Latest news with #taxrises
The Independent
4 days ago
- Business
- The Independent
Consumer confidence weakens among Britons amid tax rise fears
Consumer confidence weakened slightly in July amid concerns from shoppers that they could face potential future tax rises, according to new figures. GfK's long-running Consumer Confidence Index dropped one point to remain in firmly negative territory at -19 points. Researchers suggested the figures showed that consumers are currently 'sensing stormy conditions ahead' amid wider uncertainty in the economy. The drop was shallower than expected by economists, who had predicted a reading of -20 for the month. The research found that its measure from consumers' view of the general economic situation for the country over the past year dropped one point to -44. Expectations for the general economic situation over the next 12 months also decreased by one point for the month. Meanwhile, the index for consumers' views on their personal finances remained steady but was still in negative territory. Nevertheless, there was a rise in the study's savings measure and people continued to seek to benefit from elevated interest rates. Neil Bellamy, consumer insights director at GfK, said: 'The key measures on personal finances, the economy and purchase intentions are flat in July, and many will conclude that consumers are in a cautious wait-and-see mood. 'But the data suggests that some people may be sensing stormy conditions ahead. 'With speculation growing over possible tax rises in the autumn budget, and price pressure contributing not just to higher inflation already but also to the likelihood of worse inflation to come, the news is worrying.' It came as figures from the Office for National Statistics (ONS) showed that retail sales bounced back 0.9% last month as record hot weather boosted sales of food and drink.
Daily Mail
6 days ago
- Business
- Daily Mail
Lloyds boss warns Reeves against tax hikes as it forecasts weaker growth
The boss of Britain's biggest mortgage lender has sounded the alarm over tax rises as it warned of slowing GDP growth and rising unemployment. Charlie Nunn, chief executive of Lloyds Banking Group, said hiking taxes on banks would be 'inconsistent' with helping lenders in their role of boosting the economy. Nunn's comments came as the group – which owns Halifax and Bank of Scotland as well as Lloyds Bank – reported a 5 per cent rise in first half profits to £3.5billion. But the lender also faced questions about the possibility of a tax raid on banks by Chancellor Rachel Reeves in the autumn Budget as slower growth, U-turns on spending cuts, and higher borrowing costs leave her with a gaping financial black hole. Nunn said tax rises were a 'political decision' and it has had 'no engagement with the government on that or any discussion with them'. But he pointed to the Chancellor's acknowledgment of a 'stronger economy needing a strong financial services sector' and the role for banks in supporting households and businesses and international investment into the UK to 'get us on a faster growth trajectory'. 'We definitely think that's an important thing to focus on and obviously therefore wouldn't be consistent with tax rises,' Nunn said. He said Britain already had the highest taxes on the financial services sector of any major economy. 'It is important when you look at the competitiveness of the City of London and the financial services sector that we remain a competitive tax regime,' Nunn added. Meanwhile, Lloyds altered its economic outlook for the UK, slightly upgrading its growth forecast for this year from 0.8 to 1 per cent. It also predicts 1 per cent growth for 2026 – but that is down from a previous forecast of 1.4 per cent. And its assumptions on unemployment have also darkened, with a jobless rate of 4.8 per cent predicted for this year – up from 4.7 per cent – and 5 per cent next year – up from 4.8pc. However, Nunn sounded a positive note on households and businesses which he said were 'improving their financial health' and may now be able to 'move to a higher growth trajectory'. He added: 'We think there is a chance to do that despite our forecasts today being relatively lower growth. On a relative basis to other economies, the UK's in an OK place – it's obviously been impacted by the uncertainty in the tariffs going on globally.' Meanwhile, Lloyds like other lenders has been affected by bumpy mortgage lending trends – as buyers raced to beat stamp duty changes saw a surge in lending at the start of the year, resulting in a slower trend in the second quarter. Finance chief William Chalmers said overall the first half had seen 'meaningful growth' in mortgages. He said the stamp duty changes had seen deal completions pulled forward into the first quarter but added that June volumes were 'starting to return to normal'. Meanwhile, speculation of a reduction in the ISA saving limit – which the Chancellor ultimately shied away from – has seen a burst of saving in the tax-free wrappers. Nunn said: 'Over the last few quarters we've had a few things going on in the economy that's changed behaviours in a way that we haven't seen in the past. 'So obviously, the discussions that the Government was having around ISA limits, we did see a very significant increase in ISAs this year – we saw about a 30 per cent increase in the ISA market.'
