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There will be a lot of positive talk from the chancellor when he delivers his autumn statement on Wednesday, but this will be a fiscal event full of illusory gains.

The government is on track to borrow less than previously forecast, which will give rise to a fantasy that Chancellor Jeremy Hunt has more space to slash taxes than he actually has.

It’s a fantasy because these gains on borrowing are largely the product of high inflation, which has bolstered tax receipts. The government hasn’t admitted it yet, but inflation will inevitably drive up spending too.

It means Hunt’s room for manoeuvre is actually limited if he wants to meet his target of getting debt falling as a proportion of gross domestic product (GDP).

Although interest rates, which have been higher than expected, will weigh on the public finances, the windfall from higher taxes bolstered by inflation and wage growth will more than offset this. The Office for Budget Responsibility (OBR) will likely show that the government’s headroom against that target has grown from £6.5bn to around £13bn.

Jeremy Hunt will want to claim this as a victory, while also tempering expectations for tax cuts. His message will be that the public finances are improving under this government but they are in too poor a shape to allow for any tax cuts.

This is where the political infighting begins. Many MPs within his own party want him to use that headroom to cut taxes. They are perturbed by the fact that a Conservative government has overseen growth in the tax burden to its largest in the post-war era.

More on Jeremy Hunt

Among the most egregious of these tax rises is the freezing of thresholds, a stealth tax which will see taxpayers pay £40bn a year more by 2028. It has dragged millions of public sector workers, including teachers and nurses, into the higher band of tax.

Tensions over taxation have been simmering in the party and will likely flare up again because Hunt is unlikely to make any big giveaways. The government is insistent that the priority must be to bring inflation down because any tax rises could drive inflation higher. However, with the target to halve inflation now met, MPs will be asking when the tax cuts can begin.

Chancellor Jeremy Hunt
Jeremy Hunt will deliver his autumn statement on Wednesday

Both Hunt and Rishi Sunak are sensitive to this and will probably throw a bone or two. Downing Street has been looking for options that are relatively inexpensive and less likely to increase inflation.

There are a number of policies under consideration, including the scrapping of inheritance tax, or a reduction in the rate from 40% to 20% on estates above £325,000. The government could also cancel a planned increase on stamp duty. Together, these policies would cost about £5.2bn. The chancellor is also expected to cancel the planned 5p increase in fuel duty from April next year, which will cost £6bn.

So, any giveaways would quickly swallow up the headroom, at a time when government spending will inevitably have to rise. Departmental budgets are set in cash terms and high inflation means that the cost of paying prison guards and running courts has gone up. Without substantial increases, public services face real-terms pay cuts.

On current plans, unprotected departments would see their spending power cut by 16% between 2022-23 and 2027-28, which would be a similar pace of cuts to those implemented by George Osborne in the early 2010s. The Resolution Foundation, a left-leaning think tank, described this scale of the cuts as a “fiscal fiction” that is “undeliverable”.

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Chancellor on ‘next part of economic plan’

The opposition will be keeping a hawk eye on this and will be quick to decry any signs that the country is returning to a period of austerity. It will also be quick to attack any of the government’s tax-raising plans – and there will be a number of them.

Tax thresholds will probably remain frozen into 2029, a policy that could raise another £6bn. The Treasury will also be cracking down on benefits, uprating them in line with October’s inflation rate of 4.6% instead of September’s figure of 6.7%. That could save £2bn. A tweak to the triple lock calculation for pensions could net £600m.

So, for all the large upward revisions to the numbers coming out of the OBR, it’s a fiscal event that is unlikely to inspire. There will be some tweaks around the edges and some big talk on plans to boost economic growth.

However, the government will probably want to keep its powder dry for the budget in March. Unfortunately, that may not be enough to satisfy Tory MPs, who are hungry for tax giveaways now.

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Rishi Sunak suggests more tax cuts are on the way – but refuses to commit to triple lock manifesto pledge




Rishi Sunak suggests more tax cuts are on the way - but refuses to commit to triple lock manifesto pledge

Rishi Sunak has suggested more tax cuts are on the way because the economy has “turned a corner”.

