"I think we will have to increase taxes in the Budget," Chancellor Rachel Reeves told the News Agents podcast yesterday. Although she repeated the Labour manifesto commitment of no VAT, national insurance, or income taxincreases, she did not rule out inheritance tax or capital gains tax increases, nor changes to pensions. "I'm not going to write a Budget or start to write a Budget on this podcast," she said, adding that Labour wants to stick to "sensible" rules aimed at bringing the government's longer-term debts down. Shadow chancellor Jeremy Hunt responded on social media platform X, saying: "By refusing to take the difficult decisions needed, Rachel Reeves will do what she planned all along like every Labour chancellor in history - raise your taxes." Hunt denies Reeves’ claim that the previous Conservative Government made "undisclosed" spending commitments, saying he was "open" about public finances. Labour’s decisions to pull the winter fuel allowance from millions of pensioners, scrap infrastructure spending, pour money into a National Wealth Fund, GB Energy, and public sector pay rises were a choice that added up to billions. “If you make those choices, you’re going to have to put up taxes and she should be upfront that those are her decisions," he later told BBC Breakfast. Reeves has, meanwhile, also confirmed that VAT will be introduced on private school fees from 1^st January 2025 - including on any payments in advance made on or after 29^th July 2024 – and that there will be additional windfall taxes on oil and gas companies, both of which were manifesto commitments.

Energy Secretary Ed Miliband’s plans to ramp up investment in Britain’s offshore wind industry will add up to £1.5bn to energy bills, the Telegraph reports this morning. Miliband plans to increase the budget for offshore wind schemes by 50% to £1.1bn, a fresh record high, in a new auction for renewable energy contracts to attract investment in the industry again. Last September’s auction got no bids because developers said the guaranteed price they were offered by the Government for power they generate under the ‘Contracts for Difference (CfD)’ scheme, was too low. ^[1] The new £1.1bn budget is more than all previous offshore wind allocations combined, The Department for Energy Security and Net Zero (DESNEZ) said. “Last year’s auction round was a catastrophe, with zero offshore wind secured and delaying our move away from expensive fossil fuels to energy independence,” Miliband said, announcing that he is “backing industry to build in Britain, with this year’s auction getting its biggest budget yet”. However, the CfD regime is paid for via consumer bills, hence the increase. Significant sums totalling £335m will also be set aside for onshore wind, solar and tidal projects.

Housing Secretary Angela Rayner has confirmed her intention to overhaul England's planning rules to make Government-set local authority housing targets mandatory again, and to make it easier to build on low-quality green belt land that will be reclassified as "grey belt". Councils that fail to meet targets face seeing their power to block new developments curbed. Labour has pledged to build 1.5m new homes over the next parliamentary term, which equates to more than 820 new homes built per day.  Overall, the changes mean councils overall will have to plan to build around 370,000 homes annually, instead of the current 305,000, although in some areas, mostly Labour-run, the Telegraph notes, targets will go down. In London, for instance, the quota will drop from just under 99,000 homes to around 80,000., while in Birmingham, the target will drop from 7,174 to 4,974. Coventry's will go down from 3,081 to 1,527. It is further proposed that councils with green belt in their areas should review the boundaries if they cannot meet housing need "through other means" and look to reclassify previously developed land, or land that makes only a "limited contribution" towards goals such as protecting countryside and the special character of historic towns, as "grey belt". However, officials “could not say what proportion of the green belt, which covers 12% of England's land area, would be reclassified,” the newspaper said, noting too that Labour is also ditching a requirement for new homes to be “beautiful”, arguing the term was too vague and had been interpreted differently in different areas.

Businesses are feeling more confident in the future, according to the latest Lloyds Business Barometer, a closely-watched index which results from a survey of some 1,200 businesses each month. In July, overall business confidence jumped nine points to 50%, the highest level since before the EU Referendum. 62% of businesses reported a much stronger trading outlook, up from 53%, and wider economic optimism hit 62%, up from 55% previously.

Some 900 sub-postmasters wrongly convicted in the Post Office Horizon scandal and since exonerated are to be given an immediate £200,000 payout and the option to choose one of two further compensation routes. One offers £600,000 as a final settlement and another allows sub-postmasters who think they are owed more to continue to claim, although they could get less. Business and Trade Secretary Jonathan Reynolds said: “Postmasters have suffered immeasurably so I hope today’s new redress scheme brings some relief to postmasters who have waited far too long to get back the money that is rightfully theirs."