The Sun
6 days ago
- Business
- The Sun
UK is drowning in debt but striking junior doctors want huge pay rises – patients died last time before 22% increase
TUESDAY brought yet more grim news for the public finances. The Office For National Statistics revealed that in June, the Government was forced to borrow £20.7billion. 4 4 That was £6.6billion higher than last June — and all this in spite of the £40billion of tax rises announced in last October's Budget. The Government is drowning in debt. Paying interest on its accumulated debts is costing the taxpayer £100billion a year — almost double what we spend on defence. There is little hope of improvement. Economic growth is virtually non-existent, productivity is flat-lining and tax rises are failing to raise as much revenue as the Chancellor hoped, as taxpayers choose to work less hard, rearrange their tax affairs or, in some cases, emigrate. But there is one place where you can be sure the news will not have sunk in: the offices of Britain's public sector unions. Lining pockets In fact, the BMA — which is rapidly inheriting the mantle of the country's most militant trade union from the Rail, Maritime And Transport union — chose the moment to request that its consultant members charge the NHS at least £188 an hour to provide cover during the junior doctors' five-day strike, which begins tomorrow, rising to £313 an hour for weekend work. It could mean some consultants lining their pockets with up to £6,000 this weekend. It isn't hard to see the BMA's logic: it wants to try to break the NHS's finances to force the Government to give in. In spite of the extravagant bills demanded by consultants, the NHS will still not be providing a normal service during the latest walkout. During the last set of strikes by junior doctors — who now demand to be called 'resident doctors' to disguise the fact they are still in training — more than a million treatments ended up being cancelled. Wes Streeting brutally slams Kemi AND Farage and demands Tories say sorry for how they ran the NHS in blistering attack It's been reported that coroners' findings mentioned the strikes in five deaths, but that is almost certainly a gross under-estimate. During the week of one 72-hour strike in March 2023, the ONS recorded 2,247 'excess deaths' — the number of deaths above what might have been expected from the average of the previous five years over that period. Deep down, the BMA's hard men seem to realise the harm that they are causing. Dr Ross Nieuwoudt, the co-chair of the BMA's Resident Doctors' Committee, told Times Radio yesterday that consultants who refused to cancel their normal clinics in order to man A&E departments would be guilty of a 'dereliction of duty'. Yet strangely, he did not seem to want to apply the same term to junior doctors who walk out on strike. We all appreciate what doctors do, of course — yet even miners' leader Arthur Scargill at the height of his pomp was not as unreasonable as the BMA is being. 4 Junior doctors received a 22 per cent pay increase last year and have already been offered an inflation-busting 5.4 per cent this year. Their claim that they need a 29 per cent increase this year to return their pay in real terms to 2008 levels is fallacious. They made that calculation using the Retail Prices Index, a long-discredited measure which has been criticised for exaggerating inflation. Some junior doctors can now earn £100,000 a year, including overtime. What's more, they have a generous pension scheme which involves the taxpayer contributing an extra 20.68 per cent of their pay to their pension pot. When they retire, their pensions will be linked to their lifetime earnings and will be inflation-proofed. Such deals are virtually unknown now in the private sector, where employers make average pension contributions equivalent to just 4.5 per cent of an employee's pay — and where in most cases pension payouts are dependent on the performance of underlying investments. And it is not just the BMA which has lost its grasp of fiscal reality. Public sector unions are living in a parallel, dream universe where there is an infinite pot of money to meet their demands. On their side of the looking glass, workers have a fundamental right to above-inflation pay rises year on year without ever having to improve their productivity. Bankrolled by unions On the contrary, many seem to think they could still enjoy inflation-busting rises if their working week was reduced from five days a week to four. Sorry, but it doesn't work. Societies grow richer by being more productive. And that is something which seems to have eluded Britain's public sector for the past three decades. 4 Astonishingly, according to ONS figures, the average worker in the public sector now produces less than they did when Tony Blair took office 28 years ago. That is an unparalleled era of non-achievement. The unions seem to be counting on the current Government being equally blind to the dire state of the public finances. Starmer's administration has shown itself so far to be a pushover — which is hardly surprising when you consider that the Labour Party is bankrolled by the unions. But no government will be able to ignore for much longer Britain's reckoning with its debts. What happened under Liz Truss was just a foretaste of what is to come if global bond investors lose confidence in the UK Government's ability to repay its dues. When that happens, Britain will be in the situation Greece was 14 years ago when public salaries and pensions had to be slashed to avoid national bankruptcy. Public sector unions will wail all they like, but they would have helped bring the disaster on themselves.
