JEFF PRESTRIDGE: Your statement didn’t put spring in my step, Chancellor – boldness, not pragmatism, should be order of day, and sooner rather than later
Smoke and mirrors. That was my initial reaction to last Wednesday’s Spring Statement by Chancellor of the Exchequer Rishi Sunak – and it hasn’t changed since, despite much cogitating.
Of course, it was reassuring to learn that Sunak is planning a cut in basic rate tax just in time for the May 2024 General Election.
Yes, planning – not guaranteeing – although guarantees in politics also count for nothing (remember the Conservative Party’s 2019 manifesto pledge: ‘We will not raise the rate of income tax, VAT or National Insurance’).
Man with a plan: It was reassuring to learn that Rishi Sunak is planning a cut in basic rate tax just in time for the May 2024 General Election
And it was good (no, essential) that Sunak cut fuel duty as petrol prices edge ever closer to £2 a litre. Yet not to have 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 nice mix of action and promises, but nowhere near enough to stave off the biggest assault on our finances since the 1950s (I was no more than a twinkle in my dad’s eye for the first nine years of that decade).
Inflation now above 6 per cent, is heading ever higher; energy bills are sucking the life out of most households’ finances; and there is a real possibility that the country could be tipped back into recession, putting real pressure on employers and jobs. Unless you are an executive of a leading UK business, any wage increase you get will come nowhere near to offsetting the corrosive impact of inflation.
Of course, what Sunak should have done is use the Spring Statement to restore the manifesto pledge made in 2019 by halting the hike in National Insurance Contributions that kicks in from April 6.
It’s what my esteemed City colleague Hamish McRae has been saying for a while – and it’s what many other economic experts believe should happen to steady the UK economic ship. I am sure Sunak will have no choice before the year is out but to come up with more than he offered last Wednesday to stop the economy freefalling – and with it the Government’s chances of winning the 2024 election.
Boldness, not pragmatism, should be the order of the day. Sooner rather than later.
Bank branch closure hitting access to cash
As exclusively revealed in last week’s Personal Finance section, Lloyds and Barclays have become the latest banks to take an axe to their branch networks.
Although 60 Lloyds’ closures may not represent a huge number compared to the 1,476 branches the banking group currently manages across its brands (Bank of Scotland, Halifax and Lloyds), it is another sign that the big banks are rapidly withdrawing from the high street. On Friday, Barclays confirmed 13 future closures.
Since cash network provider Link started monitoring closures earlier this year, 180 branches have been culled by NatWest, HSBC, Lloyds, Barclays and mutual Nationwide. And as sure as day follows night and as long as robins thrill us with their dawn chorus, more branches will be closed this year – most left to rot and leave an indelible scar on high streets up and down the country. For what it’s worth, my best guess is that 800 branches will disappear before the end of the year – with all of the big brands announcing yet more closures (Lloyds being at the forefront).
Damaging though these latest closures are for those communities impacted, it is good to see that new informal rules governing the closure of a last bank in town seem to be working.
These rules allow Link to recommend that the banks collectively fund alternative banking services to fill the hole left by the closure of the last bank in town.
So, accompanying Lloyds’ closure list was confirmation that three new-style banking hubs are likely to be opened in Buckingham (Buckinghamshire), Cottingham (East Riding of Yorkshire) and Troon in South Ayrshire.
These will provide basic banking services that all personal and small business customers can use – for example, for the banking of cheques and business takings.
Staff from individual banks will also be on hand on selected days to help customers with more complex financial matters.
As more branches are chopped, leaving communities bankless, banking hubs should become the norm, not the exception.
It’s the least the banks should do to preserve the communities they have made great profits from – and are now scarring.