Tag: Economy

Chancellor vows ‘big bang on growth’ to boost investment and savings

BETTER-OFF BRITAIN?

  • Chancellor launches landmark review to boost investment, increase pension pots and tackle waste in the pensions system.
  • New Pensions Bill confirmed in King’s Speech could boost pension pots by over £11,000, with further consolidation and broader investment strategies to potentially deliver higher returns for pensions.
  • An investment shift in defined contribution schemes could deliver £8 billion of new productive investment into the UK economy.
  • Action will be taken to unleash the full investment might of the £360 billion Local Government Pension Scheme to make it an engine for UK growth.

The Chancellor Rachel Reeves has announced a landmark pensions review as part of the new Government’s mission to ‘boost growth and make every part of Britain better off’.

Under plans unveiled by the new Chancellor, billions of pounds of investment could be unlocked in the UK economy from defined contribution schemes alone and pension pots for savers in defined contribution schemes could be boosted by over £11,000.

The Review will also, working closely with the Minister of State at MHCLG, look at how to unlock the investment potential of the £360 billion Local Government Pensions Scheme, which manages the savings of those working to deliver our vital local services, as well as how to tackle the £2 billion that is being spent on fees.

The announcement comes ahead of the first Growth Mission Board on Tuesday. This will be chaired by the Chancellor and drive the Government’s work to achieve the highest sustained growth in the G7. New measures have already been announced to fix the planning system, the creation of a new National Wealth Fund and the overhaul of the listings regime to boost UK stock exchanges.

The work announced today – focusing on investment – is the first phase in reviewing the pensions landscape and will be led by the first ever joint Treasury and Department for Work and Pensions Minister, Emma Reynolds (Minister for Pensions). The next phase of the review starting later this year will consider further steps to improve pension outcomes and increase investment in UK markets, including assessing retirement adequacy.

The Chancellor and the Pensions Minister will chair a roundtable with the pensions industry on Monday to start intensive industry engagement for the Review.

Chancellor of the Exchequer Rachel Reeves said: “Despite a very challenging inheritance, this new Government is getting on with the job of delivering our mandate to get the economy growing so we can make every part of our country better off.

“The review we are announcing is the latest in a big bang of reforms to unlock growth, boost investment and deliver savings for pensioners. There is no time to waste. That is why I am determined to fix the foundations of our economy so we can rebuild Britain and improve people’s lives.”

Deputy Prime Minister Angela Rayner said: “After putting in years of hard graft serving their communities, the very least our frontline workers deserve – millions of whom are low paid, millions of whom are women – is dignity and security in retirement.

“That’s why we want to make sure their hard-earned money works harder for them so we ensure they receive the pensions they have earned, whilst unlocking growth across our economy.”

Pensions Minister Emma Reynolds said: “As the first ever joint Treasury and DWP Minister I am uniquely placed to tackle the twin challenges of productive investment and retirement outcomes.

“Over the next few months the review will focus on identifying any further actions to drive investment that could be taken forward in the Pension Schemes Bill before then exploring long-term challenges to ensure our pensions system is fit for the future.

“There is so much untapped potential in our pensions markets, with an industry worth around £2 trillion. The measures we have already set out in our Pension Schemes Bill will help drive higher investment and a better deal for our future pensioners.”

M&G plc CEO Andrea Rossi said: “A Pensions Review is long overdue and to be welcomed. M&G has a rich heritage of investing in the UK and there are significant opportunities ahead to give the real economy a boost over the next decade and beyond.

“We know from experience, through our PruFund offer, that a large pooled fund gives savers access to a wider range of productive assets that aims to maximise benefits over the long-term. Consolidation, combined with the role of advice, has huge potential to align the interests of savers with the UK’s growth ambition. We look forward to supporting the Government on this landmark review.”

BVCA Chief Executive Michael Moore said: “We are very encouraged that the Government has brought forward their Pensions Review so quickly.

“The Chancellor has a real opportunity to deliver economic growth by facilitating increased investment in UK businesses to the benefit of returns to pension savers as well as the wider economy.

“Legislative and policy changes, including further consolidation of pension schemes to increase pension schemes’ ability to deploy capital into UK private capital funds are vital, as is greater industry partnership.

“The BVCA’s Investment Compact has already brought together over 100 growth equity and venture capital firms committed to working with pensions schemes to consider effective structures that attract investment.”

