Sunak confronts cost of living crisis with inflation-fighting budget
Chancellor of the Exchequer Rishi Sunak leaves 11 Downing Street for the House of Commons to deliver his Spring Statement on March 23, 2022 in London, England. (Photo by Leon Neal/Getty Images)
Chancellor Rishi Sunak on Wednesday launched plans to ease a cost of living crisis, with UK inflation set to spike to a 40-year high on Ukraine fallout.
Delivering the Spring Statement, Sunak unveiled measures to help household finances, including a cut on fuel duty and easing the tax burden for the lowest earners.
Britain's economy will grow far slower than expected this year owing to the Ukraine war and soaring global inflation, he told parliament.
The UK economy was set to grow 3.8 percent in 2022, down from an official estimate of six percent made in October.
Sunak said that the Office for Budget Responsibility (OBR) - the government's official economic forecaster - "has not accounted for the full impacts of the war in Ukraine and we should be prepared for the economy and public finances to worsen, potentially significantly".
"Their initial view, combined with high global inflation and continuing supply chain pressures means" the UK economy is forecast to grow significantly slower than thought.
Gross domestic product was estimated to expand a further 1.8 percent next year, down from an official prediction of 2.1 percent.
The OBR warned that should "wholesale energy prices remain as high as markets expect, energy bills are set to rise... pushing inflation to a 40-year high of 8.7 percent in the fourth quarter".
UK annual inflation accelerated to a 30-year high at 6.2 percent in February, official data showed Wednesday.
In the budget update, Sunak announced that National Insurance starting thresholds will rise to £12,570 from July. The cut, worth over £6 billion, will benefit almost 30 million working people with a typical employee saving over £330 in the year from July.
Sunak also announced that fuel duty for petrol and diesel will be cut by 5p per litre from 6pm tonight (23 March) – a tax cut worth £2.4 billion. This is the biggest cut ever on all fuel duty rates and means a one-car family will now save on average £100.
The basic rate of income tax will also be cut by 1p in the pound in 2024, when the OBR expect inflation to be back under control, debt falling sustainably and the economy growing. The cut is worth £5 billion and will be the first cut to the basic rate in 16 years.
The Chancellor also set out a series of measures to help businesses boost investment, innovation, and growth – including a £1,000 increase to Employment Allowance to benefit around half a million smaller firms.
Sunak said: “This statement puts billions back into the pockets of people across the UK and delivers the biggest net cut to personal taxes in over a quarter of a century.
“Cutting taxes means people have immediate help with the rising cost of living, businesses have better conditions to invest and grow tomorrow, and people keep more of what they earn for years to come.”
Sunak also announced that there will be an extra £500 million for the Household Support Fund, which doubles its total amount to £1 billion to support the most vulnerable families with their essentials over the coming months.
The Chancellor also reduced the VAT on energy saving materials such as solar panels, heating pumps and roof insulation from 5% to zero for five years.
This cost of living support comes on top of the measures that the Chancellor has already announced over the recent months.
Sunak last month unveiled a package worth £9 billion targeted at helping 28 million poorer and middle-income households with energy bills in particular.
Household incomes are set to shrink further in April owing to a planned tax hike on all UK workers and businesses to fund care for the elderly.
The same month, a cap on domestic gas and electricity bills will be increased, in line with rebounding wholesale energy costs.
"Higher inflation will erode real incomes and consumption," the OBR said Wednesday.
It said that "with inflation outpacing growth in nominal earnings and net taxes due to rise in April", real living standards are set to fall by a record amount this year.
Britvic, the soft drinks manufacturer set to be acquired by Carlsberg, has posted robust annual results after investment in marketing and product innovation helped it maintain demand for its brands.
Over the year to Sept 30, the company’s pre-tax profits climbed 10.5 per cent to £173.2 million despite a £21.3m hit related to the proposed Carlsberg deal. Britvic stated that its growth was driven by both volume and price-mix, with strong demand for brands such as Pepsi, Tango, Lipton, MiWadi and Ballygowan.
The group noted that scaling up new brands such as Plenish, Jimmy’s, Aqua Libra, and London Essence helped it build its presence in fast-growing categories. Meanwhile, it increased advertising and promotional (A&P) spend by 30.9 per cent to “support long-term brand growth”.
Volumes grew 3.1 per cent, driven by both organic growth and the acquisitions of the Extra Power and Jimmy’s brands.
Chief Executive Simon Litherland said, “We have delivered another excellent financial performance this year, with strong growth across our markets and portfolio of market-leading brands. We have also continued to ensure the business is fit for the future, adding more capacity, investing in our people, and significantly increasing investment in marketing and innovation.
