“Ministers are in talks with tech companies about a possible taxpayer bailout after the biggest banking collapse since the financial crisis. The Bank of England said late on Friday that it would put the UK arm of Silicon Valley Bank (SVB) into insolvency over the weekend. The California regulator has taken control of the parent company after a run on the bank, which lent to thousands of tech firms, including the online retail giant Shopify and the social media company Pinterest. The crisis could spread. SVB had branches in China, India, Germany and elsewhere. Its Chinese arm, a joint venture with Beijing, sought to reassure clients that its operations were stable. The Bank of England insisted SVB UK was not a crucial part of the financial system. “SVB UK has a limited presence in the UK and no critical functions supporting the financial system,” it said.” – Sunday Times
“In the past, there would have been a simple way out. The Fed, the Bank of England, and the European Central Bank could announce an emergency cut in interest rates and pump a few hundred billion of extra liquidity into the system. That is what Ben Bernanke, the Fed chair at the time of the last crash, or indeed Alan Greenspan, would have done. Bond prices would rally, and the banks would have spare cash and that would fix the problem. This time around, with inflation already running out of control, that is simply impossible. To cut rates and print more money now would be to guarantee hyper-inflation, with horrific consequences for every developed economy” – Sunday Telegraph
“Amid mounting anger over the rise in the levy from 19 per cent to 25 per cent next month – which has angered Tory MPs and led party donors to warn privately that they will cut their funding – Mr Hunt used an interview with The Mail on Sunday to signal new tax breaks for business. He said: ‘The most important measure we should be looking at is not the headline rate of corporation tax but the effective rate of corporation tax.’ Mr Hunt added that he was examining the way that in other countries, ‘you can lower the amount of corporation tax you pay as a company because of the incentives they’re given to invest in capital – you get your money back the following year off your tax bill’.” – Mail on Sunday
“The chancellor is expected to deliver a multibillion-pound “cradle-to-grave giveaway”, using his budget on Wednesday to announce childcare and pension reforms. Jeremy Hunt is to relax the rules on the ratio of staff to children in nurseries as part of a package of reforms that will make childcare more “flexible and affordable” for millions of families. To address concerns that the sector is understaffed and underfunded, Hunt is considering a big rise in the subsidy childcare providers receive from the government to cover free childcare to which parents are entitled. It is understood the payments will increase by hundreds of millions of pounds. To encourage more people to work in childcare, a sign-up bonus of several hundred pounds is being considered.” – Sunday Times
Other Budget news:
Budget comment:
“In a statement issued by Downing Street this evening, Mr Sunak paid tribute to Lineker as “a great footballer”, but said the issue was a matter for the BBC and the Match of the Day presenter. He said: “As Prime Minister, I have to do what I believe is right, respecting that not everyone will always agree. That is why I have been unequivocal in my approach to stopping the boats. “Gary Lineker was a great footballer and is a talented presenter. I hope that the current situation between Gary Lineker and the BBC can be resolved in a timely manner, but it is rightly a matter for them, not the government. “While that process is ongoing, it is important that we maintain perspective, particularly given the seriousness of the issue at hand.” – Sunday Express
Other Lineker news:
Lineker comment:
“Immigration Minister Robert Jenrick has warned that the UK’s asylum system is at “breaking point” as he vowed to do “everything in our power” to stop small boat crossings. As the BBC was rocked by the extraordinary row over Gary Lineker, Mr Jenrick insisted the plan to tackle illegal immigration would go ahead, declaring: “Enough is enough.” Mr Jenrick made it clear there will be no U-turn as MPs prepare to debate the measure in Parliament on Monday. And he warned: “This problem will undoubtedly get worse if we don’t take radical action.” He admitted that chaos in the immigration system is costing taxpayers millions of pounds and causing tensions across the country, with more than 37,000 asylum seekers housed in hotels at a cost of £5.6million a day.” – Sunday Express
“Rishi Sunak will fly to San Diego on Sunday to unveil plans for supplying Australia with nuclear-powered submarines under the Aukus scheme amid concerns about the growing threat from China. A major announcement 18 months in the making is expected when the UK prime minister meets his Australian counterpart, Anthony Albanese, and US president Joe Biden. In response to concerns about Beijing’s economic coercion and foreign policy aims, the UK’s defence and security strategy for the 2020s is being updated, and the revised version is due to be published on Monday. It will address “increasingly concerning behaviour” by Chinese president Xi Jinping’s government, the “grave risks” posed by Russia after a renewed assault on Ukraine and “hybrid threats” to Britain’s economy and energy security, No 10 said.” – Observer
“The Health Secretary has urged junior doctors to consider their consciences before taking part in three-day walkouts starting on Monday – and attacked their union for demanding “eye-watering” rates for medics who provide cover.Steve Barclay said the strikes will cause “huge disruption,” setting back progress clearing backlogs, while threatening patient safety.The planned action is the longest and most extreme industrial action yet by any health union, with junior doctors across all hospitals in England expected to withdraw from A&E departments, cancer care and maternity, as well as planned care. On Saturday the British Medical Association rejected Mr Barclay’s offer for pay talks, if they called off the walkouts, accusing him of a “feeble effort … to kick the can down the road”. – Sunday Telegraph
Other political news:
Other political comment:
“The shadow chancellor has vowed to create a new ‘national wealth fund’ – a giant pot of money to kickstart green economic projects across the UK. The £8 billion fund will have the explicit aim of tackling regional inequality.This means poor areas like the old industrial towns across the Red Wall get much of the investment. Deprived coastal areas are also expected to benefit. This will create a whopping 450,000 jobs in these areas by 2030, Labour says. Unveiling the plan just days before the Budget, Ms Reeves told The Sun on Sunday: “In the US, President Biden has been fundamentally rewiring and reviving local economies, while here the Tories have failed on levelling up, pitting communities against one another and opting for short-term sticking plasters instead.” – Sun on Sunday