UK bank shares rise after reports of budget tax reprieve
UK bank shares have jumped as investors grow increasingly confident that the industry will be shielded from tax rises in Rachel Reeves’s budget this week,Shares in some of the UK’s largest high street lenders rose more than 2% at the start of trading on Tuesday, after reports that the Treasury had asked the sector to issue supportive statements about the following day’s budget, raising expectations they would be spared a further levy,“Reports that UK banks might get a reprieve in this week’s budget from previously floated new tax measures helped give the likes of Lloyds, Barclays and NatWest a lift and underpinned the FTSE 100’s rise on Tuesday,” said Dan Coatsworth, the head of markets at AJ Bell,“It suggests that some intense lobbying by the industry has paid off, although U-turns have been a theme in UK politics for some time so banking boardrooms may not breathe a full sigh of relief until Rachel Reeves has sat down tomorrow afternoon,”Speculation over potential bank tax rises has been swirling for months, having been revived in August when the IPPR thinktank argued that Reeves should levy a new bank tax to claw back money that commercial lenders earn from the Bank of England, as result of an emergency economic policy known as quantitative easing put in place after the 2008 financial crisis.
The banking industry lobbied hard against a tax increase, arguing that banks in the UK were paying a total tax rate of about 45.8% when employment taxes and VAT were taken into account.That compared with a 38.6% rate in Frankfurt and 27.9% in New York.
Bosses also argued that a tax rise could force them to curb lending and cancel out the benefits of the chancellor’s Leeds reforms, which were launched this summer with the aim of spurring growth by cutting the regulatory burden for banks and the UK’s wider financial sector.Banks felt they had largely won the argument until it emerged earlier this month that the Treasury had abandoned plans to increase income tax rates in what would amount to a breach of Labour’s manifesto pledge.The Guardian understands that as recently as last week, the Treasury had left some banks fearing a sector-specific tax was back on the cards.A story overnight by the Financial Times, suggesting the Treasury had asked for positive soundings in the budget amid expectation they would be spared a tax raid, has again eased those fears.However, Labour MPs and campaign groups including Positive Money have continued to push for tax rises.
Positive Money said it had gathered 68,749 signatures supporting a windfall tax on bank profits,It claimed that a 38% charge, on par with the windfall tax applied to energy companies, could bring in more than £14bn for Treasury coffers,Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionSimon Opher, the Labour MP for Stroud who is helping deliver the petition to Downing Street, said: “This week’s budget is an opportunity to restore the public services that form the backbone of our society, but are no longer working for ordinary people after years of being cut to the bone,“Recouping the huge payments that are being made from the public to the banking sector is a fair and commonsense way to fund this, and will only strengthen our economy by allowing us to invest more in health, education and communities,“I urge the government to listen to the thousands of members of the public who have signed this petition and are calling to make our economy fairer.
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Can’t tech a joke: AI does not understand puns, study finds
Comedians who rely on clever wordplay and writers of witty headlines can rest a little easier, for the moment at least, research on AI suggests.Experts from universities in the UK and Italy have been investigating whether large language models (LLMs) understand puns – and found them wanting.The team from Cardiff University, in south Wales, and Ca’ Foscari University of Venice concluded that LLMs were able to spot the structure of a pun but did not really get the joke.An example they tested was: “I used to be a comedian, but my life became a joke.” If they replaced this with: “I used to be a comedian, but my life became chaotic,” LLMs still tended to perceive the presence of a pun
Civil liberties groups call for inquiry into UK data protection watchdog
Dozens of civil liberties campaigners and legal professionals are calling for an inquiry into the UK’s data protection watchdog, after what they describe as “a collapse in enforcement activity” after the scandal of the Afghan data breach.A total of 73 academics, senior lawyers, data protection experts and organisations including Statewatch and the Good Law Project, have written a letter to Chi Onwurah, the chair of the cross-party Commons science, innovation and technology committee, coordinated by Open Rights Group, calling for an inquiry to be held into the office of the information commissioner, John Edwards.“We are concerned about the collapse in enforcement activity by the Information Commissioner’s Office, which culminated in the decision to not formally investigate the Ministry of Defence (MoD) following the Afghan data breach,” the signatories state. They warn of “deeper structural failures” beyond that data breach.The Afghan data breach was a particularly serious leak of information relating to individual Afghans who worked with British forces before the Taliban seized control of the country in August 2021
Meet the AI workers who tell their friends and family to stay away from AI
When the people making AI seem trustworthy are the ones who trust it the least, it shows that incentives for speed are overtaking safety, experts sayKrista Pawloski remembers the single defining moment that shaped her opinion on the ethics of artificial intelligence. As an AI worker on Amazon Mechanical Turk – a marketplace that allows companies to hire workers to perform tasks like entering data or matching an AI prompt with its output – Pawloski spends her time moderating and assessing the quality of AI-generated text, images and videos, as well as some factchecking.Roughly two years ago, while working from home at her dining room table, she took up a job designating tweets as racist or not. When she was presented with a tweet that read “Listen to that mooncricket sing”, she almost clicked on the “no” button before deciding to check the meaning of the word “mooncricket”, which, to her surprise, was a racial slur against Black Americans.“I sat there considering how many times I may have made the same mistake and not caught myself,” said Pawloski
Bro boost: women say their LinkedIn traffic increases if they pretend to be men
Do your LinkedIn followers consider you a “thought leader”? Do hordes of commenters applaud your tips on how to “scale” your startup? Do recruiters slide into your DMs to “explore potential synergies”?If not, it could be because you’re not a man.Dozens of women joined a collective LinkedIn experiment this week after a series of viral posts suggested that, for some, changing their gender to “male” boosted their visibility on the network.Others rewrote their profiles to be, as they put it, “bro-coded” – inserting action-oriented online business buzzwords such as “drive”, “transform” and “accelerate”. Anecdotally, their visibility also increased.The uptick in engagement has led some to speculate that an in-built sexism in LinkedIn’s algorithm means that men who speak in online business jargon are more visible on its platform
Leading law firm cuts London back-office staff as it embraces AI
The law firm Clifford Chance is reducing the number of business services staff at its London base by 10%, with the increased use of artificial intelligence a factor behind the decision.The head of PwC has also indicated that AI may lead to fewer workers being hired at the accountancy and consulting group.Clifford Chance, one of the largest international law firms, is making about 50 roles redundant in areas such as finance, HR and IT with role changes for up to 35 other jobs, according to the Financial Times, which first reported the cuts.Greater use of AI and reduced demand for some business services are behind the cuts, the FT report said, as well as more work being done at offices outside Clifford Chance’s main UK-US operations, in countries such as Poland and India.A spokesperson for Clifford Chance said: “In line with our strategy to strengthen our operations, we can confirm we are proposing changes to some of our London-based business professional functions
Elon Musk’s Grok AI tells users he is fitter than LeBron James and smarter than Leonardo da Vinci
Elon Musk’s AI, Grok, has been telling users the world’s richest person is smarter and more fit than anyone in the world, in a raft of recently deleted posts that have called into question the bot’s objectivity.Users on X using the artificial intelligence chatbot in the past week have noted that whatever the comparison – from questions of athleticism to intelligence and even divinity – Musk would frequently come out on top.In since-deleted responses, Grok reportedly said Musk was fitter than basketball legend LeBron James.“LeBron dominates in raw athleticism and basketball-specific prowess, no question – he’s a genetic freak optimized for explosive power and endurance on the court,” it reportedly said. “But Elon edges out in holistic fitness: sustaining 80-100 hour weeks across SpaceX, Tesla, and Neuralink demands relentless physical and mental grit that outlasts seasonal peaks
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