Economy
Do political donations win government tenders for the Big Four?
A recent submission to a Senate inquiry by the Centre for Public Integrity claimed that in the decade to 2023 companies making political donations “were 2.49 times more likely to win procurement contracts than non-donors”, and that the value of contracts won by donor companies was on average 4.4 times the value of contracts won Continue reading »
Pressure for a Windfall Tax on Banks Grows As ‘Big Four’ Net Huge Profits
Newsletter offer
Subscribe to our newsletter for exclusive editorial emails from the Byline Times Team.
Labour MP Richard Burgon will demand a new windfall tax on bank profits, mirroring the recent tax imposed on energy companies, in a parliamentary debate today (December 8).
The Labour MP is expected to argue that an extra levy on excess profits could generate billions of pounds for public services and provide relief to those struggling in the current economic climate.
Burgon’s speech is set to highlight the disproportionate profits banks have been accruing amid the cost of living crisis, noting: “Just like the oil and gas companies, the banks have used this crisis to line their pockets."
The MP underscores the disconnect between struggling families grappling with mortgages and rents, and the banks that are profiting from higher interest rates. Burgon plans to note that increased rates have not benefited savers, but have instead been “hoarded by the banks creating a windfall of many billions.”
Don't miss a story
The proposal comes against the backdrop of soaring bank profits in the first nine months of 2023, with the 'big four' - Lloyds, Barclays, HSBC, and NatWest - amassing £41 billion in pre-tax profits. This figure nearly doubles the £23 billion earned in the same period last year, according to analysis by Unite the Union.
The Government has cut taxes on banks, with Conservative cuts to Bank Surcharge and Bank Levy totalling £22bn over the next six years, according to recent Liberal Democrat analysis of the OBR’s Autumn Statement data.
Jeremy Hunt cut the Bank Surcharge from 8% to 3% in April this year, even as he increased taxes on millions of families by extending the freeze in the Income Tax personal allowance and higher-rate threshold.
The Conservatives cut the Bank Levy every year from 2016 to 2021. The two bank taxes are forecast to raise a combined £2.4 billion next year, down from £4.7 billion in 2016-17 – a 60% real-terms cut, the Lib Dems argue.
Burgon hopes to issue a fierce rebuke of the government's fiscal approach in light of the vast profits, challenging the notion that austerity and cuts are the only viable solutions.
‘From BP to Banks: There’s Lots of Money Around – It’s Just Not In Workers’ Pockets’
Despite Government calls for pay restraint, new figures show some people are doing very well out of the cost of living crisis, writes Josiah Mortimer
Josiah Mortimer
Chancellor Jeremy Hunt’s recent Autumn Statement set out unspecified cuts of 16% to unprotected Government departments within the next few years - which is paying for the pre-election National Insurance tax cuts.
“Are we going to allow this government to claim that more austerity and cuts are inevitable and that public investment is unaffordable?” the Leeds North MP is likely to ask, calling for a tax system that demands more from the wealthiest.
The proposed windfall tax, according to Burgon, could raise between £4 billion and £16 billion this year from the profits of the big four banks alone. Labour has not formally backed a windfall tax on banks but it is a key call of Socialist Campaign Group MPs, the parliamentary party’s left flank.
Burgon plans to cite Spain's progressive government, which introduced a 4.8% Windfall Levy on certain bank incomes and commissions, as a potential model. And the Leeds MP will reference a past precedent set by Margaret Thatcher, who introduced a 2.5% tax on banks’ non-interest-bearing deposits.
Amid controversy over Labour leader Keir Starmer’s apparent praise for the late Conservative PM, he is expected to say: “Thatcher said that the banks had ‘made their large profits as a result of our policy of high-interest rates rather than because of increased efficiency or better service to the customer.’ Such a tax in the UK, according to Positive Money calculations, could raise up to £11bn today.”
Burgon's call for a fairer tax system is supported by public opinion, he will argue. A recent poll commissioned for the TUC found that three-quarters of the public, including 76% of Conservative 2019 voters, support a windfall tax on banks’ excess profits.
The Labour MP’s call for a windfall tax on banks is a challenge not only to the Government but to the Labour leadership to be bolder on tax.
Analysis by Positive Money has shown that higher interest rates mean that the Bank of England is expected to pay an estimated £75bn of interest on banks’ risk free reserves over 2023 and 2024, with a total of around £150bn due to be paid out between 2022 and 2028.
Calls for a windfall tax on banks have been echoed by other Labour MPs, including Angela Eagle, John McDonnell, and Clive Lewis. Polling commissioned by Positive Money found the majority of the public supports a windfall tax on banks.
