United Kingdom

JEFF PRESTRIDGE: Chancellor treading tightrope over tax rises

What a mess this country now finds itself in. For sure, a tough winter lies ahead for many households as inflation rises on the back of higher energy prices and as key industries struggle to deliver their services because of acute labour shortages. The shelves of some supermarkets are as bare as they were in the early days of the pandemic, while petrol is in short supply. I can smell panic in the air. 

Of course, the finger can't just be pointed at the Government. Some of the problems are a hangover from the pandemic and lockdowns, some are a consequence of global issues beyond our control (for example, an acute world shortage of gas) while others (a labour supply squeeze) are a by-product of Brexit (we voted for it, so we can hardly complain). 

Yet it all makes the Government's decision to jack up taxes (in the form of national insurance) next spring even more questionable than it seemed earlier this month when Boris Johnson announced details of the tax raid to reboot the NHS.

Canny?: Surely Chancellor Rishi Sunak knows that announcing more tax hikes in his next Budget will be a bad move

Yes, food and petrol supply problems may well dissipate in the coming weeks, but inflation isn't going away – whatever the boss of the Bank of England may say. Combined with tax hits to workers' pay packets, household finances are going to come under extreme pressure. A tough winter looks like turning into a brutal 2022. It's time to batten down the hatches. 

As for the Government, it is treading a tightrope. The announcement of any more tax rises in next month's Budget would be a big step too far. Surely, Chancellor Rishi Sunak is canny enough to know that?

Competition is good but can backfire 

Competition is all well and good, but when a market is opened up to charlatans and opportunists, it's inevitable that the move will at some stage backfire spectacularly, causing widespread consumer detriment in the process. 

That is exactly what has happened in the energy supply market. Although rising wholesale energy prices have been blamed for the recent failure of a string of 'small' energy suppliers, that doesn't explain the whole picture. Many of them shouldn't have been allowed to enter the market in the first place. They were not fit for purpose. 

The Mail on Sunday pointed this out as early as 2019 when we looked into the financial probity of some of the new suppliers – and visited their offices. What we discovered was disturbing. Widespread financial ineptitude and directors not up to the job – in it purely to make a quick buck. Interestingly, of the five firms we investigated, three (Toto Energy, Tonik Energy and Go Effortless) are no more, Bulb is desperately seeking funding to stay afloat, while Leicester-based Outfox The Market (Foxglove Energy Supply) has gone awfully quiet. 

Yes, soaring wholesale energy prices have killed off many suppliers, but an effective regulator would never have granted them a licence in the first place. 

Ofgem must therefore take a share of the blame for the current carnage in the energy supply market, which is going to result in higher gas and electricity bills for everyone.

Action needed over fraud 

'Government-coordinated action needed as fraud losses rise by 30 per cent.' That was the headline last week in a press release from banking body UK Finance after a surge in fraud. 

Fancy that? It's exactly what The Mail on Sunday's Nail The Scammers campaign has long been calling for. It's time for a Government plan to rid us of financial vermin. 

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