Sky News
22-07-2025
- Business
- Sky News
The wealth tax options Reeves could take to ease her fiscal bind
Faced with a challenging set of numbers, the chancellor is having to make difficult choices with political consequences. Tax rises and spending cuts are a hard sell. Now, some in her party are calling for a different approach: target the wealthy. Is there a way out of all of this for the chancellor? Economic growth is disappointing and spending pressures are mounting. The government was already examining ways to raise revenue when, earlier this month, Labour backbenchers forced the government to abandon welfare cuts and reinstate winter fuel payments - blowing a £6bn hole in the budget. The numbers are not adding up for Rachel Reeves, who is steadfastly committed to her fiscal rules. Short of more spending cuts, her only option is to raise taxes - taxes that are already at a generational high. For some in her party - including Lord Kinnock, the former Labour leader, the solution is simple: introduce a new tax. They say a flat wealth tax, targeting those with assets above £10m, could raise £12bn for the public purse. Yet, the government is reportedly reluctant to pursue such a path. It is not convinced that wealth taxes will work. The evidence base is shaky and the debate over the efficacy of these types of taxes has divided the economics community. 1:16 Why are we talking about wealth? Wealth taxes are in the headlines but calls for this type of reform have been growing for some time. Proponents of the change point to shifts in our economy that will be obvious to most people living in Britain: work does not pay in the way it used to. At the same time wealth inequality has risen. The stock of wealth - that is the total value of everything owned - is much larger than our income, that is the total amount of money earned in a year. That disparity has been growing, especially during that era of low interest rates after 2008 that fuelled asset prices, while wages stagnated. It means the average worker will have to work for more years to buy assets, say a house, for example. Left-wing politicians and economists argue that instead of putting more pressure on workers - marginal income tax rates are as high as 70% for some workers - the government should instead target some of this accumulated wealth in order to balance the books. 2:19 The Inheritocracy At the heart of it all is a very straightforward argument about fairness. Few will argue that there aren't problems with the way our economy is functioning: that it is unfair that young people are struggling to buy homes and raise families. Proponents of a wealth tax say that it would not only raise revenue but create a fairer tax system. They argue that the wealth distortions are creating a divided society, where people's outcomes are determined by their inheritances. The gap is large. A typical 50-year old born to the poorest 20% of parents in the UK is already worth just a quarter of what someone born to the richest 20% of parents is worth at that age. This is before they inherit anything when their parents die. A lot of money is passed on earlier; for example, people may have had help buying their first home. That gap widens when the inheritance is passed on. This is when inheritance tax, one of the existing wealth taxes we have in the UK, kicks in. However, its impact in addressing that imbalance is negligible. Most people don't meet the threshold to pay it. The government could bring more people into the tax but it is already a deeply unpopular policy. 1:51 Alternatives So what other options could they explore? Lord Kinnock recently suggested a new tax on the stock of wealth - one to two percent on assets over £10m. That could raise between £12bn and £24bn. When making the case for the tax, Lord Kinnock told Sky News: "That kind of levy does two things. One is to secure resources, which is very important in revenues. "But the second thing it does is to say to the country, 'we are the government of equity'. This is a country which is very substantially fed up with the fact that whatever happens in the world, whatever happens in the UK, the same interests come out on top unscathed all the time while everybody else is paying more for getting services." However, there is a lot of scepticism about some of these numbers. Wealthier people tend to be more mobile and adept at arranging their tax affairs. Determining the value of their assets can be a challenge. In Downing Street, the fear is that they will simply leave, rendering the policy a failure. Policymakers are already fretting that a recent crackdown on non-doms will do the same. Critics point to countries where wealth taxes have been tried and repealed. Proponents say we should learn from their mistakes and design something better. Some say the government could start by improving existing taxes, such as capital gains tax - which people pay when they sell a second property or shares, for example. The Labour government has already raised capital gains tax rates but bringing them in line with income tax could raise £12bn. Then there is the potential for National Insurance contributions on investment income - such as rent from property or dividends. Estimates suggest that could bring in another £11bn. This is nothing to sniff at for a chancellor who needs to find tens of billions of pounds in order to balance her books. By the same token, she is operating on such fine margins that she can't afford to get the calculation wrong. There is no easy way out of this fiscal bind for Rachel Reeves. Whether wealth taxes are the solution or not, hers is a government that has promised reform and creative thinking. The tax system would be a good place to start.
