UK to hike taxes on banks to pay for energy bill cuts

Britain will hike taxes on banks to pay for cuts to energy bills, it was announced on Wednesday in the first budget of Andy Burnham’s Labour government.

John Healey, who has replaced Rachel Reeves as Britain’s chancellor of the exchequer, said he would add 3 percentage points to a levy on bank profits for 15 months from January.

Healey said the cash raised would be used to fund £100 council tax cash refunds to 20 million households, which is meant to offset some of the rising costs of fuel.

The Labour Party politician also announced an increase in taxes ‌on gambling companies on Wednesday in his annual ​budget.

In his budget statement, Healey said the government would raise Machine Games Duty, a ​tax on the net takings from ⁠some slot machines, to 25 per cent from 20 per cent.

The ‌new ‌taxes ​will impact companies such as Ladbrokes owner Entain and ⁠Evoke, ​the owner of William ​Hill UK and 888.

Gambling companies warned ‌in advance of the ​budget that higher taxes could lead to ⁠job losses ⁠in ​a sector already grappling with tax increases announced in last year’s budget.

Analysis commissioned by the Betting and Gaming Council, an industry lobby group, claimed in ‌recent months ⁠that doubling Machine Games Duty could lead to the closure of ‌up to 1,470 betting shops and the loss ​of 15,900 jobs across ​the industry.

Meanwhile, Healey also announced an increase to the British minimum wage.

The rate paid to workers aged 21 and over, ‌currently £12.71 (€15) an hour, and the rate payable to workers aged 18-20, now £10.85, will both rise by 3.9 per cent. Some analysts ​and employers have blamed larger jumps in the rate for younger workers for increasing youth unemployment.

Britain’s main minimum wage rate has risen by around 50 per cent since 2020 and is one ‌of the highest among advanced economies ​as a share of median earnings, following efforts by successive governments to lift it ⁠to two thirds of median hourly ⁠pay.

Businesses, especially in ​lower-paying sectors such as retail and hospitality, have complained about the increased minimum wage and higher social security contributions, though there is no clear evidence that it has cost large numbers of jobs.

Between 2024 and 2026, the minimum wage for 18-20 year olds increased significantly faster than that for older workers, and in advance of its 2024 election victory, the Labour Party promised to scrap the lower ‌rate, which it ⁠called “discriminatory”.

However, in March, the Labour government tweaked the remit of the Low Pay Commission to give it more scope to take labour market conditions into ‌account when setting the minimum wage for 18-20 year olds.

The most recent official data showed that average ​weekly earnings, excluding bonuses, rose by an annual 3.7 per cent in ​the three months to August, while consumer price inflation hit an 11-month high of 3.5 per cent in September. – Additional reporting: Reuters

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