Triple lock scrapped for 2022/23 to avoid huge pensioner payout Dividend tax increase – how much extra you will pay and how to beat it How to beat the National Insurance social care tax grab Sign up here for our daily business briefing newsletter The triple lock has been scrapped for next year, meaning the Government can avoid an 8pc rise to pensions in April to save £4bn. The measure, which raises pensions in line with the greater of CPI, wage increases or 2.5pc, will not be in place for 2022 or 2023.
It followed the Government increasing National Insurance contributions by 1.25pc, as well as a dividend take hike of the same value, as it seeks to fund social care reform. Employers will have to pay an additional 1.25pc in national insurance contributions from April 2022 as part of a string of reforms unveiled today. The move prompted outrage from British businesses who argued Boris Johnson’s plans to hike taxes to fund health and social care will put yet more pressure on firms still struggling from the pandemic and could cost jobs.
Johnson’s National Insurance raid threatens 130,000 jobs Confidence in German economy falls to lowest level since first lockdown Ethical investing is a pointless fad with ‘no impact’, says former BlackRock executive El Salvador’s president Nayib Bukele said that the country was “buying the dip” after Bitcoin’s price plunged just hours after it was officially adopted as legal tender. Bukele wrote on Twitter: “150 new coins added”, taking the nation’s holding of Bitcoin to 550 coins. The 150 coins were worth about $7m. Ahead of Tuesday’s launch, El Salvador had bought 400 bitcoins worth around $20m.
The purchase came after the price of Bitcoin suddenly collapsed on Tuesday, diving as much as 17pc just hours after El Salvador adopted it as legal tender. It later recovered some ground, with Bitcoin down around 8.5pc in afternoon trading. Pukele then wrote on Twitter: “It appears the discount is ending. Thanks for the dip. We saved a million in printed paper.” France is set to produce less wine this year than it ever has on record, after severe spring frosts hit vineyards.
France’s farm ministry warned that the industry looked set to produce 33.3m hectolitres this year, around a quarter below the average amount that has been produced over the past five years. Each hectolitre is the equivalent of around 133 standard wine bottles. The ministry said: “The spring frosts cut down a good part of the production, which will be historically low, below those of 1991 and 2017.” Some vineyards were also the victim of diseases, such as fungus attacks, which were particularly damaging in the Champagne region. Such attacks cause both grapes and leaves to dry up.
Bitcoin plunges amid faltering El Salvador rollout El Salvador has become the first country to accept Bitcoin as legal tender Credit: MARVIN RECINOS / AFP Bitcoin dropped to its lowest level in a month today amid troubles during its highly-anticipated rollout in El Salvador. The Central American country has become the first in the world to adopt Bitcoin as legal tender, giving the cryptocurrency its biggest ever push towards widespread take-up.
But the launch was overshadowed when El Salvador’s digital wallet system Chivo was taken offline due to technical glitches. Bitcoin fell as much as 17pc to $43,050 today, shedding more than 10pc in just one hour after breaking through the closely-watched $50,000 level. Rival cryptocurrencies also suffered losses, with Dash and Ethereum Classic both tumbling around 20pc. The technical issues will come as a setback to Bitcoin, which is facing one of the biggest tests in its 12-year history.
Users on platforms such as Twitter and Reddit were discussing buying significant amounts of the cryptocurrency today to pump up its price and mark its first introduction as legal tender. Food packaging giant Hilton Food Group has gobbled up the remaining 50pc stake in Dutch vegan and vegetarian manufacturer Dalco Food. The FTSE 250-listed group built up its stake in Dalco in 2019 and said the company had grown rapidly and outperformed expectations ever since.
Hilton added that the acquisition was in line with its strategy to diversify its protein offering within the rapidly-growing vegan and vegetarian market. “This is the next natural step in our ambitions to broaden and diversify Hilton’s multi-protein offer,” said chief executive Philip Heffer. “The completion of this transaction will further strengthen Hilton’s position within the vegan and vegetarian market, at a time when our customers are increasingly seeking out innovative, high quality vegetarian products at scale.”
Hilton said it will continue to invest in Dalco’s product ranges, adding that the Dutch company’s existing management team would continue to play a significant role in the combined group. Maintaining the triple lock was ‘mathematically impossible’ James Andrews, senior personal finance editor at money.co.uk, says more change is coming after the government suspended its triple lock pledge.
“On one level the decision to suspend a manifesto pledge makes economic sense, with a bumper payout coming just as the Government looks for any way it can to find money to cover the cost of Covid-19 payments and earnings still down on two years ago. “But people are bound to ask why they made that decision today when suspending the triple lock was far from the only option on the table.
“For example, it would also have been possible to move the earning element to a three-year average rather than an annual figure. “And whatever they say, more change is coming. “It’s quite simply mathematically impossible to maintain the triple lock indefinitely, with the promise guaranteeing pensions will cost the Government more and more every year regardless of what happens to the taxes coming in. “A single year’s suspension might cover a statistical anomaly, but it does nothing to answer the bigger question.”
