Could higher borrowing give Rachel Reeves her optimistic vision?

Published

7 months ago

September 24, 2024

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Today saw a shift in rhetoric from Chancellor Rachel Reeves as she moved to promise the Labour conference a more optimistic vision for the country.

But quietly there also appears to have been a shift in approach, which could mean a markedly different landscape for public spending come the budget on 30 October, allowing far greater scope for Labour to borrow and spend.

Politics live: ‘More optimistic’ Budget could be in store

The easiest way to see the change is to compare the chancellor’s actions before and after the summer.

In July, when Ms Reeves created the £22bn “black hole”, she gave us a taste of how she intended to fill it.

Not only was there the means testing of the winter fuel allowance, but she did something the Treasury have been wanting for years – to cancel a whole load of investment projects, including road building with the A303 down to Cornwall, as well as delaying the hospital building programme.

This was as striking as it was confusing. Such projects would be the cornerstone of any government’s growth plan.

Yet in the eternal tension in Labour between fiscal discipline and growth, the former had won out seemingly at the expense of the latter.

And Treasury mandarins at the time were clear. The best way to fill an immediate £22bn black hole would always be to delay or can these investments – or capital projects.

Now fast forward to the Autumn and £16bn of the black hole remains to be filled on 30 October.

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There is no doubt that some tax rises, welfare cuts and spending curbs may be in the mix. But I am told that borrowing might also be used to plug this hole.

This is by no means certain – the government’s first fiscal rule could yet prevent this from happening.

But I am told they may reduce the amount of cuts or tax rises simply by putting it on the nation’s credit card once more.

This is just one of the ways that the government may allow itself to borrow more.

There is the well-trailed discussion about redefining debt in the second fiscal rule – a technical change that could free up £15bn or more.

There’s discussion about how to treat other assets like GB Energy on the balance sheet, which again could allow the government to borrow more within its rules.

The markets are unlikely to take fright. They have been convinced, it seems, by the vibe of Ms Reeves as an iron chancellor.

However, there is now a chance the optimistic vision she outlined today could come sooner than we think – thanks to higher borrowing.

Politics

Crush fly-tippers’ vans, government tells councils

Published

41 mins ago

April 30, 2025

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Crush fly-tippers' vans, government tells councils

The government wants councils to crush more vans used to fly-tip rubbish, as it announces a crackdown on the illegal dumping of waste.

No new funding is being given to local authorities for the initiatives, with ministers saying the seven percent raise announced in the budget can be used.

As part of the announcement, the government has also proposed that fly-tippers could face up to five years in prison, although this would require a change in the law.

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Environment Secretary Steve Reed said: “Councils will get much more aggressive against fly-tippers and that includes using the latest technology, things like the new mobile CCTV cameras and drones to identify, track and then seize the vehicles that are being used for fly-tipping to a yard like this and crush them.

“That’s both as a punishment for those people who are dumping the rubbish but also as a deterrent for those who are thinking about doing it.”

He added: “We’re also looking to change the law so that those rogue operators who take rubbish from someone’s home and then dump it on a nearby road – they were getting away almost scot-free under the previous government – they will now be looking at potentially five-year prison sentences.”

The minister claimed the fly-tipping was “out of control” under the last government.

Data from the Department for Environment, Food and Rural Affairs (DEFRA) shows local authorities in England dealt with a record 1.15 million incidents last year – a 20% increase from 2018/19.

Environment Agency chief executive Philip Duffy said: “We’re determined to bring these criminals to justice through tough enforcement action and prosecutions.

“That’s why we support the government’s crackdown on waste criminals, which will ensure we have the right powers to shut rogue operators out of the waste industry.”

However, the Conservatives claimed that rubbish is “piling high” in areas like Birmingham as refuse workers strike against a pay and jobs offer from the Labour-run council.

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Shadow environment secretary Victoria Atkins said: “Wherever Labour is in charge, waste is piling high – like in Birmingham, where Labour’s inability to stand up to their union paymasters has left rat-infested rubbish littered across the street.

“And with statistics showing that of the 50 worst local areas for fly-tipping, 72% are Labour controlled, it is clear that voting Labour gets you rubbish and rats.

“So the British public deserve real action, not this series of reheated announcements and policies already introduced by previous governments that Labour is peddling.”

