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MORALLY WRONG! DOUBLE STANDARDS!

‘This news will be a slap in the face for families struggling to cope with Rishi Sunak’s crippling tax hike’

Opposition Labour and Liberal Democrats turn heat on Chancellor Rishi Sunak as media reveal that his is avoiding British tax through the infamous non-dom route.

Responding to the news that the chancellor wife claims non-domicile tax status, Liberal Democrat Treasury Spokesperson Christine Jardine said Sunak must come clean on family tax affairs.

“This news will be a slap in the face for families struggling to cope with Rishi Sunak’s crippling tax hike,” she said in a statement.

“Sunak now needs to come clean about which country his family pays tax in abroad and if it is a tax haven. He is clobbering people with an unfair tax rise at the worst possible time, it won’t wash for him to try and brush this issue under the carpet.”

Diane Abbot MP

Tory Chancellor Rishi Sunak refused to put up benefits in line with inflation, most Brits continue to see their taxes rise despite his supposed “cuts.” But his billionaire wife will save millions in tax by claiming “non-dom” status. #DoubleStandards

Labour’s Diane Abbot said: Tory Chancellor Rishi Sunak refused to put up benefits in line with inflation, most Brits continue to see their taxes rise despite his supposed “cuts.” But his billionaire wife will save millions in tax by claiming “non-dom” status. #DoubleStandards she tweeted.

“The Chancellor has big questions to answer,” said Tulip Siddiq MP. “He must urgently explain how much he has benefited at the same time he was putting taxes up for millions of working families and choosing to leave them £2620 a year worse off.”

Tulip Siddiq MP

“The Chancellor has big questions to answer. He must urgently explain how much he has benefited at the same time he was putting taxes up for millions of working families and choosing to leave them £2620 a year worse off.”

“It is definitely legal, but is it right?,” asked Ed Miliband, the shadow secretary of state for climate change. “It’s “very surprising” that Rishi Sunak’s immediate family is “sheltering a large part of their income” from UK tax.”

The issue also rekindled the Jimmy Carr tax avoidance case. The prime minister David Cameron said that it is morally wrong.sss

The chancellor’s wife Akshata Murthy is the daughter of Narayana Murthy, the billionaire co-founder of IT services company Infosys, and she owns around 0.93% of the company. The tax status means she would not pay taxes in Britain on dividends from the Indian business.

The news, which featured prominently in Britain’s newspapers on Thursday, comes as the government is putting up taxes in for millions of people.

Murthy’s spokeswoman said as a citizen of India, Murthy was treated under British law as non-domiciled for UK tax purposes because India does not allow its citizens to hold the citizenship of another country simultaneously.

Sunak, who became finance minister in February 2020 just as the country entered the COVID-19 pandemic, is now facing some of the toughest economic conditions in decades, with inflation soaring and living standards set to drop to levels last seen in the 1950s.

To help fund the rebuilding of the country’s national health service and its public finances, he has increased the tax take to the highest level since the 1940s.

“Akshata Murty is a citizen of India, the country of her birth and parent’s home,” the spokeswoman said in a statement. “India does not allow its citizens to hold the citizenship of another country simultaneously.

“She has always and will continue to pay UK taxes on all her UK income.”

A person familiar with the situation said Sunak had declared his wife’s status to the government when he became a minister and the Treasury department was also informed. The person who asked not to be named due to the sensitivity of the matter added that Murthy pays foreign taxes on her foreign income.

ALSO READ-Boris, Xi hold phone call over Ukraine

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Firms send SoS to Sunak

Business forums and leading business people are urging Chancellor Rishi Sunak to unveil schemes to help small and medium businesses…reports Asian Lite News

Chancellor Rishi Sunak must use Wednesday’s Spring Statement to help businesses tackle unprecedented cost pressures head on, leading business forums and captains of the industry said.

Reports suggest Mr Sunak is set to cut fuel duty in a bid to stave off a cost of living crisis, after petrol and diesel prices reached record highs over the past fortnight.

“The economic consequences of the pandemic are still being felt by small businesses, whose ability to make up for lost time and income has been undermined by a vicious cycle of rising costs,” said Martin McTague, National Chair of the Federation of Small Businesses (FSB).

