Published: 19 September 2023
Speaking at the Institute for Government yesterday, former Prime Minister Liz Truss defended the polices she attempted to introduce during her short time in office, and pulled no punches in blaming a “powerful force comprising the economic and political elite, corporatists, parts of the media and even a section of the Conservative parliamentary party" for her forced exit from Downing Street. She cited the three main causes of Britain’s stagnating economy as being high taxes, the growing size of the state, and high levels of regulation, all areas she said she had tried to address in her Plan for Growth, the so-called ‘mini-Budget’ that was widely blamed for economic meltdown. However, she stuck to her guns, saying it is unacceptable that the UK has the highest debt interest payments in the developed world, and that the national debt has tripled since 2005. Had her Plan for Growth been implemented, she said, government spending would have been 35.5bn lower by 2025. On the spike in interest rates following the mini-budget, she highlighted how rates had been kept "artificially low" for many years and would have risen regardless of her policies. Asked after her speech how she would respond to criticism from Mark Carney, the former Governor of the Bank of England, she replied saying Carney had contributed to the "25-year economic consensus that has led to low growth across the western world". She also defended her proposal to cut the higher rate of tax from 45p to 40p, saying it was not “unfunded” as was widely reported at the time, and would, in the longer term, have increased tax revenue. She called on Prime Minister Rishi Sunak to cut taxes, saying the UK is now third to only China and Russia in seeing high net worth individuals leaving the country. She also said he should reduce benefit increases; raise the retirement age; reinstate VAT-free shopping for tourists; abolish the windfall tax on oil and gas firms; and delay net-zero commitments. Truss also mentioned that she is writing a book on her views, due to be published in April and titled Ten Years to Save the West, and confirmed she will attend Conservative Party conference in Manchester later this month. Watch her full speech here: https://www.
Closer ties with the EU will be a key priority for Labour leader Keir Starmer if he becomes Prime Minister, he has said in an interview with the Financial Times. Starmer said he will “attempt to get a much better deal for the UK” in 2025, when the current Trade and Cooperation Agreement signed by former PM Boris Johnson at the end of 2020 comes up for review. said “almost everyone recognises the deal Johnson struck is not a good deal – it’s far too thin”. He ruled out rejoining the customs union or the single market, but said “we have to make it work…I’ve got an utter determination to make this work,” but without specifying in which areas he would lobby for change. Starmer appears to be ramping up his political ambitions ahead of an anticipated General Election next year, or in early 2025. Last week, he met at The Hague with Europol, the EU's law enforcement agency, seeking a way to try and stop smuggling gangs bringing people across the channel in small boats, a move which led to him having to deny on Sunday that this meant he would accept a quota of asylum seekers amounting to some 180,000 people from the EU as part of a 'burden-sharing' migration agreement. Meanwhile, he spent this last weekend in Montreal, speaking at a conference of fellow left-wing leaders and meeting, among others, Canada’s Prime Minister Justin Trudeau, and he plans to meet French President Emmanuel Macron in Paris later this week. A spokesperson for the Conservatives accused him of changing his position, saying: "Three years ago he promised he wouldn't seek major changes to the UK's new relationship with the EU, but now his latest short term position is that he will. What price would Keir Starmer be prepared to pay to the EU for renegotiating our relationship?"
More than two pubs a day have closed so far this year, according to official Government statistics. The number of pubs being demolished or converted for other uses across England and Wales surged by 50% in the three months to 30th June, during which time 230 pubs disappearing for good, a 50% jump on the first quarter of 2023, when 153 pubs vanished. The drop in numbers also represents a sharp year-on-year rise: only 386 pubs closed permanently in the whole of 2022. Wales lost the most pubs (52) while London and North West regions lost 46 pubs each. The overall number of pubs still operating in England and Wales, including those vacant and being offered to let, fell to 39,404 at the end of June. Pubs, as with other eligible hospitality, leisure and retail businesses, currently get a 75% discount off their business rates bills for the 2023/2024 tax year up to a cap of £110,000 per business, but this is set to end on 31st March next year, levying an increased inflation-linked tax burden on the sector, a move that is becoming increasingly unpopular. Alex Probyn, president of property tax at Altus Group, called on Chancellor Jeremy Hunt to act in his autumn statement in ease the pressure of the increase. “With energy costs up 80% year-on-year in a low growth, high inflation and high interest rates environment, the last thing pubs need is an average business rates hike of £12,385 next year.” The Campaign for Pubs has warned that even profitable pubs are being lost due to landlords wanting to "cash in" by converting or demolishing premises for housing, and wants the Government to introduce stricter penalties for "unauthorised conversions and demolitions".
