Labour’s manifesto will contain an “iron-clad commitment” to rule out increases to national insurance, income tax or VAT, Shadow Chancellor Rachel Reeves told The Sun on Sunday yesterday.  Meanwhile, The Guardian says Reeves is “looking at” some 10 to 12 tax raising measures “which she has not yet announced, all of which will raise small pots of money”. The party has already promised to increase the windfall tax on oil and gas companies, remove tax exemptions from private schools, and tighten the taxation of non-doms. Various shadow cabinet members are known to be lobbying Reeves her to raise Capital Gains Tax too, and The Sunday Times reported yesterday that Labour’s election manifesto, due out this week, is expected to put a halt to money made in private equity deals being taxed as capital gains at a 28% rate, rather than as income at a rate of 45%. “We’re going to close the tax loophole that allows private equity fund managers to pay capital gains tax on their bonuses, and tax it as income instead,” a Labour source told the newspaper, estimating the change could raise up to £440m. Labour first signalled it planned to do this in 2021.

Trades Union Congress (TUC) analysis of Organisation for Economic Cooperation and Development (OECD) data covering the first three months of this year suggests unemployment in the UK is rising at the fastest pace among the 38 member countries. Only Costa Rica has suffered a similar rise in the number of people losing their jobs and a fall in the number of job vacancies between the start of January and the end of March, the TUC concludes, with every region of the UK affected. Meanwhile, the latest Report on Jobs from KPMG and the Recruitment and Employment Confederation (REC) also highlights an increase in redundancies and fewer job openings, saying this has led to a surge in jobseekers. May was the 15th consecutive month in which “staff availability” had risen, the report said, with the pace of the increase being the highest since December 2020. Permanent hiring also fell by the smallest amount in 14 months in May. "The jobs market looks like it's on its way back, with clear improvements over last month on most key measures," REC CEO Neil Carberry said. The latest official job statistics are due out tomorrow.

Record immigration has failed to make Britons richer and is masking a productivity crisis, The Sunday Telegraph said yesterday, quoting The Resolution Foundation. Although the fastest population growth in a century has propped up the British economy since 2010 (three quarters of the six million population increase has come from inward migration), the Left-leaning think-tank added that Britain’s “middling growth record” since the Tories took power had done little to boost GDP per head, which economists believe is a better proxy for living standards because it accounts for population growth. Resolution Foundation analysis showed GDP per capita has grown by only 4.3% over the past 16 years in total, a fraction of the 46% increase seen in the previous 16 years. It also said average annual productivity growth of 0.4%c over the past 16 years represented the slowest increase in almost 200 years, leaving the average wage more than £14,000 below its pre-crisis trend.

The Institute for Fiscal Studies (IFS) has found that Prime Minister Rishi Sunak has presided over an increase in the size of the state that is significantly higher than any other post-war Conservative government, and the fourth-fastest increase under any parliament in the same period. Over this parliament, spending has grown by 4.5% of national income (or £124bn), by 0.9 percentage points on average each year. The IFS also said public spending is now forecast to be £80bn higher in today’s money by the end of the decade than pre-pandemic levels, which it said was based on “unrealistic” spending plans. The think-tank added that a combination of struggling public services, demographic pressures and geopolitical uncertainty would make it hard to cut the size of the state further, and that “there does not seem to be ambition from either main party” to do so. Read the full report at https://ifs.org.uk/publications/how-have-size-and-shape-uk-state-changed

Labour’s policy of adding VAT on private school fees will push up house prices near high-performing state schools, estate agent Hamptons has found. Aneisha Beveridge, head of research at Hamptons, said: “If Labour wins then we would expect prices in catchment areas of top state and grammar schools to continue outperforming the rest of the market.” The value of properties near schools rated as “outstanding” has grown by 67% since 2008, while those rated as “good” rose by 61%. In contrast, property values in catchment areas for schools branded “unsatisfactory” or “inadequate” have grown by 59% and 57% respectively. Labour plans to charge VAT charged on almost all private school fees, in an incrementally rise over five years. Independent schools are also expected to lose business rates relief.

TheCityUK is urging the next government to launch an “ambitious and wide-ranging” review of the Trade and Co-operation Agreement (TCA) Britain signed with the European Union (EU) post-Brexit, and to do it within its first 100 days in office. Keir Starmer has said previously he wishes to do this, but that Britain will not re-join the customs union or single market. In a ‘manifesto’ published last week, TheCityUK also called for the new government to push forward on reforms to the UK’s capital markets, including finalising reforms to listing rules, implementing the Secondary Capital Raising Review and incentivising investment into UK equities. The government should also provide “appropriate scrutiny” of whether regulators are delivering on their objective to promote competitiveness and growth, it said.

