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    Total freeze urged on Michelle Mone-linked assets including Scots properties after £122m PPE ruling

    Total freeze urged on Michelle Mone-linked assets including Scots properties after £122m PPE ruling

    Rachel Reeves decision to axe two-child benefit cap would impact millions of Scottish families

    Rachel Reeves decision to axe two-child benefit cap would impact millions of Scottish families

    Anas Sarwar’s woes are about to get worse but Labour still has path to victory

    Anas Sarwar’s woes are about to get worse but Labour still has path to victory

    Seagull summit goes ahead days after SNP minister was forced to quit in row over feathered menaces

    Seagull summit goes ahead days after SNP minister was forced to quit in row over feathered menaces

    Scotland becoming more intolerant amid immigration debate, warns Humza Yousaf

    Scotland becoming more intolerant amid immigration debate, warns Humza Yousaf

    Alexander Dennis to continue bus building in Scotland as SNP Government offers £4m furlough scheme

    Alexander Dennis to continue bus building in Scotland as SNP Government offers £4m furlough scheme

    Peter Mandelson facing sacking calls by SNP over links to paedophile Jeffrey Epstein

    Peter Mandelson facing sacking calls by SNP over links to paedophile Jeffrey Epstein

    Greyhound racing set for total ban in Scotland after ministers back MSP’s bill

    Greyhound racing set for total ban in Scotland after ministers back MSP’s bill

    MSPs should ‘go through vetting’ to be alone with kids after Colin Smyth charges

    MSPs should ‘go through vetting’ to be alone with kids after Colin Smyth charges

    MSP Colin Smyth denies hiding secret camera in Scottish Parliament toilet

    MSP Colin Smyth denies hiding secret camera in Scottish Parliament toilet

    Labour MP blasts ‘coked-up yobbery’ of far right protestors as she hits out at ‘disaster’ of asylum hotels

    Labour MP blasts ‘coked-up yobbery’ of far right protestors as she hits out at ‘disaster’ of asylum hotels

    Blow for Scottish Conservatives as MSP quits party in protest at ‘reactionary politics’

    Blow for Scottish Conservatives as MSP quits party in protest at ‘reactionary politics’

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      What is a virtual office and why you need one in Central London – Your Company Formations Ltd

      Inflation rises again to new 40-year high

      Inflation rises again to new 40-year high

      Bank of England hikes interest rates to 1.25%

      Bank of England hikes interest rates to 1.25%

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      Hiring activity in Scotland slows amid steep decline in staff availability

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      Scottish retail footfall growth ‘worst in UK compared to pre-pandemic’

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      Kasper Schmeichel call made as Celtic make three changes in predicted XI vs Motherwell

      Kasper Schmeichel call made as Celtic make three changes in predicted XI vs Motherwell

      Brendan Rodgers knows my one Celtic regret but he’s the best I’ve worked under and a true perfectionist

      Brendan Rodgers knows my one Celtic regret but he’s the best I’ve worked under and a true perfectionist

      Hearts chief demands ‘calm’ amid Rangers pile on as Celtic title tilt sparks knowing warning

      Hearts chief demands ‘calm’ amid Rangers pile on as Celtic title tilt sparks knowing warning

      Ex Man Utd star faces prison for failure to pay child maintenance

      Ex Man Utd star faces prison for failure to pay child maintenance

      Dermot Desmond to ‘take a lead’ in Celtic fan row and ditch golden rule for first time in three years

      Dermot Desmond to ‘take a lead’ in Celtic fan row and ditch golden rule for first time in three years

      Raging Ally McCoist slaughters Rangers chiefs for ‘unacceptable’ sin

      Raging Ally McCoist slaughters Rangers chiefs for ‘unacceptable’ sin

      Mikel Arteta claim about Ange Postecoglou rings louder than ever as Arsenal boss tosses rivalry aside

      Mikel Arteta claim about Ange Postecoglou rings louder than ever as Arsenal boss tosses rivalry aside

      Chris Sutton reacts to ‘misguided’ Celtic transfer declaration as UEFA spending cap claim torpedoed

      Chris Sutton reacts to ‘misguided’ Celtic transfer declaration as UEFA spending cap claim torpedoed

      Union Bears torch Green Brigade gear as Celtic ultras targeted by gloating Rangers rivals

      Union Bears torch Green Brigade gear as Celtic ultras targeted by gloating Rangers rivals

      Kieron Bowie touted for Rangers transfer if key hurdle can be cleared

      Kieron Bowie touted for Rangers transfer if key hurdle can be cleared

      Raging Fabrizio Romano fires back at fan for branding him a ‘fraud’

      Raging Fabrizio Romano fires back at fan for branding him a ‘fraud’

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      Scotland’s plunging coefficient faces threat from Sweden as Champions League abyss awaits

