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In February, the then Chancellor of the Exchequer Rishi Sunak announced that eligible UK households would be offered a £400 discount to help with energy bills from October. However, this month, it was announced that, in January 2023, a new energy price cap will see bills reach as much as £4,266 per year.   

Speaking on BBC Radio 4’s Today programme, Martin Lewis commented, “We’ve heard mutterings from the Rishi Sunak camp that he would increase the previous handouts that were given, but if he were to be consistent he would have to essentially double every number in that package.

“He will effectively need, if he wants to make this work, to double the numbers, especially for the poorest.”

This week, business secretary Kwasi Kwarteng and chancellor Nadhim Zahawai are set to ask energy company executives to submit a breakdown of their expected profits and payouts in an attempt to find an appropriate solution.

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Charities have already been tested and stretched by two years of restrictions on fundraising and the closure, whether temporary or permanent, of their retail operations. Now they are facing increased costs at a time when they are also going to see the value of their assets eroded by growing inflation.

Help from the government

The government’s measures to help charities through the pandemic, while not universally felt to be adequate, did include some very welcome provisions including, of course, the ability to furlough staff and relief from business rates.  The recent announcement of measures valued at £37 billion to help households to cover rising fuel and food costs is also welcome, but charities, to whom increasing numbers of people will turn for support as they feel the pinch, are not likely to be offered any new grant schemes, loans or furlough deals to help them weather the storm, and nobody really knows when or where this inflationary spiral will peak, when and how much it will come down and how long it will take to do so.

It is striking that more than 40% of the mutual aid groups that were formed to help communities when COVID-19 hit are still operating, with their focus now shifting from helping those who were forced to isolate to providing food banks and community kitchens, and many of them have now become more formally established as charities. They join the growing numbers of food banks serving those who struggle to put food on the table; the Trussell Trust reports that food banks in its network across the UK provided more than 2.1 million food parcels in the year to the end of March 2022, 14% more than the year before the pandemic.

Donor behaviour

At the same time, there is a real possibility that donors will cut back on what they choose to give to charities as they find their disposable income no longer stretches as far as charity.  Having said that, many donors stuck by their favourite charities through the pandemic as they realised that new needs were emerging, and they may well continue to support them through what is looking increasingly like a recession in the making.  

Flexibility and resilience

Let’s also not forget that charities can show great resilience in times of crisis, and an ability to adapt and innovate to survive. I recall predicting a wave of charity mergers and closures in the wake of the 2008 banking crisis, which I am glad to say never materialised, and it may well be that this capacity for flexibility and responsiveness will see charities through the storm.

We have seen some great examples in the sector of charities that responded to the pandemic in a highly organised way, acting quickly to identify risks and put mitigating measures in place. While they may still have some way to go before they are back at pre-pandemic levels of income, charities are likely to find ways of coping with a period of high inflation and low economic growth. Some will, we are sure, explore new sources of funding or modify their approach to any investments they may be fortunate enough to have, and the measures in the new Charities Act 2022 that will make it easier to unlock capital may help in this regard.

Others may find new ways of releasing value from their properties, whether by renting them out during any periods when they might otherwise not be needed (of particular interest to charities that manage educational premises) or by disposing of property that may have become surplus to requirements in the new era of remote and hybrid working.

More mergers?

Mergers may become an attractive option for some charities, as there are significant savings to be had in the medium to long term if they can find the right partner with whom they can share some of their functions.  A merger is unlikely to be the answer to a financial crisis, as any partner organisation will be aware of the dangers of taking on the liabilities of a charity that is struggling to stay afloat, but if steps are taken early enough, it can be an effective way of ensuring the continuity in the delivery of services to beneficiaries.

Should the government do more?

Thinking beyond the question of what charities can do to help themselves, I have also been reflecting on the extent to which the charity sector has changed since I first became involved, with increasing volumes of services that were previously delivered by local authorities now being outsourced to the voluntary sector.  I am all in favour of deploying the expertise of charities, and their knowledge of local needs, to help communities.  However, when I see contracts awarded to charities with no scope for price increases to keep pace with the rising wage bills or other costs, or charity balance sheets showing potentially crippling pension scheme deficits inherited from the public sector, I do wonder whether the central government may have to reverse (at least on a temporary basis) the process by which local and central government passed these risks to the charity sector.  Shouldn’t we be urging the government to put more resources into a sector on which it has come to rely so heavily for core infrastructure and services?