The debate is expected to end by 7:30pm.
Subscribers Get More from JOSIAH
Josiah Mortimer also writes the On the Ground column, exclusive to the print edition of Byline Times.
So for more from him...
Do you have a story that needs highlighting? Get in touch by emailing josiah@bylinetimes.com
Home Ownership and the History of Mortgages
In this episode of Past Present, Niki, Natalia, and Neil discuss Americans’ attachment to the thirty-year mortgage...
Jeremy Hunt Used Autumn Statement to ‘Channel Funds to Marginal Conservative Seats’ Analysis Suggests
Newsletter offer
Subscribe to our newsletter for exclusive editorial emails from the Byline Times Team.
Chancellor Jeremy Hunt is targeting funds and investment at Conservative marginal seats, according to analysis of his Autumn Statement shared with Byline Times.
Ten of 12 MPs and seats mentioned by the Conservative chancellor in his major economic intervention last week had majorities smaller than the UK-average. And eight of the 12 had majorities of less than ten per cent.
Sarah Atherton, the MP for Wrexham, and Simon Baynes, the MP for Clwyd South, both of whose seats would be lost by the Conservatives at the next election based on current predictions, were given specific mention by the Chancellor, while other seats received bungs including Moray, represented by Douglas Ross MP (majority of 1%) and Bury North (James Daly MP) with a majority of just 0.22%.
The Chancellor said: “Having listened to my hon. Friends the Members for Wrexham (Sarah Atherton) and for Clwyd South (Simon Baynes), I can announce a second investment zone in Wales in the fantastic region of Wrexham and Flintshire, which I will visit tomorrow.”
Don't miss a story
The twelve MPs or seats referenced in the Chancellor’s speech with regard to a policy decision he had taken were:
- James Daly MP - Bury North: majority 105 (0.2%) - New ‘investment zone’ for his area
- Douglas Ross MP - Moray: majority 513 (1%) - Freezing alcohol duties
- Simon Baynes MP - Clwyd South: majority 1,239 (3.4%) - New ‘investment zone’ for his area
- Virginia Crosbie MP - Ynys Môn: majority 1,968 (5.4%) - Extending freeport/investment zone tax reliefs (benefiting her seat)
- Sarah Atherton MP - Wrexham: majority 2,131 (6.4%) - New ‘investment zone’ for her area
- Alun Cairns MP - Vale of Glamorgan: majority 3,562 (6.5%) - Freezing alcohol duties
- David Mundell MP - Dumfriesshire, Clydesdale and Tweeddale: majority 3,781 (7.7%) - Freezing alcohol duties
- Matt Vickers MP - Stockton South: majority 5,260 (9.6%) - Extending the 75% business rates discount for retail, hospitality and leisure
- Simon Jupp MP - East Devon: majority 6,708 (10.5%) - as above
- Simon Fell MP - Barrow and Furness: majority 5,789 (12.6%) - as above
- Greg Smith MP - Buckingham: majority 20,411 (32.2%) - Freezing alcohol duties
- Ben Bradley MP - Mansfield: majority 16,306 (33.1%) - New ‘investment zone’ for his area
The average MP’s majority at the last general election was 24.9% or 12,527 votes, while seats with a majority of under 7,000 votes represented just 14.15% of the country as a whole, according to House of Commons data.
Yet of the twelve MPs identified by name by the Chancellor as beneficiaries of his policy decisions, only two represent constituencies that are more safe than the average seat at the 2019 election, analysis by pro-PR campaign Make Votes Matter reveals.
Eight of the remaining ten MPs would lose their seats at the next election based on current polling.
Campaigners point to the Chancellor's targeted generosity as a symbol of the pork-barrel politics with which First Past the Post is associated.
Last year, the New Statesman found that each Conservative MP constituent received an average of £64 more from four major ‘levelling up’ funds than those represented by another party.
Analysis in 2020 by the Guardian showed that opposition Labour councils have borne the brunt of local government cuts over the past decade. And research in 2019 by the BBC found that Conservative-held constituencies were overwhelming beneficiaries of the government’s increase in schools funding. The BBC’s Newsnight also found that Labour-Tory marginal seats were overrepresented when it comes to the government’s promises of money for “left-behind” towns.
In 2019, it emerged that money from the government’s £3.6bn Towns Fund was being spent in richer areas where Conservative MPs were fighting to keep their seats, at the expense of some of the UK’s poorest towns. Out of 61 areas picked by government ministers for the new Towns Fund, 60 were in Conservative-held seats or Tory targets with an average majority of just 3,000, according to The Times. Byline Times found similar bias.