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        ‘Compact’ power bank that is ‘perfect for on the go’ drops to £29 in limited time deal

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        Sky Mobile throws in £210 freebies with Samsung’s new £9 Apple iPad rival

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        Scottish siblings diagnosed with the same terminal illness that killed their dad

        Signs of depression in later life and how to recognise them, according to experts

        Signs of depression in later life and how to recognise them, according to experts

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        New update on calls for weekly State Pension payments of £586 for people over 60

        New update on calls for weekly State Pension payments of £586 for people over 60

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        DWP timeline for PIP eligibility changes for new and existing claimants

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        Debenhams cuts price of ‘beautiful’ £845 watch perfect for Christmas gifting to £99

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        Next shoppers ‘absolutely love’ £34 teddy fleece that’s ‘very cosy’

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        UK watchdog issues new car finance update on possible £1,100 compensation payout due next year

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        Police investigate alleged attack on boy at top Welsh secondary school

        Police investigate alleged attack on boy at top Welsh secondary school

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        Welsh council explains how and when schools will search pupils for weapons

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        Best universities in Wales and the UK named in prestigious rankings

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        Primary schools in one part of Wales propose big change for parents

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        International students warned of deportation if they overstay their visa

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        Total freeze urged on Michelle Mone-linked assets including Scots properties after £122m PPE ruling

        Total freeze urged on Michelle Mone-linked assets including Scots properties after £122m PPE ruling

        Rachel Reeves decision to axe two-child benefit cap would impact millions of Scottish families

        Rachel Reeves decision to axe two-child benefit cap would impact millions of Scottish families

        Anas Sarwar’s woes are about to get worse but Labour still has path to victory

        Anas Sarwar’s woes are about to get worse but Labour still has path to victory

        Seagull summit goes ahead days after SNP minister was forced to quit in row over feathered menaces

        Seagull summit goes ahead days after SNP minister was forced to quit in row over feathered menaces

        Scotland becoming more intolerant amid immigration debate, warns Humza Yousaf

        Scotland becoming more intolerant amid immigration debate, warns Humza Yousaf

        Alexander Dennis to continue bus building in Scotland as SNP Government offers £4m furlough scheme

        Alexander Dennis to continue bus building in Scotland as SNP Government offers £4m furlough scheme

        Peter Mandelson facing sacking calls by SNP over links to paedophile Jeffrey Epstein

        Peter Mandelson facing sacking calls by SNP over links to paedophile Jeffrey Epstein

        Greyhound racing set for total ban in Scotland after ministers back MSP’s bill

        Greyhound racing set for total ban in Scotland after ministers back MSP’s bill

        MSPs should ‘go through vetting’ to be alone with kids after Colin Smyth charges

        MSPs should ‘go through vetting’ to be alone with kids after Colin Smyth charges

        MSP Colin Smyth denies hiding secret camera in Scottish Parliament toilet

        MSP Colin Smyth denies hiding secret camera in Scottish Parliament toilet

        Labour MP blasts ‘coked-up yobbery’ of far right protestors as she hits out at ‘disaster’ of asylum hotels

        Labour MP blasts ‘coked-up yobbery’ of far right protestors as she hits out at ‘disaster’ of asylum hotels

        Blow for Scottish Conservatives as MSP quits party in protest at ‘reactionary politics’

        Blow for Scottish Conservatives as MSP quits party in protest at ‘reactionary politics’

        Trending Tags

        • Business

          Salesforce boss Marc Benioff joins Weev.

          What is a virtual office and why you need one in Central London – Your Company Formations Ltd

          What is a virtual office and why you need one in Central London – Your Company Formations Ltd

          Inflation rises again to new 40-year high

          Inflation rises again to new 40-year high

          Bank of England hikes interest rates to 1.25%

          Bank of England hikes interest rates to 1.25%

          Hiring activity in Scotland slows amid steep decline in staff availability

          Hiring activity in Scotland slows amid steep decline in staff availability

          Scottish retail footfall growth ‘worst in UK compared to pre-pandemic’

          Scottish retail footfall growth ‘worst in UK compared to pre-pandemic’

        • Sports
          Kasper Schmeichel call made as Celtic make three changes in predicted XI vs Motherwell

          Kasper Schmeichel call made as Celtic make three changes in predicted XI vs Motherwell

          Brendan Rodgers knows my one Celtic regret but he’s the best I’ve worked under and a true perfectionist

          Brendan Rodgers knows my one Celtic regret but he’s the best I’ve worked under and a true perfectionist

          Hearts chief demands ‘calm’ amid Rangers pile on as Celtic title tilt sparks knowing warning

          Hearts chief demands ‘calm’ amid Rangers pile on as Celtic title tilt sparks knowing warning

          Ex Man Utd star faces prison for failure to pay child maintenance

          Ex Man Utd star faces prison for failure to pay child maintenance

          Dermot Desmond to ‘take a lead’ in Celtic fan row and ditch golden rule for first time in three years