Liberal Democrat deputy leader Daisy Cooper said: “Under the Conservatives’ watch, local communities have been plagued by a fly-tipping epidemic.

“From overflowing bins to piles of hazardous waste, fly-tipping is blighting our landscapes, poisoning livestock on farming land and causing misery for residents.

“Enough is enough.

“The Liberal Democrats are calling for a fly-tipping fighting fund, to push for stronger local enforcement and tougher penalties for offenders.”

Politics

US Senate majority leader expects stablecoin vote before May 26 — Report

Published

2 hours ago

April 29, 2025

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US Senate majority leader expects stablecoin vote before May 26 — Report

US Senate Majority Leader John Thune reportedly told Republican lawmakers that the chamber would address a bill on stablecoin regulation before the May 26 Memorial Day holiday.

According to an April 29 Politico report, Thune made the comments in a closed-door meeting with Republican senators, who hold a slim majority in the chamber. The Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act, was introduced by Senator Bill Hagerty in February and passed the Senate Banking Committee in March.

Thune did not mention any crypto or blockchain-related bills in his public comments on US President Donald Trump’s first 100 days in office. Since his Jan. 20 inauguration, Trump has signed several executive orders with the potential to affect US crypto policy, including one affecting stablecoins. Still, many of the actions do not carry the force of law without an act of Congress.

The proposed GENIUS bill could essentially restrict any entity other than a “permitted payment stablecoin issuer” from issuing a payment stablecoin in the United States. The House of Representatives, also controlled by Republicans, has proposed a companion bill to the legislation: the Stablecoin Transparency and Accountability for a Better Ledger Economy, or STABLE Act.

Trump accused of conflicts of interest over stablecoins, crypto ventures

The president’s executive order, signed on Jan. 23, established a working group to study the potential creation and maintenance of a national crypto stockpile and a regulatory framework for stablecoins. Republican lawmakers followed by introducing the STABLE and GENIUS acts.

Trump also introduced the order before World Liberty Financial, a crypto firm backed by the president’s family, launched its US-dollar pegged USD1 stablecoin. Many Democratic lawmakers said that Trump’s ties to the firm, coupled with his political influence and position, could present an “extraordinary conflict of interest that could create unprecedented risks to our financial system” as Congress considers the two stablecoin bills.

Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions

Politics

Indian high court orders steps to block Proton Mail

Published

3 hours ago

April 29, 2025

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Indian high court orders steps to block Proton Mail

A court in India has ordered the encrypted email service Proton Mail blocked in the country for refusing to share information with authorities.

In an April 29 hearing of the High Court of Karnataka, Justice M Nagaprasanna ordered the government to “block forthwith” domain names associated with Proton Mail, citing authority under the country’s Information Technology Act of 2008. The order stemmed from a complaint filed in January by a New Delhi-based design firm, alleging that some of its employees received offensive emails through the service.

It’s unclear whether the ban will take effect or face other possible challenges in court. The Proton team reported in March 2024 that Indian authorities had similarly proposed ordering the service blocked in response to alleged “hoax bomb threats,” but it continued to operate in the country.

The crackdown on Proton Mail appeared to be part of a larger global trend to pursue action against platforms based on users’ activities, such as the arrest of Telegram founder Pavel Durov in France in part for allegedly failing to moderate illicit content. Cointelegraph reached out to Proton for comment but did not receive any response at the time of publication.

In Spain, Proton AG — the Swiss company behind the platform — provided information to the authorities about one of its users in 2024. The move had many privacy advocates questioning the security of their data with the centralized service.

Vying for market share in the world’s most populous country

Cryptocurrency exchanges are no stranger to legally sanctioned crackdowns attempting to curtail their activities in a country, or in some cases, face blocks or bans. US authorities imposed sanctions on crypto mixing services like Tornado Cash in 2022, facing swift backlash from the industry and legal challenges, while South Korea reportedly blocked 14 exchanges on the Apple store for allegedly operating without the proper registration.

In India, users face a 30% tax on profits from crypto trading, which has been in effect since April 2022. Though crypto firms operating in the country endure increasing regulatory oversight, India is estimated to have more than 100 million digital asset holders out of its roughly 1.4 billion people.

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