For electoral reform backers, the figures show that Westminster’s winner-takes-all voting system causes politicians to prioritise leafy swing seats over super-safe constituencies - which are disproportionately Labour held and in urban areas.
Make Votes Matter's Chief Executive, Klina Jordan, commented: "With levelling-up funding and now with this Autumn Statement, the government is playing politics with people's lives.
"By any other name, this is surely an attempt by the government to shore up its vote in areas it just so happens to be more electorally vulnerable.
"As long as we're stuck with the current voting system, politicians of all stripes will keep doing this. That's why we need a simpler, proportional voting system where the opinions of voters in Manchester Gorton matters just as much as those in Moray."
Make Votes Matter is a single-issue campaign for Proportional Representation in the House of Commons. The Treasury was contacted for comment.
Subscribers Get More from JOSIAH
Josiah Mortimer also writes the On the Ground column, exclusive to the print edition of Byline Times.
So for more from him...
Do you have a story that needs highlighting? Get in touch by emailing josiah@bylinetimes.com
Regulatory certainty and entrepreneurship: Unlocking Australia-China climate collaboration
Entrepreneurs occupy a pivotal role in bridging the gap between Australia and China, especially when it comes to climate collaboration. Collaboration between Australia and China on solar energy technologies stands as a testament to the potential of entrepreneurship and international partnerships in driving innovation and sustainability. The synergy had led to various successful joint ventures Continue reading »
AUKUS submarine revelations compel a rethink
US Congressional report argues that Australia’s acquisition of nuclear submarines would actually undercut deterrence of China by depleting the US submarine fleet. With the promise of nuclear submarines becoming ever distant, it may be time to reconsider other options. Recent surprising disclosures have revealed that nuclear-powered submarines, which Australia plans to acquire under the trilateral Continue reading »
Unlocking Pakistan’s 5G potential: A call to action
In March 1995, Pakistan’s Ministry of Information and Broadcasting took a bold step by granting a 15-year license to M/s Pay TV to establish a wireless TV network. The intention was clear: to harness the potential of wireless technology for the nation’s development. Years later, we find ourselves at a crossroads, with the promise of Continue reading »
A Bangladeshi workforce enslaved by greed and power
Millions of workers in the multi-billion-dollar garment industry are being exploited, activists say. The families of Anjuara Khatun, 26, and Russell Howlader, 25, shot and killed by police during a recent garment workers’ protest for a fair minimum wage are not seeking justice for their lost loved ones. “Who would I file the case against? Continue reading »
Austerity 2.0 Snuck into Chancellor Jeremy Hunt’s Autumn Statement as NHS and Services Face Huge Cuts
Newsletter offer
Subscribe to our newsletter for exclusive editorial emails from the Byline Times Team.
A new round of austerity is on its way if the next Government sticks to plans snuck out in the Autumn Statement - with Chancellor Jeremy Hunt pushing huge cuts to departments onto the next Government to balance his budget.
The NHS alone faces cuts of £5bn in real-terms, according to Lib Dem analysis of Wednesday’s major fiscal event.
Jeremy Hunt has cut day-to-day spending in cash terms for NHS England in 2024-25 from £165.9bn in his March Budget to £162.5bn in the Autumn Statement, a cut of £3.4 billion.
Taking inflation into account, that will leave the NHS budget £4.7 billion (2.9%) lower compared to 2022-23. It comes despite the Conservative Government handing £3.8bn a year of tax cuts to the banks.
Jeremy Hunt cut the Bank Surcharge from 8% to 3% in April this year, even as he increased taxes on millions of families by extending the freeze in income tax thresholds.
It follows Conservative cuts to the Bank Levy every year from 2016 to 2021. The two bank taxes are forecast to raise a combined £2.4 billion next year, down from £4.7 billion in 2016-17 – a 60% real-terms cut.
Don't miss a story
Analysis by the Liberal Democrats shows that banks will pay £22 billion less over the next five years than if revenues from the Surcharge and Levy had been maintained at 2016-17 levels in real-terms.
Jeremy Hunt failed to mention the crisis in the NHS in his Autumn Statement, instead kicking cuts to health budgets down the road.
The Trades Union Congress (TUC) has been vocal in its criticism of the Chancellor's latest round of austerity measures. The trade union body said the Chancellor has confirmed “another round of punishing spending cuts to public services and investment”.
Cutting National Insurance won’t make up for “13 continued “years of economic failure on living standards and growth” the organisation said in a statement.
