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Household tax bills to rise on average by £3,000 by 2027, says thinktank

household tax

Household tax bills to rise on average by £3,000 by 2027, says thinktank

Boris Johnson’s government has set a course for a “high-tax, big-state economy” with a budget that will raise household tax bills by £3,000 on average by 2027, according to an analysis by an independent thinktank.

The Resolution Foundation said that despite a spending spree, real wages would fall again next year. The UK is “still in the midst of its weakest decade for pay growth since the 1930s,” it said.

Sunak portrayed the budget as preparing the “high-wage” economy for the “post-Covid” era, as stronger economic forecasts gave him room to increase spending on government departments by £150bn.

However, the Resolution Foundation said real wages would grow by just 2.4% between May 2008 (as the financial crisis hit) and May 2024, compared with 36% real wage growth between May 1992 and May 2008.

The hit to real wages would be caused by rising inflation leading to a “flat recovery for household living standards”, amid surging energy prices and persistent supply chain problems, the thinktank said in analysis published on Thursday morning.

The analysis found the combined impact of the budget policies would increase incomes of the poorest fifth of households by 2.8% by 2025, while incomes for people on middle incomes will fall by 2%, and the highest-earning fifth will fall by 3.1%.

Rachel Reeves, Labour’s shadow chancellor, said Sunak’s lack of action on the cost of living showed he was describing a “parallel universe”.

Sunak told Conservative MPs on Wednesday evening that in future he planned to use “every marginal pound” to lower taxes as the Conservative party’s eyes turn towards a general election in 2023 or 2024.

The thinktank’s analysis showed that tax as a share of the economy will be at its highest level since 1950 by 2026-27.

Torsten Bell, the Resolution Foundation’s chief executive, said: “The chancellor has set out plans for a new high tax, big state economy.

“Higher taxes aren’t a surprise given the UK is combining fiscal conservatism with an ageing society and a slow-growing economy. But it is the end of low-tax conservatism, with the tax take rising by £3,000 per household by the middle of this decade.”

He said the figures did show a boost for the lower paid over the life of the parliament if the temporary, Covid-related £20-a-week uplift in universal credit wasn’t taken into account, but 3.2 million of the 4.4 million families that felt the benefit of pandemic-related welfare increases would be worse off.

The major beneficiary of the spending increases has been the National Health Service, which will have taken up £84bn of the £111bn annual increase in spending controlled by Whitehall by 2024-25.

The spending announced by Sunak will only go part way towards reversing the austerity cuts implemented by the former chancellor George Osborne. The Resolution Foundation found that a third of those cuts will have been reversed by 2025, with work and pensions and transport budgets still down by 40% and 32%.

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Supreme Court Dismisses Suit Challenging Adeleke’s Candidacy

The Supreme Court has affirmed Ademola Adeleke as the authentic candidate of the Peoples Democratic Party, PDP in the just concluded Osun State Governorship Election.

This has laid to rest the suit filed by Dotun Babayemi, a governorship aspirant of the party who sought the invalidation of Adeleke’s victory.

In a judgement delivered by Justice Amina Augie, the five-member panel held that the court lacked jurisdiction to hear the suit after counsel for the appellant, Adebayo Adelodun, withdrew the earlier notice of appeal that was filed within time.

At the resumed hearing, Adelodun, who represented the appellant and Babayemi informed the court that he sought to withdraw the earlier notice of appeal to replace it with the fresh application he filed.

But the panel held that Section 285(11) of the constitution stipulated that an appeal on a pre-election matter must be filed within 14 days from the day of the decision, and that having filed the second appeal out of time, the apex court lacked jurisdiction to entertain the matter.

Justice Augie, therefore, dismissed the appeal for lack of jurisdiction.

Babayemi had asked the court to invalidate the primary election that produced the governor-elect, citing non-compliance with a court order.

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400 Staff To Lose Jobs As BBC Goes Digital

The British Broadcasting Corporation BBC world service has on Thursday disclosed that about 400 of its staff will lose their jobs as part of a cost-cutting programme and move to digital platforms,

The BBC said its international services needed to make savings of £28.5 million ($31 million) as part of wider reductions of £500 million.

In July it detailed plans to merge BBC World News television and its domestic UK equivalent into a single channel to launch in April next year.

BBC World Service currently operates in 40 languages around the world with a weekly audience of some 364 million people.

But the corporation said audience habits were changing and more people were accessing news online, which along with a freeze on BBC funding and increased operating costs meant a move to “digital-first” made financial sense.

BBC World Service director Liliane Landor said there was a “compelling case” for expanding digital services, as audiences had more than doubled since 2018.

“The way audiences are accessing news and content is changing and the challenge of reaching and engaging people around the world with quality, trusted journalism is growing,” she added.

 

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Environment

Hurricane Ian: Cities flooded and power cut as storm crosses Florida

Hurricane Ian: Cities flooded and power cut as storm crosses Florida

Hurricane Ian made landfall at around 15:10 local time (19:10 GMT) on Wednesday, smashing into the coast with wind speeds of up to 241km/h (150mph).

Dramatic scenes saw a hospital roof blown off, cars submerged and trees ripped out of the ground.

The category four hurricane was later downgraded to a tropical storm.

However, Floridians were warned that the most dangerous 24 hours lay ahead and the mayor of Tampa urged people to shelter in place through the night into Thursday morning.

“We are going to get the majority of the rain and the higher winds starting about 20:00, and they are going to last throughout the night,” Jane Castor said during a Wednesday evening briefing.

In a message posted on Facebook, the Weather Prediction Center told residents in the Central Florida Peninsula to expect “widespread life-threatening, catastrophic flash and urban flooding” continuing into Friday morning, with potentially up to 76cm (30ins) of rain falling locally.

Residents were ordered to leave their homes, but many have decided to remain and seek shelter indoors.

Mark Pritchett, who lives in the city of Venice, some 95km (60 miles) south of Tampa, described the “terrifying” moment he stepped outside his home as the hurricane made its way across the Gulf of Mexico.

“Rain shooting like needles. My street is a river,” he said in a text message to the Associated Press news agency.

In Lee County – the south-west region where Ian made landfall – police were prevented from responding to reports of looting at a petrol station because of the storm damage.

As a result, a curfew has been declared “until further notice”.

Lee County Manager Roger Desjarlais said that the Fort Myers community had “been – to some extent – decimated”. According to news agency AFP, some neighbourhoods in the city of 80,000 had been left resembling lakes.

State Governor Ron DeSantis described Ian as the “biggest flood event” south-west Florida had ever seen, and announced that 7,000 National Guard troops are ready to lead rescue operations in flood zones.

President Joe Biden will receive a briefing on Thursday from the Federal Emergency Management Agency.

Ian is now continuing to move north through Florida. Jacksonville International Airport, based in north-east Florida, cancelled all flights scheduled for Thursday.

The storm is forecast to emerge into the Atlantic by Thursday morning.

It is expected to reach Georgia and South Carolina on Friday. Virginia has also joined Georgia, North Carolina, South Carolina and Florida by declaring a state of emergency.

Cuba’s western coast was hit by Hurricane Ian on Tuesday. Power has now been restored in some areas after the island was plunged into a total blackout. Two people are understood to have been killed in Cuba and more than 20 Cuban migrants are believed to be missing at sea.

Predicted path of Hurricane Ian. Updated 27 September

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