Air Source Heat Pump Subsidies Increased by 50%
According to The Guardian’s report, the slow adoption of low-carbon technologies has sparked criticism. The government has taken measures to address this by increasing the air source heat pump subsidy for homeowners in England and Wales by 50%, reaching £7,500. This additional £2,500 support will help reduce the installation costs of air source heat pumps, making them more affordable compared to conventional gas boilers.
Support for ground source heat pumps will also increase from £6,000 to £7,500, although it does not apply to most UK households as they require substantial outdoor space.
Last month, Prime Minister Rishi Sunak announced this increase while downplaying the plan to ban new gas boilers by 2035, which had faced criticism from the National Infrastructure Commission (NIC) regarding the government’s domestic heating policy. Heat pumps are seen as crucial for the UK to achieve its 2035 climate goals, as they can cut carbon emissions for building heating in half, accounting for one-quarter of the UK’s fossil fuel demand.
However, the government’s target was to install 600,000 heat pumps annually by 2028, but it has struggled to gain public support due to the high initial costs and lack of clear information.
The European Union is calling for a minimum 2% tax to be levied on super-rich individuals
According to the European Union Tax Observatory, governments around the world should collectively establish a global minimum tax rate, especially for extremely wealthy individuals, to significantly increase tax revenue. The research suggests that if a 2% tax rate were imposed on the wealth of the world’s 2,750 billionaires, approximately $250 billion could be raised annually.
This report also reveals that billionaires have been transferring certain income (such as dividends from company stocks) through dedicated holding companies, often with no other real purpose. These holding companies exist in a grey area between tax avoidance and tax evasion, essentially aiming to avoid income tax, making it reasonable to consider them closer to tax evasion.
These loopholes allow super-rich individuals to circumvent certain forms of income tax, with their effective tax rates ranging from 0% to 0.6% of their total wealth. In contrast, the vast majority of affluent citizens who do not exploit these loopholes end up paying 20% to 50% in income taxes.
Moreover, shell companies can also serve as nominal property owners, especially for luxury real estate in cities like London. This report points out that real estate continues to offer significant opportunities for the wealthy to engage in tax avoidance and evasion.
According to reports, British steel plants may potentially cut 2,000 jobs
Chinese-owned British Steel, based in Scunthorpe, is reportedly planning to cut up to 2,000 employees to address monthly losses of up to £30 million. The company currently employs 4,500 people, and the potential job cuts would account for nearly half of its workforce. This move is part of the company’s transition to more environmentally friendly steel production methods, including using electric arc furnaces instead of the high-pollution blast furnaces that use coking coal for smelting iron ore.
The news of layoffs was initially reported by The Sunday Times, but it’s reported that no final decision has been made regarding the restructuring and is still under consideration. The UK government provided £300 million in support to the company’s owner, Jingye Group, to aid in implementing the transition to electric arc furnace technology. However, negotiations related to this funding are still ongoing. This funding is linked to job protection and a £1 billion investment by the Chinese group. It’s currently unclear how the layoff plans might affect the government’s investment.
The UK’s inflation rate remained stable at 6.7% in September
The UK’s Office for National Statistics has released inflation data for September, indicating that the inflation rate remained at 6.7%. While food prices experienced their first monthly decline in two years, the sharp increase in fuel prices offset the impact of falling food prices, further adding to the ongoing financial pressure on households. This figure also ends the previous two months’ trend of declining inflation rates.
Economists had previously predicted that the overall Consumer Price Index (CPI) would slightly decrease to 6.6% or 6.5% in September compared to August, but the unexpected rebound in oil prices exceeded expectations. The National Statistics Office reported that from August to September, food and non-alcoholic beverage prices decreased by 0.1%, but over these two months, they increased by 1.1% compared to the same period last year. Prices for items such as milk, cheese, eggs, bottled water, soft drinks, and fruit juices experienced significant declines. Meanwhile, furniture and household goods prices increased at a relatively slower rate, and ticket prices decreased.
The Treasury has received an unexpected windfall of £100 million
According to the Financial Times, the UK Treasury is set to receive over £100 million in unexpected funds after taking control of two bank pension schemes. These two bank pension schemes provided taxpayer assistance during the 2008 financial crisis. The UK Chancellor of the Exchequer, Rishi Sunak, is expected to announce the specific use of this funding in the upcoming autumn statement.
While the net surplus of these two schemes is estimated to be around £400 million, this is based on accounting standards. Insiders reveal that the surplus expected to be transferred to the Treasury will be around £100 million. Allies of Sunak indicate that this windfall might be used for reducing government debt. However, it is anticipated that this funding will have a relatively minor impact on government debt. According to the UK Office for National Statistics, as of the end of September, the public-sector net debt stood at £26 billion, with interest payments of £7 billion made that month.