Connect with us

Published

on

The Home Office has rowed back on plans to increase the salary threshold for Britons wishing to bring a family member to the UK following a backlash.

Home Secretary James Cleverly told the Commons earlier this month that the threshold for a family visa would rise from £18,600 to £38,700 by “next spring” in a bid to reduce the number of people coming to the UK.

But documents released by the Home Office state that the earning threshold Britons need to bring foreign family members will now only increase to £29,000 in the spring – while no timeline has been set out for when the higher threshold of £38,700 will be introduced.

Home Office minister Lord Sharpe of Epsom confirmed the change in answer to a written parliamentary question on Thursday.

Lord Sharpe said the current threshold of £18,600 allows 75% of the UK working population to bring their foreign family members to join them but that increasing the threshold to £38,700 would reduce that figure to 30% of the working population.

Politics latest: Vladimir Putin poses ‘constant threat’, Sir Keir Starmer warns

The minister said: “In spring 2024, we will raise the threshold to £29,000, that is the 25th percentile of earnings for jobs which are eligible for skilled worker visas, moving to the 40th percentile (currently £34,500) and finally the 50th percentile (currently £38,700 and the level at which the general skilled worker threshold is set) in the final stage of implementation.”

More on James Cleverly

He said the minimum income requirement would be increased in “incremental stages to give predictability” and that in spring 2024, it would be raised to £29,000.

No date for when the threshold would rise beyond £29,000 was given in Lord Sharpe’s answer.

When later asked by Sky News if a timeframe had been set for the threshold’s rise to £38,700, a Home Office spokeswoman confirmed that it had not but added dates would be announced in due course.

Please use Chrome browser for a more accessible video player

Sunak warns of migration threat

Mr Cleverly said following the update that he still believed the government’s plans would reduce net migration by 300,000 people a year.

“I have been clear that current levels of migration to the UK are far too high,” he said.

“The British people are, rightly, frustrated and want to see action.

“This is why the government announced a plan to decisively cut net migration and ensure the system is fair and works for the people of this country.

“It is vital that British workers are not undercut and that we ease the strain on our public services. The measures I have announced prioritise those who will contribute significantly to our economy, whilst cracking down on those who seek to take advantage of our kindness.

“Today, I have provided further detail about how these measures will be applied and when they will be introduced.

“This plan will deliver the biggest ever reduction in net migration, with around 300,000 fewer people coming to the UK compared to last year, delivering on our promise to bring the numbers down.”

But Liberal Democrat home affairs spokesman Alistair Carmichael said: “You have to wonder who is in charge at the Home Office, or if anyone is.

“It was clear to everyone else that the raising of the earnings threshold was unworkable.

“This was yet another half thought through idea to placate the hardliners on their own back benches.

Please use Chrome browser for a more accessible video player

‘The Tory party faces electoral oblivion’

“James Cleverly needs to put down the spade and stop digging. Decisions like this should be made by experts and politicians working together.”

Labour’s shadow home secretary Yvette Cooper said the climbdown was “more evidence of Tory government chaos on immigration and the economy”.

Mr Cleverly unveiled the salary change as part of a five-point plan to reduce legal migration after net migration hit a record-breaking 745,000 in the year to December 2022.

Other measures announced in the plan include a ban on care workers bringing over their families and raising the minimum salary for a skilled worker visa from £26,200 to £38,700.

Leading immigration researchers at The Migration Observatory at Oxford University warned the new family visa rules could leave British citizens with a foreign partner facing greater restrictions on who they can live with than migrant workers.

It said the plan to hike the family visa salary threshold to £38,700 could mean that “in some circumstances, British workers would face more restrictive rules on family than migrant workers in the same job”.

Read more:
‘Embarrassed’ backbenchers demand action on net migration
Jenrick resigns as immigration minister over govt’s Rwanda plan

During Prime Minister’s Questions last week, Labour MP Sir Stephen Timms warned that the marriage plans of “thousands of couples” had been “dashed” by Mr Cleverly’s announcement.

Continue Reading

Business

Trump trade war escalation sparks global market sell-off

Published

on

By

Trump trade war escalation sparks global market sell-off

Donald Trump’s trade war escalation has sparked a global sell-off, with US stock markets seeing the biggest declines in a hit to values estimated above $2trn.

Tech and retail shares were among those worst hit when Wall Street opened for business, following on from a flight from risk across both Asia and Europe earlier in the day.

