Published: 05 December 2023
By Suzanne Evans, Director, Political Insight
The Government has announced proposals to cut the levels of legal migration by an anticipated 300,000 per year. The five-point immigration plan announced by Home Secretary James Cleverly will stop health and care workers bringing dependants; raise the skilled worker earnings threshold by a third to £38,700, in line with the median full-time wage; scrap “cut-price” labour by stopping shortage occupations being able to pay 20% less than the going rate and reforming the shortage occupation list; raising the minimum income for family visas to £38,700 from £26,200 from next spring; and ensuring the graduate immigration route is reviewed to prevent abuse. Health surcharges will also rise this year by 66% from £624 to £1,035. Some business leaders have criticised the new policies. Mark Hilton, from Business LDN, told City AM: ‘‘When businesses across the country are struggling with acute skills shortages, raising the salary threshold at which workers can be recruited from abroad would make it much harder for firms to access the talent they need to drive growth.” Seema Farazi of EY said: “Competition for global talent is fierce. In an increasingly borderless business world, it is more important than ever that the UK can access the limited pool of highly skilled workers.” Naomi Smith, Best for Britain CEO said: “There are over a hundred thousand vacancies across our public services, not to mention the wider economy. Government can’t have it both ways; reducing immigration will stunt growth and put even more pressure on vital services. It’s time for Sunak to be honest that immigration is not only good for the UK but essential.” Official figures released recently showed that total net migration hit an all-time high of 745,000 last year. Around 120,000 dependants accompanied 100,000 care workers in the year to September.
Treasury Ministers Bim Afolami and Nigel Huddleston have privately voiced their support for reinstating VAT-free shopping for tourists, The Daily Mail understands. The newspaper’s Scrap the Tourist Tax campaign is calling for a U-turn on the proposals introduced by Rishi Sunak in 2021 when he was Chancellor and is backed by more than 400 businesses including Burberry, Harrods, Marks & Spencer and Heathrow Airport. London in particular feels it is missing out because of the tax, as visitors benefit from a 20% VAT refund across much of the rest of Europe. Research suggests ditching the levy could make the UK £10bn a year better off and support 200,000 jobs.
Britain’s top 100,000 taxpayers paid 24% of all income and capital gains tax in 2021/22, a freedom of information request obtained by retail investment firm Wealth Club has revealed. Together, the wealthiest people paying tax made up 0.3% of the total number of taxpayers, footing an average income and capital gains bill of £559,000 each, up 18% from the year before. The top 100 taxpayers paid an average of £46m each, up 14% on the previous year. Wealth Club said the overall income and capital gains tax take from the top 100,000 had risen by 45 per cent in five years. The findings prompted a warning from Wealth Club: “It is commonly claimed that wealthy individuals do not pay their fair share of tax. These figures prove what a myth that is,” founder Alex Davies said. “The message is clear for politicians of all persuasions when deciding future tax policy – tread very carefully… The wealthy are a mobile bunch, proven by the fact that an estimated 3,200 millionaires are expected to leave the UK this year. And they pay a significant proportion of the UK’s tax. If the top 100 taxpayers up sticks and move to sunnier tax climates, that would be £4.6bn less in tax receipts. If the top 1,000 taxpayers migrated out of the UK, that figure would rise to £11.5bn, leaving a massive gap in the country’s finances.”
Grocery inflation slowed again in November, to 9.1%, down from 9.7% in October, according to market researcher Kantar. Annual food inflation reached its highest since 1977 in March, at more than 19%. Kantar also said the cost of a frozen turkey Christmas dinner for four with all the trimmings, Christmas pudding and sparkling wine, is up well below inflation at only 1.3% at £31.71, with Brussels sprouts and the pudding cheaper year-on-year.
All other bids are off - the Barclay family has regained ownership of The Telegraph Media Group after paying £1.2bn in debts owed to Lloyds Banking Group. The high street lender said repayment had been made in full, meaning both The Telegraph and The Spectator magazine have been released from receivership. The move means court proceedings brought on behalf of Lloyds against the Barclay family in the British Virgin Islands, which would have liquidated one of their key holding companies, have also now been called off. However, the debt-for-equity swap that the Barclay’s orchestrated with RedBirdIMI, the Abu Dhabi-backed fund that part-funded repayment of the loan and which plans to take control of the titles, remains in doubt due to a current government ban on that element of the deal proceeding. The order also prevents The Telegraph being merged with any other entity or making any changes in management or to key editorial staff until the matter is resolved following an investigation by Ofcom and the Competition and Markets Authority (CMA).
Thames Water has revealed in its half-year results that its debts have growth 7% to £14.7bn, despite revenue increasing 12% to £1.2bn during the period, mostly due to inflation-linked tariff increases. Its auditors, PricewaterhouseCoopers (PWC), have also highlighted “material uncertainty” about the water firm’s future and that it that it could “run out of money” when £190m in debt is due to be repaid in April 2024 as there are no firm arrangements to refinance it. Although Thames Water shareholders pledged to support the company, with a commitment in writing to inject £750m of further equity into the group, PWC said that “the letter is not legally binding and there are no other firm commitments to refinance the £190m loan”. Thames also announced that customer complaints to the firm have risen 13% in the past 6 months. It has been ordered to return £72m to its customers in refunds as a result of its poor service. Thames Water's co-chief CEOs Cathryn Ross and Alastair Cochran, said: "It is clear that immediate and radical action is required." "Turning around Thames will take time. We simply cannot do everything that our customers and stakeholders wish to see at a pace and for a price that everyone would like”.
Barclays shares have dropped 4.5% in early trading on reports that the Qatar Investment Authority (QIA), Barclays second largest shareholder, is reducing its stake in the bank from 5% to 2.4%, to raise £510m. It is the biggest share sale since the Gulf state first invested in the bank, and the largest sale since Qatar helped rescue the banks during the 2008 financial crisis. At its peak, Qatar owned over 1 billion shares in the bank, a number now reduced to 448m.
FTSE 250 international food and beverage travel outlet operator SSP Group has reinstated its dividend – to pay 2.5p per share - having reported a near doubling of annual core profits. The Upper Crust owner, hit hard during covid travel restriction, is now back on track following a resurgence in passenger numbers and workers returning to the office. SSP posted underlying core earnings of £280m, up 97%. Revenue jumped 37% to £3bn. On a pre-tax basis, profits surged to £88m from £25m. Year on year, UK sales grew 22%; Continental European revenues increased by 14%; North America grew 33% ; and Asia-Pacific and Europe, Eurasia and the Middle East revenues rose by 29%.
London-listed THG is buying luxury US skincare brand Biossance for up to $20m. Founded in 2015, Biossance has generated global revenues of around $300m and is currently stocked in over 1,600 stores globally including Sephora, Harrods, Space NK, Douglas and Selfridges.
Frasers Group has bought yet another chunk of Boohoo, increasing its shareholding in the fast fashion business from 16.5% to 17.2%.
According to Sky News, Manchester United and billionaire Sir Jim Ratcliffe are set to confirm a £1.25bn deal next week which will see Ratcliffe's Ineos Sports take a 25% stake and two boardroom seats in the football club. Ineos would acquire 25% of the listed A-shares, and the Glazer family, who have controlled the club since 2005, would sell 25% of their B-shares to Ratcliffe. The deal also reportedly included a commitment from Ratcliffe to invest £245m into United's infrastructure.
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