Defined contribution schemes will be managing around £800 billion in assets by the end of the decade and the Review will explore ways to increase their investment into productive assets. Even a 1 percentage point shift of assets into productive investments could mean £8 billion of new productive investment to grow the economy and build vital infrastructure by the end of the decade.

This would also help savers using these schemes build up better retirement pots as productive assets are more likely to provide higher returns. Immediate action has already been taken to boost retirement savings through the Pensions Bill, which introduces a Value for Money Framework to promote better governance and achieve higher returns – boosting the pension pot of an average earner who saves over their lifetime in a defined contribution scheme by over £11,000.

The first stage of the review will examine actions to support greater productive investment and better retirement outcomes, including through further consolidation and encouraging at-scale schemes to increase returns through broader investment strategies.

The Local Government Pension Scheme (LGPS) in England and Wales is the seventh largest pension fund in the world, managing £360 billion worth of assets. Its value comes from the hard work and dedication of 6.6 million people in our public sector, mostly low-paid women, working to deliver our vital local services. Pooling this money would enable the funds to invest in a wider range of UK assets and the government will consider legislating to mandate pooling if insufficient progress is made by March 2025.

To cut down on fragmentation and waste in the LGPS, which spends around £2 billion each year on fees and costs and is split across 87 funds – an increase in fees of 70% since 2017, the Review will also consider the benefits of further consolidation.

The first stage of the review will report in the next few months and consider further measures to support the Pensions Bill. It will take account of the need to prioritise gilt market stability, liquidity and diversity. It will then broaden out to consider the wider pensions landscape to strengthen security in retirement. In the meantime, immediate action has been taken through new laws announced to Parliament in The King’s Speech.

Barclays CEO C. S. Venkatakrishnan said: “We welcome the Government’s timely review of the pensions sector.

“Pensions reforms are critical to unlocking institutional investment in growth equity, and alongside a streamlining of listing requirements, will give a significant boost to UK capital markets and growth. Building institutional demand is also an important signal in encouraging private share ownership.

Border to Coast CEO Rachel Elwell said: ““Our focus is on delivering a strong and sustainable LGPS to enable it to pay the pensions of the 6.6million local government workers in an affordable manner.

“Border to Coast has developed innovative and cost-effective investments, while cutting Private Market fees by almost 30%. There is an opportunity to build and expand on this, delivering greater value to local taxpayers, and delivering productive investment in the UK. We therefore welcome the opportunity to work with the Government on a co-ordinated review to deliver this.

“If the Government is ambitious and considers a wide range of options in this review we are optimistic that this will deliver the clear roadmap we have called for, building on the work of the BVCA’s Pensions and Private Capital Expert Panel.”

Chair of the Pensions & Private Capital Expert Panel and co-founder of IQ Capital Kerry Baldwin said: “An early and ambitious review of the pensions landscape is an extremely important step in prioritising returns for UK savers and driving economic growth.

“The Chancellor’s Pensions Review will add further impetus to the work of the Investment Compact for Venture Capital and Growth Equity, which has brought together the private capital and pensions industries to support pension savers and to encourage investment from pension funds into unlisted equities.

“There has been significant progress through this collaboration. We are already developing a greater understanding of the ways we can work together to deliver new options for UK pension savers at the same time as supporting high growth, innovative UK companies with new sources of capital.

“The Review offers us the opportunity to develop this shared agenda further and deliver better outcomes for all the stakeholders.”

TheCityUK CEO Miles Celic said: “Creating the right investment environment is critical both for improving people’s retirement incomes and for boosting growth across the UK.

“The government’s new Pensions Review will be an important mechanism to help deliver this. We look forward to working closely with government and regulators to ensure that an effective long-term strategy that supports financial resilience is developed.”

King’s Speech will put growth at the heart of Labour’s legislative agenda

Starmer prepares for The King’s Speech at the State Opening of Parliament on Wednesday 17 July

  • New laws will prioritise growth, the Government’s overarching mission for the year ahead
  • Legislative programme will support delivery of the Government’s first steps and missions to rebuild Britain
  • Focus on improving the prosperity of the country and living standards of working people

The Government will use its mandate for change to put economic growth at the heart of its legislative agenda as it prepares for The King’s Speech at the State Opening of Parliament on Wednesday (17 July). 

Departments are working on more than 35 bills to deliver an ambitious parliamentary session that will be built on a bedrock of economic security, to enable growth that will improve the prosperity of our country and the living standards of working people.

