JEFF PRESTRIDGE: Your statement didn’t spur me on, Chancellor; audacity, not pragmatism, should be on the agenda, and sooner rather than later
Smoke and mirrors. That was my first reaction to Chancellor of the Exchequer Rishi Sunak’s spring statement last Wednesday – and it hasn’t changed since, despite much thought.
Of course, it was reassuring to learn that Sunak was planning a basic tax rate cut just in time for the May 2024 general election.
Yes, plan – not guarantee – even if guarantees in politics don’t matter either (remember the 2019 Conservative Party manifesto pledge: “We will not raise the rate of income tax, VAT or national insurance”).
Man with a plan: It was reassuring to hear that Rishi Sunak was planning a basic tax rate cut just in time for the May 2024 general election
And it was good (no, essential) that Sunak cut fuel taxes as petrol prices edge closer and closer to £2 a litre. Still, not having cut would have caused widespread derision. After all, it’s not just the oil giants that have benefited from rising fuel prices, but the government’s own finances.
An increase in the threshold at which national insurance kicks in was also welcome.
So a good mix of action and promise, but nowhere near enough to avert the biggest assault on our finances since the 1950s (I was just a twinkle in my dad’s eye for the first nine years of this decade).
Inflation, now above 6%, continues to climb; energy bills sap the finances of most households; and there is a real possibility that the country has slipped back into recession, putting real pressure on employers and jobs. Unless you’re an executive at a top UK company, any pay rise you get will be far from offsetting the corrosive impact of inflation.
Of course, what Sunak should have done was use the spring declaration to reinstate the manifesto commitment made in 2019 by halting the hike in National Insurance contributions which comes into effect from April 6.
That’s what my esteemed City colleague, Hamish McRae, has been saying for a while – and that’s what many other economic pundits think should happen to stabilize Britain’s economic ship. I’m sure Sunak will have no choice before the end of the year but to offer more than he offered last Wednesday to prevent the economy from freefalling – and with it the government’s chances. to win the 2024 elections.
Boldness, not pragmatism, should be the order of the day. Sooner rather than later.
The closure of a bank branch hinders access to cash
As exclusively revealed in last week’s Personal Finance section, Lloyds and Barclays have become the latest banks to ax their branch networks.
While 60 Lloyds closures may not be a huge number compared to the 1,476 branches the banking group currently operates across its brands (Bank of Scotland, Halifax and Lloyds), it is another sign that the major banks are rapidly withdrawing from the main street. On Friday, Barclays confirmed 13 future closures.
Since cash network provider Link began monitoring closures earlier this year, 180 branches have been cut by NatWest, HSBC, Lloyds, Barclays and Nationwide Mutual. And as sure as day follows night and as long as the robins thrill us with their dawn chorus, more branches will be closed this year – most left to rot and leave an indelible scar on the main streets from the country. For what it’s worth, my best guess is that 800 branches will disappear before the end of the year – with all the big brands announcing even more closures (Lloyds being the front runner).
While these latest closures are damaging to affected communities, it’s good to see that new, informal rules governing the closure of one last city bank appear to be working.
These rules allow Link to recommend that banks collectively fund alternative banking services to fill the void left by the closing of the last bank in town.
So Lloyds’ closing list accompanied confirmation that three new-style banking centers would likely open in Buckingham (Buckinghamshire), Cottingham (East Riding of Yorkshire) and Troon in South Ayrshire.
These will provide basic banking services that all retail and small business customers can use – for example, for check cashing and trade receipts.
Staff from individual banks will also be available on certain days to assist customers with more complex financial matters.
As more branches are cut, leaving communities bankless, banking centers should become the norm, not the exception.
It’s the least the banks should do to preserve the communities they’ve made big profits from – and are now scarring away from.