City minister accused of ignoring £2bn car finance tax loophole
The City minister, Lucy Rigby, has been accused of snubbing taxpayers after she appeared to brush off concerns about a £2bn tax loophole benefiting big banks caught up in the car loans scandal,Rigby was urged to intervene by a member of the parliamentary Treasury committee after it emerged that lenders including Barclays, Lloyds and Santander could sidestep rules designed to ensure banks pay tax on compensation linked to corporate misconduct,Rules introduced in 2015 prevent banks from deducting compensation payouts from their profits before calculating corporation tax, meaning they cannot reduce their tax bill, regardless of the financial impact of their own wrongdoing,However, the Guardian revealed last month that banks will be able to exploit a loophole when they start paying compensation to victims of the £11bn car finance scandal this year,Their motor finance divisions are registered as “non-bank entities”, even though they are part of the larger banking groups, placing them outside the scope of rules.
Specialist lenders involved in the scandal, including the finance arms of car manufacturers such as Honda and Ford, are also exempt.The Office for Budget Responsibility has confirmed that this would cost taxpayers £2bn over the next two years, prompting Bobby Dean, a Liberal Democrat member of the Treasury committee, to write to ministers calling for urgent intervention.But Rigby’s response, dated 29 December and seen by the Guardian, confirmed that lenders caught up in the car loans scandal would fall outside the 2015 rules.“The bank compensation restriction does not apply to companies that are not banking companies, even if they are within banking groups,” she said.She closed the letter by thanking Dean for “making me aware of these concerns”, adding that she and the chancellor, Rachel Reeves, wanted to see the redress issue “resolved in a way that is efficient, orderly and provides certainty for both firms and consumers”.
“This is a complete non-answer from the government,” Dean told the Guardian,“Once again, they have chosen to side with the industry over consumers and taxpayers, just as they have done throughout the motor finance scandal,“We hear from ministers over and over again about tough economic choices, but when big banks avoid £2bn in tax through a loophole, they refuse to take action,”The Financial Conduct Authority closed its consultation on a proposed car loan compensation scheme in mid-December,Its £11bn plan has drawn criticism from consumer advocacy groups and lenders, and the regulator is expected to outline its next steps in February or March.
A Treasury spokesperson said: “It is vital that consumers have access to motor finance to enable them to spread the cost of a vehicle in a way that is manageable and affordable.We want to see this issue resolved in an efficient and orderly way that provides certainty for consumers and firms.”
Starmer allies urge him to block Andy Burnham from running in byelection
Keir Starmer’s allies are urging him to block Andy Burnham from running in the Gorton and Denton byelection, after the Greater Manchester mayor declared his intention to stand, setting up a potential fight for the prime minister’s political future.Burnham said on Saturday he wanted to contest the seat after the sitting MP, Andrew Gwynne, said he intended to stand down.Burnham’s allies – including ministers, MPs and trade union chiefs – say that as one of the country’s most high-profile and popular Labour politicians, he must be allowed to fight the seat and attempt a return to parliament.But with the Manchester mayor having made no secret about his leadership ambitions, those close to the prime minister were on Friday night urging him to take steps to prevent Burnham standing.“If Keir doesn’t make the call [to block Burnham], it’s game over,” said one
‘The best interests of our party’: Andy Burnham’s letter to Labour NEC in full
Dear Chair,I write to seek the permission of the NEC to enter the process for the selection of Labour’s candidate for the forthcoming Gorton and Denton byelection.This has been a difficult decision for me to make and I thought it would help members of the NEC if I shared my reasoning in reaching it.Of course, nobody wanted or expected a byelection at this time and I have given careful thought to what is in the best interests of our party and the city-region I represent.With that in mind, I have come to the conclusion that this is the moment to mount the strongest possible defence of what we stand for and what we have built in this city over many generations.Manchester inspires because it is a place that has always stood for the equality of all people, right back to the cotton workers of 1862 who refused to handle slave-picked cotton
Red meat, no lettuce: Nigel Farage and Liz Truss attend private lunch after week of Tory defections
If it was on the menu, a side helping of lettuce never made it to the table. Over blood-red steak and chips, Nigel Farage and Liz Truss came together on Monday for a discreet lunch at a swish Mayfair club, organised by a climate-denying US thinktank.Lois Perry, a former leader of the far-right Ukip party who is now Europe director of the Heartland Institute, posted photographs, now deleted, on X of Farage addressing others, including Truss, at the meal.While Reform UK appears to be keeping the former prime minster at arm’s length publicly, despite welcoming other former Tories, the gathering at Mark’s Club organised by the Heartland Institute raises potentially fresh awkward questions for the party.“Liz Truss would not be welcome in Reform UK,” the party’s press team replied within seven minutes of being asked by the Guardian if the party would ever allow the UK’s shortest-serving prime minister into its ranks
Starmer faces pressure not to block Andy Burnham’s return to parliament
Keir Starmer is facing mounting pressure not to block Andy Burnham from making a comeback to parliament, with Angela Rayner planning to urge No 10 to let him stand in a forthcoming byelection.The prime minister’s allies have been trying to prevent Burnham’s return as a candidate in the Greater Manchester seat of Gorton and Denton, amid fears he could challenge the leadership.However, a string of Labour MPs and the boss of Britain’s biggest union, Unison, warned on Friday that the party must ensure a democratic process and avoid a stitch-up.Rayner, the former Labour deputy leader, is understood to be supportive of Burnham standing if he wants to, and is expected to argue he should be allowed to when she speaks at Labour’s north-west regional conference on Saturday.The timeline for candidates to make a decision is extremely tight, with applications opening at 5pm on Friday, a deadline to seek permission from the national executive committee (NEC) 24 hours later, and applications closing on Sunday shortly before midnight
Nigel Farage’s trip to Davos hosted and paid for by family trust of billionaire
Nigel Farage’s trip to Davos this week was hosted and paid for by the $10bn family trust of an Iranian-born billionaire, the Guardian has learned.The leader of Reform UK has been touring Davos this week, giving speeches in which he pledged to tax banks and “fight the globalists”.But in a surprising entry, he is listed on the programme for the World Economic Forum as a member of parliament and a representative of HP Trust, which describes itself as the “family office of Sasan Ghandehari” with a portfolio value in excess of $10bn (£7.4bn).A representative for the trust said Farage had been invited to Davos by Ghandehari, a venture capitalist, as an honorary and unpaid adviser to his impact investment portfolio focused on philanthropic activities, particularly in the Middle East
UK politics: Trump’s Nato claims ‘insulting and frankly appalling’, says Starmer –as it happened
Keir Starmer has condemned Donald Trump’s claim that Nato allies did no properly fight alongside the US in Afghanistion. In a pooled clip that has just been broadcast, he sounded genuinely angry.Starmer said:Let me start by paying tribute to 457 of our armed services who lost their lives in Afghanistan.I will never forget their courage, their bravery and the sacrifice that they made for their country.There are many also who were injured, some with life-changing injuries
Minnesota workers pressure employers to take action against ICE operations
City minister accused of ignoring £2bn car finance tax loophole
Google AI Overviews cite YouTube more than any medical site for health queries, study suggests
How the ‘confident authority’ of Google AI Overviews is putting public health at risk
‘Alex Pretti was murdered’: NBA’s Haliburton among sports stars to condemn Minnesota killing
Alex Honnold free solos Taipei 101 skyscraper in live Netflix climb