Legislation will include a bill to enforce tough new spending rules, designed to ensure economic growth, while avoiding the chaos which left families with spiralling bills and wreaked misery on people’s lives.    

To ensure nobody can play fast and loose with the public finances ever again, this new bill will strengthen the role of the Office of Budget Responsibility, meaning significant fiscal announcements must be properly scrutinised and that taxpayers’ money is respected.

Prime Minister Keir Starmer said: “Our work is urgent. There is no time to waste. We are hitting the ground running by bringing forward the laws we will need to rebuild our country for the long-term – and our ambitious, fully costed agenda is the downpayment on that change. 

“From energy, to planning, to unbreakable fiscal rules, my government is serious about delivering the stability that is going to turbo charge growth that will create wealth in every corner of the UK.

“The task of national renewal will not be easy, and this is just the down payment on our plans for the next five years, but the legislation set out at the King’s Speech will build on the momentum of our first days in office and make a difference to the lives of working people.”

‘His Majesty’s Most Gracious Speech’ will build on the momentum of the Government’s first week in office which saw the Prime Minister and his ministerial team roll up their sleeves and get to work.

Legislation to enact announcements made this week, including the launch of a National Wealth Fund to drive investment into the UK, to a new Mission Control tasked with turbocharging UK to clean power by 2030, to opening the recruitment of a new border security command, show that the Government is getting on with the job.   

The package of bills will focus on growing the economy through ‘turbocharging’ building of houses and infrastructure, better transport, more jobs and securing clean energy – helping to make every part of the country better off.  

As part of the Government’s plans to empower regions to deliver change for their communities, new legislation will also help to create wealth in every community and hand the power back to local leaders who know what is best for their areas.

Chancellor: ‘I will take the difficult decisions to deliver growth’

Rachel Reeves: ‘No time to waste’

  • Chancellor Rachel Reeves will vow to “fix the foundations of Britain’s economy” to make every part of Britain better off.
  • In her first major speech, the Chancellor will declare economic growth is “a national mission” and promise to take the tough decisions to deliver on the Government’s mandate.
  • She is expected to announce swift changes to unblock infrastructure and private investment.

The Government will take the difficult decisions to deliver growth, Rachel Reeves will say in her first speech as Chancellor today.

Business leaders from some of Britain’s most pioneering industries – including its financial services and green industries – are expected to be in attendance in central London to hear Ms Reeves vow to “fix the foundations of our economy so we can rebuild Britain and make every part of our country better off.”

Rachel Reeves will say there is “no time to waste” on delivering change, pledging to reverse “the legacy of fourteen years of chaos and economic irresponsibility”.

The Chancellor is expected to say: ““Last week, the British people voted for change. And over the past 72 hours I have begun the work necessary to deliver on that mandate.

“Our manifesto was clear: ‘Sustained economic growth is the only route to improving the prosperity of our country and the living standards of working people.’

“Where governments have been unwilling to take the difficult decisions to deliver growth – or have waited too long to act – I will deliver.

“It is now a national mission. There is no time to waste.

“This morning I want to outline the first steps this new government has taken to fix the foundations of our economy, so we can rebuild Britain and make every part of our country better off.

“We face the legacy of fourteen years of chaos and economic irresponsibility. 

“New Treasury analysis I requested over the weekend exposed the opportunities lost from this failure.

“Had the UK economy grown at the average rate of OECD economies since 2010, it would have been over £140 billion larger.

“This could have brought in an additional £58 billion in tax revenues last year alone to sustain our public services.

“It falls to this new Government to fix the foundations.”

First Minister to meet new Prime Minister in Scotland today

First Minister John Swinney will welcome new Prime Minister Sir Keir Starmer to Scotland today.

Speaking ahead of the meeting, the First Minister said: “I was really pleased to have the opportunity to speak to the Prime Minister on his first day in office and to congratulate him and wish him, and his family well.

“I look forward to welcoming the Prime Minister to Scotland where I hope to have constructive discussions with him on our shared priorities for the people of Scotland. This includes eradicating child poverty, growing the economy, prioritising net zero, and ensuring effective public services. 

“I welcome the Prime Minister’s commitment to forge a positive relationship between our governments and for our part, the Scottish Government is committed to working constructively with the UK Government to build a better Scotland.”