 “Consumer confidence has plunged and the cost-of-living squeeze has intensified, with record fuel prices and sky-high utility bills meaning loss of disposable income. Small businesses increasingly feel that the Government is indifferent to the cost pressures they face.

 “The planned hikes to national insurance and dividend taxation taking effect in a matter of days, alongside an income tax threshold freeze, will, for many, be the final straw. Increasing the Employment Allowance, upping the small business rates relief threshold on rates, and taking action on surging fuel and utility bills would all help.

 “‘Pay as you grow’ options to spread the pressure of debt repayments should be opened up to users of other state-backed loan schemes beyond just bounce-backs. We urgently need to see the Chancellor ease the pressure on the five and a half million small firms and sole traders on which our recovery will depend.” 

The Greater Birmingham Chambers of Commerce has issued a six-point plan it would like to see the Chancellor introduce in a bid to help firms cope with soaring costs.

The GBCC is calling on the Chancellor to take the following actions:

@ Introduce an energy price cap for businesses

@ Provide SMEs with energy grants

@ Introduce additional support for energy efficiency

@ Delay planned National Insurance rises for a year

@ Continue reform of the business rates system

@ Extend the VAT reduction for hospitality businesses

Raj Kandola, head of policy at Greater Birmingham Chambers of Commerce, said: “Often viewed as a minor fiscal event in relation to the Autumn Budget, the crisis in Ukraine coupled with the escalation of the cost of living crisis means the importance of the Spring Statement has been elevated to a whole new level.

 “Whereas as the Chancellor has preached the importance of fiscal rectitude over the previous few months,  the ongoing fallout from Covid-19, rocketing levels of inflation and sky-high energy bills means businesses are facing unprecedented cost pressures – as early analysis from our latest Quarterly Business Report survey reveals.

 “Right now, we need the Government to act decisively and tackle these issues head on – implementing our six-point plan would give businesses the breathing space they need to get back on their feet and plan ahead with a modicum of certainty.

 “As always the Chamber will be on hand to provide a full breakdown of the announcements made on the day and the potential impact they are likely to have businesses in the region.”

Pvt. Sector Investments

The industry body responsible for the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS), the EIS Association (EISA) is calling for the Chancellor to recognise the importance of private sector investment into the UK’s early stage growth businesses.

The Enterprise Investment Scheme supports the Government’s growth agenda by helping early stage, high risk UK companies to attract the investment needed to grow their businesses.

In the current difficult market conditions for entrepreneurs, assurances of the availability of the EIS incentives for investors is critical to the UK’s continued standing as a world leader in innovation.

Boris Johnson and Rishi Sunak Post Budget visit Teesport. Prime Minister Boris Johnson and Chancellor Rishi Sunak visit Teesport in Teeside the day after the 2021 Budget. Picture by Andrew Parsons / No 10 Downing Street

The EISA is calling on the Chancellor to give reassurances in one principal area:

@ A commitment that every effort will be made to ensure the continuation of the EIS scheme beyond the current sunset clause of 2025.

Director General of the EISA, Christiana Stewart-Lockhart commented, “We all recognise that the Chancellor has an enormous job to do given the current economic challenges, and ensuring that we support the country’s growth businesses, bringing with them employment, profitability and tax income is crucial to our economic recovery. Making the EIS permanent would provide some much-needed certainty for early stage companies looking to raise equity and for the individuals investing in them. At the top of our wish list is confirmation that the scheme will be extended beyond 2025, so that both entrepreneurs and investors can plan their future for the benefit of the economy as a whole.”

ALSO READ-Sunak resists rise in defence spending

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Sunak resists rise in defence spending

Chancellor of the Exchequer Rishi Sunak on his way to brief members of the cabinet at the weekly Cabinet meeting inside No10 Downing Street, on the day the Chancellor delivers his summer statement to the House during the coronavirus. Picture by Andrew Parsons / No 10 Downing Street

The chancellor said he had already allocated a £24bn cash increase for military spending over four years, while allies said his spring statement was not a moment to announce more, reports Asian Lite News

Rishi Sunak is resisting pressure for a big increase in defence spending this week in the wake of Russia’s invasion of Ukraine, as he attempts to free up money for cuts in fuel duty and taxes to ease the crisis in the cost of living.

