Key events
Heather Stewart
John Healey is poised to tax Britain’s banks in his ۲۸ October budget, to help offset the damage inflicted on the public finances by war in the Middle East, the Guardian understands.
The chancellor is in Bangkok, where the International Monetary Fund has praised the UK’s progress towards balancing the books, urging him to “stay the course”.
To keep the Treasury’s deficit reduction plans on track in the face of rising government borrowing costs, the Guardian understands Healey has decided to tap the financial sector for additional revenue.
One option understood to be under discussion – reversing cuts to the bank surcharge made by Jeremy Hunt – would raise upwards of £۲bn a year.
Lenders have been logging strong earnings on the back of rising interest rates, with the UK’s four largest lenders – HSBC, NatWest, Barclays and Lloyds Banking Group – alone having generated £۲۰۰bn in pre-tax profits over the past five years.
Thinktanks and trade unions have repeatedly urged Healey to tax Britain’s banks more heavily, an option considered but rejected by his predecessor Rachel Reeves, who was wary of deterring future investment.
Paul Nowak, the general secretary of the Trades Union Congress (TUC), said: “Britain’s big four banks are making a billion pounds a week, while bonuses have hit a post-crash record. These are bumper profits, driven by high interest rates and households’ mortgage misery. It’s time to make sure banks pay their fair share.”
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Burnham in Scotland as SNP minister accuses PM of ‘hypocrisy’ over indyref stance
Good morning and welcome to our UK politics live blog. Prime minister Andy Burnham is in Scotland today where he is expected to invite Scotland’s first minister, John Swinney, to collaborate on devolving decision-making powers away from both Westminster and Holyrood and pushing control further down to Scottish regions and towns.
The newswires have reported an extract of his speech, which he is expected to deliver in Lanarkshire around midday:
During my first week in office, I told the first minister that I wanted to work with him to spread opportunities to communities across Scotland’s regions and cities.
Through No۱۰ North, we are rewiring the state and I want to make sure regions in Scotland are fully part of this.
This is me making an offer to the Scottish government. With us working together, there is no limit to what we can achieve for the Scottish people.”
Burnham’s visit coincides with the SNP’s annual party conference in Aberdeen, which the party has said will launch the biggest pro-independence campaign since the ۲۰۱۴ referendum.
The prime minister has repeatedly ruled out another independence referendum, but he has been accused of hypocrisy by the SNP for proposing to reopen the debate on Brexit and re-examining the UK’s relationship with the EU.
“That hypocrisy is there for all to see and I think the Scottish electorate will take a pretty dim view of it,” SNP minister Stephen Flynn told the Press Association.
He added: “Mr Burnham wants power pushed out of Westminster – so do we.
“But let’s make sure that power and that decision making is taken by the Scottish people and they have the opportunity to do so in an independence referendum.”
In other news:
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Young people who rely on benefits will be given less money in exchange for more intensive health and employment support under plans for a separate youth welfare system, the Financial Times reported. Alan Milburn, who is leading a major review into Britain’s youth jobs crisis, will recommend benefits for young people not in education, employment or training (Neet) be delivered through a different process, sources told the newspaper.
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Reform’s Robert Jenrick has responded to claims made by his colleague Sarah Pochin that the party is “chauvinistic”, after she was caught by an undercover ITV news reporter complaining about the party’s culture. “That’s not my experience of Reform,” Jenrick told BBC Radio ۴’s Today programme.
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John Healey is planning to increase taxes on the UK banking sector in his ۲۸ October budget, the Guardian understands. One option on the table is reversing former Conservative chancellor Jeremy Hunt’s ۲۰۲۳ cut to the bank profit surcharge, from ۳% back to ۸%. You can read more on this story here:
