Johnson: Reforms will end ‘cruel lottery’ of social care costs
Boris Johnson will be confident of victory in a snap Commons vote on his NHS bailout and social care shake-up, which MPs are claiming is the biggest political gamble of his premiership.
Defying potential Tory rebels, the prime minister has raised taxes to their highest level since the Second World War and broken Conservative manifesto pledges on taxation and pensions.
And ahead of a debate and vote on what some senior Tories are calling a one-item Budget, the threat of a damaging backbench rebellion was receding and a full-scale mutiny close to collapse.
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PM promises social care boost
The crucial vote, just 24 hours after Mr Johnson unveiled his £12 billion tax hike, is on a motion to give the government the authority to create a healthcare levy and change the rate of national insurance.
Writing in the Daily Mail, the prime minister said he wanted to put an end to the “cruel lottery” of who will or will not face financial ruin to meet their care costs.
Mr Johnson conceded that a lot of the money raised would not, at least in the short term, be going towards social care reform, but would be used to relieve pressure on the NHS and to clear the “backlog of missed operations and treatments”.
He said he had ruled out borrowing to pay for his proposed reforms and instead had “reluctantly concluded that the only responsible course is to ask everyone to pay more”.
He added: “No one in this Conservative government wants to raise taxes. But after the extraordinary exertions of the NHS – and the sacrifices made by countless people – we cannot shirk the challenge.”
And although the PM has not ruled out further tax rises, most Conservative MPs back the post-COVID emergency cash injection to tackle the massive NHS backlog and accept that reform of social care funding is long overdue.
Many MPs also see the snap vote as a move to bounce potential rebels into backing the controversial proposals and claim the threat of an imminent government reshuffle is being used by No. 10 to exert pressure on MPs and ministers to remain loyal.
The prime minister’s move to combine his tax hike to pay for social care reforms with extra cash to fight the COVID backlog in the NHS is being seen as a political masterstroke that effectively killed off the threat of a major rebellion.
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Is the social care plan fair or unfair?
Defending the tax hike, Chancellor Rishi Sunak writes in The Times: “This is one of the most consequential decisions a government has made on a matter of public policy in my lifetime; a decision that governments of all political colours have said they would make, but ultimately ducked.
“But we can’t spend money we don’t have, and this will come at a cost. There will be some who will say that we should borrow, and hope that in the end it will all come good. But no responsible government would ever plan on that basis.
“With national debt set to reach nearly 100 per cent of GDP and our borrowing levels high as a result of the pandemic, we must take the difficult decisions. So we have made the tough but responsible choice to raise taxes.
“And the only way to raise such significant sums is from income tax, VAT or National Insurance contributions (NICs). We believe NICs is the fairest and most progressive approach.”
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A budget in all but name
The Commons vote presents a dilemma for Labour, which also backs more cash for the NHS but is opposed to the 1.25% rise in national insurance. Sir Keir Starmer held an emergency meeting of his shadow cabinet to decide how to respond.
Over a third of people think Rachel Reeves exaggerated economic bad news in the run-up to the budget – twice as many as thought the chancellor was being honest, a new Sky News poll has found.
Some 37% told a YouGov-Sky News poll that Ms Reeves made out things were worse than they really are. This is much higher than the 18% who said she was broadly honest, and the 13% who said things were better than she presented.
This comes in an in-depth look at the public reaction to the budget by YouGov, which suggests widespread disenchantment in the performance of the chancellor.
Just 8% think the budget will leave the country as a whole better off, while 2% think it will leave them and their family better off.
Some 52% think the country will be worse off because of the budget, and 50% think they and their family will be worse off.
This suggests the prime minister and chancellor will struggle to sell last week’s set-piece as one that helps with the cost of living.
Some 20% think the budget worried too much about help for older people and didn’t have enough for younger people, while 23% think the reverse.
The poll found 57% think the chancellor broke Labour’s election promises, while 13% think she did not and 30% are not sure. Some 54% said the budget was unfair, including 16% of Labour voters.
And it arguably gets worse…
This comes as the latest Sky News-Times-YouGov poll showed Labour and the Tories are now neck and neck among voters.
The two parties are tied on 19% each, behind Reform UK on 26%. The Greens are on 16%, while the Liberal Democrats are on 14%.
This is broadly consistent with last week, suggesting the budget has not had a dramatic impact on people’s views.
However, the verdict on Labour’s economic competence has declined further post-budget.
Asked who they would trust with the economy, Labour are now on 10% – lower than Liz Truss, who oversaw the 2022 mini-budget, and also lower than Jeremy Corbyn in the 2019 election.
