Rachel Reeves said to be "plotting a tax raid on savers"

Daily Business News

Chancellor Rachel Reeves is said by The Telegraph to be “plotting a tax raid on savers by making it easier for HMRC to dock workers’ pay”. Savers currently have a personal tax-free allowance of up to £1,000 a year, depending on the rate of income tax they pay, but HMRC is concerned savers are failing to pay tax due on interest, hence it is consulting on whether it should have new powers to demand more personal information from banks about those who save with them. This would include forcing banks to release savers’ National Insurance numbers so the tax authority can match taxpayers to money held in savings accounts, thereby enabling it to change workers’ tax codes more readily to collect tax owed. Former Conservative Cabinet Minister Sir David Davis is among those suggesting such powers would encroach on savers’ privacy and pave the way for even more snooping by HMRC. “It’s not being done to make it easier for taxpayers. It’s being done to make it easier for tax collectors,” he said. “The simple truth is HMRC makes mistakes, and allowing them to step in and arbitrarily take your savings in circumstances where they may well have made a miscalculation is completely unjust and improper. The state has, over the last few decades, taken more and more liberties with our privacy and with our data and in general, it hasn’t improved services, it hasn’t improved security, but what it has done is undermine the integrity of people’s lives.” Mike Warburton, former tax director at Grant Thornton, told the Telegraph: “I have no problem with HMRC developing and expanding their systems to collect information that they need to assess the tax that we owe. What I would be concerned about is the expansion of this into a ‘Big Brother’ scenario where the Government collects information of a wider nature which they can then use to control us.” John O’Connell, CEO of the TaxPayers’ Alliance, also criticised the approach, saying: “HMRC has become increasingly Kafkaesque in its dealings with the public, particularly high earners with complicated tax affairs. The taxman needs to ensure that any changes result in a more open, transparent and receptive body than is the case now.” HMRC defended the proposals. A spokesman said: “These changes, if taken forward, would be positive for savers, by making it easier for them to get their tax right first time.”

It has also been revealed by The Telegraph this morning that Energy Secretary Ed Miliband has been ‘forced’ to set aside £8bn in ‘insurance’ to cover the risks of his £22bn carbon capture and storage project failing. The Department for Energy Security and Net Zero Energy (DESNEZ) has taken the charge to compensate companies in case the unproven technology flops, and as protection against risks ranging from CO2 leaks to simply not making enough money. “The £8bn is thought to be in addition to the £22bn of funding and subsidies already pledged by the Government to support the nascent industry,” the newspaper says, adding that the details were buried in Rachel Reeves’s Spring Statement, which listed the “colossal” sums simply as “contingent liabilities,” without giving any explanation. The Treasury has since confirmed the money is “specifically to support companies involved in building the carbon capture and storage industry,” it adds. The technology involves stripping CO2 from the emissions produced by industries like power stations, cement factories and refineries, before compressing it into liquid form and eventually burying it in rocks beneath the seabed. However, the industry fears there could be leaks from the pipelines carrying the CO2 which would be “disastrously expensive but also dangerous” to plug. Hence companies investing, including BP, Equinor, TotalEnergies and Shell, have put money into the scheme contingent on the Government indemnifying them against excess risk.

The Government’s staffing bill will rise by more than £50bn per year by the end of the decade, despite Reeves’ claims she is shrinking the size of Whitehall. The Office for National Statistics has revealed that spending on central government employees will rise from £172bn last year to £225.7bn in 2029 to 2030. In her Spring Statement on Wednesday, she said £150m would be set aside for a scheme to encourage up to 10,000 people to leave the Civil Service, in the hope of cutting administration costs by 15% by the end of the decade.However, the Office for Budget Responsibility predicts pay per head among central government workers will rise by 2.3% this year and 4.9% in 2025-26.

“Businesses hoped for more from this week’s Spring Statement to help them drive growth,” Neil Carberry, the CEO of the Recruitment and Employment Confederation (REC) has said, but instead they are still pessimistic about hiring new staff. Once again, Chancellor Rachel Reeves pledged to “kickstart economic growth” in her speech, but a new REC survey of more than 700 UK employers conducted just before the Spring Statement suggests businesses remain downbeat. “We have seen business sentiment begin to improve this Spring, though the impact of the national insurance hike hangs over this like a fog,” Carberry said, adding: “Too often, the government talks a good game but day-to-day action paints business as the problem rather than the solution”. From next week, employers’ national insurance contribution will mean firms pay an increased rate of 15% of tax on earnings by any employee they pay more than £5,000. Carberry urged Reeves to take action and introduce a raft of business-friendly policies to help the job market, including revising the Employment Rights Bill which is expected to depress hiring still further, because of the additional red tape and employment costs it intends to put on businesses.

