The Telegraph 2024-03-06 04:30:36

National Insurance cut sparks talk of May election

Jeremy Hunt is expected to unveil a 2p cut to National Insurance in Wednesday’s Budget in a move that has sparked speculation that an early election could be called.

The Chancellor will announce that he has chosen to cut National Insurance rather than income tax, saving workers £900 a year when combined with the cut announced last autumn.

He is expected to set out a number of revenue-raising measures to help pay for the cut, including scrapping or scaling back the non-dom scheme

There will be a new levy on vapes, tax reliefs for the owners of short-term lets will be scrapped, and the windfall tax on oil and gas giants will be extended by a year.

Downing Street made the unusual decision to confirm the National Insurance cut, likely to be a centrepiece of the Budget, 24 hours ahead of the statement. 

The move raised questions over whether the Government had a surprise up its sleeve, as Labour fuelled speculation that Rishi Sunak was preparing to call an election in May.

Lord Mandelson, the architect of New Labour who helped Sir Tony Blair sweep to power, said such a move could help the Tories avoid a huge defeat, while Jonathan Ashworth, the shadow paymaster general, made a public bet that an election would be held in May. 

Mr Ashworth agreed the £10 bet with Kay Burley, the Sky News presenter, and said: “I think everything the Conservatives are doing in terms of both their advertising on social media and the political positioning suggests to me that May is their preferred choice.”

Speaking on his podcast, How To Win An Election, Lord Mandelson said: “The Conservatives… have an incentive to call an early election, partly because they think they might catch Labour on the hop. 

“But secondly, it would put an end to the sort of endless Tory-Farageist soap opera week in, week out, which I think is having a depressing effect on their standing in the polls and in the view of the public.”

On the same podcast, Lord Finkelstein, his his co-host, said: “I’ve always thought that it was the right thing to do to hold an election in May, but it’s become much, much less likely as we’ve moved closer.”

It is understood that the Government will bring forward legislation next week to ensure that the National Insurance cut comes into effect in April. 

With the Bill enabling migrants to be deported to Rwanda also expected to pass this month, it could pave the way for a general election to be held on May 2, when local elections are planned.

The decision not to cut income tax in the Budget would allow the Tories to present it as a manifesto pledge at the next election. One idea is a promise to reduce the basic level from 20p to 16p by the end of the decade, which Mr Sunak promised when he ran for the Conservative leadership.

Tory sources played down speculation of a general election, pointing to Mr Sunak’s previous comments signalling a vote in the second half of the year. They insisted the National Insurance cut was a non-inflationary move that rewarded workers.

On Tuesday night, Mr Hunt stressed that the Budget was designed to boost growth and put money back into the pockets of families. He said: “Because of the progress we’ve made, because we are delivering on the Prime Minister’s economic priorities, we can now help families with permanent cuts in taxation.

“We do this not just to give help where it is needed in challenging times, but because Conservatives know lower tax means higher growth. And higher growth means more opportunity and more prosperity.”

“But if we want that growth to lead to higher wages and higher living standards for every family in every corner of the country, it cannot come from unlimited migration. It can only come by building a high-wage, high-skill economy. Not just higher GDP, but higher GDP per head.”

However, his plans to extend the windfall tax sparked a row in Scotland, where Douglas Ross, the Scottish Tory leader, said it would hamper Tory election chances. 

Sources said Mr Ross had appealed to the Prime Minister not to go ahead with the extension in a “heated” face-to-face conversation at a pre-Budget gathering of about 80 Tory MPs on Monday night. They said the pair had a “robust exchange of views”, with Mr Sunak arguing it was required to make room for pre-election tax cuts in the autumn.

Mr Ross is said to be determined to “call out” the move in a speech in the Commons on Wednesday afternoon, after Mr Hunt delivers the Budget. 

About 90,000 Scottish jobs depend on oil and gas, mostly in the north-east of the country, and industry leaders have warned that extending the windfall tax would threaten investment.

Meanwhile, two former home secretaries have criticised the Chancellor for cutting National Insurance rather than income tax.

Suella Braverman told GB News: “My preference would be 2p off the basic rate of income tax… Rishi Sunak himself promised to take a penny off the basic rate, and I would go further with 2p because I think that would really send the message that people will be able to keep more of what they earn.”

Dame Priti Patel said Mr Hunt should unfreeze income tax thresholds because it “is one area where, as Conservatives, we should do more to show that we back working households”.

The Chancellor had been hoping to cut income tax, but he was told by the Government’s spending watchdog on Friday night that he did not have enough “fiscal headroom” to do so responsibly. The Office for Budget Responsibility also said it would be inflationary.

