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

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1 year ago

December 4, 2023

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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.”

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.

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”.

Politics

The cost of innovation — Regulations are Web3’s greatest asset

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53 mins ago

April 27, 2025

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The cost of innovation — Regulations are Web3’s greatest asset

Opinion by: Hedi Navazan, chief compliance officer at 1inch

Web3 needs a clear regulatory system that addresses innovation bottlenecks and user safety in decentralized finance (DeFi). A one-size-fits-all approach cannot be achieved to regulate DeFi. The industry needs custom, risk-based approaches that balance innovation, security and compliance.

DeFi’s challenges and rules

A common critique is that regulatory scrutiny leads to the death of innovation, tracing this situation back to the Biden administration. In 2022, uncertainty for crypto businesses increased following lawsuits against Coinbase, Binance and OpenSea for alleged violations of securities laws.

Under the US administration, the Securities and Exchange Commission agreed to dismiss the lawsuit against Coinbase, as the agency reversed the crypto stance, hinting at a path toward regulation with clear boundaries.

Many would argue that the same risk is the same rule. Imposing traditional finance requirements on DeFi simply will not work from many aspects but the most technical challenges.

Openness, transparency, immutability, and automation are key parameters of DeFi. Without clear regulations, however, the prevalent issue of “Ponzi-like schemes” can divert focus from effective innovation use cases to conjuring a “deceptive perception” of blockchain technology.

Guidance and clarity from regulatory bodies can reduce significant risks for retail users.

Policymakers should take time to understand DeFi’s architecture before introducing restrictive measures. DeFi needs risk-based regulatory models that understand its architecture and address illicit activity and consumer protection.

Self-regulatory frameworks cultivate transparency and security in DeFi

The entire industry highly recommends implementing a self-regulatory framework that ensures continuous innovation while simultaneously ensuring consumer safety and financial transparency.

Take the example of DeFi platforms that have taken a self-regulatory approach by implementing robust security measures, including transaction monitoring, wallet screening and implementing a blacklist mechanism that restricts a wallet of suspicion with illicit activity.

Sound security measures would help DeFi projects monitor onchain activity and prevent system misuse. Self-regulation can help DeFi projects operate with greater legitimacy, yet it may not be the only solution.

Clear structure and governance are key

It’s no secret that institutional players are waiting for the regulatory green light. Adding to the list of regulatory frameworks, Markets in Crypto-Assets (MiCA) sets stepping stones for future DeFi regulations that can lead to institutional adoption of DeFi. It provides businesses with regulatory clarity and a framework to operate.

Many crypto projects will struggle and die as a result of higher compliance costs associated with MiCA, which will enforce a more reliable ecosystem by requiring augmented transparency from issuers and quickly attract institutional capital for innovation. Clear regulations will lead to more investments in projects that support investor trust.

Anonymity in crypto is quickly disappearing. Blockchain analytics tools, regulators and companies can monitor suspicious activity while preserving user privacy to some extent. Future adaptations of MiCA regulations can enable compliance-focused DeFi solutions, such as compliant liquidity pools and blockchain-based identity verification.

Regulatory clarity can break barriers to DeFi integration

The banks’ iron gate has been another significant barrier. Compliance officers frequently witness banks erect walls to keep crypto out. Bank supervisors distance companies that are out of compliance, even if it’s indirect scrutiny or fines, slamming doors on crypto projects’ financial operations.

Clear regulations will address this issue and make compliance a facilitator, not a barrier, for DeFi and banking integration. In the future, traditional banks will integrate DeFi. Institutions will not replace banks but will merge DeFi’s efficiencies with TradFi’s structure.

Recent: Hester Peirce calls for SEC rulemaking to ‘bake in’ crypto regulation

The repeal of Staff Accounting Bulletin (SAB) 121 in January 2025 mitigated accounting burdens for banks to recognize crypto assets held for customers as both assets and liabilities on their balance sheets. The previous laws created hurdles of increased capital reserve requirements and other regulatory challenges.

SAB 122 aims to provide structured solutions from reactive compliance to proactive financial integration — a step toward creating DeFi and banking synergy. Crypto companies must still follow accounting principles and disclosure requirements to protect crypto assets.

Clear regulations can increase the frequency of banking use cases, such as custody, reserve backing, asset tokenization, stablecoin issuance and offering accounts to digital asset businesses.

Building bridges between regulators and innovators in DeFi

Experts pointing out concerns about DeFi’s over-regulation killing innovation can now address them using “regulatory sandboxes.” These dispense startups with a “secure zone” to test their products before committing to full-scale regulatory mandates. For example, startups in the United Kingdom under the Financial Conduct Authority are thriving using this “trial and error” method that has accelerated innovation.

These have enabled businesses to test innovation and business models in a real-world setting under regulator supervision. Sandboxes could be accessible to licensed entities, unregulated startups or companies outside the financial services sector.

Similarly, the European Union’s DLT Pilot Regime advances innovation and competition, encouraging market entry for startups by reducing upfront compliance costs through “gates” that align legal frameworks at each level while upgrading technological innovation.

Clear regulations can cultivate and support innovation through open dialogue between regulators and innovators.

Opinion by: Hedi Navazan, chief compliance officer at 1inch.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Politics

Kemi Badenoch does not rule out local coalitions with Reform after Thursday’s council elections

Published

53 mins ago

April 27, 2025

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Kemi Badenoch does not rule out local coalitions with Reform after next week's council elections

Kemi Badenoch has not ruled out forming coalitions at a local level with Reform after the council elections on Thursday.

