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The economy could have crashed had the government not found savings by cutting winter fuel payments for pensioners, a minister has said.

Lucy Powell told Sunday Morning With Trevor Phillips that the loss of the benefit, which will now be means tested, was necessary because of a “£22bn blackhole” left behind by the Conservatives.

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Labour claim this is a worse deficit than they had expected, requiring them to make difficult choices.

Asked why pensioners had been targeted in the cuts – when public sector workers are in line for an above-inflation pay rise – Ms Powell said: “Finding savings in the current year that you are in is very difficult indeed.

“And why we had to do that was because if we didn’t, we would have seen the markets losing confidence, potentially a run on the pound, the economy crashing, and the people who pay the heaviest price for that are not you and me, Trevor, the people who pay the heaviest price when the economy crashes are the poorest in society.”

She added the public sector pay awards “were on the desks of ministers before the election, and they chose not to budget for them”.

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She said this along with “nearly £7bn underfunding on the asylum system” had left a blackhole of £22bn.

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Labour MP wants winter payment rethink

They knew they had these things on their desk, and they put their head in the sand, and they didn’t take the difficult decisions that they needed to take because they knew they were going to lose the election and it was going to fall to us to do,” Ms Powell said.

“And that’s why we’ve had to make some of these really difficult decisions around means testing the winter payment so that the poorest pensioners continue to receive it but some of the wealthiest pensioners won’t.

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The Conservatives have denied covering up the extent of the shortfall in the nation’s finances and say Labour is using that as a “smokescreen” for cuts they had always planned.

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Who will be hit by the Budget?

The Tories and Liberal Democrats are pushing for a Commons vote to block the winter fuel payments change when parliament returns from summer recess tomorrow. Some Labour MPs have voiced opposition to the measure too.

A packed legislative agenda is on the cards, with bills on nationalising rail, renters rights and regulating water companies expected to be among the priorities of the new government.

The first budget is set to be announced in October, which Prime Minister Sir Keir Starmer has previously warned will be “painful” – though he said those with the “broadest shoulders should bear the heavier burden”.

Ms Powell, the leader of the House of Commons, would not be drawn on what this could mean, saying she is not part of those discussions.

Inheritance tax, capital gains tax and fuel duty have all been mooted as possible taxes that could go up.

Ms Powell said Labour will “stand by” its election promise not to raise national insurance, VAT or income tax.

Referencing a song by Oasis, which Ms Powell was able to get tickets to, she said: “I’m afraid we do look back in anger at what the last government left to this government in the economic inheritance and now we’re faced with some really challenging choices.”

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Power grid operator scrambles to avert blackout risk

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Power grid operator scrambles to avert blackout risk

The UK’s power grid operator has issued a call for electricity providers to bolster output this evening to avert the risk of blackouts.

The National Energy System Operator (NESO) issued an alert “to encourage market actions to increase system margins”.

It was the first such precautionary measure of the winter to date and issued at a time when much of the UK is shivering under sub-zero temperatures.

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The NESO is worried about a lack of spare capacity in the grid from 4pm until 7pm due to “system constraints”.

The body, which is in public control having been part of National Grid until last autumn, said in an update that it was seeking 1,200 megawatts (MW) of power as part of the so-called system margin notice.

Such notices are a call for a greater safety cushion between power demand and available supply.

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The NESO was at pains to point out that it does not signal that blackouts are imminent or that there is not enough generation to meet current demand.

Read more: Why UK energy bills could rise

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Sky’s Ed Conway explains why your energy bills look set to rise this winter.

There is strain on the system due to a lack of wind and bitterly cold temperatures, which stoke stronger demand for electricity and gas.

Lows of minus 16C, the coldest of the winter so far, are forecast for parts of the UK on Thursday.

A yellow warning for snow and ice has been issued for northern Scotland and Northern Ireland from noon on Wednesday until midnight on Thursday.

Sub-zero temperatures are expected across the country for the foreseeable future.

It is the first winter the UK has seen in living memory without coal power forming part of the domestic electricity generation mix.

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The number of such power stations held in reserve was gradually drawn down under efforts to reduce the country’s carbon footprint.

Ratcliffe-on-Soar power station shut down in September.

The UK has reciprocal arrangements with neighbouring countries to draw power via so-called interconnectors if and when required to help keep the lights on.

National Grid data showed that more than 50% of the UK’s power was being generated through natural gas.

Renewables accounted for just 16% while France and Norway were helping provide 10% of output, with nuclear and Biomass accounting for the bulk of the balance.

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Piers Morgan to leave Rupert Murdoch’s News UK in deal over YouTube venture

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Piers Morgan to leave Rupert Murdoch's News UK in deal over YouTube venture

Piers Morgan, the broadcaster and journalist, is leaving Rupert Murdoch’s British empire to focus on expanding his Uncensored YouTube channel in the US and other international markets, underlining prominent media figures’ accelerating shift away from traditional outlets.