About the author: Paul Ridout is Partner at Hunters Law.

The Bank of England is tasked with creating inflation every year. Inflation erodes the value of money – prices rise – and our wages don’t always keep up with the cost of living. So who benefits from this policy and who pays? We know who pays for inflation.  It’s the young people saving for a deposit who have those savings eroded, while first home prices are pushed further out of reach. House prices in the UK have benefited from dramatic inflation over the past fifty years and this has meant more and more people are left behind. What’s more, rents are going up and, right now, household bills are going ballistic.  Inflation drives the abject misery of ‘heating or eating’. 

Who benefits from rising inflation?

Governments tend to favour inflation as it erodes the real cost of repaying government debt; the warfare and welfare won’t cost quite so much to pay for if we inflate the debt away. Inflation can work as a stealth tax, by freezing a tax band so that more people must pay at that rate of tax. It can also be a stealthy way of reducing current expenditure; nurses get a rise, but not by quite as much as the real inflation rate. 

Those of us who own houses and other assets quietly know that we are at least protected from inflation.  In fact, our house prices always seem to go up by more than the official rate of inflation.  The property guys see their rents increasing, with the value of their buildings increasing too and the real value of what they owe the bank falling. Property is a good gig.  Inflation works for the banks as well.  They can lend more against rising property values and are protected should they ever need to rely on the value of their security.  Banking is a good gig too. Is there an inherent problem that the Bank of England should preside over a policy that seems to suit its industry?  

Inflation is the ultimate regressive tax

Inflation takes money from poorer people and transfers it to those with wealth, as well as to the government.  It enables governments to behave irresponsibly in relation to running up debts.  In enacting this policy and indeed in letting inflation get completely out of hand, the Bank of England is behaving as a latter-day Sheriff of Nottingham.

Moreover, the Bank of England is uniquely well placed amongst central banks to start getting a grip on inflation.  Through quantitative easing and suppressing interest rates, the bank has helped keep the Sterling at its lowest sustained value since the founding of the bank.  In such a free trading country as the UK – where we import much of the products we use – an improvement in our exchange rate against other major currencies would have the immediate impact of reducing inflation. 

The fact that the Bank has operated such a loose monetary policy in a period when the UK economy has been growing reasonably well and has record levels of employment is extraordinary.

It is almost as if the bank is trying to wilfully exceed its inflationary remit.

We are so used to inflation in our lives that it is easy to forget that it has not always been like this.  In the 100 years between the battle of Waterloo and the outbreak of WW1 the pound gained about 5% in value.  This marginal deflation is perhaps not surprising given the extraordinary advancement in technology and spread in trade that enabled many items in the shopping basket to become cheaper.  As always, for most people, the largest item in that basket was the rent or purchase of their home. The Victorians managed to reduce the cost of an average home from 14 times the average household income at the beginning of the 19th Century to three times by the end.

By contrast, in the 100+ years since the outbreak of WW1 - rather than gaining in value - the pound lost over 95% of its value.  Where a pound would buy 20 loaves of bread in 1914, it now doesn’t buy one.  Average house prices are back at nearly 10 times average household incomes.  The Victorians would have been proud of our amazing technological innovation and increase in trade.  They would have been horrified at how we have allowed much of the social benefit of economic success to be eaten away by inflation.  That inflation is a government policy is shameful. That inflationary policy has been allowed to get completely out of hand is criminal. 

Inflation got going in the West as a by-product of paying for the two world wars and later for the Vietnam war.  It became a policy of governments as it suits their desire for us to live beyond our means.  It simultaneously suited financiers and property people too.  A strange marriage of the state and capital that normally appear to be opposites in our society.

Final thoughts

I am not so sure the Bank of England shouldn’t be tasked with a policy of deflation.  House prices would become more affordable for Millennials and Gen Z. This could help reverse a long-running decline in homeownership.  Rents might fall.  A policy to undo some inflation would be novel.  Who would benefit and who would pay?

About the author: Sebastian Chambers is the author of The A-Z of Inequality, published by White Fox, priced at £10.00 and available at Amazon.co.uk.

As National Small Business Week (May 1-7) gets underway, GreenDayOnline, an online lending platform that offers same day $255 loans, presents three critical investing tips to assist small business owners in weathering the current economic storm.