Speaking to Sunday Morning with Trevor Phillips, the Conservative leader did however categorically rule out a pact with Nigel Farage’s party on a national level.

“I am not going into any coalition with Nigel Farage… read my lips,” she said.

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However, she did not deny that deals could be struck with Reform at a local level, arguing some councils might be under no overall control and in that case, “you have to do what is right for your local area”.

“You look at the moment, we are in coalition with Liberal Democrats, with independents,” she said. “We’ve been in coalition with Labour before at local government level.

“They [councillors] have to look at who the people are that they’re going into coalition with and see how they can deliver for local people.”

She added: “What I don’t want to hear is talks of stitch-ups or people planning things before the results are out. They have to do what is right for their communities.”

In response, Nigel Farage said: “The Tories broke Britain nationally for 14 years, and their councils continue to break local communities with the highest taxes ever and worst services.

“Reform have no intention in forming coalitions with the Tories at any level.”

A total of 23 councils are up for grabs when voters go to the polls on Thursday 1 May – mostly in places that were once deemed Tory shires, until last year’s general election.

It includes 14 county councils, all but two of which have been Conservative-controlled, as well as eight unitary authorities, all but one of which are Tory.

In addition, there is one Labour-controlled borough being contested.

Ms Badenoch has set expectations low for the Tories, suggesting they could lose all the councils they are contesting.

The last time this set of councils were up for election was in 2021, when the Conservative Party was led by Boris Johnson who was riding high from the COVID vaccine bounce.

Despite not ruling out agreements between the Tories and Reform once the local elections have finished, Ms Badenoch has been at pains to stress she is against any kind of deal with Mr Farage at a national level.

On Friday she criticised talk of “stitch-ups” ahead of next week’s local elections and said she was instead focused on ensuring that voters have a “credible Conservative offer”.

Speculation that the Tories and Reform could join forces heightened after two senior Tories appeared to advocate for some sort of agreement between the two rival parties.

Robert Jenrick, the shadow justice secretary, was captured in a video recording leaked to Sky News vowing to “bring this coalition together” to ensure that Conservatives and Reform UK are no longer competing for votes by the time of the next general election.

According to the excusive audio Mr Jenrick – who lost the Tory leadership campaign to Ms Badenoch – said he would try “one way or another” to make sure the two right-wing parties do not end up handing a second term to Sir Keir Starmer.

Mr Jenrick has denied his words amounted to calling for a pact with Reform.

Meanwhile, in an interview with Politico, Tees Valley Mayor Ben Houchen also suggested the two parties should join forces in some way.

“I don’t know what it looks like. I don’t know whether it’s a pact. I don’t know whether it’s a merger… [or] a pact of trust and confidence or whatever,” he said.

“But if we want to make sure that there is a sensible centre-right party leading this country, then there is going to have to be a coming together of Reform and the Conservative Party in some way.”

All of the other national parties have launched their campaigns for the local elections ahead of the poll next week.

Labour Cabinet Office minister Pat McFadden told Trevor Phillips that he was “not predicting huge Labour gains on Thursday”.

He also ruled out Labour striking deals with any other party.

“The deals on offer after Thursday won’t be between Labour and the Tories and Labour and Reform,” he said.

“But what there’s been a lot of debate about is what’s going to happen between the Tories and Reform, because I’m not even sure if they’re two different parties or one party at the moment.”

Politics

Federal taxes to be ‘substantially reduced’ once tariffs set in: Trump

Published

1 hour ago

April 27, 2025

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<div>Federal taxes to be 'substantially reduced' once tariffs set in: Trump</div>

United States President Donald Trump recently said that federal income taxes would be “substantially reduced” or potentially eliminated once the tariff regime fully sets in.

In an April 27 Truth Social post, Trump added that the focus of the purported tax cuts would be on individuals making less than $200,000 per year.

The US President also said that the “External Revenue Service” — a reference to funding the federal government exclusively through import tariffs instead of the current model of collecting taxes through the Internal Revenue Service (IRS) — is materializing.

Eliminating the federal income tax would likely be a positive catalyst for asset prices, including cryptocurrencies, as the increase in disposable income should partially flow back into productive investments. However, this stimulative effect is not guaranteed.

Taxes, US Government, United States, Donald Trump — *Source:* *Donald Trump*

Trump’s plan leaves analysts and markets doubting

Trump previously floated the idea of eliminating the federal income tax in an October 2024 appearance on the Joe Rogan Experience, although Trump, who was on the campaign trail at the time, provided scant concrete details on the proposal.

The US President suggested that replacing the federal income tax with revenue from import duties would return the US to a time of prosperity seen during the Gilded Age, in the 19th century, when the US did not have a permanent federal income tax.

Research conducted by accounting automation company Dancing Numbers found that Trump’s proposal could save the average American $134,809 in lifetime tax payments.

Dancing Numbers added that the tax savings could be as much as $325,561 per American if other wage-based income taxes are also eliminated.

On April 2, Trump signed an executive order imposing sweeping tariffs on all US trading partners, which included a 10% baseline tariff on all countries and different “reciprocal” tariff rates on countries with import duties on US goods.

However, since that time, the Trump administration walked back its tariff policies several times, flip-flopping on tariff rates and when the tariff regime would fully take effect.

The Trump administration’s ever-changing rhetoric surrounding trade policies has heightened volatility in the US stock market, caused a rise in US bond yields, and has drawn widespread criticism from financial analysts who say the protectionist trade policies hurt capital markets while achieving little else.

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