Sunak has told ministers he is turning off the spending taps and they will have to make do with the money they have got, ordering a search for £5.5bn of efficiency savings.

He has vowed to cut taxes but has warned that reductions must be funded by controlling public spending. Sunak’s allies believe the defence and health budgets are particularly badly managed.

The chancellor said on Sunday he had already allocated a £24bn cash increase for military spending over four years, while allies said his spring statement on Wednesday was not a moment to announce more.

“This is not a spending review,” said one ally of the chancellor. Sunak told the Mail on Sunday: “Let’s not be spending any more money — let’s make sure the money we’re spending is spent really well.”

Sunak argued that he increased the military budget before the Russian invasion of Ukraine, telling the BBC’s Sunday Morning programme that was “a good thing”.

He insisted the government’s integrated defence and foreign policy review last year recognised the Russian threat, although critics claim the document was overly preoccupied with a “tilt to the Asia-Pacific”.

With Sunak attempting to hold down public spending, he is expected to use his spring statement to start mitigating cost-of-living pressures, as households confront soaring energy prices and rising inflation.

The chancellor said he would help families struggling with the cost of living when he presents updated economic forecasts on Wednesday, saying: “Where we can make a difference, of course we will.”

Sunak admitted that energy prices were “the number one priority” for people at the moment and that, as MP for the rural Yorkshire constituency of Richmond, he knew fuel prices were “a big issue”.

“It’s something that’s challenging to families, I get that,” he said, hinting at fuel duty cuts. He said his policy was to take “targeted action where we think there is most acute pressure”.

Sunak is under pressure to go further and cut taxes more generally, and said they would come down “over time”. He blamed the pandemic for the fact Britain has its highest overall tax burden since the 1950s.

But he refused to say whether he would cut income tax or change the threshold for the payment of national insurance in the spring statement, as many Tory MPs would like.

The chancellor said his priority was to cut taxes over the rest of the parliament, after analysis showed he had raised taxes more in two years than Gordon Brown, former Labour chancellor, did in a decade.

Sunak insisted that Brown had not had to contend with a pandemic, but his credibility with Conservative MPs now rests on his ability to control spending and push down taxes before the election.

The Labour party is calling for a reversal of the £12bn national insurance rise, which Sunak insisted would go ahead in April to help fund the NHS and deal with a treatment backlog. Labour also wants a windfall tax on North Sea oil companies.

Rachel Reeves, shadow chancellor, said it was about time Sunak lived up to his rhetoric about wanting to cut taxes and said Labour would not “stand in the way” if he decided to cut fuel duty by 5p a litre.

ALSO READ-Sunak calls on G7 to go faster in support of Ukraine

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Sunak admits attending controversial lockdown party

Prime Minister Boris Johnson and Chancellor of the Exchequer Rishi Sunak. (Picture by Andrew Parsons / No 10 Downing Street)

He acknowledged that the scandal surrounding parties during lockdown at Downing Street had damaged the public’s trust in the government, reports the Mirror…reports Asian Lite News

Chancellor of Exchequer Rishi Sunak has reportedly admitted to attending Prime Minister Boris Johnson’s lockdown birthday party in 2020 but refused to say what happened when he entered the room and claimed that he was in the Cabinet Room for a Covid meeting.

Johnson’s five aides, including longstanding policy chief Munira Mirza, chief of staff Dan Rosenfield, principal private secretary Martin Reynolds, and communications director Jack Doyle, resigned from their posts within hours of each other on Thursday, after a damning investigation revealed that multiple parties took place at Downing Street while the rest of the United Kingdom was living under strict Covid lockdown rules.

Sunak, who lives next door to the Prime Minister in Downing Street, is also reported to have attended a surprise birthday party for Johnson in No. 10’s Cabinet Room in June 2020.

He acknowledged that the scandal surrounding parties during lockdown at Downing Street had damaged the public’s trust in the government, reports the Mirror.

But, the Indian-origin Chancellor said, he believed his plans to deal with the cost of living crisis would help restore it.

Officers from the Met Police are investigating a total of 12 Downing Street parties.

