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Jan 1 2025

Starmer hails ‘year of change’ as he delivers first New Year message as prime minister, with plan for ‘more cash in your pocket’ in 2025 | Politics News

Sir Keir Starmer has hailed 2024 as a “year of change” as he shared his first New Year message as prime minister.

But the Labour leader, who took office after a staggering general election victory over the Conservatives in July, admitted there is “still so much more to do” in 2025.

It will include a plan to make sure there will be “more cash in your pocket”, as well as a raft of other initiatives for “change”.

Almost six months into the prime minister’s time in Downing Street, Sir Keir is battling criticisms of his party’s management of the economy and the direction in which he is taking the country.

Despite this, the Labour leader’s New Year message largely takes an optimistic tone, celebrating a “year of changing Britain for the better” and looking forward to a “fight for change” that will define “every waking hour of this government”.

The prime minister also takes a moment to joke that his mantra of “change” didn’t extend to football in 2024, lamenting “another agonisingly close shave for England” in the Euros final.

He said: “But change in politics, with the election of this Labour government in July. And more importantly, with the work of change that we have begun.

“The minimum wage will be raised by a record amount. Wages are up more broadly. Returns of foreign national criminals – up 20%. Billions of pounds worth of new projects in clean British energy making our country more secure. And over £25bn invested in our NHS starting to cut waiting lists in your local hospital.

“Now, I know there is still so much more to do. And that for many people it’s hard to think about the future when you spend all of your time fighting to get through the week.

“So I want to be clear. Until you can look forward and believe in the promise and the prosperity of Britain again, then this government will fight for you.”

The prime minister says this “fight for change” will “define this year, next year, and indeed – every waking hour of this government”.

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He mentions his “Plan for Change”, vowing to focus on a “year of rebuilding” for the country – and “rediscovering the great nation that we are”.

“We have a clear plan for change: 1.5 million new homes – restoring the dream of home ownership; children starting school, ready to learn; a more secure energy system; waiting lists cut dramatically; immigration – reduced; neighbourhood police, tackling anti-social behaviour in every community; and more cash in your pocket, wherever you live,” Sir Keir explains.

“A nation that gets things done. No matter how hard or tough the circumstances.

“We will have time to reflect on that this year. A chance, with the 80th anniversary of VE and VJ day, to cherish the greatest victories of this country. And the greatest generation that achieved it.

“But that victory – and indeed the peace and the prosperity that followed – all rested on that same foundation we must rebuild today.

“The security of working people. That is the purpose of this government. The goal of our Plan for Change. And we will push it forward in 2025.”

The prime minister concludes: “Here’s to a year of changing Britain for the better.”

Conservative leader Kemi Badenoch noted that her party is going through a “period of change” in her New Year message.

She said: “This process of renewal will be a long-term project.

“Things may be bumpy along the way, but the Party I now lead is going to do things differently. Watch this space.”

Ms Badenoch, who took over as Conservative leader months ago, added she is looking forward to a 2025 that is “full of hope, security and prosperity”.

Sir Ed Davey, the leader of the Liberal Democrats, has also shared his New Year message.

He has called on Labour to “be much bolder” to deliver “real change” and tackle the challenges facing the UK in 2025.

The Lib Dem leader also used his New Year message to claim instability and insecurity around the world has been “made worse” by Donald Trump’s re-election in the US.

Sir Ed is looking forward to the next year with “genuine hope”, he will say, as the UK has “the people, the grit, the talent, the businesses – and the right values, to change things for the better”.

Meanwhile, Reform UK leader Nigel Farage said in his message that the UK has been “appallingly led” for several decades.

He said: “We’re in societal decline, we’re in economic decline, most people are getting poorer with every year that passes, we’re losing any sense of national identity and we’re actually teaching kids at school that people like Winston Churchill – born in this palace – are bad people and that our country’s history is something to be ashamed of.”

Mr Farage said Reform’s campaigning will include calls for “proper border controls” and to reduce the cost of living.

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Oct 26 2024

Budget: Rachel Reeves has left herself with very few political levers to pull to get hold of large sums of cash | UK News

In a classic piece of political understatement, a government source justified the coming £20bn rise in employer national insurance as “asking businesses to help out”.

This language of throwing a few quid in the collection pot belies the size of this tax hike.

It is huge. But that’s the point.