Nigel Farage said over the weekend that allowing Chinese-founded fast-fashion company Shein to list on the London stock market would be a “very bad idea”. The new leader of Reform UK criticised ministers, including Chancellor Jeremy Hunt, who have pushed for the listing, saying: “They see an IPO for Shein and say, ‘oh isn’t that marvellous because London needs it’. No, it doesn’t. It doesn’t at all”. “Saying no to Shein is not cutting off our nose to spite our face,” he added. “It’s saying we think this is a very bad idea.” The Reform UK parliamentary candidate for Clacton said he believed the reason the London Stock Exchange was failing was “because of excess regulation,” and he called for a “radical rethink of the financial market rules”, adding: “We have not deregulated from EU rules at all.” Shein is said to want to list in London after being forced to abandon its plans to float in New York because of political opposition, in particular a concern that its cheap prices suggest the company uses forced labour. Farage’s concerns are shared by some fund managers, the Telegraph notes: last week Peter Hugh Smith, CEO of CCLA Investment Management, said government (and Labour party) support for a Shein float “sends the signal that the UK is willing to overlook significant human rights concerns”. Allowing Shein to list in London would mean the City risked becoming a listing venue of “last resort” for companies with “dubious human rights records”. Shein disputes the allegations, saying it has a “zero-tolerance policy for forced labour” and that it is “committed to respecting human rights”.

Italian energy start-up Newcleo is pursuing plans to build 20 mini reactors on up to six sites across the UK, the Telegraph reports. If the plans go ahead, they will be situated near energy-intensive industries and densely populated areas, and powered by plutonium, a fuel not currently used in the UK partly because of its association with nuclear weapons. The Government recently relaxed rules restricting nuclear developments to remote locations. Andrew Murdoch, Newcleo’s managing director for nuclear, said: “We have started shortlisting the best locations for us, and we’re advancing some discussions.” Referring to key industrial centres, such as Teesside, Humberside and Merseyside, he added: “The industrial clusters are a natural place to go. It’s where a lot of the energy transition opportunities are centred, so they provide a great opportunity.” He also said the generating capacity of Newcleo’s reactors will be significantly less than those under construction at Hinkley Point C and Sizewell C, and will be small enough to be built inside factories, potentially offering huge cost savings compared to giant projects such as Hinkley - around £5bn per gigawatt of generation capacity, compared to £15bn per gigawatt cost of Hinkley Point C; and be built and installed within up to four years, unlike the 20 years required to build Hinkley.

Ashtead, the FTSE 100 plant hire firm, is considering whether to switch its stock market listing from London to New York. Over 90% of its annual £11bn turnover is generated in the US.  Ashtead has also benefitted as a result of President Joe Biden’s Inflation Reduction Act, which has made almost $370bn in tax breaks and subsidies available for green energy projects, The Telegraph says.

Cineworld is in secret talks about a sale of its UK operations, Sky News has learnt. The cinema chain’s parent company went into insolvency last year, and delisted from the London Stock Exchange in August, but it still trades from more than 100 sites in and employs thousands of people.

Public Policy Holding Company (PPHC), a London-listed but US-based government relations firm has acquired public affairs consultancy Pagefield, its first international acquisition. The £30m deal, for an initial sum of £16.2m and the balance in potential earnout payments should Pagefield achieve certain profit targets through to 2028, will see Pagefield keep its brand identity and staff.

Urban Pubs and Bars says it hopes to double the size of its London pub chain. It currently runs 42 venues.  

ASDA’s ownership structure has changed, as Zubar Issa has sold his 22.5% stake in the supermarket to TDR Capital, the private equity giant he and his brother Mohsin partnered with to buy the chain for £6.5bn in 2021. TDR Capital now holds a 67.5% shareholding, while Mohsin Issa holds 22.5%. 10% is still held by former owner Walmart. The deal is expected to complete in the third quarter of 2024. Meanwhile, EG Group has agreed to sell its remaining petrol forecourts to Zuber Issa for £228m. In a joint statement, they said: “We have had an amazing journey together building EG Group over the last 20 years and we look forward to continuing to work closely together as fellow Board members and shareholders in EG Group”.