1. Utilise technological advancements in order to reduce or completely remove the need for additional services

It is possible that using technology to lower fixed expenses will result in the generation of dividends in the medium to long term (for example, digital record keeping or automated revenue management systems to expedite data entry and billing).

2. Market to customers who are already loyal in order to keep them that way

Despite the fact that the cost of new customer acquisition is significant, it is necessary because loyal customers can be relied upon to keep revenue streams continuous and profitability stable throughout time, regardless of the state of the economy. When it comes to generating repeat business, establishing a client loyalty program is one of the most effective strategies available. The provision of discounts to repeat customers, reward programs for frequent customers, or any other sort of advantage in exchange for a membership fee are examples of how this can be accomplished. Customers that participate in these types of programs have a higher likelihood of remaining loyal to a company, which reduces the amount of money that firms would otherwise spend on advertising and recruiting new customers to their products and services.

3. Purchasing in large quantities in order to save money on per-unit prices 3

Whenever a firm operates in an inflationary environment, the expenditures made today by the business are worth more than the expenditures made tomorrow by the same business. This is feasible through the purchase of vast amounts of goods and services. Using this method is acceptable during years of low inflation, but it is extraordinary during periods of high inflation, as the following chart illustrates.

It may sound odd at first, but GreenDayOnline website president and co-founder Tarquin Nemec explained in a business press release that "spending more to save more" is a strategy that the company employs. "However, it is effective," he went on to say. Business owners who adopt a long-term perspective and make prudent investment decisions now to assist reduce long-term expenses will be the ones who gain in the long run, according to the authors.

Recently released economic numbers demonstrate that inflation is continuing to grow at an unprecedented rate, which is unprecedented in recent history. The Bureau of Labor Statistics reported an increase in consumer prices of 8.5% in April, bringing consumer prices to their highest level in 40 years at the time. Businesses and government entities are also experiencing the effects of the recession.

The National Federation of Independent Business (NFIB) conducted a poll last week in which it found that more than 90% of small businesses stated that inflation was having an impact on their operations in some form, with 62% reporting that it had a "significant impact." In addition, the poll indicated that 68% of those who replied stated that they "intend to raise average selling prices in the next three months," according to the findings.

A record-breaking 5.4 million new company applications were filed in 2018, according to the United States Census Bureau, shattering the previous year's prior high of 5.1 million applications filed the year before.

According to the government, the tax increase of an extra 1.25p in the pound will help pay for £39 billion more spending on health and social care across the next three years. 

Plans to increase National Insurance contributions were announced by the government back in September. Amid the spiralling cost of living crisis, the move by the government has faced widespread criticism. 

Instead of paying National Insurance contributions of 12% on earning up to £50,270 and 2% on anything above that, employees will now pay 13.25% and 3.25% respectively. Meanwhile, those who are self-employed will see their rates go up from 9% and 2% to 10.25% and 3.25%. 

Frances O’Grady, the general secretary of the TUC, has urged the government to offer more support to UK households: With energy bills set to shoot up by £700, and by hundreds more in the autumn, many households face being pushed into the red [...] Ministers must do far more to help people get through this cost of living crisis.”

With such a youthful market, it is natural to have some issues and misunderstandings amongst the people and the network. It, by extension, results in exceptional volatility in the market, with the costs of diverse cryptocurrencies fluctuating from ground to sky and vice versa in a matter of days. This article will examine the four entities present in the cryptocurrency market, their roles, and their dynamics. It will also look for an answer to the question: Who controls cryptocurrency in India?

There are presently four entities in the cryptocurrency market:

1. Small Fishes

As the name suggests, small fishes are the minor players in this huge cryptocurrency market. Now the question arises: who is considered a small fish? To put it simply, a small fish is any crypto investor that does not greatly influence the cryptocurrency market as an individual. It could vary from a housewife placing 10,000 into Bitcoin to millionaires putting 2 crores into cryptocurrency, and such an amount is barely something to look up in such a vast market.

A small fish holds negligible influence in the cryptocurrency market as an individual. Nevertheless, when all the small fishes collaborate, it would make or break the crypto market, or the coin as well.

2. Whales

Whales are individuals or groups of individuals who can shake the cryptocurrency market. It encloses renowned individuals in the world of finance, including CEOs or a group of investors that can invest and trade hundreds of millions of dollars into the budding cryptocurrency market. Their belief alone could swing the cryptocurrency market for notable individuals such as CEOs who have a great impact on the best cryptocurrency to invest in.