Having ruled out pushing up the big revenue raisers, Rachel Reeves has left herself with very few levers to pull to get hold of large sums of cash.

This move will be the largest tax rise in the budget, filling half of the £40bn the chancellor is trying to find.

The fact that national insurance is paid by businesses big and small increases the size of the net – meaning relatively small headline changes can yield big sums.

That’s also the downside though.

Groups representing small companies have already said this will make jobs harder to create and maintain.

So what of the politics?

At £20bn, the value of these tax rises mirrors almost exactly the cost of all 4p worth of cuts to employee national insurance pushed through by the last Tory government (with the support of Labour).

We’re essentially seeing a shift in the national insurance burden from workers to businesses.

But again, maybe that’s the point.

Analysis: Are Starmer and Reeves on the same page?

Much has been made of the fuzziness around Sir Keir Starmer’s attempts to define who the ‘working people’ are that he is seeking to protect from tax rises.

Government comms on the matter have been clunky.

But there’s also been something of a misreading of what that two-word phrase represents.

For some this has been a conscious and political choice.

Such as when one Tory MP suggested the prime minister believed anyone who owns a (tax-free) ISA doesn’t count as a working person.

In fact, isn’t it more likely that the now fabled ‘working person’ was never meant as a technical definition, but rather a statement of political intent?

Consider these statements – reproduced here without endorsement – that Labour would like you to ingest:

If you’re among the 97% who doesn’t pay capital gains tax, we’re on your side.

If you’re among the 94% who doesn’t pay inheritance tax, we’re on your side.

And yes, if you’re among the overwhelming majority of people whose biggest tax outlays are income tax, national insurance and VAT, we’re on your side too.

Set against that backdrop – even if we’re still unclear about who a ‘working person is’ – it becomes pretty obvious who the prime minister believes is not one.

And it’s a familiar and traditional Labour answer.

It’s the 1% as opposed to the 99%. The few, not the many. The rich rather than the poor.

But drawing a line like that when it comes to policy is harder.

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The modest-earning family with a few stocks and shares may wonder why they are now thrown in with the serial investors.

The small family-run bakery will ask why they are seeing their payroll taxes whacked up alongside the big corporates.

And economists will argue that business taxes like national insurance are always ultimately paid by workers eventually in the form of lower wages and fewer jobs.

Which leads us to what will likely be one of the central tensions in the budget.

The only solution to pay for public services in the long term is economic growth.

But can that growth be achieved when the interim funding fix relies on upping taxes on the rich and the private sector?

The chancellor will try to square that circle on Wednesday by announcing billions of pounds of extra investment borrowing.

But firms may still feel the government has bought them a fancy pair of trainers only to then break both their legs.

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Dec 7 2023

Cash use grows for first time in 10 years as people pay closer attention to household budgets | UK News

Cash usage has grown for the first time in a decade as households look to balance their budgets amid the cost-of-living squeeze.

Across the UK, coins and banknotes accounted for nearly a fifth (19%) of transactions in 2022, according to the British Retail Consortium (BRC) annual Payments Survey.

Its report said: “This year’s Payments Survey shows an increase in cash usage for the first time in a decade, up from 15% (in 2021) to just under 19% of transactions (in 2022).

“Faced with rising living costs, cash was a useful tool for some people to manage their finances and track their day-to-day spending.”

The increase also reflects a natural return to cash following the contactless switch during the COVID pandemic, the report said.

The BRC said it is the first time since its reports started in 2013 that year-on-year cash usage has increased.

“However, the recovery in cash use in retail is fairly minimal, with only a relatively small increase as a share of total sales by value, up from 8.2% in 2021 to 11% in 2022,” the report stated.

“It appears that whilst a small percentage of people have returned to pre-pandemic habits, for a large portion of the population, the pandemic has had a lasting impact on how much we transact in cash.”

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Card payments were used for 76% of transactions in 2022, with debit cards accounting for around four in five of these transactions.

Retailers spent £1.26bn on card processing fees in 2022, the BRC said.

Alternative payment methods, such as buy now, pay later, increased in popularity in 2022, from 2% of transactions in 2021 to 5% in 2022.

People have also been making smaller but more frequent payments as they manage their budgets.

The number of transactions increased from 17.2 billion in 2021 (47.2 million per day) to 19.6 billion in 2022 (53.7 million per day) and the average transaction value fell from £24.49 to £22.43, as consumers shopped around.