It is believed that as many as six of those could have been attended by the Prime Minister.

Sack Sunak, cabinet colleague reportedly tells PM

One cabinet colleague is reported to have asked British Prime Minister Boris Johnson to sack Rishi Sunak, the capable Indian-origin Chancellor of the Exchequer in the same government. Two other ministers are said to have warned the Premier the Sunak is “on manoeuvres” for leadership of the ruling Conservative party. Both revelations were carried prominently by the Independent newspaper published out of London.

Meanwhile, The Observer, a Sunday paper, headlined: “Johnson’s removal is now inevitable, warns loyalist.” Sir Charles Walker said in an interview: “It is an inevitable tragedy. He (Johnson) is a student of Greek and Roman (for he studies Classics at Oxford University). It is going to end in him going, so I just want him to have some agency in that.” Earlier in the week, he told Channel Four News he would be stepping down as MP.

He added: “It is just not going to get better.” Sir Charles is a former Vice Chairman of the powerful ‘1922 Committee’ of backbench Conservative MPs, who are vested with the role of conducting leadership contests in the event there is a motion of no confidence in an incumbent prime minister. For a motion to be triggered, 15 per cent of the party’s MPs – 54 on the basis of its present strength in the House of Commons – have to demand such a vote.

The Independent had a different take on “partygate”, though, which has plagued Johnson for nearly two months. Conservatives MPs it spoke to, expressed the view that an “accidental” or premature no confidence vote could go in Johnson’s favour. This means MPs are hesitant to bring him down before London’s Metropolitan Police’s investigation into whether Covid-19 lockdown laws were broken by the 12 “parties” at the Prime Minister’s office-cum-residence at 10 Downing Street is complete. The outcome of this is expected in about a week. There are indications Johnson was present in at least three of the gatherings.

Under Conservative party rules, a leadership contest cannot take place more than once a year. In other words, if Johnson survives an early test, he cannot be challenged for another year.

While he promised a shake-up at Downing Street after a redacted report on “partygate” by senior civil servant Sue Grey found that Covid-19 rules had been serially violated within its premises, he was rocked by resignations of five close and senior aides before the weekend. His effort to bring in new staff have since apparently floundered.

Unusually for Britain, he brought in fellow minister Steve Barclay as chief of staff, a post generally occupied by a bureaucrat. This gave the impression civil servants are not keen to take up positions at the centre of political power as they possibly think Johnson’s future is uncertain.

He also appointed a former BBC journalist Guto Harri as director of communications. Harri worked with him in the same capacity when he was Mayor of London, In between, this Welshman has been a critic of Johnson, once warning publicly he would be a “divisive” Prime Minister.

Information filtering out of Downing Street over the weekend spoke of Johnson adopting a bunker mentality. Insiders were quoted as saying he had become “unpredictable and erratic”.

Lawmaker submits letter of no confidence in PM

Aaron Bell, a British lawmaker in the ruling Conservatives, said on Friday he had submitted a letter of no confidence in Boris Johnson, saying the prime minister’s handling of Downing Street lockdown parties had made his position untenable.

Johnson could face a vote of no confidence in his leadership if 54 of his 360 Conservative lawmakers submit a letter to the chairman of the party’s 1922 Committee.

Bell said he was profoundly disappointed in the situation after he backed Johnson to become leader.

“However the breach of trust that the events in No. 10 Downing Street represent, and the manner in which they have been handled, makes his position untenable,” he said in a statement on Twitter.

ALSO READ-Queen joins select group of longest-reigning monarchs

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MEDIA SCAN: ‘Dishy’ Rishi favourite for next UK PM and China enters Bhutan

The Prime MinisterBoris Johnson is joined by the Chancellor of the Exchequer Rishi Sunak as they make their way up the staircase of No10 Downing Street to give a press conference on the Coronavirus. Picture by Andrew Parsons / No 10 Downing Street

Indian-origin Rishi Sunak is the favourite to be the next UK PM and China is reportedly building villages in Bhutan…writes Joyeeta Basu

At least nine people were killed and 36 injured in a train accident in West Bengal, India. The accident occurred after the Bikaner-Guwahati Express train derailed near Bengal’s Jalpaiguri district on Thursday, reported NDTV. Railway Minister Ashwini Vaishnaw has rushed to the site.

