Labour pledges more power for OBR to prevent repeat of Liz Truss’s ‘disastrous’ mini-budget

Published

2 years ago

September 22, 2023

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Labour has pledged to bolster the power of the UK’s economic watchdog to prevent a repeat of the “disastrous mistakes” of Liz Truss’s mini-budget.

Labour leader Sir Keir Starmer has vowed to introduce legislation that would allow the Office for Budget Responsibility (OBR) to independently publish their own impact assessment of any major and permanent tax and spending changes.

His shadow chancellor, Rachel Reeves, said it meant that “never again” can the “disastrous mistakes” of the former prime minister be repeated, ahead of the first anniversary of her “fiscal event”.

Tories accuse Starmer of wanting to ‘return to agonies of the past’ – politics latest

The mini-budget last September spooked the markets and sparked a huge economic fallout, pushing up government borrowing costs and putting certain pension funds on the brink of collapse.

One of the reasons for the markets’ reaction was that Ms Truss and her chancellor, Kwasi Kwarteng, refused to publish the OBR’s independent forecasts for the public finances alongside the plans.

The party said under its plans, ministers would be forced to open their books to the forecasters – though any government wanting to disregard them could seek to reverse the legislation.

It said families and businesses are “still paying the price” for her “crashing the economy” – with households coming off fixed rate mortgages paying an average of £220 more a month and inflation forecast to be the highest in the G7.

They have billed their proposal as a “fiscal lock” which would ensure fiscal stability by:

Amending the legal framework governing the OBR to guarantee that where a fiscal event makes permanent tax and spending changes over a certain threshold, the fiscal watchdog can independently publish a forecast of the impact
Setting out the threshold in a revised charter of budget responsibility, that would be voted on in Parliament
Ensuring that in the event of an emergency where changes must be introduced at speed and a forecast cannot be produced in time, the OBR would be allowed to set a date for when it can publish its forecast
Setting out a fixed timetable for budgets that would say major fiscal decisions are announced by the end of November each year, allowing businesses and families four months to prepare for the new tax year and avoiding major changes to policy at the last minute
Annual autumn budgets would be followed by a spring update in early March providing an updated forecast and minor policy changes

James Murray, Labour’s shadow financial secretary to the Treasury, told Sky News this morning it was “absolutely crucial to legislate because we all remember what happened a year ago”.

He accused the Tories of having “set the economy on fire” with the mini-budget that “sidelined the OBR”.

“Never again should a prime minister and a chancellor be able to play fast and loose with public finances and damage the economy and household budgets in the way they have,” he added.

Speaking ahead of a visit with the Labour leader to the London Stock Exchange on Friday, the shadow chancellor said: “The economic damage done by the Conservatives’ mini-budget was nothing short of disastrous and Britain is still paying the price, with higher mortgages, higher energy bills and higher prices in the shops.

“As chancellor, my mission will be to bring stability back to our economy because that is the only way we can bring growth back. Never again can a prime minister or chancellor be allowed to repeat the disastrous mistakes of last year’s mini-budget.

“Labour will introduce a new fiscal lock to strengthen the UK’s financial stability to prevent the turmoil we witnessed this time last year. Labour will ensure stability returns to our economy and on that rock of stability working people will be better off.”

Labour has been seeking to pitch itself as fiscally prudent, prioritising stabilising the economy over big spending commitments in a move that has angered some unions and those on the left.

They have sought to weaponise the anniversary of the Truss mini-budget to hammer home their message of fiscal responsibility, while highlighting the government’s record on the economy.

Ms Truss’ £45bn package of unfunded tax cuts, which she admitted would primarily have benefited the wealthy, sent the pound tumbling, interest rates soaring and culminated with the Bank of England having to intervene to prevent pension markets from collapsing.

Although she rowed back on her measures and sacked her chancellor, Kwasi Kwarteng, it was not enough to save her administration from collapsing and she resigned after just 49 days in the job – making her the shortest serving prime minister in British history.

She is still facing criticism over her actions, with the former Bank of England governor Mark Carney this week accusing her of turning Britain into “Argentina on the Channel” instead of “Singapore on the Thames”.

But Ms Truss has remained unrepentant, blaming “institutional bureaucracy” for her downfall.

