Chancellor unveils tax cuts and benefits boost as he warns of ‘challenging’ months ahead

Published

4 years ago

October 27, 2021

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Chancellor Rishi Sunak has set out a budget for a “new economy” after the COVID crisis with a £150bn increase in government spending – but he also warned of “challenging” months ahead due to the continuing pandemic and rising inflation.

In his statement to the House of Commons, Mr Sunak promised “the largest increase this century” in total spending across government departments.

The £150bn increase would include “a real terms rise in overall spending for every single department” and also saw Mr Sunak confirm money for the NHS, prisons, local transport and housing.

However, the chancellor also used his budget to warn of the “challenging backdrop of rising inflation” as he promised to provide “help for working families with the cost of living”.

Having previously removed a pandemic-inspired £20 per week uplift to Universal Credit, Mr Sunak said he would now be lowering the benefits taper rate from 63% to 55%.

This means, for every extra £1 somone earns, their Universal Credit will be reduced by 55p rather than 63p.

Mr Sunak claimed the move, which will be implemented no later than 1 December, would see nearly two million families keep, on average, an extra £1,000 a year.

In a series of tax changes, Mr Sunak announced a new post-Brexit system of alcohol duties, including a lower rate of tax on draught beer and cider to boost pubs.

He also sought to support high streets across the country with a new year-long 50% business rates discount for businesses in the retail, hospitality and leisure sectors.

But, in a move that might worry environmentalists and in the week before the COP26 climate change summit in Glasgow, the chancellor revealed a new lower rate of Air Passenger Duty for domestic flights.

As he outlined the current state of the economy, Mr Sunak said he was keeping a cash reserve to “protect ourselves against economic risks”.

“That is the responsible decision at a time of increasing global economic uncertainty, when our public finances are twice as sensitive to changes in interest rates as they were before the pandemic and six times as sensitive as they were before the financial crisis,” the chancellor said.

“Just a one percentage point increase in inflation and interest rates would cost us around £23bn.”

Mr Sunak set out new government spending rules said he would keep the public finances “on the path of discipline and responsibility” with his new rules.

These include underlying public sector net debt – excluding the impact of the Bank of England – falling as as a percentage of GDP.

And Mr Sunak also said that, in normal times, the government should only borrow to invest in “future growth and prosperity”.

“Everyday spending must be paid for through taxation,” the chancellor said, as he set out action to pay back the multi-billion pound spending during the COVID crisis.

Mr Sunak said his budget “does not draw a line under COVID” as he warned of “challenging months ahead” and encouraged “everyone eligible to get their booster jabs right away”.

But the chancellor added his budget “does begin the work of preparing for a new economy” after the coronavirus crisis.

The OBR now expects the UK’s economic recovery from the COVID pandemic to be “quicker” than previously thought, Mr Sunak told MPs, with growth revised up from 4% to 6.5% for this year.

In 2022, the OBR expects the UK economy to grow by 6% and 2.1%, 1.3% and 1.6% over the following three years.

And they have also revised down their estimates of long-term “scarring” to the UK economy of the COVID crisis.

The chancellor also told the Commons that the OBR expects a lesser peak of unemployment, of 5.2%, which means “over two million fewer people out of work than previously feared”.

Wednesday’s statement was the third budget delivered by Mr Sunak as chancellor and the second of this year, following his statement in March.

Labour leader Sir Keir Starmer was unable to respond to Mr Sunak’s budget in the House of Commons after earlier testing positive for COVID.

Politics

Coinbase refuses $20M ransom after support agent data breach

Published

1 hour ago

May 15, 2025

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Coinbase refuses M ransom after support agent data breach

Coinbase, the world’s third-largest cryptocurrency exchange, was hit by a $20 million extortion attempt after cybercriminals recruited overseas support agents to leak user data, the company said.

According to a May 15 blog post, Coinbase said a group of external actors bribed and coordinated with several customer support contractors to access internal systems and steal limited user account data.

“These insiders abused their access to customer support systems to steal the account data for a small subset of customers,” Coinbase said, adding that no passwords, private keys, funds or Coinbase Prime accounts were affected.

Less than 1% of Coinbase’s monthly transacting users’ data was affected by the attack, the company said.

Coinbase refuses $20M ransom after support agent data breach — *Source:* *Coinbase*

After stealing the data, the attackers attempted to extort $20 million from Coinbase in exchange for not disclosing the breach. Coinbase refused the demand.

Instead, the company announced it was offering a $20 million reward for information leading to the arrest and conviction of those responsible for the scheme.

Scammers often masquerade as recognizable brands to inspire a false sense of trust in their victims.

In 2024, Coinbase was the most impersonated cryptocurrency brand by scammers.

This is a developing story, and further information will be added as it becomes available.

Politics

Sir Keir Starmer in talks with ‘a number of countries’ over return hubs for failed asylum seekers

Published

3 hours ago

May 15, 2025

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Sir Keir Starmer in talks with 'a number of countries' over return hubs for failed asylum seekers

The UK is in talks with “a number of countries” about sending failed asylum seekers to return hubs in third countries, Sir Keir Starmer has said.

The prime minister confirmed the plan at a press conference alongside his Albanian counterpart Edi Rama in the country’s capital, Tirana.

Politics Live: Britain’s economy grew more than expected in first quarter of 2025

Sir Keir described the hubs as a “really important innovation” that complements other measures the government is taking to crack down on criminal smuggling gangs.

“We are in talks with a number of countries about return hubs,” he said.

“At the appropriate time, I’ll be able to give you further details in relation to it.”

Sir Keir did not say which countries he is in talks with, but Mr Rama suggested he is not open to hosting UK detention centres as Albania has already signed a deal for Italy to build them there.

“We have been asked by several countries if we were open to it, and we said no, because we are loyal to the marriage with Italy and the rest is just love,” he said.

Earlier, Sir Keir told GB News that the hubs would be for people whose asylum applications have failed and they have exhausted all avenues to appeal.

This is a different concept to the Tories’ failed Rwanda scheme which Sir Keir scrapped almost immediately after winning the general election.

The Rwanda plan involved deporting all people who arrived in the UK by unauthorised means to the east African country, where their asylum claims would be processed for them to settle there, not in Britain.

Return hubs would be an offshore location to hold migrants set to be returned to their home countries and who have no chance of remaining in the UK.

The Rwanda scheme failed to get off the ground before the Tories lost the election, despite millions spent, after it was repeatedly challenged in the courts.

Shadow home office minister Chris Philp today insisted it would have acted as a deterrent, whereas the return hubs are a “con on the British public”.

He said: “It’s better than nothing but it won’t work because most of the people crossing the Channel are of nationalities where they will get their asylum claims granted.

“It’s a con on the British public for Keir Starmer to claim these return hubs will have any practical effect.”

Mr Philp also called it a “slap in the face” and “humiliation” for the prime minister that Albania has already rejected the idea, saying he’d travelled all that way to “announce a few tweaks” to a cooperation deal that was put in place by the Conservatives.

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Politics

Ukraine strategic Bitcoin reserve bill reportedly in final stages

Published

3 hours ago

May 15, 2025

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Ukraine strategic Bitcoin reserve bill reportedly in final stages

Ukraine is reportedly moving closer to adopting Bitcoin as a national reserve asset, a move that could bolster its financial resilience amid the ongoing war with Russia.

Lawmakers are reportedly working on a Bitcoin (BTC) national reserve proposal, with a draft bill in its final stages, according to Yaroslav Zhelezniak, a member of parliament who confirmed the plan to local media outlet Incrypted.

The proposal was announced during the CRYPTO 2025 conference in Kyiv on Feb. 6. “We will soon submit a draft law from the industry allowing the creation of crypto reserves,” Zhelezniak said.

Cointelegraph reached out to Zhelezniak for comment on the bill’s status but had not received a response by publication.

Bitcoin has gained international attention as a national reserve asset since the election of US President Donald Trump in November 2024. On March 7, Trump signed an executive order to establish a national Bitcoin reserve seeded with BTC confiscated from criminal cases.

A month later, Swedish MP Rickard Nordin issued an open letter urging Finance Minister Elisabeth Svantesson to consider adopting Bitcoin as a national reserve asset, citing its growing recognition as a “hedge against inflation,” Cointelegraph reported on April 11.

Legal challenges may delay adoption

While Ukraine’s push for a national Bitcoin reserve marks a potentially historic shift in crypto policy, it may require “significant legal change,” according to Kyrylo Khomiakov, regional head of CEE, Central Asia and Africa, at crypto exchange Binance.

“We commend Ukraine’s ambition to establish a strategic crypto reserve,” he told Cointelegraph. “Implementing such a reserve would necessitate significant legal changes, indicating that this process will not be swift.”

He added, “Another positive aspect is that this initiative will likely lead to greater regulatory clarity in Ukraine, as the government will need to articulate its stance more clearly.”

Ukraine was reportedly planning to legalize cryptocurrencies in early 2025 with the finalization of a draft bill in coordination with the National Bank of Ukraine (NBU) and the International Monetary Fund (IMF), according to Daniil Getmantsev, head of the tax committee of the Verkhovna Rada.

On April 8, Ukraine’s financial regulator proposed taxing certain crypto transactions as personal income with a rate of up to 23%, excluding crypto-to-crypto transactions and stablecoins.

Not all voices in Ukraine’s crypto industry are optimistic about the timing of the proposal.

”The country is broke. More than 50% of the budget is in grants and loans from the European Union,” said Michael Chobanian, the founder of Ukraine-based Kuna exchange.

“The population is decreasing at the fastest rate in the world. Men are kidnapped and sent to the army against their will. What kind of BTC reserves are we talking about here? This is done only to divert your attention,” Chobanian claimed.