While a 2p cut in National Insurance contributions costs £10 billion a year, a 2p income tax cut would cost almost £14 billion.

The OBR told ministers they only had about £13 billion to spend because of a combination of higher government borrowing costs and lower than expected tax receipts – down from the £30 billion they told the Treasury was available in December.

However, the National Insurance cut will not stop taxes from rising to record levels by the end of the decade, a leading think tank said. The Institute for Fiscal Studies said the UK would still be on track to break a 1948 tax burden record even with the change due to be announced by Mr Hunt.

The National Insurance cut is likely to be paid for with tax rises and around £3billion of public spending cuts.

Mr Hunt will tell councils they have until July to submit new productivity plans, including proposals to use technology to improve services and reduce “unnecessary” spending on consultants as well as equality and diversity initiatives.

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Live The world is laughing at us, says Trump in attack on Biden

Donald Trump said “the world is laughing at us” as he painted a picture of America broken by years of Joe Biden in the White House.

In a victory speech after crushing his rival Nikki Haley in Super Tuesday primaries, Mr Trump attacked his successor’s handling of the economy, crime, and his attempts to secure the southern border.

He told supporters at his Mar-a-Lago resort: “Our cities are being overrun with migrant crime and that’s Biden migrant crime.

“They’ll stand in the middle of the street and have fistfights with police officers…The world is laughing at us. The world is taking advantage of us.”

Mr Trump did not mention Ms Haley once in his speech. But he labelled Mr Biden the “worst president in the history of our country” and claimed that inflation was “destroying the middle class”.

During his time in office, the former president added, there was “no inflation” and the US had “the safest border in the history of our country” thanks to hundreds of miles of wall he claimed to have built.

Mr Trump has so far won 10 Super Tuesday states, but was denied a clean sweep when Ms Haley took a narrow victory in Vermont.

Follow below for the latest updates, and join the conversation in the comments below.

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Michael Sheen’s controversial drama becomes one of BBC’s biggest flops

A Michael Sheen drama which imagined civil uprising in Wales over the future of the Port Talbot steelworks has become one of the BBC’s biggest flops.

Only 697,000 viewers watched the third and final episode of The Way, which was hailed by the corporation as “ambitious, powerful and surprising”.

It is believed to be the lowest ever rating for a prime time BBC One drama finale.

In Monday’s 9pm slot, The Way was trounced by the launch of Celebrity Big Brother on ITV, which drew an audience of 2.3 million.

It was also beaten by The Push: Murder on the Cliff on Channel 4 (992,000 viewers), Inside the Force: 24/7 on Channel 5 (939,000) and a repeat of Inside Our Autistic Minds on BBC Two (768,000), according to overnight figures from Broadcast.

The BBC said that audience behaviour had changed and many people would have watched the series on-demand on iPlayer, rather than in the 9pm slot.

A spokesman for the broadcaster said: “The Way has been available to view in full on BBC iPlayer for more than a fortnight. Overnight ratings no longer provide a full picture of all of those who have watched in an on-demand world.”

However, The Way launched with only 1.7 million viewers, below the average for the slot. Other dramas available as on-demand box sets have fared much better: ITV’s Mr Bates vs the Post Office was a ratings hit with a launch audience of 3.9 million in January and added millions more via catch-up.

The Way is a mix of thriller, Welsh mythology and documentary-style imagery, written by James Graham and co-created by Adam Curtis, the cult documentary film-maker.

Lindsay Salt, the BBC’s director of drama, told an industry gathering last month that the broadcaster should “take the risks others won’t” in its programming-making and deliver dramas that “push the boundaries and venture into the creative unknown”.

Sheen directed the drama and appears as the ghost of a steelworker. The drama imagines a brutal government crackdown in Wales – borders are closed and anyone wanting to cross into England must make a perilous journey as a refugee.

Although it had been in the making for several years, its broadcast coincided with the real-life news that Tata Steel is to push ahead with plans to close its blast furnaces in Port Talbot, with the expected loss of 3,000 jobs.

The drama attracted criticism from politicians after Sheen, who lives close to the town, said in a promotional interview that “the people of Port Talbot have been let down”.

Kemi Badenoch, the Business Secretary, wrote a newspaper article in response headlined: “Whatever Michael Sheen says, the truth is we’re pouring millions in to save steel jobs in Britain.”

Sheen told The Times ahead of The Way’s broadcast that timing was an “unfortunate coincidence” but that the fictional story “has come bizarrely very close to the truth. In no way is this a blueprint to how people should react, but you don’t know, do you?”

In the drama, uncertainty over the future of the foreign-owned steelworks leads to a strike. Soon, civil unrest has spread throughout Wales and the government puts the army on the streets.