Politicians may love to talk about the UK becoming a tech superpower, but that title seems to be slipping further and further away from the realms of possibility, at least if a new global ranking released by STEM consultancy SThree and the Centre for Economics and Business Research (Cebr) is to be believed. The Global STEM competitive index puts Britain only in 13th overall for tech competitiveness, behind nations like Ireland, Singapore and Australia, who are now leading the way. Although London remains one of Europe’s leading tech hubs, the index cites a severe lack of investment in key areas; a failure to scale homegrown startups; and lack of tech talent as fallings leading to slow growth. However, the UK did rank sixth for high-tech exports and for computer science university rankings. Once, the UK and the other G7 nations dominated the global tech landscape, but no G7 nation made it even into the index’s top 10. Timo Lehne, CEO of SThree, said this is a “clear warning sign”. “Once the global epicentre for innovation, these countries are now facing stiff competition from emerging tech hubs. The challenge is no longer just maintaining their position, but ensuring they lead the charge in fostering innovation and nurturing the businesses that will drive the future of global technology,” he said.

Thousands of jobs are at risk at British Steel. The manufacturer owned by China’s Jingye announced plans to shut two blast furnaces at its Scunthorpe plant yesterday, after rejecting a £500m government lifeline despite two years’ of talks. British Steel said that the coke-fired blast furnaces and steelmaking operations were "no longer financial sustainable, due to highly challenging market conditions, the imposition of tariffs and higher environmental costs relating to the production of high-carbon steel". Between 2,000 and 2,700 jobs will go because of the decision, out of a total workforce of 3,500. CEO Zengwei An said: "We understand this is extremely difficult day. But we believe this is necessary decision, given the hugely challenging circumstances the business faces." Despite £1.2bn invested into the business by Jingye, British Steel is still losing around £700,000 a day, the firm said. However, trade union Unite called the decision a "disgrace" and accused British Steel of holding the government "to ransom". General secretary Sharon Graham said: "In discussions with Unite, the Government has clearly moved and has made an offer to invest heavily in British Steel. The offer comes with long-term job guarantees - anything less would be complete misuse of taxpayers' money. British Steel must now withdraw its job threats and work with the government and Unite on a sustainable way forward." Business and trade secretary Jonathan Reynolds said: “I know this will be a deeply worrying time for staff and, while this is British Steel’s decision, we will continue working tirelessly to reach an agreement with the company’s owners to secure its future and protect taxpayers’ money. We’ve been clear there’s a bright future for steelmaking in the UK. We’ve committed up to £2.5bn to rebuild the sector and will soon publish a Plan for Steel setting out how we can achieve a sustainable future for the workforce, industry and local communities.”

Sky is closing three of its ten call centres, putting around 2,000 jobs at risk, or around 7% of its workforce. The broadcaster, owned by US media giant Comcast, has earmarked centres in Stockport, Sheffield and central Leedsfor closure, and announced that some roles will also be affected at sites in Dunfermline and Newcastle. Last year, Sky cut around 1,000 jobs, mostly engineers, after weaker demand for satellite dish installations.

The WH Smith name will soon disappear from our high streets and retail parks after 233 years, although it will still be seen in travel outlets such as railway stations and airports. It has just been announced that the historic retailer is selling its 480 high street stores to investment company Modella Capital, which also owns Hobbycraft, for £76m. The stores will be rebranded by Modella as TG Jones. The high street arm of the business, founded in 1792, employs around 5,000 staff, and comprises 15% of total group profits. WH Smith has been in talks to sell the division for months, so it can focus on its travel brand, with 1200 stores. A Modella spokesman said: “TG Jones feels like a worthy successor to the WH Smith brand. Jones carries the same sense of family and reflects these stores being at the heart of everyone’s high street.” Bensons for Beds-owner Alteri was also in the running to take over the chain.

A train driver whose sacking has prompted threats of a 56-day strike fell asleep at the controls and failed to officially report it, The Telegraph has discovered. At the time of the sacking, trade union Aslef condemned Hull Trains for its “failure to act responsibly” and suggested the unnamed driver had been forced out because he had reported a “safety concern”. The union is demanding he is reinstated to his job, and has announced an eight-week walkout at the franchise, scheduled to begin on Monday next week. But a letter to Aslef, seen by the newspaper, reveals the driver had experienced “fatigue matters” while at the controls of Hull Trains’ 125mph services on more than one occasion, leading the company to believe he therefore poses an unacceptable safety risk to passengers. Hull Trains MD Martijn Gilbert said in the letter that the discovery of the fatigue incidents presented “a safety risk that we could not ignore,” especially not as incidents of fatigue “were also not properly reported,” meaning the firm “cannot be confident that [the driver] can be trusted to properly report safety matters in a safe and appropriate way, so that we can support them and manage the risk”.

HSBC failed to give investment bankers at vice-president level and above any bonuses, despite letting them go on the day they were supposed to learn their pay award figures, The Financial Times reports. New HSBC CEO George Elhedery is pulling the FTSE 100 lender away from investment banking to cut £1.2bn in costs by the end of 2026. However, it booked a record £25.6bn in pre-tax profit for 2024, and according to Sky News, Elhedery is in line for a pay package worth over £15m, trumping that of his predecessor Noel Quinn, who received £10.6m in his last full year at the bank. HSBC has declined to comment on the story.

David Schwimmer, CEO of the London Stock Exchange Group, was paid almost £8m last year, despite numerous high-profile delistings in 2024. Last year, 88 companies left the bourse, among them Darktrace and Paddy Power-owner Flutter, while only 18 joined.