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The UK economy is “headed for the worst of all worlds” as businesses expect activity to fall at the start of next year, according to the Confederation of British Industry (CBI).

The industry group’s growth indicator survey found that private sector firms expect to cut down on hiring, reduce output and for prices to rise in the first three months of 2025.

One of the main reasons given by businesses for the poor outlook was Chancellor Rachel Reeves‘ decision to raise employers’ national insurance contributions (NIC) – which is expected to raise around £25bn a year.

While the chancellor accepted the budget decision will not be “easy” for businesses, she said earlier this month the government “made a commitment during the general election… that we wouldn’t increase taxes on working people”.

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UK economy declined in October

Alpesh Paleja, the CBI’s interim deputy chief economist, said: “There is little festive cheer in our latest surveys, which suggest that the economy is headed for the worst of all worlds – firms expect to reduce both output and hiring, and price growth expectations are getting firmer.

“Businesses continue to cite the impact of measures announced in the budget – particularly the rise in employer NICs – exacerbating an already tepid demand environment.”

He added that firms are looking for Labour “to boost confidence and to give them a reason to invest” in 2025, “whether that’s long overdue moves to reform the apprenticeship levy, supporting the health of the workforce through increased occupational health incentives or a reform of business rates”.

More on Labour

The CBI’s poll, based on responses of 899 companies between 25 November and 12 December, also found expectations for economic growth were at their weakest since November 2022, in the aftermath of Liz Truss’s resignation as prime minister.

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Low Christmas sales in key month, ONS finds

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Why has growth ground to a halt?

Minister defends budget

It comes after the economy shrank by 0.1% in October, according to Office for National Statistics (ONS) figures, for the second month in a row.

Lucy Powell, leader of the House of Commons, told Sky News’ Sunday Morning with Trevor Phillips the ONS figures were “disappointing” and said that “of course we want to see these things (economic growth) happening faster”.

The Labour MP for Manchester Central said, however: “This is a bit like turning round some huge oil tanker…

“We take a fundamental view here about fixing the foundations, which is about trying to bring some economic stability, which means making sure that the budget adds up, which is something that we didn’t inherit.

“We inherited this big black hole in the public finances which we had to put right.”

Ms Powell then defended raising employers’ NICs, acknowledging while “it was a difficult decision,” it was made “to get money into the front line” of the NHS and other services.

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Responding to the CBI’s survey, shadow business secretary Andrew Griffith said: “Since taking office, the chancellor has made this country a hostile climate for aspiration, for investment and for growth.”

The Conservative MP added: “Rachel Reeves’s tax-raising spree and trash-talking her economic inheritance are literally killing businesses and jobs.

“If there is a recession – and based on these CBI expectations that seems increasingly likely – it will be one made in Downing Street. Labour needs to urgently change course before the damage they are doing becomes even greater.”

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Compensation scheme for infected blood scandal widened

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Compensation scheme for infected blood scandal widened

More victims of the infected blood scandal will qualify for compensation while others will get higher awards under changes to the scheme.

The new rules mean estates of affected people who have already died will be able to claim payments.

As well as this, around 1,000 people who are already eligible will be able to claim a higher amount, including chronic Hepatitis C individuals.

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The reforms are being introduced following 16 recommendations from the Infected Blood Inquiry, which published an additional report earlier this month.

Confirming the changes, minister for the Cabinet Office Nick Thomas-Symonds said the government has “concentrated on removing barriers to quicker compensation”.

More on Infected Blood Inquiry

He added: “Our focus as we move forward must be working together to not only deliver justice to all those impacted, but also to restore trust in the state to people who have been let down too many times.”

Between the 1970s and early 1990s, more than 30,000 people in the UK were infected with HIV and hepatitis C while receiving NHS care.

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Infected blood scandal explained

Some 3,000 people have died after they were given contaminated blood and blood products, while survivors live with lifelong implications.

In last October’s Budget, Chancellor Rachel Reeves committed £11.8bn to compensate victims of the infected blood scandal, with the scheme opening at the end of last year.

The changes will ensure that those who endured treatments with adverse side effects, such as interferon, will receive higher compensation to what is currently provided.

Extraordinary intervention forces govt to act

The government will now hope its response to Sir Brian Langstaff’s criticism will be enough to convince the Infected Blood chair – and more importantly those infected and affected by this scandal – is listening and acting with urgency.

The long-awaited report was published in May 2024. It was an afternoon charged with raw emotion. After decades of being lied to, ignored and gaslit, finally the infected blood community had found its champion. Someone who understood their pain and suffering.

Sir Brian called on the government to deliver compensation quickly, knowing that many were dying before seeing justice delivered.

But Sir Brian was not himself convinced. Even after the publication of the report he kept the Inquiry open.

This is unprecedented. It showed that he feared there would be more stalling and further delays to payments. He was, sadly, proved right.

It took an extraordinary intervention from Sir Brian last month to push the government to respond. It says it will implement all of the Inquiry’s latest recommendations, some immediately and the rest after further consultation with the community.

More people will now qualify for payment and others will get more compensation.

And importantly the claims of victims will not die with them but instead can now be passed on to surviving family members. All hugely important revisions.

The government says it understands the urgency. But it will also know it should not have taken an unprecedented intervention to force the issue.

Higher compensation will also be available for the impacts currently recognised by the Infected Blood Support Scheme ‘Special Category Mechanism’ (SCM), which is provided to chronic Hepatitis C individuals who have experienced a significant impact on their ability to carry out daily duties.

The government said the changes mean that over a thousand people will receive a higher amount than they would have under the existing scheme.

Scheme widened to estates of deceased affected people

The scheme will also be widened to some people who don’t currently qualify.

Under the current mechanism, if someone who was infected dies before receiving full compensation, then any final award can be passed on to their relatives through their estate.

However while compensation is also available to family members affected by the scandal – a partner, sibling or parent of someone who was infected, for example, this claim dies with them if they pass away.

The changes announced today mean that if the affected person has died after May 21st 2024, or dies in future before receiving compensation, their estate will be able to make a claim.

Memorial plans announced

The government also announced that Clive Smith, president of the Haemophilia Society, will be the chair of the new Infected Blood Memorial Committee.

The project will include plans for a UK memorial and support memorials in Scotland, Wales and Northern Ireland.

In line with the Infected Blood Inquiry’s recommendation, the committee will also develop plans for commemorative events and is planning to hold the first by the end of 2025.

Mr Smith said the memorial is “long overdue”.

He added: “It is a great privilege to be asked to lead this important work on behalf of the community.

“I am conscious that we are already behind in relation to implementing the Infected Blood Inquiry’s recommendation that community events be held on a six-month basis post the Inquiry reporting. We intend to correct that by the end of this year.

“I look forward to working with the whole community across the UK on building an appropriate memorial to those we have lost and to act as a lasting memorial to the nation of what can happen when patient safety is not prioritised.”

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Progressives are losing the crypto future

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Progressives are losing the crypto future

Progressives are losing the crypto future

As US conservatives rapidly shape the crypto landscape through policy, funding and grassroots adoption, progressives remain divided and hesitant. Progressives lack a unified strategy and risk losing relevance.

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Stablecoin or CBDC? Tether’s latest freeze adds fuel to decentralization debate

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Stablecoin or CBDC? Tether’s latest freeze adds fuel to decentralization debate

Stablecoin or CBDC? Tether’s latest freeze adds fuel to decentralization debate

Following its latest freeze of nearly $86K in stolen USDt, Tether’s enforcement capabilities are again in the spotlight — raising questions about centralized control in stablecoin ecosystems.

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