Daily Mail
16-07-2025
- Business
- Daily Mail
QUENTIN LETTS: Kemi won a laugh at the PM's expense, popping his priggish pomposity
That nasal quack. The sticky-up fringe. Drearily predictable evasions – 'working people... breakfast clubs... £22billion black hole'. Sir Keir Starmer was going through the PMQs motions again, plumply contented with himself, even as the latest inflation figures brought more bad news. With his gift for stale phraseology he complained that Kemi Badenoch 'comes here every week and just talks the country down'. Mrs Badenoch: 'I'm not talking the country down. I'm talking him down.' That won a laugh. Kemi has plenty of problems of her own but at least she pops the old booby's priggish pomposity. With summer recess imminent, this was the last PMQs until September. It has not been the easiest of first years. Sir Keir, however, was insistent that 'we're fixing the country'. How did he define the 'working people' who will allegedly be protected from tax rises? Sir Keir: 'The sort of people who work hard but haven't necessarily got the savings to buy themselves out of problems.' If you have savings, you might want to withdraw them from the bank and stick them under the tea cosy. Do so before the autumn Budget. Noise levels on the Labour benches were reasonably high but the volume was coming from a few lusty Starmerites. Gateshead's Mark Ferguson had his mouth constantly ajar, lips funnelled like an operatic baritone. He's a burly lad, Ferguson. Could do a lot of damage to one of those Chinese all-you-can-eat buffets. A row or two behind him sat two leaner, more delicate cats: former Labour Party lawyer Alex Barros-Curtis (Cardiff W), who is prone to twitches, and Emily Darlington (Lab, Milton Keynes C). Both wore rapt smiles as the PM churned through his scripted, recycled zingers. Further along the row we had Matt Turmaine (Lab, Watford), beaming moonily. Not an automatic choice for University Challenge, perhaps. Closer to the chamber's back doors sat two more glinting intellectuals, Perran Moon (Lab, Camborne & Redruth) and Sean Woodcock (Lab, Banbury). How they cackled at Sir Keir's stodgy repartee. Mr Woodcock actually lifted one buttock off the bench, so electrified was he by our prosaic helmsman. Other parts of the Labour benches were less gaseous. This became particularly evident when Sir Desmond Swayne (Con, New Forest W) rasped a precise question about the Hermer-Benn proposal which threatens to leave Northern Ireland veterans liable to prosecution while bringing a compensation windfall to Gerry Adams. The silence from the Government benches was evidence that Lord Hermer commands little esteem among his Commons comrades. Cabinet members on the front bench did not exactly gleam with enthusiasm. Angela Rayner was a lank, motionless figure. Rachel Reeves forgot to maintain her rictus grin. Call for the Kleenex Mansize! Yvette Cooper and Steve Reed were two carsick spaniels. Graham Stuart (Con, Beverley & Holderness) made a forced joke about the Labour manifesto, calling it 'beautifully written, deeply moving and, like that other great blockbuster, Salt Path, a total pack of lies'. Liz Kendall, Work and Pensions Secretary, cast a sad gaze to the floor. Home Secretary Ms Cooper's ringed eyes bored into the middle-distance. Lincoln Jopp (Con, Spelthorne) had a larky question about England's Test match win. It meant nothing to Sir Keir. Cricket quite foreign to him. Behind the Speaker's chair there was no sign of Defence minister Al Carns, who normally stands there. His place was taken by two slender greasers, Jake Richards (Lab, Rother Valley) and Jack Abbott (Lab, Ipswich), adopting shrewd frowns and macho stances. Treasury minister Torsten Bell toddled up to them, blushing. They resisted the urge to gush back at little Torsten. And at the other end of the joint that strange creature Paul Kohler (Lib Dem, Wimbledon) removed his jacket to betray braces, silver shirt-sleeve garters and a set of keys prominent on his trouser belt. Mr Kohler dropped low his head. I thought he was bowing to the Speaker. But then he threw his skull backwards. He was just rearranging his floppy fringe. Vain, self-absorbed, detached. That's Westminster.
