Tag: Treasury

The press release issued by HM Treasury on 12 December 2024.

What is a Spending Review?

A Spending Review is the process the government uses to set all departments’ budgets for future years. This covers both the services the public uses every day, like the NHS, schools and transport, and how the government will invest in research, energy security and infrastructure to drive economic growth across the country.

In the same way that households budget what they spend, the government does this with public money. This is to ensure it is spent effectively.

How does the government spend money?

The total amount the government spends is known as Total Managed Expenditure (TME). This is made up of:

• Spending by departments – this is the amount that government departments have been allocated by the Treasury to spend each year and is known as Departmental Expenditure Limits (DEL).
• Money spent on things that are harder to plan for, usually because demand for them varies, so budgets are not fixed in advance. This includes welfare, pensions and debt interest payments. This is known as Annually Managed Expenditure (AME). The level of AME spending in the future is forecast by the Office for Budget Responsibility.

DEL budgets are split into two additional categories:

• Resource spending – which covers what the government spends on its day-to-day running and administration costs. These are generally goods and services, like nurses’ pay or medicines.
• Capital spending – which is funding for investment to improve the UK’s infrastructure and public services. For example, new roads, hospitals and military equipment.

What is the Spending Review process?

The Chancellor of the Exchequer and Chief Secretary to the Treasury lead the Spending Review.

First, the government identifies key priorities for all departments, which includes the key outcomes that public services should deliver.

All departments are then asked to submit their budget requests to the Chief Secretary to the Treasury, detailing how much money they will need and how it will be used. Collaboration across government is key to ensuring this process runs smoothly and everyone understands how budget requests across different departments will help deliver the government’s priorities.

The Chief Secretary and Treasury officials review these requests, assess how they align with the government’s priorities and make sure they offer good value for money for the taxpayer, working together with departments to understand the requests. The Chief Secretary then meets with Secretaries of State to discuss and agree a final budget, including how it will be spent and what outcomes it should deliver.

The government often uses a Spending Review to set budgets for several years. At Autumn Budget 2024, the government committed to setting resource budgets for three years and capital budgets for five years, with reviews every two years. This will enable better financial planning and help achieve value for money.

The Chancellor of the Exchequer then approves and allocates final budgets to each department.

What is happening in the current Spending Review?

Spending Review 2025 is taking place in two phases.

At the Autumn Budget on 30 October 2024, the Chancellor set out the outcome of Phase 1 of the Spending Review, which confirmed departmental budgets for 2024-25 and set budgets for 2025-26. She also announced the total level of funding planned for Phase 2 (‘the envelope’), which will conclude and be published in late spring of 2025.

Phase 2 will prioritise delivering the government’s missions. As part of this departments will be expected to make better use of technology and seek to reform public services, to support delivery of the government’s plans for a decade of national renewal.

The press release issued by HM Treasury on 12 December 2024.

Chancellor of the Exchequer launches second phase of the Spending Review.

Government departments will be expected to find savings and efficiencies in their budgets, in a push to drive out waste in the public sector and ensure all funding is focused on the government’s priorities.

Every single pound the government spends will be subjected to a line-by-line review to make sure it’s being spent to deliver the Plan for Change and that it is value for money, as the Chancellor Rachel Reeves today (Tuesday 10 December) launches the next round of government spending.

It will be the first time in over a decade and a half that government departments have been asked to take such an approach, with what’s called a “zero-based review” last undertaken 17 years ago.

Reeves will today begin her work with government departments and reiterate that they cannot operate in a business-as-usual way when reviewing their budgets for the coming years, as the new government continues to fix the foundations after inheriting a £22bn black hole, alongside crumbling public services and damaged public finances.

Secretaries of State across government will need to allocate their budgets to ensure that government spending is focused on the Prime Minister’s Plan for Change, and that every pound of taxpayers’ money is spent well. The Chancellor will work with departments to prioritise spending that supports the milestones to deliver the Plan. This includes boosting growth to put more money in working people’s pockets, fixing the NHS, creating safer streets, making Britain a clean energy super-power and giving every child the best start in life while strengthening our borders, national security and the economy.

Chancellor of the Exchequer Rachel Reeves said:

By totally rewiring how the government spends money we will be able to deliver our Plan for Change and focus on what matters for working people. The previous government allowed millions of pounds of taxpayers’ money to go to waste on poor value for money projects. We will not tolerate it; I said I would have an iron grip on the public finances and that means taking an iron fist against waste.

By reforming our public services, we will ensure they are up to scratch for modern day demands, saving money and delivering better services for people across the country. That’s why we will inspect every pound of government spend, so that it goes to the right places and we put an end to all waste.