Sheen said: “We wanted to get this out quickly. The concern was that if it was too close to an election, the BBC would get nervous.”

Only two BBC One dramas have recorded lower ratings in the 9pm slot: an episode of 2021 series The Pact in 2021 (663,000 viewers) and last year’s The Following Events Are Based On a Pack of Lies (645,000). Audiences for both rose for the final episodes, while The Way’s audience fell.

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‘Scandalous’ pothole repair lasts only nine days before crumbling

A pothole repair lasted only nine days before it crumbled, a council has admitted.

Pete Munro, a plumber and resident of Three Oaks, in East Sussex, took a picture of the freshly Tarmacked surface soon after council contractors had filled in the pothole.

As an experiment, he went back to the spot two days later to take a comparative picture – which showed that large cracks had already started to appear.

The 49-year-old returned again three days later to find even more cracks and a small hole in the repair. On his final visit, nine days after the job was completed, he found the hole had deteriorated and reported it for repair again.

Mr Munro said the episode was an indictment of the state of Britain’s broken and neglected roads.

Last month, the RAC revealed that local council road maintenance in England dropped by 45 per cent last year compared with five years ago.

There were almost 630,000 potholes reported to local authorities across the country, costing drivers as much as £500 million in repair bills.

Residents called the repair job “scandalous” and accused council officials of “pouring taxpayers’ money down a bottomless pothole”.

Mr Munro said he often walks around the village to look for potholes to report to East Sussex county council. On his last visit, he counted 19 that needed logging.

He said: “Ironically, the pothole on Moor Lane I took photos of was not on that list. I saw some contractors repairing this pothole. It took them less than a minute to do.

“A couple of hours after they left, I went and took a picture. At that moment I thought this would be a good opportunity to see how long the repairs last for. I just had a feeling this one wasn’t going to last long.

“It’s a shambles. They can’t be repairing potholes properly because they are failing so quickly, and the contractors have to go back and fill them in again. They are chasing their tails. It’s no wonder why there are so many potholes in our roads.”

Mr Munro posted his photos on social media and wrote: “This is a permanent pothole repair between Three Oaks and Westfield. We will never have safe roads while ESCC [East Sussex county council] allows our roads to be repaired like this.”

In reply, Guy Harris, from nearby Rye, wrote: “This is a powerful commentary. It’s a painful display of our money being poured into a bottomless pothole.”

A spokesman for East Sussex county council’s highways department said: “We are aware of the failed repair on Moor Lane, which was identified through our regular quality inspections. Whilst it is regrettable that this pothole repair has failed, we have instructed our contractor to return and carry out a more substantial repair.”

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Hotel shampoo bottles and restaurant sauce sachets to be banned as part of EU green drive

Sachets of sauce and small bottles of shampoo will be banned from European restaurants and hotels after a deal was struck to ban single-use plastics in the EU.

Belgium, negotiating on behalf of EU member states, reached provisional agreement with the European Parliament on the law to cut packaging waste late on Monday.

Negotiators agreed on packaging waste reduction targets of 5 per cent by 2030, and 15 per cent by 2040, with a commitment that all packaging should be recyclable by 2030.

They also agreed that empty space should make up no more than half of packaged goods, a move intended to stop the use of oversized boxes for online deliveries.

From Jan 1 2030, mini shampoo bottles will not be allowed in hotels and neither will plastic shrink wrap around suitcases in airports.

Restaurants will be banned from offering sauces such as ketchup and mayonnaise in plastic sachets, unless they are takeaways.

‘Forever chemicals’ to be prohibited

The ban will also apply to single-use plastic items such as disposable plates, cups and boxes used by fast food restaurants, and lightweight bags, such as those offered in markets for groceries.

There will also be a ban on “forever chemicals” (per- and polyfluorinated alkyl substances or PFASs) in food contact packaging.

The deal comes after the European Commission called for a revamp of packaging rules in 2022. Packaging waste has grown by more than 20 per cent in the EU over the last decade and each European generates almost 419lb of packaging waste per year.

The targets will not apply to very small businesses.

But the agreement still needs approval from the European Parliament and EU governments, and that is not guaranteed as EU green rules come under increasing pressure from Right-wing parties.

Conservative forces have argued they are too burdensome during the cost of living crisis.

A UK ban on some single-use plastics came into force in October last year. It banned, among other items, single-use plastic cutlery, balloon sticks, polystyrene cups and food containers in England. As things stand, the EU ban goes further and covers more items.

European legislation will apply in Northern Ireland

The European legislation will apply in Northern Ireland, which continues to follow more than 300 EU rules as part of post-Brexit trading arrangements, unless a majority in Stormont attempts to block it.