Analysis by the investment platform AJ Bell put the value of the peak losses among major indices at $2.2trn (£1.7trn).

The tech-focused Nasdaq Composite was down 5.8%, the S&P 500 by 4.3% and the Dow Jones Industrial Average by just under 4% at the height of the declines. It left all three on course for their worst one-day losses since at least September 2022 though the sell-off later eased back slightly.

Trump latest: UK considers tariff retaliation

Analysts said the focus in the US was largely on the impact that the expanded tariff regime will have on the domestic economy but also effects on global sales given widespread anger abroad among the more than 180 nations and territories hit by reciprocal tariffs on Mr Trump‘s self-styled “liberation day”.

They are set to take effect next week, with tariffs on all car, steel and aluminium imports already in effect.

Price rises are a certainty in the world’s largest economy as the president’s additional tariffs kick in, with those charges expected to be passed on down supply chains to the end user.

The White House believes its tariffs regime will force employers to build factories and hire workers in the US to escape the charges.

Please use Chrome browser for a more accessible video player

The latest numbers on tariffs

Economists warn the additional costs will add upward pressure to US inflation and potentially choke demand and hiring, ricking a slide towards recession.

Apple was among the biggest losers in cash terms in Thursday’s trading as its shares fell by almost 9%, leaving it on track for its worst daily performance since the start of the COVID pandemic.

Concerns among shareholders were said to include the prospects for US price hikes when its products are shipped to the US from Asia.

Other losers included Tesla, down by almost 6% and Nvidia down by more than 6%.

Please use Chrome browser for a more accessible video player

PM: It’s ‘a new era’ for trade and economy

Many retail stocks including those for Target and Footlocker lost more than 10% of their respective market values.

The European Union is expected to retaliate in a bid to put pressure on the US to back down.

The prospect of a tit-for-tat trade war saw the CAC 40 in France and German DAX fall by more than 3.4% and 3% respectively.

The FTSE 100, which is internationally focused, was 1.6% lower by the close – a three-month low.

Financial stocks were worst hit with Asia-focused Standard Chartered bank enduring the worst fall in percentage terms of 13%, followed closely by its larger rival HSBC.

Among the stocks seeing big declines were those for big energy as oil Brent crude costs fell back by 6% to $70 due to expectations a trade war will hurt demand.

The more domestically relevant FTSE 250 was 2.2% lower.

A weakening dollar saw the pound briefly hit a six-month high against the US currency at $1.32.

There was a rush for safe haven gold earlier in the day as a new record high was struck though it was later trading down.

Sean Sun, portfolio manager at Thornburg Investment Management, said of the state of play: “Markets may actually be underreacting, especially if these rates turn out to be final, given the potential knock-on effects to global consumption and trade.”

He warned there was a big risk of escalation ahead through countermeasures against the US.

Read more:
Trump tariff saga far from over
‘Liberation Day’ explained
What Sky correspondents make of Trump’s tariffs

Sandra Ebner, senior economist at Union Investment, said: “We assume that the tariffs will not remain in place in the
announced range, but will instead be a starting point for further negotiations.

“Trump has set a maximum demand from which the level of tariffs should decrease”.

She added: “Since the measures would not affect all regions and sectors equally, there will be winners and losers as in 2018 – although the losers are more likely to be in the EU than in North America.

“To protect companies in Europe from the effects of tariffs, the EU should not respond with high counter-tariffs. In any case, their impact in the US is not likely to be significant. It would be more efficient to provide targeted support to EU companies in the form of investment and stimulus.”

Continue Reading

Business

British businesses issue warning over ‘deeply troubling’ Trump tariffs

Published

on

By

British businesses issue warning over 'deeply troubling' Trump tariffs

British companies and business groups have expressed alarm over President Donald Trump’s 10% tariff on UK goods entering the US – but cautioned against retaliatory measures.

It comes as Business Secretary Jonathan Reynolds launched a consultation with firms on taxes the UK could implement in response to the new levies.

Money blog: Pension top-up deadline days away

A 400-page list of 8,000 US goods that could be targeted by UK tariffs has been published, including items like whiskey and jeans.

On so-called “Liberation Day”, Mr Trump announced UK goods entering the US will be subject to a 10% tax while cars will be slapped with a 25% levy.

The government’s handling of tariff negotiations with the US to date has been praised by representative and industry bodies as being “cool” and “calm” – and they urged ministers to continue that approach by not retaliating.