The Prime Minister has been clear that public services must reform if they are to be put on a sustainable footing in the long-term, so that outcomes can be improved for people who depend on services every day. Today’s announcement builds on the Chancellor of the Duchy of Lancaster yesterday launching a £100 million fund to pioneer public service reform and deliver the Government’s Plan for Change, by deploying new test-and-learn teams into public services across the country. They will be empowered to experiment and innovate to fix the public sector’s biggest challenges, working towards the Government’s ambitious and far-reaching reform programme that will seek to break down Whitehall silos and galvanise government as it seeks to deliver the Plan for Change.

Departments will ensure budgets are scrutinised by challenge panels of external experts including former senior management of Lloyd’s Banking Group, Barclays Bank and the Co-operative Group. Panels will bring an independent view to what government spend is or isn’t necessary, with a mixture of expertise from local delivery partners, think tanks, academic experts and private sector backgrounds.

In letters sent by the Chief Secretary to the Treasury, departments will be advised that where spending is not contributing to a priority, it should be stopped. Although some of these decisions will be difficult, the Chancellor is clear that the public must have trust in the government that it is rooting out waste and that their taxes are being spent on their priorities.

Work has already begun on evaluating poor value for money spend, with an evaluation into the £6.5m spent on Social Workers in Schools programme, which placed social workers in schools, finding no evidence of positive impact on social care outcomes, meaning the intervention was not considered cost-effective. The Government has made clear it will not shy away from taking the difficult decisions needed to fix the foundations, as shown by the Chancellor’s decisions at the Budget to balance the books.

Departments will be expected to work closely together to identify how their work contributes to the Government’s missions, meeting in mission clusters throughout the process to agree priorities and links.

Throughout this process, the ideas, expertise and innovation of the private sector will be sought out and brought right into the heart of government. An online portal has been launched to give businesses the opportunity to put forward policy proposals for the Spending Review, including on how government can deliver public services more efficiently or effectively. These representations will be collated and shared with departments for consideration in their submissions.

The press release issued by HM Treasury on 14 November 2024.

Chancellor to announce package of reforms to ensure the UK’s status as a global powerhouse for financial services in her first Mansion House speech.

The Chancellor will announce a package of reforms to drive growth and competitiveness in financial services, as she argues that regulatory changes to eliminate risk after the financial crisis have ‘gone too far’ and led to unintended consequences.

In her first Mansion House speech as Chancellor, Rachel Reeves will say that the UK’s status as a global financial centre cannot be taken for granted.

She will argue that, while the UK will always uphold high standards, a system has been created which seeks to eliminate risk taking and holds back economic growth. “The UK has been regulating for risk, but not regulating for growth,” she will say.

The Chancellor will outline a plan to rebalance the system, setting the financial services sector up to innovate, grow and seize the opportunities for investment in businesses, infrastructure and clean energy across Britain.

This will include setting new growth-focused remits for financial service regulators, the publication next year of the first ever Financial Services Growth and Competitiveness Strategy and creating pension mega funds to boost investment so that ordinary people benefit from growth.

Speaking in the City of London, the Chancellor of the Exchequer Rachel Reeves will say:

Before we came into government, I was clear that the financial services sector must play a central part in our economic vision and our plan for economic growth.

Because I know that this sector is the crown jewel in our economy. It employs 1.2m people, from London to Edinburgh, and from Manchester to Belfast. It is one of the country’s largest and most productive sectors, accounting for 9% of our economic output.

And it is a global success story: we are the second largest exporter of financial services in the G7.

But we cannot take the UK’s status as a global financial centre for granted. In a highly competitive world we need to earn that status and we need to work to keep it.

She will add:

While it was right that successive governments made regulatory changes after the Global Financial Crisis, to ensure that regulation kept pace with the global economy of the time, it is important that we learn the lessons of the past.

These changes have resulted in a system which sought to eliminate risk taking. That has gone too far and, in places, it has had unintended consequences which we must now address.

She will conclude by saying:

The changes I have set out today will drive growth and competitiveness through investment and through reform.

A long-term strategy to harness the strengths of the financial services sector: making the UK a global leader in sustainable finance, developing the right approach to redress to reduce uncertainty, reinvigorating our capital markets by unlocking private investment through our pension funds, and reforming our approach to regulation to make it more dynamic and more competitive.

Taken together, these measures represent the most pro-growth financial services package since the financial crisis.

Reform to unlock innovation and growth

While the UK’s regulatory model for financial services is respected around the world, reform is needed to unlock innovation, drive more investment and deliver sustainable economic growth.

High regulatory standards will be maintained but parts of the regulatory system will be rebalanced to drive economic growth and competitiveness. The Chancellor has written to the Financial Conduct Authority, Prudential Regulation Committee, Financial Policy Committee and Payment Systems Regulator to ensure a greater focus on supporting economic growth.