Sky News can exclusively reveal that Mr Morgan and News UK – publisher of The Sun and The Times and owner of Times radio – have agreed a deal that will see him taking ownership of the Uncensored media brand and its existing 3.6 million-strong YouTube subscriber base through his production company, Wake Up Productions.

He is understood to have struck a four-year revenue-sharing deal with News UK that will see the Murdoch-owned company receiving a slice of the advertising revenue generated by Piers Morgan Uncensored until 2029.

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Mr Morgan returned to News UK in January 2022 with a three-year deal that included writing regular columns for The Sun and New York Post, as well as presenting shows on the company’s now-folded television channel, Talk TV.

People close to the situation said a book deal with the Murdoch-owned publisher Harper Collins would still go ahead, with Mr Morgan expected to complete that project later this year.

He will also continue to write occasionally for News Corporation’s newspapers, according to one insider.

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Mr Morgan’s future had been the subject of growing speculation following the expiry of his three-year contract with News UK at the end of 2024.

As part of his new arrangements, Mr Morgan has also signed a deal with Red Seat Ventures, a US-based agency which partners with prominent media figures and influencers to help them exploit commercial opportunities through sponsorship and other revenue streams.

Piers Morgan on TalkTV. Pic: PA
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Piers Morgan on TalkTV. Pic: PA

Among those Red Seat has worked with are Megyn Kelly, the American commentator, and Tucker Carlson, the former Fox News presenter.

Mr Morgan is also understood to have received expressions of interest in other commercial and broadcasting deals from American media groups, having been one of few Brits to present his own TV chatshow on a mainstream US network.

Fond of the phrase “One day you’re the cock of the walk, the next you’re the feather duster,” during various phases of his career, his latest deal reflects the shifting dynamics in media consumption.

Responding to an enquiry from Sky News on Wednesday morning, Mr Morgan said in a statement: “I have had a great time working back at News and am delighted that we will continue to be partners.

“Owning the brand allows my team and I the freedom to focus exclusively on building Uncensored into a standalone business, editorially and commercially, and in time, widening it from just me and my content.

“It’s clear from the recent US election that YouTube is an increasingly powerful and influential media platform, and Uncensored is one of the fastest-growing shows on it in the world.

“I’m very excited about the potential for Uncensored.”

Mr Morgan declined to comment on any other aspect of his new arrangement with News UK or his expansion plans ahead of an official announcement, which is understood to be scheduled for later on Wednesday.

His decision to strike out on his own – albeit with a continued relationship with News UK – is said to reflect his belief that broadcast audiences will increasingly shift away from mainstream channels to platforms such as YouTube.

“He thinks YouTube will be a dominant broadcasting platform in terms of audience share within a couple of years,” said one.

It was unclear what the precise revenue split would be between Wake Up Productions and News UK during their four-year partnership.

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He is expected to focus his efforts to expand Uncensored on US audiences initially, with a wider international plan to follow that.

On Tuesday, Mr Morgan posted on X that he believed an interview with Elon Musk, the Tesla founder who has sparked a firestorm in British politics in recent weeks, was “getting closer”.

Among the other interviewees on his YouTube show have been Donald Trump during his first presidency, the Ukrainian president Volodomyr Zelensky and Cristiano Ronaldo, the footballer.

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Rolls-Royce factory expansion to meet bespoke car demand

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Rolls-Royce factory expansion to meet bespoke car demand

Rolls-Royce Motor Cars says a record £300m investment at its West Sussex factory base will help expand production of bespoke and electric models.

The BMW-owned firm, like rivals in the luxury sphere, has enjoyed rising demand for personalised vehicles among its wealthy customer base.

The carmaker said recent orders to complement its base models included 18-carat gold sculptures, embroideries consisting of more than 869,500 stitches, wood veneers including 500 individually-shaped pieces and holographic paint finishes.

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The investment, Rolls-Royce said, would bolster facilities at Goodwood to cover such requests and also its Coachbuild programme – an invitation-only service where clients get to “craft an entirely original motor car.”

The company added that additional space would also be created to prepare Rolls-Royce for an all-battery electric future, with a new fully electric model due to be unveiled later this year.

Bespoke commissions for 2024 included 'year of the dragon' embroidery for one customer. Pic: R-R/Ciaran McCrickard/Mindworks
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Bespoke commissions for 2024 included ‘year of the dragon’ embroidery for one customer. Pic: R-R/Ciaran McCrickard/Mindworks

The £300m investment marked the largest cash injection in the company’s operations since the plant opened in 2003, Rolls said.

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It made the announcement while revealing a fall in sales during 2024.

The company sold 5,712 cars in 2024, a drop of more than 5% versus the 6,032 vehicles sold over the previous 12 months.

It said the decline was in line with expectations as it switches over to new models. Four were introduced during 2024 including the Cullinan Series 2 and Ghost Series 2.

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North America was its largest market in 2024. The most popular model, it said, was the all-electric Spectre.

Goodwood employs 2,500 people and produces 28 cars daily, it added.

Recent workforce expansion has been a result of its high margin Bespoke and Coachbuild programmes but also the transition to electric technology.

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