“I am confident that the prospects for our brands and people are extremely positive, and I look forward to them going from strength to strength,” concluded Litherland.
Subject to approval by the regulatory authorities, the £3.3bn acquisition of Britvic by Carlsberg is expected to be completed in the first quarter of 2025.
The Metropolitan Police has identified two new suspects in its investigation into possible criminal offences as part of the Post Office Horizon scandal. This takes the total number of individuals to four as the force also revealed it believes more suspects will be identified as the inquiry progresses.
Scotland Yard said members of the investigation team met with Sir Alan Bates, the leading Post Office campaigner, and fellow victims to update them on the development.
A Met spokesman said: “On Sunday Nov 17, members of the investigating team met with Sir Alan Bates and a number of affected sub-postmasters to provide an update on our progress and next steps, following an invitation to do so.
“Our investigation team, comprising of officers from forces across the UK, is now in place and we will be sharing further details in due course. The team is preparing to contact other affected sub-postmasters soon. While four suspects have been formally identified at this stage, this number will grow as the investigation progresses.”
However, Sir Mark Rowley, the Met Commissioner, has warned it could be years before anyone faces charges because of the “tens of millions of documents” that must be worked through.
Speaking previously on the matter, he said, “I think at the core of this you’ve potentially got fraud, in terms of false documents, if it’s for financial purposes.
“Clearly, we have to prove beyond all reasonable doubt, so really it’s 99.9 per cent, that individuals knowingly corrupted something. So that’s going way beyond incompetence, you have to prove deliberate malice, and that has to be done very thoroughly with an exhaustive investigation.
“So it won’t be quick. But the police service across the country are alive to this and we will do everything we can do to bring people to justice if criminal offences can be proven.”
More than 900 sub-postmasters were wrongfully prosecuted between 1999 and 2015 as a result of the Horizon scandal, in which the faulty computer software incorrectly recorded shortfalls on their accounts. Of these, hundreds of people are still awaiting compensation despite the previous government announcing that those who had convictions quashed were eligible for payouts of £600,000.
Oral evidence at the Post Office inquiry concluded this month.
New research by American Express Shop Small reveals the nation’s top 10 hotspots for independent shops, showcasing the small businesses and the valuable role they plan in their local communities.
American Express partnered with retail experts GlobalData to identify the top high streets for independent shops through ranking factors such as the number of independent outlets, variety of business types, and vibrancy of the high street.
The list also took into consideration the number of Gen Z and Millennial independent business owners (those aged between 18-43) in each location, factoring in how these younger generations are investing in the future success of UK high streets. Across the top 10 hotspots, on average over a third (36 per cent) of all business owners are in these age cohorts.
The research identified bustling St Mary’s Street in Stamford, Lincolnshire, as Britain’s top hotspot for independent shops – scoring highly across all the factors and delivering a unique experience for shoppers.
Britain’s top high street hotspots for independent shops:
St Mary’s Street, Stamford, Lincolnshire
Devonshire Street / Division Street, Sheffield, Yorkshire
Gloucester Road, Bristol
Market Street / Bridge Gate, Hebden Bridge, Yorkshire
Stoke Newington Church Street, Hackney, London
High Street, Narberth, Pembrokeshire
Oldham Street, Manchester, Greater Manchester
Bailgate, Lincoln, Lincolnshire
Byres Road, Glasgow
The Lanes, Norwich, Norfolk
Beyond their contribution to local communities, the research also revealed how living near a vibrant independent high street can benefit home valuations.
Dan Edelman, general manager, Merchant Services at American Express, said, “Small businesses play a crucial role in supporting local economies up and down the country, and it’s pleasing to now see their impact beyond the high street. Through our Shop Small campaign and support of Small Business Saturday we’re proud to be championing and shining a spotlight on the diverse and vibrant independent businesses who help our local communities thrive.”
The research is released ahead of this year’s Small Business Saturday (Dec 7), of which American Express is founder and principal supporter. Small Business Saturday is the UK’s most successful small business campaign. Over the years it has been running, it has engaged millions of people and seen billions of pounds spent with small businesses across the UK on the day, with an impact that lasts all year round.
Michelle Ovens, director of Small Business Saturday, said, “The nation’s 5.5 million small businesses bring incredible value to the UK’s economy, society and communities, and this research underlines the material impact they have in boosting local areas. On Small Business Saturday, and beyond, we are asking the nation to throw their arms around their favourite local small businesses and show them how much they mean to us all and the wider community. Public support is so vital for small businesses, particularly for the next generation of owners.”