The Financial Ombudsman Service framework will also be modernised so that it continues to play a vital role for consumers to get redress while giving clearer expectations around its decisions for consumers and for financial services firms.

The government will also consult on replacing the current Certification Regime, which applies to staff below senior management level, with a more proportionate approach that reduces costs so that businesses are freed up to focus on growth.

To combat the scourge of fraud that cost UK consumers almost £8.3 billion last year alone and steals money away from investment and lending by the financial services sector, a coordinated effort across sectors, law enforcement and government is needed. The Chancellor, Home Secretary and Secretary of State for Science, Innovation and Technology have therefore written to the tech and telecommunication sectors calling for them to go further and faster in reducing the scale of fraud taking place on their platforms and networks – with an update on progress requested by March 2025 ahead of an expanded fraud strategy.

Further action is being taken to drive innovation in payments with the publication of a National Payments Vision, and reinvigorate the UK’s capital markets by committing to legislate to establish PISCES by May 2025 – a world-first regulated market for trading private company shares where transfers will be exempted from stamp duty taxes on shares.

The government is launching a pilot to deliver a Digital Gilt Instrument, using distributed ledger technology (DLT), demonstrating the government’s commitment to innovation in the financial services sector.

The government is also consulting on introducing a new framework for UK-based captive insurance companies to make the UK insurance market a more attractive hub for businesses seeking efficient risk solutions.

Stability – confidence to invest

Building on the Budget – which fixed the foundations of the economy by repairing the public finances and bolstered economic and fiscal stability – the Chancellor will set out a clear path for growth in the financial services sector.

The government will publish the first ever Financial Services Growth and Competitiveness Strategy in the Spring to deliver long-term certainty and cement the sector’s place at the heart of the government’s 10-year modern Industrial Strategy.

The government will propose focusing on five priority growth opportunities in financial services to take advantage of the UK’s existing strengths and maximise the potential for growth.

These will be FinTech, sustainable finance, asset management and wholesale services, insurance and reinsurance, and capital markets. A Call for Evidence will be published alongside the announcement to ensure that industry voices are at the heart of designing the new Strategy.

The Strategy will reflect the fact that the success of the financial services sector is built on strong ties with international partners. This means strengthening partnerships with established and fast-growing financial centres will be a cornerstone of the government’s approach to financial services: critical to attracting foreign investment and delivering economic benefits for the UK.

Investment through financial services

To deliver more investment in businesses, infrastructure and clean energy, the Chancellor will also announce bold reforms to the pension system and lay the foundations for a world-leading sustainable finance regulatory regime.

Two consultations will be published ahead of the Pension Schemes Bill in the Spring to merge defined contribution pension schemes and the Local Government Pension Scheme in England and Wales into megafunds – mirroring the pensions landscape in Australia and Canada. This, along with reforms to ensure better value from these pension schemes, could unlock around £80 billion new investment in businesses and infrastructure, while boosting savers’ pension pots.

The Chancellor will announce that the British Growth Partnership has secured the support of two UK pension funds for its future launch. Aegon UK – as a substantial cornerstone investor – and NatWest Cushon, who have combined assets worth over £219 billion, have both agreed to work with the British Business Bank with a view to investing in the UK growth companies of the future, subject to commercial and regulatory steps and, where appropriate, agreement from the Trustees. She is also expected to announce that, alongside Phoenix Group, the British Business Bank has completed its LIFTS investment in Schroders Capital, to create a new £500 million investment vehicle to invest in UK science and technology. The government expects 20% of the LIFTS capital to be invested into life sciences.

The Chancellor will also set out plans to mobilise trillions of pounds of private capital to support clean energy and growth as part of the UK’s efforts to reclaims its position as a global leader in climate change. This follows action at the International Investment Summit and Budget to unlock investment, including £27.8 billion of capitalisation for the National Wealth Fund, which is expected to mobilise over £70 billion of private investment.

To deliver a world-leading sustainable finance framework, the Treasury will publish draft legislation to boost investor confidence in sustainable companies by regulating ESG ratings providers, publish a consultation on the value case for a UK Green Taxonomy, commit to consult on economically significant companies disclosing information using future UK Sustainability Reporting Standards and launch a set of integrity principles for voluntary carbon and nature markets ahead of a consultation in the new year.