          Dermot Desmond to ‘take a lead’ in Celtic fan row and ditch golden rule for first time in three years

          Raging Ally McCoist slaughters Rangers chiefs for ‘unacceptable’ sin

          Raging Ally McCoist slaughters Rangers chiefs for ‘unacceptable’ sin

          Mikel Arteta claim about Ange Postecoglou rings louder than ever as Arsenal boss tosses rivalry aside

          Mikel Arteta claim about Ange Postecoglou rings louder than ever as Arsenal boss tosses rivalry aside

          Chris Sutton reacts to ‘misguided’ Celtic transfer declaration as UEFA spending cap claim torpedoed

          Chris Sutton reacts to ‘misguided’ Celtic transfer declaration as UEFA spending cap claim torpedoed

          Union Bears torch Green Brigade gear as Celtic ultras targeted by gloating Rangers rivals

          Union Bears torch Green Brigade gear as Celtic ultras targeted by gloating Rangers rivals

          Kieron Bowie touted for Rangers transfer if key hurdle can be cleared

          Kieron Bowie touted for Rangers transfer if key hurdle can be cleared

          Raging Fabrizio Romano fires back at fan for branding him a ‘fraud’

          Raging Fabrizio Romano fires back at fan for branding him a ‘fraud’

          Scotland’s plunging coefficient faces threat from Sweden as Champions League abyss awaits

          Scotland’s plunging coefficient faces threat from Sweden as Champions League abyss awaits

          Trending Tags

          • Technology
            Xbox Game Pass ‘gets biggest update yet’ but could lead to ‘mass unsubscribing’ for one reason

            Xbox Game Pass ‘gets biggest update yet’ but could lead to ‘mass unsubscribing’ for one reason

            ‘Compact’ power bank that is ‘perfect for on the go’ drops to £29 in limited time deal

            ‘Compact’ power bank that is ‘perfect for on the go’ drops to £29 in limited time deal

            Sky Mobile throws in £210 freebies with Samsung’s new £9 Apple iPad rival

            Sky Mobile throws in £210 freebies with Samsung’s new £9 Apple iPad rival

            NASA announces breakthrough discovery suggesting life on Mars

            NASA announces breakthrough discovery suggesting life on Mars

            Sir James Dyson unveils new AI robot vacuum in a bid to help households to clean with ease

            Sir James Dyson unveils new AI robot vacuum in a bid to help households to clean with ease

          • Health
            NHS atorvastatin warning over common ‘nosebleed’ symptom

            NHS atorvastatin warning over common ‘nosebleed’ symptom

            NHS doctor shares common mistake people make at GP appointments

            NHS doctor shares common mistake people make at GP appointments

            ‘Our son, 18, died when curly hair hid deadly disease – now we’re taking action’

            ‘Our son, 18, died when curly hair hid deadly disease – now we’re taking action’

            Scottish siblings diagnosed with the same terminal illness that killed their dad

            Scottish siblings diagnosed with the same terminal illness that killed their dad

            Signs of depression in later life and how to recognise them, according to experts

            Signs of depression in later life and how to recognise them, according to experts

          • Entertainment
            New update on calls for weekly State Pension payments of £586 for people over 60

            New update on calls for weekly State Pension payments of £586 for people over 60

            DWP timeline for PIP eligibility changes for new and existing claimants

            DWP timeline for PIP eligibility changes for new and existing claimants

            Debenhams cuts price of ‘beautiful’ £845 watch perfect for Christmas gifting to £99

            Debenhams cuts price of ‘beautiful’ £845 watch perfect for Christmas gifting to £99

            Next shoppers ‘absolutely love’ £34 teddy fleece that’s ‘very cosy’

            Next shoppers ‘absolutely love’ £34 teddy fleece that’s ‘very cosy’

            UK watchdog issues new car finance update on possible £1,100 compensation payout due next year

            UK watchdog issues new car finance update on possible £1,100 compensation payout due next year

          • Life Style
          • Travel
          • Education
            Police investigate alleged attack on boy at top Welsh secondary school

            Police investigate alleged attack on boy at top Welsh secondary school

            Welsh council explains how and when schools will search pupils for weapons

            Welsh council explains how and when schools will search pupils for weapons

            Best universities in Wales and the UK named in prestigious rankings

            Best universities in Wales and the UK named in prestigious rankings

            Primary schools in one part of Wales propose big change for parents

            Primary schools in one part of Wales propose big change for parents

            International students warned of deportation if they overstay their visa

            International students warned of deportation if they overstay their visa

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          Why the new government is staying silent about the City – it won’t get tough on the UK’s financial sector anytime soon

          by BP Author
          July 16, 2024
          in World
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          Rachel Reeves’ first speech as the UK chancellor highlighted the financial constraints the new Labour government faces. With taxes already at a 70-year high in relation to national income, she repeated the pledge of no increases in national insurance, income tax or VAT.

