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UK’s tax burden will rise to levels not seen during peacetime

   News / 27 Jan 2022

Published: 27 January 2022
Location: London, UK

By Suzanne Evans, Director, Political Insight


The Treasury Committee has reiterated its belief that the UK’s tax burden will rise to levels not seen during peacetime as it seeks to recover from the coronavirus pandemic.
 
The government is putting up £100m to support the planned Sizewell Cnuclear plant in Suffolk, Business and Energy Secretary Kwasi Kwartenghas announced. The investment marks the latest stage in efforts to build the £20bn reactor on the east coast of England, but does not commit the government to approving the project, which is still subject to negotiations. Talks between the government and project developer EDF have been under way since December 2020.
 
Masks need not be worn in England from today, but Sainsbury's, John Lewis, Waitrose and Morrisons are still asking customers and staff to do so. Electronics retailer Currys also said it would urge staff to continue to wear masks in-store and while delivering products to homes, but wouldn't ask customers. The Rail Delivery Group, which represents train companies, said operators will still ask passengers to wear masks, and Transport for London(TfL) said its passengers would be still be expected to keep wearing face coverings. However, none of the above can legally force compliance. The government is still advising people to wear masks in enclosed or crowded spaces and when meeting strangers.
 
A report from The Law Commission says people in control of a self-driving car should not be responsible for dangerous driving, accidents, speeding and jumping red lights. The legal watchdogs covering England, Wales and Scotland are calling for parliament to regulate vehicles that can drive themselves and redefine drivers as a "user-in-charge", so that if anything goes wrong, the company behind the driving system would be responsible, rather than the driver. However, drivers will still have responsibility for insuring their vehicles, checking loads, ensuring that children wear seat belts, and remaining within the drink-drive limit, for example. In April 2021 the Department for Transportannounced hands-free driving in vehicles with lane-keeping technology would be allowed on congested motorways at speeds of up to 37mph.
 
Thousands of families could be missing out on up to £2,000 a year to help with the cost of childcare, according to HM Revenue and Customs. Tax-free childcare — the 20% childcare top-up — gives eligible working families up to £500 per child every three months towards the cost of holiday clubs, before and after-school clubs, childminders and nurseries, and other accredited childcare schemes. Parents of disabled children could be entitled to claim £1,000 every three months through the scheme. Tax-free childcare is available for children aged up to 11, or 17 if the child has a disability. For every £8 deposited into an account, families will receive an additional £2 in government top-up. However, a large proportion of parents are still unaware of its existence," said Myron Jobson, personal finance campaigner at Interactive Investor. “The uptake of the scheme continues to fall ... due to underpromotion of the initiative. Greater promotion of the initiative is still needed to raise awareness while encouraging even more parents to apply,” he added.
 
Rents outside of London have jumped almost 10% in a year and are now averaging £1,068 per month. Meanwhile rent in the capital have hit a new record high of £2,142 per calendar month, new figures from property company Rightmove show. Rising rents are currently outpacing house price increases in all but three regions — the East Midlands, the South West and the South East.
 
Demand for UK commercial property is higher than pre-pandemic levels, the Royal Institution of Chartered Surveyors (RICS) says. Its fourth quarter commercial property survey showed a swing in demand towards office space with almost nine in every ten survey participants seeing re-purposing of office space, with 15% highlighting that this is happening in significant volumes.
 
Citi, one of the world's biggest banks, has put its faith in post-Brexit Britainand London as a financial centre by announcing a major refurbishment of its HQ in Canary Wharf. The budget for the project has not been revealed, but it is expected to run into nine figures. The Wall Street giant employs 9,000 people in the capital and a further 3,200 in Belfast, and bought the 200-metre high, 42-storey tower at 25 Canada Square in Canary Wharf for £1.2bn in 2019, saying at the time, that it was a demonstration of its commitment to London as its headquarters for Europe, the Middle East and Africa (EMEA). David Livingstone, Citi's EMEA chief executive, told Sky News the latest investment underlined the bank's confidence that London would remain one of the world's preeminent international financial centres. "There are some background elements which never go away,” he said. “London's time zone position between Asia and the Americas…The rule of law, as well as English law, which is a very important component to international commerce…But there's also the regulatory environment which is remains a strong principles-based environment which we think, post-Brexit, will forge its own particular way which will be positive for the UK.” Finally, he said, “the thing you can't get away from is the talent - and it's the talent which is home-grown, it's the talent that wants to come to work in London, and we only see that as being a continuing element of why London is such a fantastic place to build not just a major operation, but also our headquarters for the entire region."
 
Telecoms giant BT is planning to recruit more than 600 apprentices and graduates later this year in engineering, customer service, applied research and cyber-security. The recruits will also support the company’s plans to build and extend its 5G network around the UK. The new roles will be spread across several locations including Belfast, Birmingham, Bristol, Dundee, Glasgow, Ipswich, London and Manchester.
 
EasyJet says it will operate its largest number of flights between the UK and beach destinations this summer as coronavirus restrictions ease. With sales “performing very well”, the low-cost airline’s capacity compared with 2019 levels will be more than doubled on routes to Turkey and up 36% for Greece, according to chief executive Johan Lundgren. An overall 14% rise in capacity on routes between the UK and beach locations make those operations “the biggest ever” in easyJet’s 26-year history, he told PA Media.
 