To underpin continued UK leadership on transition finance, the government is delivering one of the key recommendations of the Transition Finance Market Review by co-launching the Transition Finance Council with the City of London Corporation. The government will also consult in the first half of next year on how best to take forward the manifesto commitment on transition plans in support of its ambition to become the global hub for transition finance –  ensuring the UK’s regulatory framework is growth-focused, internationally competitive and maintains the UK’s status as a global financial hub. It has also emphasised the transition to net zero in the government’s economic strategy within the remit of the Bank of England’s Monetary Policy Committee, and reinstated sustainable finance as an area the Financial Policy Committee should support as part of its secondary objective.

These announcements come alongside COP29’s ‘Finance, Investment, and Trade Day’ currently underway in Baku, Azerbaijan. Representing HM Treasury at COP29, Growth Minister Lord Spencer Livermore laid out the UK’s commitment to making the UK the sustainable finance capital of the world, mobilise climate finance from a range of sources and reform the global financial system so it delivers better on climate change.

The government recognises the invaluable role of the mutual and co-operative sector in driving inclusive growth across the UK. It is therefore announcing a package to help unlock the full potential of the sector. This includes publishing a call for evidence on reform to credit union common bonds in Great Britain, writing to the Financial Conduct Authority and Prudential Regulation Authority asking them to produce a report on the mutuals landscape in 2025, and welcoming the establishment of an industry-led Mutual and Co-operative Business Council.

The government has already laid legislation to support modernisations to the Building Societies Act 1986 and continued funding the Law Commission to conduct reviews considering how the laws governing co-operatives, community benefit societies, mutual insurers, and friendly societies can be modernised.

The Chancellor will also announce an upcoming Financial Conduct Authority consultation to help households make better-informed decisions about their finances, as part of the government and regulator’s joint Advice Guidance Boundary Review.

Stakeholder reaction to the Chancellor’s Mansion House package

David Postings, Chief Executive of UK Finance said:

The Chancellor has set out a positive vision for financial services, which are a UK success story and vital to our economy. I strongly welcome her support for the sector, coupled with the fact that she is addressing how we can best balance risk and consumer protection to help support economic growth. Key to this is the regulatory environment, with the new remit letters rightly stressing the importance of growth and competitiveness in regulators’ work. The Chancellor has listened to industry and is delivering across a range of areas we have called for action on, including a digital gilt, tackling payment fraud, reforming the Financial Ombudsman Service, supporting green finance, and the National Payments Vision. I look forward to continuing to work closely with her and the government to ensure the UK retains a strong and globally competitive financial services sector.

BVCA Chief Executive Michael Moore said:

The private capital industry warmly welcomes the decisive action taken by government to reform our pensions system to boost investment and deliver growth to the UK economy.

Creating greater opportunity for investment by pension funds into private capital could have a transformational impact on the UK’s most promising businesses whilst delivering strong returns for pension savers.

Richard Oldfield, Group CEO Schroders said:

We have all the building blocks we need to generate growth in the UK. We have great, innovative companies; we have the capital, and we have the expertise and a world class capital market to link the two. What we need now is an injection of optimism and a healthier attitude to taking risk in the pursuit of reward. It is great to see the government putting sensible risk taking back at the centre of our economy. Whether that’s on green finance, infrastructure, science or tech; firms like Schroders working in partnership with pension schemes, regulators and the government can unlock the potential of the UK for the benefit of all of us.

James Alexander, CEO, UKSIF said:

We welcome the new Chancellor’s prioritisation of sustainable finance in her first Mansion House speech. We are pleased to see this ambitious suite of measures including further progress on transition plans, harmonisation with international standards, and carbon market integrity. If delivered, these measures could position the UK as a world-leading centre for sustainable finance.

The press release issued by HM Treasury on 13 November 2024.

Biggest pension reforms in decades will merge Local Government Pension Scheme assets and consolidate defined contribution schemes into megafunds.

Pension megafunds will be created as part of the biggest set of pension reforms in decades, unlocking billions of pounds of investment in exciting new businesses and infrastructure and local projects.

After her inaugural Budget that fixed the foundations to deliver stability, Rachel Reeves will use her first Mansion House speech as Chancellor to announce bold action to tackle the fragmented pensions landscape, deliver investment and drive economic growth – which is the only way to make people better off.

The radical reforms, which will be introduced through a new Pension Schemes Bill next year, will create megafunds through consolidating defined contribution schemes and pooling assets from the 86 separate Local Government Pension Scheme authorities.

These megafunds mirror set-ups in Australia and Canada, where pension funds take advantage of size to invest in assets that have higher growth potential, which could deliver around £80 billion of investment in exciting new businesses and critical infrastructure while boosting defined contribution savers’ pension pots.

Chancellor of the Exchequer, Rachel Reeves said:

Last month’s Budget fixed the foundations to restore economic stability and put our public services on a firmer footing. Now we’re going for growth.