Politics

‘Will the PM side with parents or tech bros?’: Labour peer demands action on children’s smartphone safety

Published

5 mins ago

April 4, 2025

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'Will the PM side with parents or tech bros?': Labour peer demands action on children's smartphone safety

Sir Keir Starmer needs to choose between parents who want stronger action to tackle harmful content on children’s phones, or the “tech bros” who are resisting changes to their platforms, Baroness Harriet Harman has said.

Speaking to Beth Rigby on Sky News’ Electoral Dysfunction podcast, the Labour peer noted that the prime minister met with the creators of hit Netflix drama Adolescence to discuss safety on social media, but she questioned if he is going to take action to “stop the tech companies allowing this sort of stuff” on their platforms where children can access it.

Sir Keir hosted a roundtable on Monday with Adolescence co-writer Jack Thorne and producer Jo Johnson to discuss issues raised in the series, which centres on a 13-year-old boy arrested for the murder of a young girl, and the rise of incel culture.

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The aim was to discuss how to prevent young boys being dragged into a “whirlpool of hatred and misogyny”, and the prime minister said the four-part series raises questions about how to keep young people safe from technology.

Sir Keir has backed calls for the four-part drama to be shown in all schools across the country, but Baroness Harman questioned what is going to be achieved by having young people simply watch the show.

“Two questions were raised [for me],” she said. ” Firstly – after they’ve watched it, what is going to be the discussion afterwards?

“And secondly, is he going to act to stop the tech companies allowing this sort of stuff to go online into smartphones without protection of children?

“Because if the tech companies wanted to do this, they could actually protect children. They can do everything they want with their tech.”

She acknowledged there are “very big public policy challenges” in this area, but added of the prime minister: “Is he going to side with parents who are terrified and want this content off their children’s phones, or is he going to accept the tech bros’ resistance to having to make changes?”

👉 Click here to listen to Electoral Dysfunction on your podcast app 👈

Can parliament keep up?

The Labour peer backed the Conservative Party’s call for a ban on smartphones in schools to be mandated from Westminster, saying it would “enable all schools not to have a discussion with their parents or to battle it out, but just to say, this is the ruling” from central government, which Ofsted would then enforce.

“I’m sensitive to the idea that we shouldn’t constantly be telling schools what to do,” she continued. “And they’ve got a lot of common sense and a lot of professional experience, and they should have as much autonomy as possible.

“But perhaps it’s easier for them if it’s done top down.”

Baroness Harman also questioned the speed with which parliament is actually able to legislate to deal with the very rapid development of new technologies, and posits that it could “change its processes to be able to legislate in real time”.

She suggested that a “powerful select committee” of MPs could be established to do that, because “otherwise we talk about it, and then we’re not able to legislate for 10 years – by which time that problem has really set in, and we’ve got a whole load more problems”.

On the podcast, the trio also discussed the 10% tariffs imposed on the UK by Donald Trump and the government’s efforts to strike a trade deal with the US to mitigate the impact of the levy.

The government has refused to rule out scrapping the Digital Services Tax, a 2% levy on tech giants’ revenues in the UK, as part of the negotiations with the Trump administration – a move Baroness Harman said would be “very heartbreaking”.

👉 Click here to listen to Electoral Dysfunction on your podcast app 👈

Politics

Bakkt investors file class-action lawsuit after loss of Webull, BoA contracts

Published

3 hours ago

April 4, 2025

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Bakkt investors file class-action lawsuit after loss of Webull, BoA contracts

A group of investors with cryptocurrency custody and trading firm Bakkt Holdings filed a class-action lawsuit alleging false or misleading statements and a failure to disclose certain information.

Lead plaintiff Guy Serge A. Franklin called for a jury trial as part of a complaint against Bakkt, senior adviser and former CEO Gavin Michael, CEO and president Andrew Main, and interim chief financial officer Karen Alexander, according to an April 2 filing in the US District Court for the Southern District of New York.

The group of investors allege damages as the result of violations of US securites laws and a lack of transparency surrounding its agreement with clients: Webull and Bank of America (BoA).