WHATEVER your political allegiances. the relationship between the two governments is crucial to the people of Scotland. I’d like to think it will be more constructive than it has been in the recent past – Ed.

Chancellor Rachel Reeves delivers first address to HM Treasury staff

Chancellor of the Exchequer Rachel Reeves’ speech delivered to HM Treasury staff yesterday (Friday 5 July):

Thanks to all of you for being here. It is such an honour to be here today as the Chancellor of the Exchequer.

I know what a responsibility this brings – to guide our economy through uncertain times;

To restore stability in an age of insecurity;

To build prosperity that draws on the talents of working people.

The central mission of this new Government will be to restore economic growth.

During the election that was the Labour Party’s mission.

It is now our national mission.

And it will be for the Treasury to lead that mission.

Not growth for growth’s sake.

But growth for a purpose.

To make every part of our country better off.

To deliver on this mission, I want this to be the most pro-growth Treasury in our country’s history.

That will mean doing what the Treasury does best – building growth on a rock of economic stability.

But it also means taking on new challenges and new responsibilities.

To fix the foundations.

And to rebuild Britain;

To drive growth not just in a few pockets of our country but in every part of Britain.

To meet the challenges and seize the opportunities of the future – including our energy transition.

That is why this Treasury will play its full part in a new era of industrial strategy;

Working hand-in-glove with business, to make sure Britain is truly open to business once again.

And I know that in an uncertain world, if we can deliver the stability, investment and reform that the Prime Minister and I have set out, then Britain can reap the rewards.

But for families at home – I know that this is about more than just lines on a graph.

It is about tackling the causes of the cost of living crisis and making work pay.

Rebuilding our health service and our schools.

And driving opportunity in every part of Britain.

I will always hold in my minds eye the people across our country whose livelihoods, public services and aspirations will rise or fall based on the decisions we make here.

And I ask you to do the same – whether in Darlington, or Norwich, or in this building.

It is also a huge privilege to be the first ever female Chancellor of the Exchequer.

So every young woman and girl watching this:

Let today show that there should be no ceilings on your ambitions.

Your hopes,

or your dreams.

But there is a deeper responsibility too:

To women whose work is too often undervalued.

Who have borne the brunt of inequality.

And whose lives and interests are too often excluded from economic policymaking.

Together, we are going to change that.

Now, I have been a Member of Parliament for fourteen years now.

And if I’m honest, I’ve spent a lot of those years frustrated.

Talking, not doing.

Responding to constituents’ problems, but not being able to get to the root cause of those problems.

So as far as I’m concerned, there is no time to waste.

I will judge my time in office a success if I know that, at the end of it, there are working-class kids from ordinary backgrounds living richer lives, their horizons expanded, and their potential realised;

If we are leaving to the next generation a country that is more prosperous, with more good jobs paying decent wages, and a country better able to thrive in an uncertain world.

I know that a lot has been asked of you in the last few years – and I know, when the chips are down, staff at the Treasury have risen to the occasion, from furlough to energy price support.

I have often disagreed with the political choices that have been taken in this building.

But I have never been in any doubt about the talent, the dedication and the professionalism that Treasury staff have displayed.

I know too that at times it must have been frustrating for you, working under a weight of uncertainty, changes in direction, and without clarity of political purpose.

As Chancellor, I am determined to change that.

All our plans for government will rely on your hard work.

I’m under no illusion about the scale of the challenges we face.

The difficult choices that we will have to make.

I am not promising you that it will be easy.

There is a long road ahead.

It comes with a great weight of responsibility.

I embrace it.

It will demand hard work.

I am ready for it.

The British people have put their trust in this new government.

They have put their trust in us to run their economy.

And to protect their finances.

And that trust must not be squandered.

We’re a team.

It’s a new start.

So let’s get to work.

Thank you very much.

First Minister outlines his ambitions for Scotland’s economy

The First Minister has set out his ambitions for Scotland’s economy during a speech in Glasgow.

Speaking at the Barclays Campus in Glasgow’s financial district on Friday, First Minister John Swinney outlined his government’s approach to economic policy making.

Mr Swinney said poor decision-making at UK level, typified by Brexit and immigration policy, means the Scottish Government must work even harder with its limited powers to help businesses and workers thrive.

The First Minister stated his determination to bring hope and optimism and said he will “go all out” to encourage economic investment.