That starts with the biggest set of reforms to the pensions market in decades to unlock tens of billions of pounds of investment in business and infrastructure, boost people’s savings in retirement and drive economic growth so we can make every part of Britain better off.

Deputy Prime Minister, Angela Rayner said:

We’ve all seen the fantastic work carried out day in, day out, by our frontline workers and it’s about time their pension started working just as hard by driving investment in their communities.

This is about harnessing the untapped potential of the pensions belonging to millions of people, and using it as a force for good in boosting our economy.

Pensions Minister, Emma Reynolds said:

Harnessing the power of this multi-billion-pound industry is a win-win, benefiting future pensioners, and our wider economy.

These reforms could unlock £80 billion of investment into exciting new businesses and critical infrastructure.

The UK pension system is one of the largest in the world – with the Local Government Pension Scheme and Defined Contribution market set to manage £1.3 trillion in assets by the end of the decade. However, our pension landscape is fragmented and lacks the size needed to invest in exciting new businesses or expensive projects like infrastructure.

The government’s analysis – published today in the interim report of the Pensions Investment Review at Mansion House – shows that pension funds begin to return much greater productive investment levels once the size of assets they manage reaches between £25-50 billion. At this point they are better placed to invest in a wider range of assets, such as exciting new businesses and expensive infrastructure projects. Even larger pensions funds of greater than £50 billion in assets can harness further benefits including the ability to invest directly in large scale projects such as infrastructure at lower cost.

This is supported by evidence from Canada and Australia. Canada’s pension schemes invest around four times more in infrastructure, while Australia pension schemes invest around three times more in infrastructure and 10 times more in private equity, such as businesses, compared to Defined Contribution schemes in the UK. Benchmarking against domestic and international examples show how consolidation of the Local Government Pension Scheme and defined contribution schemes into megafunds could unlock around £80 billion of investment in productive investments like infrastructure and fast-growing companies.

The government is therefore consulting on proposals to take advantage of pension fund size and improve their governance.

Local Government Pension Scheme

The Local Government Pension Scheme in England and Wales will manage assets worth around £500 billion by 2030. These assets are currently split across 86 different administering authorities, managing assets between £300 million and £30 billion, with local government officials and councillors managing each fund.

Consolidating the assets into a handful of megafunds run by professional fund managers will allow them to invest more in assets like infrastructure, supporting economic growth and local investment on behalf of the 6.7 million public servants – most of whom are low-paid women – whose savings are managed.

These megafunds will need to meet rigorous standards to ensure they deliver for savers, such as needing to be authorised by the Financial Conduct Authority. Governance of the Local Government Pension Scheme will also be overhauled to deliver better value from investment decisions, which independent research suggests could free up money in the long-term to support local public services.

Local economies will be boosted by the changes as each Administering Authority will be required to specify a target for the pool’s investment in their local economy, working in partnership with Local and Mayoral Combined Authorities to identify the best opportunities to support local growth. If each Administering Authority were to set a 5% target, that would secure £20 billion of investment in local communities.

A new independent review process will be established to ensure each of the 86 Administering Authorities is fit for purpose.

Defined contribution schemes

Defined contribution pension schemes are set to manage £800 billion worth of assets by the end of the decade.

There are currently around 60 different multi-employer schemes, each investing savers’ money into one or more funds. The Government will consult on setting a minimum size requirement for these funds to ensure they deliver on their investment potential.

The government will also consult on measures to facilitate this consolidation into megafunds, including legislating to allow fund managers to more easily move savers from underperforming schemes to ones that deliver higher returns for them.

The press release issued by HM Treasury on 13 November 2024.

Legislation has today been introduced to allow government, for the first time, to permanently cut business rates for retail, hospitality and leisure properties.

Draft legislation has today been published to, for the first time, permanently cut business rates for retail hospitality and leisure properties from 2026.

High streets across the UK will benefit from business rates for retail, hospitality and leisure properties being permanently cut for the first time from 2026, following the introduction of legislation in Parliament today.

This begins the delivery of the government’s promise to reform business rates and help the high street.

The tax cut will be funded by a tax rise for the very largest business properties, such as online sales warehouses.

Until then, 250,000 retail, hospitality and leisure (RHL) properties will receive 40% relief off their business rates bills up to £110,000 per business to help smooth the transition to the new system. This support is alongside the Budget announcement to freeze the small business multiplier, together with Small Business Rates Relief protecting over a million properties from inflationary increases. Taken together, this is a package worth over £1.6 billion in 2025-26.

To further support retailers, the government is today also introducing legislation to increase the Employment Allowance from £5000 to £10,500, meaning 865,000 employers will not pay employer national insurance next year.

James Murray, Exchequer Secretary to the Treasury, said:

For too long the business rates system has been working against our high streets.

