Starmer refuses to say if further tax rises will be imposed at spring statement

Published

2 months ago

February 27, 2025

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The prime minister has refused to say whether further tax rises will be imposed in the spring statement.

Sir Keir Starmer said the government was in the “early stages” of looking at whether tax rises or spending cuts were needed to meet Labour’s self-imposed fiscal rules.

He would not say if Ms Reeves is looking at further tax cuts to give her more headroom after months of economic downturn, and said the “big decisions” on tax were made in the October budget.

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Speaking to reporters on the plane to Washington DC to meet Donald Trump, he said: “Obviously I am not going to get ahead of myself until we have made decisions.

“But as I have said before, in terms of the big decisions on tax obviously the budget was the place that we took those decisions – but as ever, going into a statement I am not going to say in advance what we might do and what we might not do.

“But let me not set hares running, the big decisions were in the budget of last year and that’s the way we are approaching this spring statement.”

It is less than a month away from the spring statement on 26 March, when the Office for Budget Responsibility (OBR) will publish its forecast on the UK economy.

Chancellor Rachel Reeves will set out the fiscal watchdog’s toplines, which are widely expected to be a reduction in growth outlook and will warn the chancellor is at risk of breaching her fiscal rules.

Former Bank of England governor Lord Mervyn King told Sophy Ridge’s Politics Hub programme on Wednesday that income taxes will have to rise to plug the UK’s financial blackhole.

He said taxes would need to be increased to accommodate both a rise in defence spending, announced on Tuesday, and public services reform.

“The obvious tax to raise is the basic rate of income tax, we will all contribute to it,” he said.

Lord King added he would not have raised employers’ national insurance contributions, as Ms Reeves did in October, but would instead have increased employees’ income tax.

The OBR is required to produce two economic forecasts a year, but, the chancellor said she would only give one budget a year to provide stability and certainty on upcoming tax changes.

However, there is speculation about tax changes due to the poor economic climate since the autumn budget.

Inflation has risen to its highest level in 10 months to 3%, there has been a sharp rise in government bond yields and growth has not been as high as expected.

This has led to the chancellor’s £9.9bn headroom against her fiscal rules being all but wiped out.

Ms Reeves could extend a freeze on income tax bands and allowances beyond April 2028, dragging more people into paying more tax as their pay rises.

She is reportedly considering lowering the annual limit on how much people can put into cash ISAs from £20,000 to £4,000.

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Government claims car interventions will save £500 a year – but only if you hit a pothole

Published

2 hours ago

April 16, 2025

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Government claims car interventions will save £500 a year - but only if you hit a pothole

Hitting potholes is “all too common”, a minister has insisted amid scrutiny of the government’s claim that new road measures will save drivers £500 a year.

Lillian Greenwood told Sky News Breakfast with Anna Jones that people face “eyewatering” costs if a pothole causes more damage to their car than a puncture, with the average repair job setting them back by £460, according to the RAC.

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This, along with the continued freeze on fuel duty, will save drivers over £500 a year, the government has said, claiming its interventions are easing the cost-of-living crisis for drivers.

It was put to Ms Greenwood that the savings only apply if you hit a pothole in the first place.

Asked if she thinks it’s a common occurrence, she said: “Unfortunately, it’s all too common. And because we’ve had more than 10 years of the Conservatives under investing in our road network, that’s left it absolutely cratered with potholes.”

She said potholes are “probably the biggest issue” when she doorsteps constituents, adding: “They’re really angry about the state of their local roads.

“Far too many people are hitting a pothole and finding they’re having to fork out to get their car fixed.”

Earlier this year, an annual industry report estimated that 17% of the local road network in England and Wales are in poor condition.

It predicted that the one-time catch-up cost to clear the backlog of maintenance issues would cost £16.81bn and take 12 years to complete.

Chancellor Rachel Reeves’s autumn budget contained a £1.6bn investment to maintain roads and fix potholes, which it said was an increase of £500m on the 2024-25 budget.

Local authorities will get the first tranche of that money this month.

It comes ahead of the local elections in May, when support for drivers could become a dividing line.

It was put to Ms Greenwood that while trumpeting its motorist-friendly credentials, Labour has also introduced a £1.7bn car tax raid and backed more 20mph low tariff neighbourhoods.

She said the government has left decisions on Low Traffic Neighbourhoods to local authorities and many people “want to see drivers going slower”.