John Swinney said policy making will be governed by:

  • Moderate left of centre, progressive values
  • A partnership approach with unions and business
  • A focus on actions
  • Problem solving based on evidence

The First Minister will highlight significant announcements in Scotland’s renewable energy sector this week and actions the Scottish Government is taking to boost high growth businesses.

The First Minister said: “My goal is to help people live happier and healthier lives with higher living standards and to help businesses boost profitability.

“The evidence shows that independent countries that are comparable to Scotland are wealthier and fairer than the UK.

“Scotland has the talents and resources to match that performance with independence but in the here and now and in the face of Brexit we must work even harder to help Scotland’s economy with the powers we have.

“I will go all out to encourage investment in Scotland and I will ensure people know my government is a firmly pro-business administration.

“A partnership with trade unions and business will be at the core of my approach and through that approach and given our resources, not least incredible renewable energy, we should look to the future with hope and optimism.” 

ANALYSIS: FRASER of ALLANDER INSTITUTE

New FM – new approach on the economy?

Today, the new First Minister John Swinney set out his broad economic aspirations for Scotland (write MAIRI SPOWAGE and EMMA CONGREVE).

In a speech at the impressive Barclays Glasgow Campus (which he said embodied the ambition he wished to have for the economy), he set out the vision he had for Scotland to have a strong, successful, innovative and dynamic economy.

For people who were after specific policy actions, the speech was light on detail, but it was not perhaps fair to expect the FM to outline these sorts of specifics in a speech like this.

The FM also had a difficult line to tread, given (as he himself pointed out) that he has been a Minister in government for 16 of the last 17 years and wanted to talk about successes in a record he is “immensely proud of”. At the same time, he needed to recognise that there were failings in the previous administration that had led to him being in office as First Minister.

Economic Growth is front and centre

The First Minister had said as he took office that eradicating child poverty was his key policy objective. This morning he was keen to set out that there is no conflict between eradicating child poverty and boosting economic growth – rather, they go hand in hand. He set out that boosting the economy will create opportunities for people and raise living standards and that reducing poverty raises spending power and boosts productivity. This is to a large degree true, but there will at times be trade-offs that will require one to be prioritised over the other.

Given the key stakeholders from businesses and business organisations in the room for his speech today, he was very keen to set out that his government was going to work collaboratively with businesses and other organisations to design and implement policies to strengthen the economy. Even more broadly, the FM said that he wished to bring more consensus building back into Scottish politics to try to achieve outcomes – to “build up, not tear down” as he put it.

There was a clear “Scotland is open for business” from the FM today. Supporting more investment in Scotland (particularly related to the Energy Transition and Housing) is clearly a priority for this new administration. This featured heavily in this speech and has been supported by some of the policy announcements made earlier this week.

We will do, rather than write strategy documents

A widely welcomed aspect of the speech is likely to be the FM’s acknowledgment that his government could probably do with carrying out “more concrete actions and fewer strategy documents”.

We have been on record a number of times as saying that the Scottish Government produces too many and too weighty strategy documents. So this is a crowd pleaser to a room of people who are likely to want to see action rather than just warm words and have seen endless strategies come and go.

However, it is important to remember what the problem sometimes was with these documents. Sometimes, in the case of recent economic strategy documents, the problem is that they aren’t really strategies – if they set out high-level principles that no one can disagree with, but don’t provide a meaningful framework for prioritisation and dealing with trade-offs, then they aren’t particularly useful.

In other cases, even where strategies are set, they can often gather dust on a shelf rather than meaningfully drive activity in government.

All of this from the FM is likely to be broadly welcomed – it’s an easy sell to say there will be less bureaucracy. But let’s not forget that we still need a clear economic strategy from the FM and the DFM – and that a strategy is not a strategy unless it rules some things out and recognises trade-offs and carries through into day-to-day activity. This clarity and policy stability is what is likely to be required to inspire the confidence in investors that this new administration would like to see.

Looking forward, not back

Many of the questions from journalists in the room today were designed to get the FM’s views on what went wrong with economic policy under the previous leadership, In addition, he was asked what his government was likely to do on policies like rent controls, short term lets legislation, and tax increases (specifically income tax) that have been put in place at the past budgets. Essentially, people were keen to hear what, in these specific areas, might change under a John Swinney government.

The FM said clearly that he was “looking forward, not back” in response to the question about what went wrong under Humza Yousaf.