Today is a major step towards our new system that will support retail, hospitality and leisure businesses on our high streets to succeed.

This Bill paves the way for a permanent cut to their tax rate, helping to level the playing field between them and online and out-of-town businesses.

The government today is also legislating to increase the Employment Allowance – a discount in National Insurance bills – from £5,000 to £10,500 from April 2025.

The increase to the Employment Allowance will mean that 865,000 employers will not pay any employer National Insurance next year, and 250,000 employers will pay less National Insurance than they are now.

It will allow firms to employ up to four National Living Wage workers full time without paying employer National Insurance on their wages.

The eligibility of the allowance will also be expanded to include all eligible employers, rather than just those with a wage bill of less that £100,000 a year.

Craig Beaumont, Federation of Small Businesses Executive Director, said:

We are pleased to see James Murray and the whole Treasury team take this important step forward today – legislating for the significant increase to the Employment Allowance which FSB strongly championed, to protect smaller businesses with employment costs. But also taking a decisive step forward on business rates reform.

For far too long, permanent business rates reform has been put into the too difficult box. It is extremely encouraging on rates to see Ministers standing up for small firms in retail and hospitality and taking long-term action necessary to the future of our high streets – we look forward to continuing to work in partnership with the new Government to make sure no small businesses whatsoever are blocked from achieving their ambitions by a rates system that has not simply not kept pace with the needs of a modern economy.

This follows important action announced by the Business Secretary to tackle the scourge of late payments and to take forward an Industrial Strategy to unblock the supply side barriers holding small firms back from their full potential.

To calculate a property’s business rates bill, the rateable value of a property is multiplied by the relevant multiplier (tax rate).

Today’s Non-Domestic Rating (Multipliers and Private Schools) Bill means that new permanently lower multipliers for RHL properties can be introduced from 2026. This permanent tax cut will ensure that they benefit from much-needed certainty and support.

This will help the government achieve its goal for a fairer business rates system that protects the high-street and supports investment – one that is fit for the 21st century.

With public services crumbling and a £22 billion fiscal hole to address, ministers have been clear that the new RHL tax rates must be sustainably funded.

This will be achieved by a higher tax rate for the top 1% most valuable properties – those with a rateable value of at least £500,000. Large distribution warehouses, including those used by online giants, will help fund the high street tax cut.

Until 2026, 250,000 RHL premises will see 40% relief off their bills next year up to a cash cap of £110,000 per business.

The new RHL tax rates will provide meaningful support to RHL businesses of all sizes in recognition of the role RHL chains play in attracting footfall to the high-street. A discussion paper has also been published to engage with businesses over the next six months on how to further reform the system outside of retail, hospitality and leisure.

Sebastian James, former CEO of Boots and Dixons Carphone, said:

It is very welcome to see the Government take steps to rebalance the heavy business rates load on bricks and mortar retail and hospitality as businesses, both large and small, in this vital sector seek to mitigate cost pressures in order that our high streets up and down the country can flourish as the centres of their communities.

The National Insurance Contributions Bill which will increase the Employer Allowance, also increases National Insurance for businesses to invest in public services, including to help fund the NHS by an extra £22.6 billion over two years compared to 2023/24, as well as other measures to avoid austerity.  This will support the NHS to deliver its First Step on its Health Mission of 40,000 extra elective appointments a week and make progress towards the commitment that patients should expect to wait no longer than 18 weeks from referral to treatment.

The press release issued by HM Treasury on 3 October 2024.

Banks to be given new powers to protect consumers against scams.

Banks will be given new powers to delay and investigate payments that are suspected of being fraudulent, helping to protect consumers against scammers.

New laws proposed by the Government today will extend the time that payments can be delayed by 72 hours where there are reasonable grounds to suspect a payment is fraudulent and more time is needed for the bank to investigate.

This will give banks more time to break the spell woven by fraudsters over their victims and tackle the estimated £460 million lost to fraud last year alone.

Economic Secretary to the Treasury, Tulip Siddiq said:

Hundreds of millions of pounds are lost to scammers each year, targeting vulnerable communities and ruining the lives of ordinary people.

We need to protect these people better, which is why we are giving banks more time to investigate suspicious payments and break the criminal spell that scammers weave.

Minister of State with Responsibility for Fraud, Lord Sir David Hanson said:

Fraud is a crime that can devastate lives, and anyone can be affected.

That’s why measures like this are so crucial to provide banks the investigative powers they need to better protect customers from this appalling crime.

Fraud accounts for over a third of all crime perpetrated in England and Wales, making it the most prevalent form of crime commitment in the country. This has been driven by a growing number of purchase scams and the emergence of so-called ‘romance scams’, where victims target vulnerable people and trick them into transferring large amounts of money by pretending to be interested in a romantic relationship.