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Oct 8 2022

Cost of living: University graduates want higher starting salaries – and many would take up side hustles to earn extra cash | UK News

University graduates across the UK want to see higher starting salaries for first jobs amidst the cost of living crisis.

New research by careers platform Bright Network, shared with Sky News, reveals students expect starting salaries to be over £30,000 – 25% more than the current national average starting salary.

Due to the impact and stress because of the rising cost of living, the undergraduate students surveyed expressed “genuine concerns around the economic climate, their careers and future working life”.

The financial challenges are forcing young people to find ways to supplement their main source of income. Almost eight in 10 of the students surveyed said they’d consider taking up a personal ‘side hustle’ to bring in extra cash.

Like tens of thousands of university students Alex Johnson is back on campus for his final year and life in a working world is becoming very real for him. But with the financial future looking bleak, finding a job which pays enough is proving difficult.

He told Sky News: “A lot of them just say the salary is competitive and it’s hard to get a good grasp on what that actually means. But the ones I do see, they range between 20k to 30k, which is alright, but as a student in the cost of living crisis, I’m really looking to get more than that and get paid for what I’m worth.”

So to help him during his final year and when he enters the world of work he’s taken on a side hustle which is already bringing in additional funds. From his accommodation at the University of Leeds, Alex runs a blog about Lego. His passion for building Lego means he can use it to earn extra money which helps him now as a student and will top-up his graduate job salary.

He said: “It supports me and allows me to do other things. I was able to go on a holiday this summer which as a student, when money is tight, I might not have been able to do otherwise. It will just help me boost that income since unfortunately it’s a struggle to find those good salaries out there.”

Working part-time in a marketing job doesn’t provide enough money for Natasha Birk who graduated from the University of Bath. She’s back living at home with her parents as her salary doesn’t allow her to be fully independent and self-sufficient. But the success from her eco-eyelashes business, on the side, means she can get there quicker.

Speaking to Sky News, she said: “When you’re doing that job search you find jobs that really appeal to you and the criteria will be really exciting but then you look at the salary and it can be a bit deflating. You have to be realistic though and think how would I actually be able to afford to live off that wage, even though it’s a job I love doing.”

But for businesses, boosting salaries by thousands of pounds is not a viable option, says Alison Edgar MBE, who advises small and big businesses on how to become successful.

She told Sky News: “If you look at the national living wage people are getting out of bed for a lot less than £30,000. A degree may give you an academic background, but it doesn’t actually give you the skills that you might need in that role. So if graduates want to have a side hustle to bring in that money, that’s great, but they should not be expecting an employer to pay that salary because they’d lose out on margins.”

She added: “25% on top of current salaries doesn’t fit into the current economics. A lot of graduates are new to the workplace, so they’ll need training and understand the business side of things. If they get that increase you’d have to increase the salaries of all the employees that were and that is not going to work for businesses economically. It’s not a sustainable model.”

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Sep 16 2022

The Queen’s death made her son a King, and a rich man – but where exactly does the cash come from? | UK News

When the Queen died, fortunes passed down the line of succession along with titles.

Her death made her eldest son a hugely rich man as well as King, while his heir secured a guaranteed income of more than £20m a year along with the title Prince of Wales.

The Royal Family is funded by a rackety collection of assets with roots in the Middle Ages, refined over time in deals with parliament, the most recent in 2012.

Nearly five-mile queue to see Queen – follow latest updates

Negotiated by George Osbourne, it guaranteed revenue streams for the monarch, their heir and the wider family, while leaving the question of tax largely voluntary.

The principal source of the King’s funding is the Sovereign Grant, calculated as 25% of the profits of the Crown Estate, a £15bn portfolio of commercial and residential property, agricultural and marine land owned by the Crown, not the individual monarch.

In 2021-22 it was worth £86.3m, of which £52m covered official travel, the cost of employing almost 500 members of the Royal Household, and maintenance of the Occupied Royal Palaces; Buckingham Palace, Windsor Castle, Clarence House, St James’s Palace, Kensington Palace, Marlborough House Mews and Hampton Court Mews.

The remaining £34m was allocated to an ongoing “re-servicing” of Buckingham Palace. The Sovereign Grant was increased from 15% of revenue to 25% in 2018 to cover the total cost of £369m over 10 years.