Swedish fintech giant Klarna has launched a card that can be used for in-store payments in the UK, Yahoo Finance UK reports. Yesterday the company announced the launch of the Klarna Card, a Visa card that lets users delay payments for up to 30 days after on their purchases, both in-store as well as online.  No interest or late fees are charged, and shoppers can use the card via Apple or Google Pay, or by contactless payment. Klarna plans to roll the card out gradually, with a view to open eligibility to all customers by early 2022. Meanwhile, it has opened a waitlist to which some 400,000 consumers have already signed up. At present, borrowers must have a “good credit history,” be over 18, and have an income of at least £12,000. The card is already available in Sweden and Germany, where it is now used by over 800,000 people, according to Klarna.
 
Home supermarket delivery company Ocado has ‘reimagined’ its Smart Platform to meet its clients' demands more quickly and at a lower cost. "For Ocado Group, Ocado Re:Imagined offers higher returns from lower capital costs and operating expenses, an even greater Total Addressable Market available to the business, and the expectation of an acceleration in the sign-up of new partnerships in the years to come, in addition to further orders from existing OSP (Online Service Provider) partners," the company said in a statement. The OSP's ability to achieve a higher throughput with a smaller footprint and lower labour costs meant that it would also help to address labour shortages, Ocado said.
 
Upmarket London department store Fortnum & Mason is in talks to open an outlet in Qatar amid growing interest from international brands in the tiny Gulf state ahead of this year’s football World Cup. Sky News understands that executives at the 315-year-old grocer are in talks with potential franchise partners in Qatar about the move. If the project proceeds, it would represent Fortnum & Mason's first store in the country, although it did briefly have a presence in the Gulf with an outlet in Dubai which closed in 2017. Owned by a branch of the Weston family, which recently sold Selfridges for £4bn, Fortnum still has a limited international presence, with its own store in Hong Kong, and partnerships in Australia and Japan.
 
US investment fund Knighthead Capital Management (KCM) has tabled a £38m offer to keep some of London's most famous restaurants afloat, hours after Corbin & King - operator of The Delaunay, The Colbert and The Wolseley - was forced into administration by its biggest shareholder and lender, Minor International. KCM says it is prepared to refinance all outstanding loans owed. A source told Sky News that the offer will allow all sites to continue to trade and continue to pay suppliers, employees, and landlords. The insolvency process is being handled by FPR Advisory.
 
UK car production plummeted to its lowest level since 1956 last year, with parts shortage, staff absences and factory closures all battering the automotive industry. Data from the Society of Motor Manufacturers and Traders showed output dropped by 6.7% to 859,575 cars made in the UK in 2021 – over 61,000 less than 2020 and a fall of 34% compared to 2019, when over 1.3m cars rolled off the production lines.
 
Bentley Motors will build its first electric car at its Crewe plant in Cheshire as part of wider £2.5 billion investment programme.
 
Plans by the Northern Ireland Assembly to legislate to achieve net zero carbon emissions by 2045 could wipe out 14,800 beef and sheep farms, the Ulster Farmers Union (UFU) has told MPs. UFU president Victor Chestnutttold the Northern Ireland Affairs Committee that farmers agreed climate change legislation was necessary to tackle emissions, but added that a fair transition must be ensured. “Beef and sheep farms operating in less productive land could see a decrease in farm numbers of 98%, that’s 14,800 farms ceasing to operate. Beef and sheep farms operating in the Lowlands could face a fall in numbers of 79%, with 4,100 farms ceasing to operate. The dairy sector could see a decrease of 86%, with 2,250 less farms,” Chestnutt said. The figures stem from a KPMG report commissioned by stakeholders in the agri-food industry, which concluded that 13,000 farming jobs in Northern Ireland were at risk under a bill proposed by agriculture and environment minister Edwin Poots to rectify the anomaly of Northern Ireland being the only part of the UK and Ireland without a climate change act. A private member’s bill from Green party NI leader Clare Bailey is also currently proceeding through legislative stages.
 
Trillions of dollars need to be spent every year for almost three decades to hit net zero targets, according to consultancy McKinsey. On top of current spending, the equivalent of half of all corporate profits will have to be invested to tackle global warming, it told the BBC. The McKinsey report estimated that the annual cost of getting to net zero - when carbon dioxide emissions are completely reduced or offset - will be $9.2tn (£6.8tn). More than 130 countries have pledged net zero emissions by 2050.
 
Luxembourg's General Court of the European Union has ruled in favour of Intel in the latest round of the chipmaker's 12-year legal battle with EU antitrust regulators. The US firm was fined €1.06bn in 2009 by the European Commission which found Intel had abused its dominant market position in the global market for x86 processors. The Commission said it had done so in two ways, through so-called naked restrictions and by giving rebates to four strategic manufacturers: Dell, Hewlett-Packard, NEC and Lenovo. The alleged abused was said to have taken place between October 2002 and December 2007. However, the senior EU court yesterday ruled against the Commission's analysis of the rebates, and annulled the fine.
 
Oil has hit $90 a barrel for the first time since October 2014 on latest worries about tight supply and tensions in Europe in the Middle East.
 
Global stock markets have wobbled since the head of America's central bank yesterday declared there is "quite a lot of room to raise interest rates".  Jerome Powell, chair of the US Federal Reserve, made the remarks in a news conference after the bank declared that a hike would "soon be appropriate" - as it battles soaring inflation. Mr Powell said that since its last meeting in December his expectations for inflation had become "just a bit worse" and that there was "quite a lot of room to raise interest rates without threatening the labour market".


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