The new rules will help protect people against these types of scams by allowing banks up to an additional 72 hours to investigate suspicious payments. Currently banks must either process or refuse a payment by the end of the next business day.

Which? Director of Policy and Advocacy, Rocio Concha said:

This is a positive step in the fight against fraud. While it should not affect the vast majority of everyday payments, it’s important that banks can delay a bank transfer and take action if they think a customer is being targeted by a scam.

These measures should be used in a careful and targeted way. Financial firms of all sizes should also ensure they share intelligence and work with the police and other authorities to shut down accounts used for fraud and pursue the criminals behind them.

UK Finance Managing Director of Economic Crime, Ben Donaldson said:

UK Finance has long called for firms to be allowed to delay payments in high-risk cases where fraud is suspected, and we are delighted to see proposed new laws supporting this.

This could allow payment service providers time to get in touch with customers and give them the advice and support they need to avoid being coerced by the criminals who want to steal their money. This could potentially limit the psychological harms that these awful crimes can cause and stop money getting into the hands of criminals.

Banks who have reasonable grounds to suspect a payment is fraudulent will need to inform customers when a payment is being delayed. They will also need to explain what the customer needs to do in order to unblock the payment.

The need for evidence to trigger a delay will help protect people and businesses from unnecessary payment delays. Banks will also be required to compensate customers for any interest or late payment fees they incur as a result of delays.

The press release issued by HM Treasury on 30 September 2024.

Government sends remit letters to independent Pay Review Bodies, launching 2025/26 pay award process.

In writing to the independent Pay Award Bodies, the Government has today formally launched the 25/26 pay process for the Armed Forces, NHS workers, teachers, police officers, prison service staff, the NCA and senior public sector staff.

These bodies, made up of experts from across these areas, will now go on to collect evidence to inform their independent pay award recommendations. These will then be submitted for the Government to formally respond to.

By bringing forward the pay round this year, the Government plans to fully reset the timeline by the 2026/27 round.

The Government has now sent remit letters to the below independent Pay Review Bodies, which is the standard method for launching the 2025/26 pay award process:

Armed Forces’ Pay Review Body (AFPRB)
National Crime Agency Remuneration Review Body (NCARRB)
NHS Pay Review Body (NHSPRB)
Police Remuneration Review Body (PRRB)
Prison Service Pay Review Body (PSPRB)
Review Body on Doctors’ and Dentists’ Remuneration (DDRB)
Review Body on Senior Salaries (SSRB)
School Teachers’ Review Body (STRB)

The press release issued by HM Treasury on 30 September 2024.

HM Treasury has announced today that Nina Hingorani-Crain has been reappointed as a Non-Executive Director to the Board of NS&I (National Savings and Investments), as of 1 November 2024. The reappointment will be for a term of three years.

Non-Executive Directors on NS&I’s Board ensure a sound strategy is in place to meet the organisation’s remit of raising cost-effective debt financing for the government. They also act as an external source of advice, have oversight of risk control, and ensure NS&I’s links with its outsourcing partners remain open and transparent.

NS&I is one of the largest savings organisations in the UK, offering a range of savings and investments. All products offer 100% capital security because NS&I is backed by HM Treasury.

Nina was first appointed as a Non-Executive Director in November 2021. She has held a number of high-profile executive and non-executive roles, including as Chief of Staff and Principal Private Secretary to the Chair of the Financial Services Authority (FSA) during the global financial crisis and as Chief of Staff leading the transition of the FSA into the Financial Conduct Authority, the current financial services regulator. She is currently on the Board of Nest (the workplace pension scheme set up by the UK government), a London mental health and community health NHS Foundation Trust, and the Institute of Chartered Accountants in England and Wales (ICAEW). She has previously served on the Board of the Charity Commission for England & Wales, and the Boards of several other national and regional organisations.

Further information:

The reappointment has been made in accordance with the Code of Practice published by the Commissioner for Public Appointments.

All appointments are made on merit and political activity plays no part in the selection process. However, in accordance with the original Nolan recommendations, there is a requirement for appointees’ political activity (if any declared) to be made public. Nina Hingorani-Crain has confirmed that she has not engaged in any political activity in the last five years.

The press release issued by HM Treasury on 27 September 2024.

OFSI announces monetary penalty for breaches of UK financial sanctions imposed on Russia linked to its illegal invasion of Ukraine.

The Office of Financial Sanctions Implementation (OFSI) has issued a monetary penalty to Integral Concierge Services (ICSL) for breaches of the financial sanctions regime imposed on Russia in response to its illegal invasion of Ukraine in 2022.