Growth forecasts have been revised down and real wages are set to remain below 2008 level until 2028.
TUC General Secretary Paul Nowak said: “At a time when our schools and hospitals are crumbling – the Chancellor has confirmed another round of punishing and undeliverable spending cuts to public services and investment. Be in no doubt – if the Tories win the next election, even more austerity is on the way.”
All the Bad News Jeremy Hunt Buried in His Autumn Statement
Details buried in the Chancellor’s statement show we are heading for years more of tax rises, low growth and public sector cuts thanks to his Government, reports Adam Bienkov
Adam Bienkov
Dr. John Puntis, Co-Chair of Keep Our NHS Public, expressed grave concerns about the state of the NHS, pointing out the £1.5 billion gap in current Integrated Care Systems budgets alongside record waiting lists. He criticised the Chancellor for ignoring the healthcare crisis and for policies that he views as punishing sick and disabled people.
Instead of investing in the NHS, Dr Puntis said: “[The Conservatives] have a Victorian workhouse mentality that seeks to further demonise and impoverish sick and disabled people by withdrawing benefits unless they get into work.
“Extra and more timely medical appointments are promised to people as a solution to support this, yet without announcing any additional NHS funding or capacity to enable it…We desperately need a Government that will seek to improve all our lives and not further degrade them by choosing a second phase of austerity."
Under the Government's spending plans, real-term cuts are coming to public investment from next year, signalling a “new round of austerity, which could hinder economic growth and prosperity,” a spokesperson for the progressive Institute for Public Policy Research think tank said.
Carys Roberts, IPPR executive director, said: “The chancellor claimed to be making long-term decisions, but his actions prove otherwise. The UK sorely needs investment - in schools, homes, hospitals, and in net-zero industries of the future. But the chancellor announced real-terms cuts to public investment, which will hold back economic prosperity, and he chose to cut taxes which will suck money out of public services.
“This is despite the public favouring higher rather than lower taxes and spending. Many of his most consequential plans are put off to the next parliament, when we could have a different chancellor altogether.”
Real-terms capital spending - investment in infrastructure - is projected to fall by £20 billion in real terms (or a reduction of a third) in a few years, according to the Resolution Foundation. The economy is in the weakest state in the run up to an election in three decades, the Resolution Foundation said in a post-statement briefing.
RDEL = Real Terms (Inflation Adjusted) Departmental Expenditure. Unprotected departments (green line) see major cuts in the coming years. Picture: Resolution Foundation briefing
Unprotected Government departments will see their real budgets fall by 14% under Chancellor Hunt’s plans, delayed until the next Government is in. An election is expected around May or Autumn next year.
"2010 levels of austerity are coming” Smith added, something that is “absolutely undeliverable given public services pressures”. Almost all the handouts in National Insurance tax cuts come from reducing departmental spending in the future, several other analysts have noted.
Real household disposable income has also collapsed under Johnson/Truss/Sunak compared to previous Prime Ministers, with high inflation following the pandemic having a major impact on family finances.
The independent Office for Budget Responsibility says that if fuel duty rates are held at the current rate then more than 43 per cent of the supposed £13bn spending headroom for Government in 2028-29 would be removed. The Government has repeatedly frozen fuel duty over the past decade following lobbying from motorists.
Moreover, the financial damage from tax threshold freezing far outweighs the benefit to people from the National Insurance cuts by a factor of around four. Meanwhile, tax as a percentage of GDP is continuing to grow past its highest levels ever, even with the NI reduction, James Smith, Research Director at the Resolution Foundation said.
In a Progressive Britain event on Wednesday night, Shadow Environment Secretary Steve Reed indicated Labour's intention to diverge from the Conservative spending cuts, saying: “The party isn’t going to walk into an open trap,” according to Politico.
he Government could raise £7.5 billion a year for vital public services by closing unfair tax loopholes, according to new research by tax campaigners shared by Byline Times this week.
Subscribers Get More from JOSIAH
Josiah Mortimer also writes the On the Ground column, exclusive to the print edition of Byline Times.
So for more from him...
Do you have a story that needs highlighting? Get in touch by emailing josiah@bylinetimes.com
COP-out: Why the petrostate-hosted climate talkfest will fail
After a succession of record-breaking months of record heat including 1.8°C in September, global warming for 2023 as a whole will likely tip 1.5°C, with 2024 even hotter as the effect of the building El Nino is felt more fully. Already hundreds of thousands have died and millions displaced, primarily in countries least responsible for Continue reading »