The prime minister told reporters that while he would not comment on specifics, trimming taxes was “the direction of travel from this government”.

But it came as he refused to say if the pensions triple lock would be in the next Conservative Party manifesto – despite Downing Street insisting in September that it was “committed” to the policy.

Mr Sunak’s comments echo similar remarks by his ministers in recent weeks.

Chancellor Jeremy Hunt also said last month that the economy had “turned a corner” just before he unveiled a cut to National Insurance in the Autumn Statement.

However, four million people could also end up paying higher taxes if their wages rise after the government decided to continue the freeze on tax thresholds.

Reports suggest the Conservatives are considering additional cuts in 2024 as the party tries to woo voters and reduce Labour’s 20-point lead in opinion polls ahead of the next general election, which must take place by January 28 2025.

Cuts to stamp duty and inheritance tax are among the options reportedly being looked at by ministers.

When asked about the two policies, Mr Sunak said: “I would never comment on specific taxes. But what I will just say, though, is we have turned a corner.

“We have got inflation down, as I said we would, we have grown the economy and we are now focused on controlling spending and controlling welfare so we can cut taxes. So when we can do more, we will.”

He added: “We want to grow the economy, we want to reward people’s hard work and aspirations and cut their taxes responsibly. That is the direction of travel from this government.

“If you want controlled public spending, controlled welfare and your taxes cut, then vote Conservative.”

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Mr Sunak was unable to make similar promises about the triple lock, which ensures the state pension must rise every April by whichever is highest out of average earnings, inflation or 2.5%.

The policy has come under fire in recent months by critics who claim it has become too expensive and gives the government less financial “headroom” to deal with economic shocks.

Some senior Tories have called for it to be scrapped and Labour has refused to guarantee the triple lock will remain in place if it wins the next election.

While the government continued with the policy in its recent Autumn Statement, ensuring the state pension will rise by 8.5% in April 2024 to £221.20 a week, Mr Sunak refused to be drawn when asked directly if it would be in the next Tory manifesto.

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Analysis: Autumn Statement 2023

Speaking to journalists as he flew between the UK and Dubai for the COP28 summit, he replied: “[I’m] definitely not going to start writing the manifesto on the plane, as fun as that would be.”

Mr Sunak acknowledged there had been “some scepticism” about if policy was going to form part of the Autumn Statement, but said its inclusion had been “a signal of our commitment to look after our pensioners who have put a lot into our country”.

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Binance’s explosive growth led to compliance failures – CEO Richard Teng on $4.3B settlement




Binance’s explosive growth led to compliance failures - CEO Richard Teng on .3B settlement

“As part of the settlement, CZ cannot be involved in the day-to-day running of the company’s operations,” Richard Teng explains.

Despite that, the incumbent CEO of Binance cuts the figure of a man reveling in the challenges ahead. Speaking to Cointelegraph just two weeks after taking over from outgoing CEO Changpeng ‘CZ’ Zhao, Teng seems to be relishing being at the helm of the world’s largest cryptocurrency exchange:

“I’m taking the baton and pushing ahead with our growth agenda while working very closely with global regulators.”

Teng believes that the “overcast” conditions clouding Binance in recent months are lifting following its staggering $4.3 billion settlement with the United States Justice Department relating to a raft of violations of U.S. regulations and sanctions programs.

$4.3B settlement a result of early gaps in compliance

The exchange has paid dearly for mistakes made during its meteoric growth from 2017 onwards. Teng recalls how Zhao built Binance from a team of six people to a global operation consisting of thousands of employees that serves a user base estimated to be more than 166 million.

“In those very early days while we were building up the company, there were gaps in terms of compliance. That resulted in all these breaches and mistakes, but these are historical issues,” Teng says.

The shortcomings of its early compliance regime have led to the largest crypto-related settlement in U.S. history. However, Teng contends the company has always ensured its user funds, security, and safety have remained “sacrosanct.”

“U.S. agencies have scrutinized our operations in great detail for us to reach this settlement, and there’s no allegation of any misappropriation of user funds,” he adds.