The monetary penalty relates to the property management service ICSL provided to a designated person subject to an asset freeze. Between 2022 and 2023, ICSL made or received 26 payments in connection with the services they were providing to the designated person, despite knowing or having reasonable cause to suspect these were in breach of financial sanctions in the UK.

As a result of these breaches, ICSL was given a penalty of £15,000. ICSL did not challenge the penalty and paid in full.

This penalty demonstrates OFSI’s clear commitment to pursuing financial sanctions breaches wherever they occur. From the largest institutions to the smallest, everyone has an obligation to comply with the UK’s financial sanctions regime. OFSI is prepared to utilise the full extent of its legislative powers to pursue those who commit serious breaches of financial sanctions.

This case was not reported to OFSI by the subject of the penalty, resulting instead from a proactive investigation.

FCDO Sanctions Minister Doughty said:

We are firmly committed to enforcing the UK’s financial sanctions regime. We promised this government would act – and we are putting those involved in breaches on notice. Let this be a strong warning to those who fail to comply.

The UK is continuously working to proactively identify breaches and strengthen our enforcement powers. We will continue to close loopholes, come down hard on sanctions evaders, and crack down on sanctions circumvention to ensure the effectiveness of sanctions against Putin’s Russia, and in the case of other sanctions regimes.

The monetary penalty highlights key lessons for industry, particularly firms involved in the property management sector. This case demonstrates the importance of understanding and taking appropriate action to address financial sanctions risks arising from your business model and client base, particularly if they present heightened sanctions risks. Firms should seek professional advice on their sanctions obligations wherever necessary.

Russia is desperate to get around our sanctions and we will not hesitate to take action against those involved in supplying and funding Putin’s war machine. The government is committed to significantly strengthening our sanctions enforcement, and will continue to prioritise sanctions enforcement at every turn. This includes both public actions, such as monetary penalties, and actions which are not made public, such as warning letters and referrals to regulators. Following the introduction of strict civil liability for financial sanctions breaches in June 2022, OFSI is now also able to take action regardless of whether a person knew or had reasonable cause to suspect they would be in breach.

The press release issued by HM Treasury on 24 September 2024.

Thousands of young people could have £2,200 sitting unclaimed in their Child Trust Fund account.

• Young people urged to claim their Child Trust Fund
• £2,200 on average waiting in unclaimed accounts

More than 670,000 18-22 year olds yet to claim their Child Trust Fund are reminded to cash in their stash as HM Revenue and Customs (HMRC) reveals the average savings pot is worth £2,212.

Child Trust Funds are long term, tax-free savings accounts which were set up, with the government depositing £250, for every child born between 1 September 2002 and 2 January 2011. Young people can take control of their Child Trust Fund at 16 and withdraw funds when they turn 18 and the account matures.

The savings are not held by government but are held in banks, building societies or other saving providers. The money stays in the account until it’s withdrawn or re-invested.

If teenagers or their parents and guardians already know who their Child Trust Fund provider is, they can contact them directly. If they do not know where their account is, they can use the online tool on GOV.UK to find out their Child Trust Fund provider. Young people will need their National Insurance number – which can be found easily using the HMRC app –  and their date of birth to access the information.

Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive, said:

Thousands of Child Trust Fund accounts are sitting unclaimed – we want to reunite young people with their money and we’re making the process as simple as possible.

You don’t need to pay anyone to find your Child Trust Fund for you, locate yours today by searching ‘find your Child Trust Fund’ on GOV.UK.

Third-party agents are advertising their services offering to search for Child Trust Funds and agents will always charge – with one charging up to £350 or 25% of the value of the savings account.

Using an agent can significantly reduce the amount received, is likely to take longer and customers still need to supply them with the same information they need to do the search themselves.

Gavin Oldham, The Share Foundation, said:

If you are 18-21 years old, the government would have put money aside for you shortly after birth. This investment would have grown quite a bit and it’s in your name. The Share Foundation has linked over 65,000 young people to their Child Trust Fund accounts. It’s easy and free to find out where your money is. Go to  findCTF.sharefound.org or GOV.UK to locate it today.

In the last year more than 450,000 customers, with just their National Insurance number and date of birth, used the free GOV.UK tool to locate their Child Trust Fund.

More information on Child Trust Funds and how to access your savings can be found on GOV.UK.

Further Information

Latest figures for Child Trust Funds included in the Annual Savings Statistics  were released on 19 September 2024 and include figures up to April 2024.

The Child Trust Fund scheme closed in January 2011 and was replaced with Junior Individual Savings Accounts (ISA).

If a parent or guardian was not able to set up an account for their child, the government opened a savings account on the child’s behalf.