With regards to specific policies where regulation was impacting businesses, he said his Cabinet colleagues were looking at lots of areas of policy and that more details on specific policies would be following in the weeks and months to come.

On tax, he was more forthcoming – acknowledging that the higher tax rates on above-median earners in Scotland are an important component of raising revenue in straitened fiscal times, but also saying that “we can’t keep raising taxes”. It will be interesting to see how this approach to tax is reflected in the Government’s Draft Tax Strategy, which is due alongside the Medium Term Financial Strategy (date currently tbc). That is if these two documents survive the cull of strategies …

Evidence-based approaches

The FM today said a number of times that the government he leads will be more practical and will be driven by the evidence of “what works”. We are very supportive of this, of course, and hope it signals a shift of more meaningful appraisal and assessment of policy options within the Scottish Government, with the associated investment in evaluation.

In doing this, unintended consequences, whether economic or otherwise, are more likely to be identified and can be proactively mitigated, and/or it can allow the government to change course at an earlier stage.

In addition, progress and continuous improvement can only happen in a culture of meaningful evaluation and being prepared to learn from what worked and what didn’t work.

For example, how well has the policy on rent freezes and caps worked to date? It would initially appear from rental costs that it has had the opposite effect on rents than the government presumably desired, and it would also appear to have had an impact on investor confidence in the sector. Given the FM’s focus on housing in his speech today, and his commitment to be evidence-based, it will be interesting to see how this policy area progresses.

Is this a meaningful shift in approach?

With his speech today, that is certainly what the FM is trying to convey. He was saying many of the right things to hearten those who want to see the government focus on economic growth.

However, the proof will be in the policy action that is actually taken. So, let’s wait for these details in the weeks to come.

Cash injection for millions as National Insurance cut hits payslips

  • Millions of workers checking payslips tomorrow will see a tax cut
  • As the economy turns a corner, the government is rewarding hard work, with over £900 a year boost for typical worker
  • Marks another step in long-term ambition to end unfair double tax on work

There are 27 million employees in the UK, and today [Tuesday 30 April] millions of them on monthly salaries will wake up with a little more cash in their pockets, as the UK government’s Spring Budget cut to National Insurance appears in April’s pay-packets.

Since Autumn 2023, National Insurance Contributions (NICs) for workers have been slashed by a third – the largest cut to employee and self-employed NICs in history.

The main rate of employee National Insurance has been cut for 27 million workers from 12% to 8%, saving the average employee on £35,400 over £900 a year. An average full-time nurse will save £1053, a typical junior doctor £1508 and an average teacher £1270.

These cuts are possible because the economy is turning a corner, thanks to the government’s decisive action that has helped bring inflation down from 11.1% to 3.2% and ensure borrowing costs start to fall. Because of this progress, the government can now cut taxes to reward work and grow the economy.

This marks another step towards the longer-term ambition to end the unfair double tax on work and abolish employee and self-employed NICs altogether.

These tax cuts – worth over £20 billion a year – have been achievable while protecting spending including keeping the Triple Lock and the government has commitment to going further only when it’s possible to do so.

Prime Minister Rishi Sunak said: ““At the start of last year I made to pledge to half inflation. And because of the difficult decisions we have taken, inflation has more than halved and we are now able to reward work, and cut taxes for millions of workers who are seeing the benefit in their pay checks today.

“We have now cut National Insurance by £900 because it’s unfair that workers pay double tax on their income. We need to make it much simpler and much fairer and we are going to continue cutting this tax until it’s gone – while continuing to protect pensioners with the triple lock and providing record levels of funding to the NHS.”

Chancellor of the Exchequer Jeremy Hunt said: “We’re on the right track – we’ve been able to slash National Insurance to return hundreds of pounds back into the pockets of hard-working Brits because of the decisions we’ve made to manage the economy responsibly.

“Over the years ahead we want to get rid of National Insurance completely for workers – it is an unfair double tax on work and we’ve shown we can protect spending on public services while eliminating it.”

The tax cuts to date mean that for single individuals on average salaries, personal taxes would be lower in the UK than every other G7 country, based on the most recent OECD data.

The smart nature of the tax cuts will also help grow the economy by bringing more people into the labour market. The Office for Budget Responsibility (OBR) expects that, as a result of these combined cuts, total hours worked will increase by the equivalent of almost 200,000 full-time workers by 2028-29.