“The UK does have some single-use plastic bans in place but overall progress is slower than the EU,” said Paula Chin, senior policy adviser at WWF UK.

“We want to see more ambitious legislation to drive greater waste prevention through eco-design and enabling reuse and refill systems for many packaged products.”

A Defra spokesman said the UK had introduced one of the world’s toughest bans on microbeads and a plastic packaging tax, as well as “far reaching bans and restrictions on polluting single-use plastics, including cutlery, balloon sticks, polystyrene cups and food containers”.

“We continue to work with industry and international partners to tackle plastic pollution and meet our environmental targets,” he said.

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Dan Wootton quits GB News to launch independent show

Dan Wootton, the TV presenter, has left GB News to launch his own independent platform, he has said.

Wootton, 40, announced on X, formerly Twitter, that he was quitting the channel in the wake of a “chilling” Ofcom report, released on Monday, which found that Laurence Fox’s misogynistic comments on his show broke broadcasting rules.

Fox asked: “Who would want to shag that?” about journalist Ava Evans on the channel’s Dan Wootton Tonight show during an episode on Sept 26.

Fox and Wootton, who both later apologised, were suspended by the channel after the broadcast, which received 8,867 complaints. Fox was later sacked by GB News.

Wootton said in his statement: “I have left GB News to launch my own independent Outspoken platform which will, from later this year, feature a brand new daily news and opinion show that will NOT be regulated by Ofcommunist censors.”

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The clues that could point to a May general election

Does Jonathan Ashworth know something that Tory MPs don’t? On Tuesday, Labour’s shadow paymaster general bet Kay Burley, the Sky News presenter, £10 that the general election will be in May.

He said the Conservatives were “planning for that” – and he is not alone in believing that Rishi Sunak has been bluffing with his references to an autumn election.

Jeremy Hunt’s Budget speech on Wednesday might well ramp up speculation of an early election still further if he drops any hints about changing fiscal rules in a future manifesto.

Those who read the tea leaves in Westminster have already seen clues this week that a May election might be on the cards.

On Monday, it emerged that March 13 has been set aside for the legislation that would be needed for a National Insurance cut. Parliamentary timetablers have been told that the entire Bill must be passed in one day, suggesting that someone is in a hurry.

Add to this the fact that the Government wants to pass its landmark Rwanda Bill this month, possibly in the week starting March 18.

If it got the Rwanda Bill through Parliament by the end of that week, there would still be time – just – to announce a general election to be held on May 2, the same day as the local elections, dissolve Parliament and still have a clear 25 working days for the election campaign.

Plans for a May election would certainly help to explain why the Treasury has been so relaxed about giving away what will surely be the biggest announcement in Wednesday’s Budget, a 2p cut to National Insurance.

In the run-up to most budgets, the Treasury plays a cat and mouse game with news organisations, with journalists desperately trying to find out what the Chancellor is planning while the Treasury leaks a few smaller policies in order to control the news agenda.

One of the unwritten rules is that the Treasury tends not to pre-announce or confirm its biggest moves in order to maintain an element of anticipation, and keeps back at least one “rabbit in the hat” to grab public attention on the day itself.

In confirming that the Chancellor will announce the 2p National Insurance cut on Wednesday, the Treasury seems to have surrendered any element of surprise and in doing so dampened Mr Hunt’s squib.

It is, of course, possible that he will still surprise us all with an unexpected tax cut elsewhere – to stamp duty or inheritance tax, perhaps – which would explain the Treasury’s laid-back attitude to confirming the NI cut a day early (though there appears to be little to no room in Treasury coffers for any other major cuts).

But what if the rabbit in the hat is a nod and a wink of an early election?

Part of the reason Mr Hunt is so constrained when it comes to tax-cutting is that he will need to satisfy the Office for Budget Responsibility that he can balance the books. Just ask Liz Truss and Kwasi Kwarteng what happens if you try to leave the OBR out of the equation.

Tory MPs are complaining that the unelected OBR, rather than the Chancellor, now writes the Budget. Any suggestion from Mr Hunt that the Tories might pledge to reform or replace the OBR in a future manifesto would only increase speculation of an election around the corner.

Cooler heads will make the point that an early March Budget, rather than pointing to an early election, leaves the option of fitting in a mini-Budget later in the year before an autumn election.

There are also huge logistical problems in trying to call an election for May. For example, the selection process for Conservative candidates in some seats has not even been advertised yet, let alone begun, meaning that it would have to be rushed through.

Is it possible that could happen? Mr Ashworth clearly thinks so.

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