Handily for the monarch, the value of the Sovereign Grant cannot go down even if revenue falls, though that may be unlikely given its ownership of much of the UK seabed, on which lies hugely lucrative licences for offshore wind turbines will be granted in coming years.

No inheritance tax

King Charles will also draw income from the Privy Purse, made up primarily of the net revenue of the Duchy of Lancaster, a £600m portfolio of land and property assets worth £22.3m in 2020-21.

The Queen used this to cover the cost of expenses incurred by other members of the Royal Family including his siblings Prince Andrew, Princess Anne and Prince Edward, but not his heir.

The Queen also enjoyed private wealth estimated at more than £350m, including ownership of Balmoral and Sandringham. If, as presumed, the bulk of her wealth passes to King Charles, he uniquely will not have to pay inheritance tax on his new fortune.

Gifts from monarch to monarch are exempt from death duties, though bequests to her other children, or any other individuals or entities, will be taxable.

No probate for this will

We will never know the details, however, because the sovereign’s will remains sealed, the only will in the kingdom that does not have to pass into probate.

The Sovereign Grant is not taxed, but since 1993 the Queen has voluntarily paid income tax on revenue from the Duchy of Lancaster not used for official purposes. King Charles is yet to confirm he will do similarly.

As heir to the throne, Prince William, his wife and children will now benefit from the Duchy of Cornwall, a £1bn portfolio of agricultural land, property and investments that includes the Oval Cricket Ground & the Isles of Scilly.

Voluntary income tax

The estate paid the now-King £23m in the past financial year, earnings that are exempt from corporation and capital gains tax, and only subject to voluntary income tax on the net surplus after unspecified deductions.

Having decided to leave the working royal stable, the Duke and Duchess of Sussex now rely on trading off their talents and residual titles, with income from various media deals including a £20m book contract.

In a profound irony, Harry and Meghan have signed a reported $100m deal with Netflix, which owes much of its dominance in the streaming market to The Crown, a dramatisation that has done for the Windsors what Shakespeare did for the Plantagenets, and costs more to produce per-series than the annual Sovereign Grant.

None of these income streams cover the cost of royal security, widely estimated at more than £100m a year and borne by the taxpayer, or the price of royal visits often funded by local authorities.

Nor does the Royal Family pay for its own celebrations. The Treasury set aside an additional £28m to fund the recent Platinum Jubilee, the majority of which was spent on four-days of pageantry in central London.

Even with a conservative annual bill of £250m, the monarchy’s advocates argue they more than pay their way.

Does tourism foot the bill?

Tourism is routinely cited as their greatest benefit, yet revenue from the five royal palaces open to the public was just £9.4m last year, and only just exceeded £20m pre-COVID, and none are in the top 20 most visited popular attractions in Britain. With 1.5 million visitors, Windsor Castle ranked only 23rd, behind Chester Zoo, Stonehenge and Tate Modern.

Compare that with the appeal of Versailles, the palace of the long-gone French monarchy, which attracts almost 10 million visitors a year, and it suggests the UK’s palaces underperform.

Less quantifiable, but almost certainly more precious, is the brand value the Windsors bring to the UK. They lend Britain’s diplomats soft power and its businesses a unique selling point.

‘Don’t mess with the monarchy’

One FTSE 100 executive, recently returned from an investor tour of the US, remarked: “Don’t mess with the monarchy. After Brexit, and with all the dysfunctional politics, it’s about the only thing the rest of the world thinks still works in Britain.”

That lustre may even be enhanced by the Queen’s passing and the sustained display of pageantry and proclamation the past week has brought.

Weddings, divorces, defections and disgrace

She has been mourned around the world, with messages of goodwill from Beijing to Paris, and her funeral will take its place in the dramatic arc of weddings, divorces, defections and disgrace that have captured global attention throughout her reign.

King Charles, ascending at the height of a cost-of-living crisis and without the depth of goodwill enjoyed by his mother, will face greater scrutiny of his household and expenditure, not least how he will use at least eight palaces and private homes now available to him, and how many of the family will benefit.

Every CEO will tell you stability is the greatest asset of any business, and the Queen’s passing cannot but bring uncertainty, but The Firm’s income under Charles III is at least guaranteed.

And as the Elizabethan era ends with the first full state funeral of the colour TV age, the world will still be watching.

Whether the King can maintain the value of the Windsor stock, and public consent for the financial settlement, will be more a question of politics and philosophy than economics.

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