To mark the record cuts to NICs, HMRC launched an updated online tool earlier this month to help people understand how much they personally could save in National Insurance this year.

These cuts to reward work follow a raft of changes that came into force on 1 April and could save households up to £3,850 a year to help those struggling with cost-of-living while igniting the economy.

This includes a record increase in the National Living Wage from £10.42 an hour to £11.44, and a 12.3% drop in energy bills from the previous quarter.

In addition, households can benefit from a separate increase to the Local Housing Allowance that will mean some of the poorest families on either Universal Credit or Housing Benefit will gain £800 a year on average.

Who does this help?

The combined cuts to National Insurance mean:

  • A ‘hard-working’ family with two earners on the average salary of £35,400 each will be better off by £1,826.
  • An average full-time nurse on £38,900 will be better off by £1,053.
  • A senior nurse with five years experience on £42,618 will be better off by £1,202.
  • The average police officer on £44,300 will be better off by £1,270.
  • A cleaner working night shifts on £21,058 will be better off by £340.
  • A typical junior doctor on £65,000 will be better off by £1,508.
  • A typical self-employed plumber on £34,361 will be better off by £846.
  • The typical teacher on £44,300 will be better off by over £1,270.

Budget choices must prioritise hardest-up families, say child poverty campaigners

“Scandal of child poverty in a rich country must end” 

Scottish child payment must rise to £30 to protect lower income families who don’t benefit from proposed council tax freeze. 

Campaigners at the Child Poverty Action Group (CPAG) in Scotland are calling for tax and spending decisions to do more to prioritise hard up families ahead of tomorrow’s Scottish budget.

With the proposed £300 million council tax freeze set to benefit better off households they say the very least that is needed to protect lower income families is a £58 million investment to raise the Scottish child payment to £30 per week. CPAG were one of over 150 signatories to a letter sent to the First Minister Humza Yousaf last month urging him to deliver the increase. 

The Scottish child payment, which currently provides a vital £25 per week extra support for children in lower income families, must by law be uprated in line with inflation.

However during the SNP leadership campaign the First Minister said he wanted to see it rise to £30 in his first Budget. In a pre-Budget briefing sent to all MSPs the campaigners say this is the “minimum extra investment that is needed to support lower income families and demonstrate the First Minister is genuinely ‘shifting the dial’ on child poverty.”

The group have also joined over sixty other groups today to call on all Scotland’s political leaders to build a fair tax consensus that can provide the social investment needed for ‘a more equitable, resilient, and prosperous Scotland’. They say the Scottish Budget must be a ‘pivotal moment for fundamental change.’ 

Speaking ahead of today’s budget statement John Dickie, Director of Child Poverty Action Group in Scotland, said; “Struggling families desperately need a budget that will provide immediate support as well as help meet statutory child poverty targets.

“Increasing the Scottish child payment to £30 is a cost-effective investment that would provide much needed financial support to the lower income families who get little if any benefit from the proposed council tax freeze.

“It would make a substantive impact and demonstrate the First Minister is genuine in his desire to ‘shift the dial’ on child poverty.” 

Recognizing the challenging fiscal backdrop Mr Dickie added: “Difficult budget choices will be needed. But the right choice is to prioritise tax and spending decisions that will help end the poverty that still blights the lives of tens of thousands of children across Scotland.

“We are a wealthy country and we need all our political leaders to work together to harness that wealth to end the scandal of child poverty in a rich country once and for all.”

Child Poverty Action Group is calling for a Scottish Budget that:

•    Increases the Scottish child payment at the very least to £30 per week from April 2024, as committed by the First Minister in his leadership campaign. This investment is supported by the Children and Young People’s Commissioner and over 150 trade unions, faith groups, children’s charities and community organisations from across Scotland. 
•    Ensures sufficient resources are harnessed and allocated to fund the wider measures (including on childcare, employment and housing) set out in the statutory child poverty delivery plan – Best Start, Bright Futures.
•    Provides additional cash payments to families impacted by the two-child limit and the under 25 penalty in universal credit.
•    Invests in childcare so not only can the actions in Best Start, Bright Futures be delivered, but every parent can access the childcare they need, when they need it. 
•    Is bold in using tax powers in a progressive way to ensure sufficient resources are available to fully deliver on the actions that are needed to tackle child poverty. 