COVID-19: India reported 2.64 lakh fresh cases with the positivity rate up from 13 per cent to 14.7 per cent from yesterday. But the cases are expected to dip from today, said Health Minister Satyendra Jain, reports NDTV.

‘Dishy’ Rishi next UK PM? Rishi Sunak, the Indian-origin Chancellor of the Exchequer, is tipped as the bookmakers’ favourite to succeed the current incumbent Boris Johnson as Prime Minister of the United Kingdom. The odds on Sunak are 9/4, according to Oddschecker, a UK comparison site.

Award-winning reporter dies: NDTV’s Kamal Khan, a veteran journalist known for his deep insights into Uttar Pradesh politics, died at his home in Lucknow this morning after suffering a heart attack. Kamal was with NDTV for over three decades.

Assembly elections 2022: The BJP will announce its first list of candidates today as the Budget Session will start on January 31, reports the Financial Express.

Financial news: “India’s recovery is on a solid path”, the UN said on Thursday reporting that the country recorded the highest estimated growth rate among the major economies last year. The report estimated India’s gross domestic product (GDP) would grow at 6.7 per cent this year and 6.1 per cent next year.

Pakistan

Taliban facing staffing issues: The Taliban have staffing issues and they are looking for help in Pakistan, claims a report in the Indian Express today. It added that Taliban, despite their new grip on power in Afghanistan, is facing an economic crisis and remain dependent on Pakistan.

Fourth worst passport in the world: The Pakistani passport has been ranked as the fourth worst for international travel for the third consecutive year, with visa-free or visa-on-arrival access to 31 destinations around the world, according to the Henley Passport Index 2022.

Bangladesh

Grave rights concerns dismissed: Bangladesh’s ruling Awami League government has dismissed concerns raised by the United Nations, donors, and non-governmental organizations over evidence of extrajudicial killings, torture, and enforced disappearances by security forces. The Human Rights Watch said in its World Report 2022 that Bangladesh had cracked down on activists, journalists, and even children who criticized the government and its response to the COVID-19 pandemic.

Bhutan

China constructing villages at disputed territory: China is constructing villages in disputed Bhutan territory, according to high-resolution satellite imagery that surfaced with the security establishments. Reports said the Chinese villages in Bhutan are likely to be used for both military and civilian purposes.

On a lighter note…

Brothers unite after 74 years: In a tearful reunion, two brothers who were separated during the India-Pakistan partition in 1947, reunited after 74 years. Watch the heart-warming video on https://bit.ly/3rggKFN

‘Unpaused: Naya Safar’ poster release: The motion poster of film ‘Unpaused: Naya Safar’, has been released followed by the trailer release on January 15.

Five filmmakers have come together to shape the anthology, which features an ensemble cast of Saqib Saleem, Shreya Dhanwanthary, Neena Kulkarni and Priyanshu Painyuli. It will be released on Amazon Prime Video on January 21.

ALSO READ-MEDIA SCAN: Peace in the horizon and Modi shocks Tesla

READ MORE-MEDIA SCAN: India works on ship hijack and opposition slams Pakistan govt over taxes

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Sunak bookmakers’ favourite to be PM

Liz Truss is the second favourite at 22/5. The others in the running as per the betting opportunities are senior backbench MP Jeremy Hunt, who put up a good fight against Johnson in the Conservative party leadership contest in 2019, reports Ashis Ray

Rishi Sunak, the Indian-origin Chancellor of the Exchequer, is tipped as the bookmakers’ favourite to succeed the current incumbent Boris Johnson as Prime Minister of the United Kingdom.

The odds on Sunak are 9/4, according to Oddschecker, a comparison site compiling prices from leading British bookmakers.

Liz Truss, the present Foreign Secretary, is the second favourite at 22/5. The others in the running as per the betting opportunities are senior backbench MP and former foreign secretary Jeremy Hunt, who put up a good fight against Johnson in the Conservative party leadership contest in 2019. He is quoted at 11/1.