Law, Investments, United States, Bakkt — *April 2 complaint against Bakkt and its executives. Source: PACER*

The loss of Bank of America and Webull will result “in a 73% loss in top line revenue” due to the two firms making up a significant percentage of its services revenue, the investor group alleges in the lawsuit. The filing stated Webull made up 74% of Bakkt’s crypto services revenue through most of 2023 and 2024, and Bank of America made up 17% of its loyalty services revenue from January to September 2024.

Bakkt disclosed on March 17 that Bank of America and Webull did not intend to renew their agreements with the firm ending in 2025. The announcement likely contributed to the company’s share price falling more than 27% in the following 24 hours. The investors allege Bakkt “misrepresented the stability and/or diversity of its crypto services revenue” and failed to disclose that this revenue was “substantially dependent” on Webull’s contract.

“As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages,” said the suit.

Other law offices said they were investigating Bakkt for securities law violations, suggesting additional class-action lawsuits may be in the works. Cointelegraph contacted Bakkt for a comment on the lawsuit but did not receive a response at the time of publication.

Prices affected by Trump Media reports

Bakkt’s share price surged roughly 162% in November 2024 after reports suggested that then-US President-elect Donald Trump’s media company was considering acquiring the firm. As of April 2025, neither company has officially announced a deal.

Shares in Bakkt (BKKT) were $8.15 at the time of publication, having fallen more than 36% in the previous 30 days.

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Trump tariffs squeeze already struggling Bitcoin miners — Braiins exec

Published

10 hours ago

April 4, 2025

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Trump tariffs squeeze already struggling Bitcoin miners — Braiins exec

The new trade tariffs announced by US President Donald Trump may place added pressure on the Bitcoin mining ecosystem both domestically and globally, according to one industry executive.

While the US is home to Bitcoin (BTC) mining manufacturing firms such as Auradine, it’s still “not possible to make the whole supply chain, including materials, US-based,” Kristian Csepcsar, chief marketing officer at BTC mining tech provider Braiins, told Cointelegraph.

On April 2, Trump announced sweeping tariffs, imposing a 10% tariff on all countries that export to the US and introducing “reciprocal” levies targeting America’s key trading partners.

Community members have debated the potential effects of the tariffs on Bitcoin, with some saying their impact has been overstated, while others see them as a significant threat.

Tariffs compound existing mining challenges

Csepcsar said the mining industry is already experiencing tough times, pointing to key indicators like the BTC hashprice.

Hashprice — a measure of a miner’s daily revenue per unit of hash power spent to mine BTC blocks — has been on the decline since 2022 and dropped to all-time lows of $50 for the first time in 2024.

According to data from Bitbo, the BTC hashprice was still hovering around all-time low levels of $53 on March 30.

“Hashprice is the key metric miners follow to understand their bottom line. It is how many dollars one terahash makes a day. A key profitability metric, and it is at all-time lows, ever,” Csepcsar said.

He added that mining equipment tariffs were already increasing under the Biden administration in 2024, and cited comments from Summer Meng, general manager at Chinese crypto mining supplier Bitmars.

“But they keep getting stricter under Trump,” Csepcsar added, referring to companies such as the China-based Bitmain — the world’s largest ASIC manufacturer — which is subject to the new tariffs.

Trump’s latest measures include a 34% additional tariff on top of an existing 20% levy for Chinese mining imports. In response, China reportedly imposed its own retaliatory tariffs on April 4.

BTC mining firms to “lose in the short term”

Csepcsar also noted that cutting-edge chips for crypto mining are currently massively produced in countries like Taiwan and South Korea, which were hit by new 32% and 25% tariffs, respectively.

“It will take a decade for the US to catch up with cutting-edge chip manufacturing. So again, companies, including American ones, lose in the short term,” he said.

Csepcsar also observed that some countries in the Commonwealth of Independent States region, including Russia and Kazakhstan, have been beefing up mining efforts and could potentially overtake the US in hashrate dominance.

“If we continue to see trade war, these regions with low tariffs and more favorable mining conditions can see a major boom,” Csepcsar warned.

As the newly announced tariffs potentially hurt Bitcoin mining both globally and in the US, it may become more difficult for Trump to keep his promise of making the US the global mining leader.

Trump’s stance on crypto has shifted multiple times over the years. As his administration embraces a more pro-crypto agenda, it remains to be seen how the latest economic policies will impact his long-term strategy for digital assets.

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