The divi levy: How much extra you’ll pay and how to beat it Dividend tax rates will increase by 1.25 percentage points from April 2022 as part of sweeping reforms to raise money for health and social care. The government said the changes will raise an additional £600m of revenue, but it’s investors, the self-employed and company directors who will feel the impact. My colleagues Sam Benstead and Sam Brodbeck have crunched the numbers on how much the tax rises could cost you – and how you can dodge them.
Get the full details: Dividend tax increase – how much extra you will pay and how to beat it Oil prices deepened their losses today after Saudi Arabia’s cuts to crude contract prices in Asia raised concerns about a slowdown in demand. Brent crude futures were down 24 cents, or 0.3pc, to $71.98 a barrel by 1336 GMT, after falling 39 cents on Monday. US West Texas Intermediate crude was at $68.55 a barrel, down 74 cents, or 1.1pc, from Friday’s close, with no settlement price for Monday due to the Labor Day holiday in the United States.
Both contracts dropped by more than $1 a barrel earlier in the session. “The deep cut in Saudi OSP and the aftershock of Friday’s disappointing US jobs data that strengthened the dollar yesterday were enough to put bulls on the backfoot,” Tamas Varga of oil brokerage PVM said. Saudi Aramco on Sunday cut October official selling prices (OSPs) for all its crude grades sold to Asia by at least $1 a barrel.
The deep price cuts, a sign that consumption in the world’s top-importing region remains tepid, come as lockdowns across Asia to combat the delta variant of the coronavirus have clouded the economic outlook At the same time, the US economy created the fewest jobs in seven months in August as hiring in the leisure and hospitality sector stalled amid a resurgence in Covid-19 infections, which weighed on demand at restaurants and hotels.
Oil prices, however, were underpinned by strong Chinese economic indicators and continued outages of US supply from Hurricane Ida. Triple lock dropped: How much will you lose? The government has reneged on its so-called triple lock promise, meaning it will avoid a huge increase in pensions payouts in April. But the about-face also means millions of Brits will be denied a record £822 in the state pension, writes my colleague Jessica Beard.
If the change stays in place indefinitely, Britons will be more than £14,000 worse off by the time they reach age 85 as a result assuming the state pension rise by 2.5pc a year instead of earnings. They would get an extra £233 increase per year instead of £822. Pensioners have lost out an additional £100 in the Government’s decision to opt for the lower rise of 2.5pc over the ONS’s 3.5pc.
Find out more: Pensioners denied record rise in state pension – here’s how much you will lose BA boss: Talks on Gatwick reopening at ‘advanced’ stage British Airways’ negotiations with unions over resuming short-haul flights at London Gatwick are at an advanced stage, the airline’s chief executive has said. Sean Doyle said BA looked “long and hard” at the case for reopening European operations at Gatwick before deciding they could be viable with a lower-cost model.
He said the airline had to be honest with its workforce about “what it takes to compete” at the airport, adding that a sale of its Gatwick slots was possible if no deal could be reached. Doyle also took aim at the UK’s traffic light system for international travel, which he branded “not fit for purpose”. The BA boss said government policy was the “biggest single enabler” of airlines recovering from the pandemic.
UK employers: PM’s tax hike ‘smacks of political opportunism’ British businesses have reacted angrily to Boris Johnson’s plans to hike taxes to fund health and social care, saying the move will put yet more pressure on firms still struggling from the pandemic and could cost jobs. Employers will have to pay an additional 1.25pc in national insurance contributions from April 2022 as part of a string of reforms unveiled today.
“Businesses strongly oppose a rise in national insurance contributions as it will be a drag anchor on jobs growth at an absolutely crucial time,” said Suren Thiru, head of economics at the British Chambers of Commerce. “This rise will impact the wider economic recovery by landing significant costs on firms when they are already facing a raft of new cost pressures and dampen the entrepreneurial spirit needed to drive the recovery.”
The government has argued it’s only fair that businesses contribute, with Johnson insisting that the largest companies would bear the biggest burden of the tax increases. A government document published alongside the announcement said 70pc of the money raised from businesses will come from the largest 1pc of companies and around 40pc of businesses would not be affected at all by the levy. But the tax hikes also include a 1.25pc increase in dividend tax, which could impact business owners and investors who rely on dividends for their income.
“This is an extraordinary time to be adding additional burden to business and the cost of employing staff, just as it looks to recover from the pandemic,” said Kitty Ussher, chief economist at the Institute of Directors. “It smacks of political opportunism, exploiting public sentiment at the expense of some of the most productive and entrepreneurial segments of the economy.”
“The surprise new tax on dividends will yet again target small company directors… While it may make sense in the long-term to align tax rates for all types of income, this government has shown through its actions a total lack of understanding to the very real difficulties faced by owners of the smallest businesses in Britain.” Manufacturers’ group Make UK said the measures would hinder Britain’s recovery from its worst economic slump in more than 300 years in 2020.
“Economic history tells us that job cuts are most likely when the economy starts to open again after a downturn because firms need the capital to reset,” said chief executive Stephen Phipson. “After witnessing large-scale redundancies at the height of the pandemic and the plug being pulled on the furlough scheme, government should be putting in place measures to protect jobs and incentivise recruitment. An increase to NI would have the opposite effect”.