Sunak and Truss have been neck-and-neck for a while in public opinion surveys. On Wednesday, when Johnson tendered a conditional apology (because he apologised for the function, but not for his presence at it or for its illegality under prevailing legislation) in the House of Commons for his office holding a drinks party at his 10 Downing Street garden during the height of the Covid-19 lockdown in the UK in May 2020, Truss sat next to him, often nodding her head in support of the statement. On the other hand, the Chancellor was conspicuously absent from Parliament, 225 miles away from London in southwestern English county of Devon.

PM Boris Johnson during a press conference. (Picture Simon Dawson No 10)

Political commentators saw this as Sunak distancing himself from Johnson. In the evening he tweeted: “I’ve been on a visit all day today continuing work on out #PlanFor Jobs as well as meeting MPs to discuss the energy situation.” He added: “The PM was right to apologise and I support his request for patience while Sue Gray (a senior civil servant) carries out her enquiry.”

A YouGov poll carried out within hours of Johnson’s apology indicated 89 per cent of respondents did not accept his expression of contrition, while only 4 per cent supported it. The rest didn’t have an opinion.

Sunak is of East African Punjabi origin. His father has been a general practitioner and his mother a pharmacist in the southern English coastal city of Southampton since they migrated to Britain. He is also the son-in-law of N.R. Narayan Murthy, one of the founders of the software giant Infosys. He was educated at Winchester school, Oxford and Stanford Universities. An MP for less than seven years, his rise up the Conservative political ladder has been meteoric.

A powerful body within the Conservative parliamentary party known as the 1922 Committee has to receive 54 letters from its party’s MPs (out of around 365) to call for a leadership contest. As Johnson fights to save his political career, the big question is when will such a battle take place?

ALSO READ-Rishi Sunak not out of running to be PM if Boris is ousted

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Budget maps out return to higher foreign aid spending

That more upbeat assessment also allowed the government to predict it would be able to restore aid spending in 2024/2025 because the fiscal tests it had set for doing so would be met by then – earlier than previously forecast…reports Asian Lite News.

Britain’s spending on foreign aid should return to 0.7% of economic output by 2024/25, finance minister Rishi Sunak said on Wednesday, having temporarily ditched that target last year to help pay for the government’s pandemic response.

Prime Minister Boris Johnson has faced heavy criticism of the decision to cut aid spending to 0.5% of GDP, including from some within his own Conservative Party who said it undermined Britain’s global image at a time when it was trying to build new post-Brexit alliances.

Official budget forecasts on Wednesday showed the British economy bouncing back from Covid-19 more strongly than expected, allowing Sunak to announce billions of pounds of tax cuts and new public spending.

That more upbeat assessment also allowed the government to predict it would be able to restore aid spending in 2024/2025 because the fiscal tests it had set for doing so would be met by then – earlier than previously forecast.

The test for returning to 0.7% is that “on a sustainable basis the government is not borrowing for day-to-day spending and underlying debt is falling.” The government’s spending plans set aside 5.2 billion pounds in 2024/25 to pay for the increase, but that remains conditional on the tests continuing to be met until that time.

Campaigners raised concerns about a lack of detail around how the money would be spent – fearing Britain would try to broaden the classification of what counts as aid, resulting in less money going to where they say it is needed.

“Having already shrunk the UKs support for development, implementing further cuts by stealth would exacerbate the challenges of climate and COVID already faced by developing countries,” said Amy Dodd, Director of Development Finance Policy at campaign group ONE.

The budget documents set out in broad terms a shift in British aid spending towards bilateral aid programmes – part of recently-appointed foreign minister Liz Truss’s stated aim to tie her foreign policy more closely with Britain’s commercial, defence and security interests.

It did not set out details of any reduction in funding to multilateral agencies.

ALSO READ-Sunak delivers Budget for stronger economy

READ MORE-All eyes on Sunak ahead of Budget 2021

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All eyes on Sunak ahead of Budget 2021

Finance minister likely to announce a three-year spending plan with investments in public transport, skills training and other projects to advance Johnson’s plan to “level up” poorer regions of the country, reports Asian Lite News

Finance minister Rishi Sunak will try to show that he is moving on from the Covid-19 pandemic on Wednesday when he announces multi-billion-pound investments to help Prime Minister Boris Johnson meet his spending promises to voters.