London Mayor Sadiq Khan’s office has apologised to a whistleblower after failing to investigate concerns around the business dealings of one of his former deputies, Rajesh Agrawal, City A.M. reveals. Agrawal, a close ally of Khan who served as the deputy mayor of London for business between 2016 and 2023, has come under fire since the foreign exchange firm he owned and co-founded, RationalFX, collapsed into administration last November. The bankruptcy left customers some £14.9m out of pocket and has led to questions about what Agrawal knew about the fintech’s financial position prior to its downfall. He has insisted he stopped playing an active role in the firm after taking on the role of deputy mayor in 2016, but a whistleblower raised concerns to City Hall in October 2022 claiming he continued to be “very active” and involved in decision making despite not disclosing this on his register of interests. Sadiq Khan’s deputy chief of staff, Richard Watts, has now apologised and blamed an administrative error for failing to follow up on the issue, nearly two years after it was initially filed. Agrawal, who stood for Parliament at the General Election for Labour but lost to the Conservatives’ Shivani Raja, stepped down as a non-executive director in 2022 but still owned more than half of RationalFX when it failed last year.

The Financial Reporting Council (FRC) has highlighted worrying performance from audit firms BDO and Mazars in its annual review of audit quality.  The audit quality ratings for BDO dropped from 69% to 38%, while Mazars dropped to 44% from 56%. Both firms were told to focus on the composition and mindset of its audit teams and ensure they are supported by effective training and tools, and warned that stronger action may result if improvements were not seen in 2025. Both firms recognised failings and promised improvement.

Rolls-Royce yesterday became the first developer to present a small modular reactor (SMR) design to the final stage of examination by UK regulators in the race to build Britain’s first mini-nuclear power plant. Helena Perry, director of safety and regulatory affairs at Rolls-Royce SMR, said the latest approval was “the most important milestone to date in advancing deployment of Rolls-Royce SMRs in the UK”. The FTSE 100 engineer has “built fantastic momentum,” she said, and that “the team will move directly into step three of this rigorous independent assessment of our technology”.  

Moody’s has now issued a "junk" rating downgrade on Southern Water, just days after stripping Thames Water of its credit rating. The rating agency cited water regulator Ofwat’s draft decision to refuse Southern’s request to increase customer bills by 73% (it put forward 44% instead) as well as the fact the water company faces at least £35m in fines (and up to £60m if performance does not improve). Moody’s also proposed as "plausible scenario" in which Southern will need to raise £4.5bn in debt and equity between now and the end of the decade to survive. Southern’s current investment rating is Baa3, the last rung of investment grades. Southern, which is majority owned by Australian investment firm Macquarie, which used to own Thames Water, said Moody's warning will have "no material impact" on the firm and the over £850m it has in available liquidity.

Viaro Energy, the independent British oil producer, is buying the Southern North Sea assets currently owned by Shelland Exxon Mobil, with Reuters citing sources who say the deal could be valued at $500m. In 2023, the assets produced around 28,000 barrels of oil equivalent per day and around 5% of UK's total gas production. The deal, which requires regulatory approval, would see Exxon complete its exit from the North Sea region, which it started in 1964. The US oil giant most of its assets in the central and northern North Sea to Neo Energy in 2021. Chevron is also in the process of selling its last remaining assets in the basin.

The Competition and Markets Authority (CMA) has highlighted competition concerns over the proposed $570m acquisition of CWT Holdings by Global Business Travel Group, saying: "Following the merger, there would be a very small pool of providers capable of catering to the business travel needs of GMN (global multinational) customers". The CMA said the parties involved have until 6^th August to offer undertakings to the watchdog to address its concerns.

Wizz Air has hit back at claims made last week by consumer champion Which? that it is the “worst performing” airline in the UK. The Hungarian budget carrier called the claim “inaccurate, unrepresentative and misleading”. “Once again, Which? is attempting to pull the wool over the public’s eyes with misleading research and a staggeringly low sample size. Wizz Air believes this is a tactic from Which? designed to generate headlines, which is unfair and unethical as it will only serve to confuse the public,” Wizz said. Marion Geoffroy, Managing Director at Wizz Air UK, pointed out that Which? had surveyed only 68 Wizz Air customers - less than 0.0001% of its UK customer base of around 12.3m passengers. “It is unclear to us how Which? can claim its survey is nationally representative when only 1.66% of their respondents said they had contacted Wizz Air’s customer service team,” Geoffroy added, highlighting internal data that showed clearly that “Wizz Air is doing a significantly better job than the erroneous Which? report suggests”.

Selfridges CEO Andrew Keith, who joined the firm in 2010, has quit unexpectedly to pursue new ventures.  He will be replaced by Selfridges Group CEO André Maeder, who joined in May.

The Bank of Japan, Japan's central bank, has raised the cost of borrowing for only the second time in 17 years. The world's fourth largest economy now faces interest rates of “around 0.25%” from the previous range of 0% to 0.1%.

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