- Insights
TBA’s latest news – 8th of January 2024
Rishi Sunak Plans Income Tax Reduction in March
Rishi Sunak has announced plans to further alleviate the tax burden on the working class this year, potentially providing economic support for the tax reduction by cutting welfare expenditures.
Cameron declared on Sunday that ahead of the upcoming March budget announcement, his top priority is to deepen tax cuts, requiring more stringent control over public spending and welfare. His statements indicate the possibility of a reduction in income tax in March next year, likely the last crucial tax decision by the Chancellor before the upcoming elections.
Sunak told the BBC’s Laura Kuenssberg, “My immediate priority, as reiterated by the Chancellor over the weekend, is to ensure that we have control over spending and welfare to support tax cuts for people.” He expressed a desire to enhance the “discipline” in overseeing public sector salaries and welfare payments, highlighting long-term disability benefits as a key area for expenditure savings. “This is to ensure that everyone who can work has the opportunity,” he said. “For every hardworking person, we reward their efforts through tax cuts. This is the Conservative way, and I believe it is right for the country.”
Furthermore, in an interview with The Sunday Telegraph, he stated, “When I talk about continuing to cut taxes, this is exactly what we aim to achieve. We need to responsibly achieve this goal. Difficult decisions need to be made in public spending, and tough decisions also need to be made in controlling welfare.”
His statements may energize some backbench Conservative MPs who have consistently called for tax cuts before the elections to narrow the significant polling gap with the Labour Party. However, the Prime Minister’s focus on the salaries of the working class may disappoint those who have been urging him to use surplus funds to alleviate inheritance tax.
This also contrasts sharply with the remarks made by Chancellor Jeremy Hunt on Saturday. Hunt expressed uncertainty about whether further tax cuts could be afforded this year.
The UK Emerges as a Strong Competitor in the Global Hub
The largest manufacturers in the UK believe that despite facing challenges such as high energy costs, labour shortages, and political instability, the country’s competitiveness as a global manufacturing centre is steadily increasing.
Ahead of the upcoming elections, manufacturing trade organisation Make UK and PricewaterhouseCoopers (PwC) state that industry leaders are growing increasingly confident about the sector’s prospects post the economic downturn, despite persistent “ongoing economic headwinds.”
Make UK released survey results of over 200 senior manufacturing executives, with the majority indicating that, compared to twelve months ago, the UK is becoming a more competitive industrial production base.
The survey revealed that nearly one-third of respondents believe that the UK is becoming stronger in competition with Germany and France, while over a quarter feel that the UK is surpassing Spain and Italy. Despite the growing optimism among industry executives about the future of UK manufacturing, they still face challenges such as high energy costs and labour shortages.
Channel 4 Plans Largest Workforce Reduction in 15 Years
Channel 4 in the UK is considering implementing a workforce reduction plan that is expected to cut 200 employees, marking the largest layoffs for the channel in 15 years. Facing the most severe TV advertising slump since 2008, the channel is seeking to address the situation by reducing expenses.
The broadcasting company, which has experienced rapid expansion in recent years, with a record-high staff of over 1,200 people, aims to significantly reduce annual wage expenditures exceeding £108 million. The restructuring initiated at the end of last year is geared towards focusing on accelerating its digital streaming strategy while simultaneously restricting the extent of cutting over £700 million in content budgets.
A spokesperson stated, “Like every organisation, we must address an extremely uncertain economic situation in the short term, and in the long term, we need to accelerate our transformation into a fully digital public service broadcaster.”
While the planned layoffs are relatively small compared to the workforce size, it still adds pressure to London employees. Channel 4 has committed to increasing its “nations and regions” workforce to 600 people by 2025.
London Underground Strike Called Off
Following additional funding provided by the Mayor of London, the RMT union announced the suspension of planned action with the Transport for London (TFL). The strike, which was originally set to almost halt all tube services, causing chaos in the capital’s transportation, might still face some disruptions on Monday morning due to the last-minute suspension.
Last Friday, RMT members initiated industrial action concerning wages, including strikes by engineers and network control staff. The major impact was expected on Monday when frontline staff from stations, train operations, and signal systems joined the strike.
Secretary of State for Transport Mike Lynch stated, “Following further positive discussions today, negotiations over the London Underground staff salary agreement can now take place on a better footing, providing crucial additional funding to address the issues.”
RMT members voted for a pay increase starting April 2023. Despite TFL offering a 5% increase, rises are typically higher than the Retail Price Index inflation compared to the previous year.
The union believes TFL can afford more, pointing out the significant salary increase of TFL Commissioner Andy Lord from £40,000 to £395,000, confirmed as a permanent position in June. The union also opposes plans to freeze low-paid positions’ wage levels and advocates for the restoration of some travel benefits.
Mayor of London Sadiq Khan stated that the strike would cost the hospitality industry £50 million and expressed that the pause in the strike “demonstrates what can be achieved by engaging and cooperating with unions and transport workers rather than confronting them.”
However, the last-minute intervention seemed to catch TFL’s negotiating representatives by surprise. A TFL spokesperson said, “Last week, we had extensive discussions with three unions that rejected our pay offer, clearly stating that TFL cannot afford more pay. That remains the case.”
Aslef, the train driver union, accepted the 5% offer, but insiders suggest they might renegotiate for an inflation-linked agreement. The third rail union TSSA has announced it will vote in support of industrial action, while the Unite union has yet to accept the agreement.
Business Bankruptcies in the UK Increase by 52% in Two Years
Recent data indicates a significant increase in business bankruptcy rates last year, primarily attributed to companies grappling with the long-term effects of the inflation crisis and the ongoing COVID-19 pandemic.
Credit checking agency Creditsafe, tracking data for 430 million global businesses, shows that in 2023, a total of 30,199 UK businesses were involved in some form of bankruptcy action, a 52% increase compared to 2021.
Drew Fahiya, Director of Data at Creditsafe, suggests that some of these bankruptcies may have involved companies that were already at risk of closure and received government assistance during the pandemic, allowing them to continue operating.
He stated, “For those companies that were performing well, the coronavirus has indeed been damaging, but for those that have been struggling, it may have provided some breathing space to get back to a state where they can operate normally.”