But Sunak, who has racked up the biggest ever peacetime budget deficit to combat the coronavirus, will also keep a tight grip on day-to-day spending by many government departments, something that could slow Britain’s still incomplete recovery.

As well as a budget update — which for once is not expected to include emergency stimulus measures — Sunak will announce a three-year spending plan with investments in public transport, skills training and other projects to advance Johnson’s plan to “level up” poorer regions of the country.

At the same time, he will try to burnish the government’s low-carbon credentials before Britain hosts the COP26 climate summit starting next week.

“Today’s budget begins the work of preparing for a new economy post-Covid, an economy fit for a new age of optimism,” Sunak is due to say, according to excerpts of his speech released by the finance ministry.

That Sunak can focus on extra spending in his speech to parliament – expected to start around 1130 GMT – is due in part to a big tax increase for workers and employers announced in September. Companies face an additional tax hike in 2023.

Britain’s economy suffered a near 10% collapse last year after the country was slower than others to shutter its economy to ward off coronavirus contagion, and ended up spending more time in lockdown.

Nonetheless, an upgrade of Britain’s growth forecasts on Wednesday will give the government extra room for manoeuvre.

Bond dealers polled by Reuters expect borrowing this financial year will come in at 190 billion pounds, 44 billion pounds less than the government forecast in March and equivalent to around 8% of gross domestic product.

Sunak, a former Goldman Sachs analyst, has pre-announced higher spending on health, public transport in cities away from London, and skills training as well as the lifting of a freeze on public sector pay.

However, many ministries will face a further squeeze as Sunak sets a new fiscal rule for the government. It is expected to focus on bringing day-to-day spending into balance with tax revenues over a three-year horizon.

Many economists say that target looks achievable and could allow Sunak to cut taxes before for the next election, which is due in 2024 but could come earlier.

As well as a renewed rise in Covid-19 infections in Britain, a big risk for Sunak is that the recent jump in inflation proves to be stubborn than expected, which could push up the government’s debt costs sharply.

Around a quarter of British gilts are indexed to inflation, a higher share than most other rich economies.

A 1-percentage-point rise in interest rates and inflation would cost taxpayers about 25 billion pounds a year, according to government estimates.

That would be equivalent to double the money that Sunak plans to raise with his increase in social security contributions to fund the health service and social care.

Borrowing costs could start to go up as soon as next week when the Bank of England is due to announce its November policy decision against the backdrop of an inflation rate on course to hit 5%, more than double its target.

Retailers warn of pre-Christmas price rises

Meanwhile, British retailers warned on Wednesday of pre-Christmas price rises after they reported the smallest year-on-year decline in the average selling price of goods in their stores since before the start of the coronavirus pandemic.

The British Retail Consortium trade body said shop prices rose by 0.4% on the month in October and were 0.4% lower than a year before, the smallest year-on-year fall since January 2020.

Price rises were led by higher costs for food, which was 0.5% more expensive than a year earlier.

People wearing face masks stand next to Christmas trees in London, Britain, on Dec. 4, 2020. (XinhuaHan Yan)

“It is now clear that the increased costs from labour shortages, supply chain issues and rising commodity prices have started filtering through to the consumer,” BRC chief executive Helen Dickinson said.

Three in five retailers planned to raise prices before Christmas, she added.

The BRC’s shop price index covers a narrower range of spending than the consumer price index targeted by the Bank of England, which touched its highest since 2012 in August at 3.2%.

ALSO READ-Sunak calls on G7 to work together on supply-chain difficulties

READ MORE-Sunak on spending spree ahead of Budget

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Sunak on spending spree ahead of Budget

The finance minister, who has been in charge of the country’s financial response to the pandemic, reiterated his promise to do ‘whatever it takes’ to help businesses and working families, reports Asian Lite News

Chancellor of the Exchequer Rishi Sunak on Sunday unveiled a series of spending pledges ahead of his Autumn Budget statement next week, including GBP 5 billion towards health research and innovation and GBP 3 billion for education and skills.

The finance minister, who has been in charge of the country’s financial response to the pandemic, reiterated his promise to do ‘whatever it takes’ to help businesses and working families.