Meanwhile, it's not just pubs campaigning against the Business Rates regime today: -
· The Federation of Small Businesses (FSB) is also calling for the current business rate relief scheme to be extended beyond April next year for “thousands of small firms in our town centres and on our high streets that are vulnerable to increasing costs”. These “hard-pressed” small businesses need a “lifeline,” the FSB says, while also calling for an increase in the threshold for Small Business Rates Relief (SBRR) is also being called for, from £12,000 to at least £25,000, which the FSB said would remove over 250,000 businesses from the rates system. The Non-Domestic Rating Bill that is set to go through to the report stage today in the House of Lords “should be more ambitious… making it easier and more attractive for businesses to invest and improve by extending or upgrading their property,” Martin McTague, FSB national chair said, adding: “These small firms should not be stifled by the looming threat of higher business rates bills as a consequence of investment”. There needs to be a “sea of change” among business rates as the “system is not fit for purpose and needs an urgent overhaul,” he concluded in a statement. An HM Treasury spokesperson said: “The multiplier has been frozen for three consecutive years at an overall cost of £14.5 billion. We have also provided 75% relief for retail, hospitality and leisure properties, a tax cut worth over £2bn for around 230,000 businesses. All taxes are kept under review.”
· And Michael Murray, the CEO of Frasers Group, has described the business rates regime as a “disaster,” and is urging the Government to overhaul the system. City AM reports that Murray, the son-in-law of Mike Ashely, who founded the retail powerhouse, told The Gentleman Journal’s podcast that most of the company’s rent bills are now equal to the rates they pay on their buildings, which makes trade unviable. “You are paying rent twice, whereas historically, when there was no online, rents were higher and the rates were benchmarked at broadly 50% of what the rent you were paying, he said. “Now the rent has come down so much because online has eaten away at the retail sales. Landlords are the only ones that have the flexibility to reduce the rent, but the rates have not reformed anywhere near quick enough.” “It’s so outdated. It needs to be reformed to encourage retail investment.”
Post Office workers who were wrongfully convicted for theft and false accounting are to be offered £600,000 in compensation, “no ifs or buts,” Post Office Minister Kevin Hollinrake says. More than 700 branch managers received criminal convictions after faulty Horizon IT accounting software made them look like thieves. So far, 86 convictions have been overturned, and some £21m paid in compensation. Hollinrake said any postmasters who have already received a settlement payment of less than £600,000 will be paid the difference, and postmasters will also continue to receive funds to cover legal fees. He told the BBC: "We're doing this because people have suffered horrendous situations of course, financial loss as well as personal damage to reputation, and many other things have happened to people. So we want to get this compensation out the door." He added: "If you've suffered, if you've spent time in jail, if you lost your house, if your marriage has failed, all those things - if those things have happened to you, no amount of money will ever be enough…If you think your claim is worth more than £600,000, you can still go through the normal routes." The Horizon scandal saw 736 sub-postmasters prosecuted between 2000 and 2014, an average of one a week. The widespread miscarriage of justice left many financially ruined and shunned by their communities. Some have since died.
The cost of renting a home rose by 12% in the year to August, according to estate agency Hamptons - the highest since it started its survey in 2014. A typical monthly rent of a newly-let property is now £1,304, it said.
Czech billionaire Daniel Křetínský has joined the growing list of those hoping to buy Telegraph Media Group, according to the Financial Times, which says Křetínský – who is known for his energy ventures and European dealmaking - has recently signed the necessary non-disclosure agreement to join the auction.
Heineken UK has acquired a significant minority stake in Served, a tinned cocktail brand part-owned by Ellie Goulding which has seen 47.5% growth in five years. The firm was worth £866m in 2022. Details have not been disclosed.
Investment manager Hargreaves Lansdown has reported a 50% rise in its profits this year, as rising interest rates pushed customers to its savings offering. The group said its profit before tax had grown to £402.7m, while revenue increased 26% to £735.1m in the 12 months to 30th June.
Car dealership operator Pendragon is selling its UK motor and leasing business to US firm Lithia for £250m. The two companies also agreed to form a partnership including the rollout of Pinewood - Pendragon's dealer management software (DMS) business - to Lithia Motors' existing 50 UK sites and create of a joint venture to accelerate Pinewood's entry into the North American DMS market. Pendragon said £240m of the sale proceeds will be returned to shareholders. The company will also spin out the DMS business and change its name to Pinewood.
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