          A parallel pledge to stand by present fiscal rules, requiring public debt to be falling within five years, leaves Reeves looking for ways to target taxes.

          The government also aims to expand its non-tax revenues by rebuilding a stock of state-owned assets, including a national wealth fund and a new green electricity provider, Great British Energy.

          Labour’s approach is to treat public spending as a catalyst for private enterprise – providing the infrastructure, skills and technological development that can spur the private sector to produce and invest more. Its industrial strategy is founded on the idea that £1 of public investment, wisely targeted, can attract £3 of private investment.

          This is in line with economic research suggesting that chronically low public investment explains much of the UK’s relatively slow productivity and output growth, and that public investment in green technology would be especially effective at reviving these.

          For the past 50 years, governments of all parties have tended to take the opposite approach – associating public investment with economic stagnation, and anticipating stronger private-sector performance once state-owned assets were privatised.

          Labour’s change of course concedes that the UK’s financial markets, even when deregulated and encouraged to expand, have failed to mobilise the necessary investment – leaving wide “funding gaps” for smaller innovation-based firms, especially in disadvantaged regions.

          Labour has good reasons to be firmer with financial institutions. Its loss of office in 2010 followed a global financial crisis triggered by reckless banks and insurers, whose bailout at the public expense undermined the government’s previously successful budget balancing and public debt repayment.

          The need to absorb these losses from the City of London, then let it keep the subsequent return to profit, forced the Treasury into a decade of austerity that left it financially overstretched when COVID struck.

          Yet Labour’s pre-election plan hailed the UK financial sector as an “engine of growth”, describing it as “one of Britain’s greatest success stories” and promising to assist its growth and innovation. It’s a far cry from the party’s stance half a century ago, when it flirted with a state takeover of banks and pension funds as the solution to a previous decade of stagnation.

          Finance’s peculiar pedestal

          Governments’ fear of imposing more tax or regulation on the City of London, even after its costly 2007-8 implosion, is rooted in the financial sector’s extraordinary contribution to the UK economy.

          Finance and related professional services contribute more than 8% of gross domestic product (GDP) and 10% of tax revenue, and support 2.2 million jobs (7% of the total), according to analysis of official data by its main lobby group.

          Its £63 billion trade surplus contrasts with, and helps to offset, the deficit on manufactured goods trade. And the financial surplus it generates, by attracting inflows of money from across the globe, is vital for financing the chronic deficit on the UK’s current account, caused by paying out more than it receives for current transactions with the rest of the world.

          But this may not be the whole story of finance’s contribution to the national income and government finances. In the wake of the financial crisis, experts including the Bank of England’s chief economist and chief financial regulator suggested the financial sector’s appetite for risky lending and short-term profit could hinder productive enterprise as much as it helps.

          They also recognised that conventional measurements, especially treating the gap between lenders’ and borrowers’ interest rates as “value added”, might greatly overstate the sector’s contribution to the economy.

          In doing so, they joined a long line of researchers arguing that the City diverts funds from productive investment into speculation that promotes asset bubbles and house-price inflation.

          The financial sector’s post-crisis rebound owes much to the lowering of interest rates from 2008-22 and quantitative easing. This additional source of ultra-cheap funds let banks preserve their “bonus culture”, and widened inequality as the holders of financial assets like stocks and bonds saw their prices rise.




          Read more:
          Why central banks are too powerful and have created our inflation crisis – by the banking expert who pioneered quantitative easing


          UK financial companies also profit from an elaborate network of tax havens, denting the tax-raising powers of the UK and many other governments.

          The Conservatives had already taken steps to make pension funds invest more in innovative small firms, and set up a state-owned British Business Bank to provide funding where commercial banks would not. Past governments have also used windfall taxes to recoup public money from the banks, and polling suggests there is now widespread support for imposing another on banks’ excess profits.

          aerial view of Grand Cayman Island

          Tax havens like the Cayman Islands starve the Treasury of revenues from the financial sector.
          Richard Whitcombe/Shutterstock

          But Labour’s scope to steer resources back to the “real” economy, away from the financial sector, is limited by lingering doubts about the sector’s underlying health. Banks have strengthened their balance sheets since 2008 and now pass much stricter stress tests. But this partly reflects a shift of lending towards less-regulated “shadow banks”, which are not banks at all but other bodies that have the ability to offer credit.

          Now, new threats to global financial stability are looming, including rapid private credit growth among companies and underestimated climate risks.

          The fear of another systemic slide – on the scale that left Labour’s previous prime minister, Gordon Brown, with “no money” and more recently sank Liz Truss – means the government is unlikely to give financial institutions the tougher treatment some would recommend.



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