Matt Piner, research director at GlobalData, commented on the findings, “Independent shops bring something different to high streets, offering uniqueness and propositions that are finely tuned to the needs of their local communities. As younger generations of shoppers are attracted to their local high streets, so too are shop owners, with a new breed of Gen Z and Millennial entrepreneurs helping to keep them thriving.”
As part of this year’s Shop Small campaign, American Express has pledged £100,000 worth of grants to small businesses. The Champion Small initiative encourages Cardmembers to nominate their favourite independent small business, with 10 set to receive a £10,000 grant. Those who nominate a business will be entered into a prize draw too, with a chance to win one of 50 x £1,000 statement credits.
Shoppers who walk and wheel spend more than those arriving by car, states a recent report, demonstrating the significant economic and social benefits of investing in walkable town centres, challenging traditional views on urban accessibility.
The findings published in third edition of "The Pedestrian Pound Report", recently published by Living Streets, the UK charity for everyday walking, come at a critical juncture for British high streets, with a record number of retail failures in 2022 and a vacancy rate of nearly one in seven by the end of 2023.
The launch of the report is backed by Scotland’s national walking charity, Paths for All, underscoring the need to make walking a central feature of Scotland’s high streets.
“Making high streets and town centres more walkable increases time – and money – spent in those businesses,” says Catherine Woodhead, Chief Executive of Living Streets. “It’s slowly being recognised – the majority (95 per cent) of London’s Business Improvement Districts identify a good walking environment as important to business performance.”
The report highlights encouraging data from Scottish towns, such as Nairn, where public space improvements and community events have significantly bolstered foot traffic. In 2022, a Christmas event in the town drew 7,800 attendees, including 600 new visitors, while a classic car show in 2023 attracted over 10,000, with 80 per cent saying they would return even outside of events.
Kevin Lafferty, Chief Executive of Paths for All, emphasised the broader benefits, “These findings show that when we put people first and make walking and wheeling the easiest, most natural choices, we don’t just get an economic boost – we build communities that are happier, healthier, and more sustainable for everyone.”
The report highlights that 85 per cent of Scottish adults walk or wheel regularly, contributing to both economic and health benefits.
In Scotland alone, the health benefits from walking to work are valued at over £600 million annually in prevented deaths. Community-focused initiatives, such as the Alloa Hub, are proving successful in encouraging residents to travel into town centres, with research showing that 56p of every £1 spent in community businesses stays in the local economy.
The report is timely, with investment in active and sustainable transport cut by £23.7 million by the Scottish Government this September. The Pedestrian Pound provides an excellent case for these vital funds to be restored.
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Home secretary Yvette Cooper speaking at the annual conference hosted by the NPCC and APCC on 19 November 2024
Home secretary Yvette Cooper has announced plans to rebuild neighbourhood policing and combat surging shop theft as part of an ambitious programme of reform to policing.
In her first major speech at the annual conference hosted by the National Police Chiefs’ Council and Association of Police and Crime Commissioners on Tuesday, Cooper highlighted four of the key areas for reform: neighbourhood policing, police performance, structures and capabilities, crime prevention.
The initiatives she announced include:
a Neighbourhood Policing Guarantee to get policing back to basics and rebuild trust between local forces and the communities they serve
a new Police Performance Unit to track national data on local performance and drive up standards
a new National Centre of Policing to harness new technology and forensics, making sure policing is better equipped to meet the changing nature of crime
The home secretary also announced more than half a billion pounds of additional central government funding for policing next year to support the government’s Safer Streets Mission, including an increase in the core grant for police forces, and extra resources for neighbourhood policing, the NCA and counter-terrorism.
In her speech, Cooper said that without a major overhaul to increase public confidence, the British tradition of policing by consent will be in peril.
“I am determined that neighbourhood policing must be rebuilt,” she said, pointing to its decline over the past decade. Cuts to community-based roles have left town centres vulnerable to rising crime and antisocial behaviour, she added.
“Shop theft is up at a record high, street theft is up 40 per cent in a year… Criminals – often organised gangs – are just getting away with it. We cannot stand for this,” she said.
Cooper reiterated the government’s commitment to deliver an additional 13,000 police officers, PCSOs and special constables in neighbourhood policing roles, adding that further steps will be announced in the coming weeks.
The reforms will restore community patrols with a Neighbourhood Policing Guarantee and an enhanced role for Police and Crime Commissioners to prevent crime. The changes will also ensure that policing has the national capabilities it needs to fight fast-changing, complex crimes which cut across police force boundaries.
“The challenge of rebuilding public confidence is a shared one for government and policing. This is an opportunity for a fundamental reset in that relationship, and together we will embark on this roadmap for reform to regain the trust and support of the people we all serve and to reinvigorate the best of policing,” Cooper said.