Binance’s obligations to U.S. authorities

Binance is now left to shoulder the ongoing cost and scrutiny that its settlement with U.S. authorities involves. This includes a five-year monitorship and significant compliance undertakings to ensure “Binance’s complete exit from the United States.”

Teng wouldn’t be drawn into the details of Binance.US’s ongoing legal battle with the U.S. Securities and Exchange Commission (SEC) over alleged securities violations. Still, he maintains the company has factored in the costs of meeting the requirements set out in its settlement and its case with the SEC.

The Binance CEO is also bound to non-disclosure agreements relating to its $4.3 billion settlement and would not comment on the means of payment of the penalty. Cointelegraph understands that Binance is in the process of paying its assessment, while a separate case brought against CZ will be paid personally by the former CEO.

The company also confirmed that the movement of some $3.9 billion worth of USDT tokens reported on Nov. 21 was “unrelated to resolution matters” with the U.S. Justice Department.

Was Binance treated unfairly?

Prominent figures in the cryptocurrency space, including former BitMEX CEO Arthur Hayes and Galaxy Digital’s Mike Novogratz, have commented on the disparity between the treatment of Binance and mainstream finance firms in recent years.

Teng weighed in on the perception that “Wall Street Banks” have not been subject to the same treatment despite arguably even bigger failings.

“Fines in terms of the financial sector are not uncommon. If you do a Google search of the list of fines paid by financial institutions, that list is close to $90 billion in fines,” Teng says.

Whether Binance has been made an example of is not a consideration. Nevertheless, the exchange could be the “most regulated exchange globally”, given that Binance operates in 18 different jurisdictions.

Binance is keenly focused on compliance from now on. The company has grabbed headlines for headhunting strategic individuals to navigate regulatory requirements in different jurisdictions.

Teng says the company has “invested heavily” in this regard, pointing to key talent in its compliance team with backgrounds in regulatory agencies like the SEC and traditional financial institutions, including the likes of Morgan Stanley and Barclays.

Building out of UAE, France

Binance remains a global operation but the company has set down two regional headquarters. The United Arab Emirates (UAE) serves as its headquarters for MENA region operations, while France is its European base.

The former region is familiar territory to Teng, who previously lived in the UAE for nine years and served as CEO for local regulator Abu Dhabi Global Markets. His role involved laying down a cryptocurrency framework for the local ecosystem.

“When I first got in touch with crypto, my take was this is the future of finance. But for this to really gain traction and for mass adoption to be brought about, you need two elements,” Teng explains.

Clarity of rules and regulations was the first consideration, and the second was fostering institutional adoption. The latter point remains crucial to Teng as it brings in investors and liquidity and drives research. 

As a result, the UAE has emerged as a proverbial oasis for the cryptocurrency and blockchain sector. It continues to attract global players as a base of operations in the MENA region.

The implementation of Europe’s Markets in Crypto-Assets regulations also bodes well for Binance’s prospects in the region.

“You have clarity of rules to operate in 27 different jurisdictions,” Teng says, which provides a blanket set of requirements for the industry that has to date suffered from “disparity in terms of rules”.

Binance was forced to terminate its services in the Netherlands in June 2023 after failing to satisfy registration requirements to obtain a local virtual asset service provider (VASP) license. MiCA could serve as a means to expand into new markets through 2024 and beyond.

Stepping into CZ shoes

Undoubtedly, stepping into CZ’s shoes is an unenviable task. Teng describes Binance’s founder as an inspirational leader and great mentor focused on execution.

The incumbent is also honest in his understanding that he cannot replace CZ’s role as a founder-CEO, but the current landscape also lends to the merits of a fresh face and new approaches.

“What I can do is bring my own values and expertise to the table in a maturing company. Six years ago, compared to now, Binance is totally different,” Teng explains. The new CEO will report to a board of directors, which will act as the governing authority of the company.

If and when he has time to blow off some steam, Teng hopes to maintain routine in his private life. The CEO enjoys exercising, doing a mix of “weights, cardio and core”. He’s also a bookworm, citing Elon Musk’s biography by Walter Isaacson as his most recent read.

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