questions in the morning, and so Kwasi Kwarteng, the chancellor, will be delivering his statement soon after 9.30am.
The Commons starts sitting at 9.30am, but they always begin with prayers in private, and so Kwarteng will be up a few minutes later.
The last time they did it one third of the beneficiaries were people buying second homes or buy to let, so we are sceptical that this is the magic bullet to increase homeownership. What we really need to do is to build more houses and to help get people onto the property ladder by increasing the supply of housing.
When this has been done before, it has often fuelled an already hot market and many of the beneficiaries have been people buying a second or third home, rather than the first time buyers that we really want to help who are often trapped in private rented accommodation where they’re paying as much in rent every month as they would in a mortgage.
Continue reading...Soaring cost of living is forcing up government spending on benefits, pensions and debt leaving no spare cash to lower taxes
Britain’s first double-digit inflation in more than four decades has cast doubts on the plausibility of the tax cuts being promised by Liz Truss and Rishi Sunak during their leadership battle, one of the UK’s leading thinktanks has said.
Following news that the government’s preferred measure of the cost of living rose by 10.1% in the year to July, the Institute for Fiscal Studies said higher inflation would mean extra spending on welfare benefits, state pensions and on debt interest.
Continue reading...EU withdrawal fuelling higher import costs and costing British workers nearly £500 a year, says Resolution Foundation
Britain’s cost of living crisis is being made worse by Brexit dragging down the country’s growth potential and costing workers hundreds of pounds a year in lost pay, new research claims.
The Resolution Foundation thinktank and academics from the London School of Economics said the average worker in Britain was now on course to suffer more than £470 in lost pay each year by 2030 after rising living costs are taken into account, compared with a remain vote in 2016.
Continue reading...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...Resolution Foundation thinktank report says third of ‘returners’ on temporary or zero-hours contracts
Young people who lost their jobs during the pandemic in the UK have returned to less secure work, often in gig economy roles, according to research from a leading thinktank, which also found almost 50,000 more men under the age of 24 are now economically inactive.
A report by the Resolution Foundation published on Monday found young people had returned to work rapidly in late 2021, with unemployment now slightly lower than pre-pandemic levels, but a third of the 18- to 34-year-olds back in the workplace were now in atypical, insecure work.
Continue reading...Social Market Foundation suggests measures including better childcare provision to increase birthrate
Britain is facing a “baby shortage” that could lead to “long-term economic stagnation”, a thinktank has said.
The Social Market Foundation (SMF) said the birthrate was almost half what it was at its postwar peak in the 1960s, and the country’s ageing population could lead to economic decline.
Continue reading...Expert’s criticism comes as thinktank warns of more friction if UK fails to manage relationship with Brussels
The EU has behaved like an “absentee landlord” in relation to Northern Ireland, an expert on Brexit in the region has said, as a new report by the Institute for Government warned of more conflict across all issues “if the UK fails to manage the relationship” with Brussels.
Under the Brexit trade deal more than 20 committees and bodies are supposed to be set up to cement a working post-Brexit relationship on everything from fishing to energy supplies and aviation deals.
Continue reading...NatWest denies accusation made by Bill Browder in thinktank report into practice of ruining reputations
A longstanding critic of Kremlin corruption has accused NatWest of closing his bank account in the UK because it had been influenced by an intense and pervasive “black PR” campaign mounted against him by Russian actors in their home country.
“Black PR” is a term referring to a series of connected practices used by Russian state and non-state actors seeking to discredit individuals as part of political or business disputes, and can involve trying to create or obtain kompromat (compromising material) or generating fake media reports.
Continue reading...Review finds testing flaws meant support went to many workers who lost no income but not to others who had
Rishi Sunak’s flagship scheme to help the self-employed through the pandemic has handed £1.3bn to workers who saw no loss of income while giving nothing to 500,000 people left without work, new analysis has revealed.
In a sign of major flaws in the £12.7bn self-employment income support scheme (SEISS), more than 400,000 workers were able to claim support despite losing no income in the crisis.
Continue reading...Thinktank praises Covid-19 response but says ‘splurge’ relies on already announced plans
Rishi Sunak’s first budget is not as generous as it seems and will leave many Whitehall departments worse off than they were before the spending squeeze began in 2010, according to Britain’s foremost economics thinktank.
The Institute for Fiscal Studies said the chancellor made the budget sound more substantial than it was, while relying on previously announced spending plans.
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