Please use Chrome browser for a more accessible video player

The latest numbers on tariffs

Business lobby group the CBI (Confederation of British Industry) said: “Retaliation will only add to supply chain disruption, slow down investment, and stoke volatility in prices”.

Industry body the British Retail Consortium (BRC) also cautioned: “Retaliatory tariffs should only be a last resort”.

‘Deeply troubling’

While a major category of exports, in the form of services – like finance and information technology (IT) – has been exempted from the tariffs, the impact on UK business is expected to be significant.

Mr Trump’s announcement was described as “deeply troubling for businesses” by the CBI’s chief executive Rain Newton-Smith.

Read more:
US tariffs spark global market sell-off

Do Trump’s numbers add up?
Island home only to penguins hit by tariffs

The Federation of Small Businesses (FSB) also said the tariffs were “a major blow” to small and medium companies (SMEs), as 59% of small UK exporters sell to the US. It called for emergency government aid to help those affected.

“Tariffs will cause untold damage to small businesses trying to trade their way into profit while the domestic economy remains flat,” the FSB’s policy chair Tina McKenzie said. “The fallout will stifle growth” and “hurt opportunities”, she added.

Companies will need to adapt and overcome, the British Export Association said, but added: “Unfortunately adaptation will come at a cost that not all businesses will be able to bear.”

Watch dealer and component seller Darren Townend told Sky News the 10% hit would be “painful” as “people will buy less”.

“I am a fan of Trump, but this is nuts,” he said. “I expect some bad months ahead.”

Industry body Make UK said the 25% tariffs on cars, steel and aluminium would in particular be devastating for UK manufacturing.

Cars hard hit

Carmakers are among the biggest losers from the world trade order reshuffle.

Auto industry body the Society of Motor Manufacturers and Traders (SMMT) said the taxes were “deeply disappointing and potentially damaging measure”.

“These tariff costs cannot be absorbed by manufacturers”, SMMT chief executive Mike Hawes said. “UK producers may have to review output in the face of constrained demand”.

The new taxes on cars took effect on Thursday morning, while the measures impacting car parts are due to come in on 3 May.

Continue Reading

Business

Trump trade war: The blunt calculation that should have spared UK from reciprocal tariffs

Published

on

By

Trump trade war: The blunt calculation that should have spared UK from reciprocal tariffs

Economists immediately started scratching their heads when Donald Trump raised his tariffs placard in the Rose Garden on Wednesday. 

On that list he detailed the rate the US believes it is being charged by each country, along with its response: A reciprocal tariff at half that rate.

So, take China for example. Donald Trump said his team had run the numbers and the world’s second-largest economy was implementing an effective tariff of 67% on US imports. The US is responding with 34%.

Trump latest: UK considers tariff retaliation

How did he come up with that 67%? This is where things get a bit murky. The US claims it studied its trading relationship with individual countries, examining non-tariff barriers as well as tariff barriers. That includes, for example, regulations that make it difficult for US exporters.

However, the actual methodology appears to be far cruder. Instead of responding to individual countries’ trade barriers, Trump is attacking those enjoying large trade surpluses with the US.

A formula released by the US trade representative laid this bare. It took the US’s trade deficit in goods with each country and divided that by imports from that country. That figure was then divided by two.

More on Donald Trump

So, in the case of China, which has a trade surplus of $295bn on total US exports of $438bn, that gives a ratio of 68%. The US divided that by two, giving a reciprocal tariff of 34%.

Please use Chrome browser for a more accessible video player

PM will ‘fight’ for deal with US

This is a blunt measure which targets big importers to the US, irrespective of the trade barriers they have erected. This is all part of Donald Trump’s efforts to shrink the country’s deficit – although it’s US consumers who will end up paying the price.

But what about the small number of countries where the US has a trade surplus? Shouldn’t they actually be benefiting from all of this?

Read more:
Trump tariff saga far from over
‘Liberation Day’ explained
What Sky correspondents make of Trump’s tariffs

That includes the UK, with whom the US has a surplus (by its own calculations) of $12bn. By its own reciprocal tariff formula, the UK should be benefitting from a “negative tariff” of 9%.

Instead, it has been hit by a 10% baseline tariff. Number 10 may be breathing a sigh of relief – the US could, after all, have gone after us for our 20% VAT rate on imports, which it takes issue with – but, by Trump’s own measure, we haven’t got off as lightly as we should have.

Continue Reading

Trending