The government’s announcement on savings today came alongside a pledge to remove 1,000 miles of roadworks over the Easter weekend in a bid to cut journey times.

The works will be reinstated after Easter Monday.

However, bank holiday engineering works on the railway lines will not be halted, meaning there will be disruption for people who don’t have a car.

No trains are running from London Euston, affecting most of the Avanti West Coast line.

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China selling seized crypto to top up coffers as economy slows: Report

Published

4 hours ago

April 16, 2025

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China selling seized crypto to top up coffers as economy slows: Report

Local governments in China are reportedly seeking ways to offload seized crypto while facing challenges due to the country’s ban on crypto trading and exchanges.

The lack of rules around how authorities should handle seized crypto has spawned “inconsistent and opaque approaches” that some fear could foster corruption, lawyers told Reuters for an April 16 report.

Chinese local governments are using private companies to sell seized cryptocurrencies in offshore markets in exchange for cash to replenish public coffers, Reuters reported, citing transaction and court documents.

The local governments reportedly held approximately 15,000 Bitcoin (BTC) worth $1.4 billion at the end of 2023, and the sales have been a significant source of income.

China holds an estimated 194,000 BTC worth approximately $16 billion and is the second largest nation Bitcoin holder behind the US, according to Bitbo.

Zhongnan University of Economics and Law professor Chen Shi told Reuters that these sales are a “makeshift solution that, strictly speaking, is not fully in line with China’s current ban on crypto trading.”

The issue has been exacerbated by a rise in crypto-related crime in China, ranging from online fraud to money laundering to illegal gambling. Additionally, the state sued more than 3,000 people involved in crypto-related money laundering in 2024.

China crypto reserve floated as solution

Shenzhen-based lawyer Guo Zhihao opined that the central bank is better positioned to deal with seized digital assets and should either sell them overseas or build a crypto reserve.

Ru Haiyang, co-CEO at Hong Kong crypto exchange HashKey, echoed the suggestion saying that China may want to keep forfeited Bitcoin as a strategic reserve as US President Donald Trump is doing.

Creating a crypto sovereign fund in Hong Kong, where crypto trading is legal, has also been proposed.

This issue has gained attention amid rising US-China trade tensions and Trump’s plans to regulate stablecoins and foster growth and innovation in the crypto industry.

Several industry observers have suggested that China’s tariff response could result in a devaluation of the local currency, which may result in a flight to crypto.

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3iQ’s Canadian Solana ETF selects Figment as staking provider

Published

12 hours ago

April 15, 2025

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3iQ’s Canadian Solana ETF selects Figment as staking provider

Blockchain infrastructure provider Figment has been selected as the staking provider for 3iQ’s newly approved Solana exchange-traded fund (ETF), underscoring Canada’s continued efforts toward adoption of digital asset financial products.

Figment will enable institutional staking for the 3iQ Solana (SOL) Staking ETF, which launches on the Toronto Stock Exchange on April 16 under the ticker SOLQ, the companies said in a statement. In addition to 3iQ, Figment provides staking infrastructure solutions to more than 700 clients.

The Ontario Securities Commission (OSC), a provincial regulator, green-lighted 3iQ’s SOL fund on April 14. The approval was also extended to other fund managers seeking to offer SOL ETFs, including Purpose, Evolve and CI.

As Bloomberg ETF analyst Eric Balchunas reported at the time, the funds are permitted to stake a portion of their SOL holdings through TD Bank, Canada’s second-largest financial institution by assets.

3iQ estimates that its SOL fund will provide yields of between 6% and 8%, according to its website.

3iQ leads Canadian crypto ETFs as US regulators drag their feet

As US regulators continue to consider various crypto-related fund offerings, Canada has been leading the curve in adoption going back to 2021. That was the year that 3iQ debuted its spot Bitcoin (BTC) ETF, which crossed $1 billion in net assets almost immediately.

It would take nearly three more years before spot Bitcoin ETFs were approved in the United States. Like their Canadian counterparts, the US ETFs saw overwhelming success in their first year, generating more than $38 billion in net inflows.

In October 2023, 3iQ launched an ETF tied to Ether (ETH), giving investors direct access to the smart contract platform. Unlike the Ether ETFs that US regulators approved the following year, 3iQ’s fund offers staking rewards.

As Cointelegraph recently reported, US regulators may be on the cusp of approving staking rewards after they authorized exchanges to list options contracts tied to ETH.