The Tories come top of the list of parties trusted on the economy on 17%, with Reform UK second on 13%, Greens on 8% and Lib Dems on 5%. Nearly half, 47%, don’t know or say none of them.
Only 57% of current Labour voters say the party would do the best job at managing the economy, falling to 25% among those who voted Labour in the 2024 election.
Some 63% of voters think Ms Reeves is doing a bad job, including 20% of current Labour voters, while just 11% of all voters think she is doing a good job.
A higher proportion – 69% – think Sir Keir Starmer is doing a bad job.
Paul Atkins, chair of the US Securities and Exchange Commission, said that the agency can continue advancing digital asset regulation without legislation from Congress, signaling his expectations for the industry in 2026.
In a CNBC interview released on Tuesday, Atkins said the SEC was providing “technical assistance” as Congress considered legislation for digital asset regulation, likely referring to the market structure bill working its way through the US Senate. Atkins said that although the agency’s operations were impacted by the longest US government shutdown in the country’s history, he continued to make progress on “rules that are focused on helping [the crypto] sector.”
“We have enough authority to drive forward,” said Atkins. “I’m looking forward to having an innovation exemption that we’ve been talking about now. We’ll be able to get that out in a month or so.”
Atkins, whom the US Senate confirmed to chair the SEC in April after his nomination by US President Donald Trump, has taken steps to reduce the number of enforcement actions against crypto companies, including by issuing no-action letters for decentralized physical infrastructure networks.
His actions align with many of the policy directives from the White House under Trump, who has issued several executive orders touching on crypto and blockchain.
Related: Republicans urge action on market structure bill over debanking claims
The SEC chair rang the opening bell at the NYSE on Tuesday, outlining his plans for the agency “on the cusp of America’s 250th anniversary.”
US regulators are still awaiting progress on a market structure bill
Lawmakers on the US Senate Agriculture Committee and the Senate Banking Committee are taking steps to move forward with a digital asset market structure bill, which will outline the regulatory authority of agencies, including the SEC and Commodity Futures Trading Commission, over cryptocurrencies.
Senate Banking Chair Tim Scott said that the committee planned to have the bill ready for markup in December.
Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice
An official from the Bank of Russia suggested easing restrictions on cryptocurrencies in response to the sweeping sanctions imposed on the country.
According to a Monday report by local news outlet Kommersant, Bank of Russia First Deputy Governor Vladimir Chistyukhin said the regulator is discussing easing regulations for cryptocurrencies. He explicitly linked the rationale for this effort to the sanctions imposed on Russia by Western countries following its invasion of Ukraine in February 2022.
Chistyukhin said that easing the crypto rules is particularly relevant when Russia and Russians are subject to restrictions “on the use of normal currencies for making payments abroad.”
Russia banned the use of cryptocurrencies for payments in the summer of 2020.
Chistyukhin said he expects Russia’s central bank to reach an agreement with the Ministry of Finance on this issue by the end of this month. The central issue being discussed is the removal of the requirement to meet the “super-qualified investor” criteria for buying and selling crypto with actual delivery. The requirement was introduced in late April when Russia’s finance ministry and central bank were launching a crypto exchange.
Related: UK sanctions Kyrgyz banks, $9.3B crypto network tied to Russia
What is a super-qualified investor?
The super-qualified investor classification, created earlier this year, is defined by wealth and income thresholds of over 100 million rubles ($1.3 million) or an annual income of at least 50 million rubles.
This limits access to cryptocurrencies for transactions or investment to only the wealthiest few in Russian society. “We are discussing the feasibility of using ‘superquals’ in the new regulation of crypto assets,” Chistyukhin said, in an apparent shifting approach to the restrictive regulation.
Related: How a Russian national allegedly laundered $530M in crypto via Tether
Russia’s fight against sanctions
Russia has been hit with sweeping Western sanctions for years, and regulators in the United States and Europe have increasingly targeted crypto-based efforts to evade those measures.
In late October, the European Union adopted its 19th sanctions package against Russia, including restrictions on cryptocurrency platforms. This also included sanctions against the A7A5 ruble-backed stablecoin, which EU authorities described as “a prominent tool for financing activities supporting the war of aggression.”
Earlier in October, reports indicated that A7A5 — backed by the Russian ruble but issued in Kyrgyzstan — had become the world’s largest non-US-dollar stablecoin. In August, the US Treasury’s Office of Foreign Assets Control also redesignated cryptocurrency exchange Garantex Europe to its list of sanctioned entities for a second time.
Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice
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