Among the pledges unveiled by his Treasury department ahead of Wednesday’s Budget speech, GBP 1.4 billion has been earmarked to encourage foreign investment into UK businesses and attract overseas talent; GBP 700 million to be spent mainly on the new post-Brexit borders and immigration system, as well as a new maritime patrol fleet; GBP 560 million for adult maths coaching to help increase numeracy; and a six-month extension to the COVID recovery loan scheme to June 2022.

“I know that families here at home are feeling the pinch of higher prices and are worried about the months ahead,” Sunak wrote in the ‘Sun on Sunday’.

“But I want you to know, we will continue to do whatever it takes, we will continue to have your backs. just like we did during the pandemic. And while we cannot solve these problems overnight, I’m determined to meet these challenges head on, with the same grit and determination this great nation has shown throughout the pandemic,” he wrote.

At the heart of his plans is a so-called ‘skills revolution’ covering T-Level skills qualifications for 16 to 19-year-olds.

“This GBP 3 billion skills revolution builds on our Plan for Jobs and will spread opportunity across the UK by transforming post-16 education ‘ giving people the skills they need to earn more and get on in life,” said Sunak.

And, around 500,000 people are expected to benefit from a new Multiply programme of free personal tutoring, digital training, and flexible courses.

“Better maths can mean a better job and a bigger pay packet. Multiply will help people develop new skills and create opportunities,” added Sunak.

Besides, a UK-wide trial of Covid-19 antiviral treatments will receive GBP 33 million, while GBP 40 million will be spent on research in social care reform, GBP 30 million on investing in research skills and training, and GBP 20 million on research in climate change and health.

The Autumn Budget, presented to the House of Commons, is crucial in the UK’s financial calendar and will be accompanied by a Spending Review to allocate funds to different government departments. Sunak has described next week’s Budget as his plan to ‘invest in public services, invest in growth, and invest in jobs’.

The minister will also announce a £5 billion fund for innovative health-related projects, according to his office.

Health Minister Sajid Javid said the investment would add to coronavirus treatments and vaccines developed in the UK to battle the pandemic.

“The new investment will build on this success by accelerating the discovery of ground-breaking medicines and technologies,” he said.

But the big-spending plans have raised questions about where the debt-wracked government is going to find the money, with free-marketers within Sunak’s Conservative Party concerned that it will come from tax rises.

The country is also suffering from high inflation and supply shortages, blamed on the pandemic and Brexit.

But he conceded supply shortages and high energy prices were squeezing household budgets.

Labour’s Rachel Reeves, the shadow finance minister, took aim at her counterpart for not doing enough to ease the burden.

“Our priority would be easing the cost-of-living price crisis, helping businesses who have had a torrid 18 months,” she told Sky News.

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Sunak calls on G7 to work together on supply-chain difficulties

“Global cooperation is key to addressing our shared challenges as we emerge from the pandemic,” he said in a statement ahead of the meetings…reports Asian Lite News.

Finance minister Rishi Sunak said on Wednesday the Group of Seven rich nations should work together more closely to tackle supply-chain disruption which has hampered the economic recovery from the COVID-19 pandemic.

Sunak is meeting other finance ministers in Washington this week on the sidelines of the annual meetings of the International Monetary Fund and the World Bank.

“Global cooperation is key to addressing our shared challenges as we emerge from the pandemic,” he said in a statement ahead of the meetings.

“From global tax reform to global supply chains, we must work together to seek international solutions for the benefit of our citizens at home.” The IMF warned on Tuesday that supply-chain bottlenecks, including delays at ports and shortages of key components such as microchips used in car production, were delaying recovery and fuelling inflation pressures worldwide.

Britain has been hit especially hard due to the added impact of post-Brexit trade barriers and tougher immigration rules.

Many British petrol stations temporarily ran out of fuel last month, and a pan-European surge in natural gas prices has led to a shortage of carbon dioxide used to stun farm animals before slaughter.

Sunak also intends to encourage other rich countries to redirect part of their share of the IMF’s new $650 billion allocation of its internal currency to poorer nations to improve healthcare and respond to climate change.

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