Over £115m contributed to Edinburgh and the Lothians economy by Barratt Developments East Scotland

Barratt Developments Scotland, which includes Barratt Homes and David Wilson Homes, has made a substantial contribution of £355.5m to the Scottish economy, with the housebuilder’s East Scotland division supplying £115.5m in GVA itself.

In the year ending 30 June 2023, Barratt East Scotland also completed 847 new homes of which 187 were affordable, and supported 1,641 direct, indirect and induced jobs across the region, which includes Edinburgh and The Lothians.

2023 also saw the largest UK housebuilder reinforce its commitment to creating homes for nature as well as people. The business created 10.3ha of public green spaces and private gardens around the region, the equivalent of 15 football pitches, to help support wildlife on and around its sites.  

Across the UK, Barratt is working towards reducing its direct carbon emissions by 29 per cent by 2025 and indirect emissions by 24 per cent per square metre by 2030. In the past year, CO2e emissions per 100m.sq. of completed build area fell to 1.87t in Scotland – a reduction of 2 per cent from the 2018 benchmark.

Alison Condie, managing director for Barratt Developments East Scotland, said: “As the UK’s largest housebuilder, and one of the most sustainable, we place considerable emphasis on supporting people, the environment and generating strong economic growth for the region.

“We are proud to have made such a positive contribution to the region in 2023 with 847 new homes being delivered to families and boosting the local economy by £115.5m.”

As part of its housebuilding activity, Barratt East Scotland has made £3.4m in local contributions to help build new facilities and community infrastructure. This contribution includes the provision of 173 new school places. More than £27.3m has also been spent on physical works within communities, such as highways, environmental improvements and community facilities. 

Other key findings from the Barratt East Scotland 2021 socio-economic report include: 

  • Increased support for public services with £28.9m in generated tax revenues 
  • Over £96,000 donated to local charitable and community causes 
  • 296 supplier and 276 sub-contractor companies supported 
  • Increased support for the UK supply chain with 90% of all components centrally procured, assembled or manufactured in-country 
  • More than £15.2m in retail spending by new residents, helping support 150 retail and service-related jobs 

The development of new and future talent remains a key priority for Barratt Developments Scotland and 75 graduates, apprentices and trainees launched their careers with the company in 2023, including 24 from its East Scotland division.   

The assessment of Barratt Developments’ performance was carried out by independent consultants Lichfields, who analysed socio-economic impacts through the delivery chain for new housing based on Barratt datasets, published research and national statistics. 

Asylum seekers’ right to work

Changes could add £30 million to Scotland’s economy annually

Allowing asylum seekers the right to work could help them settle into communities better while boosting Scotland’s economy and workforce.

Research by the Scottish Government’s independent Expert Advisory Group on Migration and Population sets out how enabling asylum seekers to gain employment could improve health and wellbeing and reduce the risk of exploitation.

Changes could also benefit the Scottish economy, help fill gaps in the workforce and see increased council tax paid directly to local authorities which host asylum seekers.

The report will underpin the development of proposals for a Scottish Asylum Right to Work pilot, to be submitted for consideration to the Home Office in 2024.

Migration Minister Emma Roddick said: “Scotland provides a welcoming home to many people seeking asylum, with policies underpinned by dignity, respect and compassion.  

“This independent report shows how enabling asylum seekers to find work could reduce anxiety and improve the wellbeing of vulnerable people, while supporting Scotland’s economy by helping fill skills shortages and addressing population challenges.

“As the UK Government continues to pursue repugnant policies on asylum and immigration, we are developing mitigations as far as possible within our devolved powers and budget, including through our New Scots refugee integration strategy.

“The Scottish Government will now use this report to design a proposal to work within the current devolution settlement, but only independence would give us power to implement a full Scottish asylum system rooted in respect for human rights.”

Chair of the Scottish Government’s independent Expert Advisory Group on Migration and Population Rebecca Kay said: “Our report shows strong international evidence that strict restrictions on the right to work have negative consequences for asylum seekers’ material and emotional well-being, and for long-term integration outcomes. 

“We also find substantial evidence of the considerable barriers which people seeking asylum are likely to face on entering the labour force. These will require careful consideration by Scottish Government, and deliberate remedy, when designing a pilot proposal.

“Wider measures to provide adequate reception, settlement and integration services will be required in order to realise the full benefits of a right to work policy for asylum seekers.”

Extending the Right to Work to Asylum Seekers in Scotland: evaluation, analysis, and policy options