3. Institutions Or Creators

The name ‘Creators’ is pretty detailed; they are simply cryptocurrency developers. There are presently more than 1400 different cryptocurrencies present in the market, with some having tens to hundreds of staff, to a small company of only a few developers. There are so many different types of cryptos because anyone can create their crypto with comparative comfort. It results in many cryptos that are not useful being released, even when funding and development are deficient.

4. Government

Government regulations have been one of the most significant factors influencing the cryptocurrency market. Unlike stock exchanges, where prices can be relatively stable due to some rules, the cryptocurrency market is still in its infancy. Most of the investors in the cryptocurrency market work based on speculation rather than facts. Thus, any bad news, especially regarding future government regulations, would cause a tremendous price drop. As noted, before, the sudden influx of investors had governments precipitously implementing temporary rules to protect their citizens. Many governments have yet to put any form of protection for investors in place. At present, governments (China, South Korea, United States, Singapore, etc.) are scrambling to implement various measures to protect their citizens.

Except it hasn’t been like that. Not even a little. The UK is in the midst of its “weakest decade for pay growth since the 1930s”, according to a report by the Resolution Foundation, a think tank. Meanwhile, the cost of living in the UK is at its highest since September 2011, according to the Office for National Statistics (ONS). Then there’s inflation. This almost hit a 30-year high of 5.4% in December. But the great compounder of peoples’ travails is the energy crisis. In 2021, a typical home was paying around £1042 for gas and electricity per year, in April – when the price cap changes – that figure is likely to increase to £2000.

Crises require collaboration

People are hoping that governments, central banks, and energy companies will step in with measures to alleviate the spate of issues facing households. The chancellor's announcement to provide a repayable £200 discount on bills and a further £150 council tax rebate for most homes in England will serve as some comfort, but the majority will still face a shortfall. Is the right solution for people to quietly struggle? Of course not. As the situation worsens, we might anticipate a wave of radical creativity and activity from citizens. We know from experience that catastrophes are mobilising moments, they spark new thinking, collaboration, and help knit society together.  Consider the pandemic – a single emergency inspired 436,000 people to join the NHS Volunteer Responders Programme. The service reckons these people carried out about 2-million covid-associated tasks. Then there was all the clapping and banging of saucepans in the street to celebrate the efforts of health workers - crises are traumatic, but they unite.

Take the power back

It’s easy to see how citizens might mobilise in response to covid – delivering essentials to quarantining neighbours, staffing a vaccine centre, or just being conscientious when it comes to handwashing and mask-wearing. But the issues at hand require more thought. What can people do in response to soaring energy prices and inflation? The answer might lie in the rise of a consumer-centric energy market. We are currently seeing the first phase of this with a year-on-year increase in solar panel installations. There is room for growth, as of 2020, 970,000 UK homes are using them, according to government figures – that’s only 3.3% of the country. Further along, it’s possible that citizens will tire of paying huge prices to huge companies and opt for creating energy themselves. This could see the birth of localised power co-operatives, where energy is produced peer-to-peer. New, low-cost and easy to use technologies will be key to making this revolution happen in the coming years. 

In the short term, the UK is staring down the worst set of circumstances since the financial crash of 2008. But if government inaction and industry stagnation lead to an era when people are more conscious of their own collective power for social change, the twenties might roar at last.

About the author: Matt Hay is the founder and CEO of Bulbshare, a company on a mission to solve the world's biggest social and commercial problems through the power of community collaboration.

The Office for National Statistics (ONS) announced Consumer Prices Index (CPI) inflation hit 5.5% in January, with wage growth lagging significantly behind. 

In comments largely interpreted as a rebuke to Bank of England Governor Andrew Bailey, the Labour leader said it is “very difficult” to tell people they are not entitled to request pay increases from their bosses. 

Earlier this month, Bailey suggested that workers should not ask for significant pay rises in order to avoid fuelling the rise in inflation. 

Starmer has called on the Conservative government to take action to ease the strain on household finances, including scrapping the national insurance tax increase planned for April which coincides with the energy price cap increase

The Government is forever saying these are forces beyond its control, that it can’t do anything because this is all global,” said Starmer. “Actually, those tax increases are the Government’s own deliberate policy and half their own side don’t think they’re right.”

Labour is also calling for a windfall tax on oil and gas companies that have benefitted from rocketing global prices in order to help reduce consumers’ energy bills.

National insurance contributions, paid by employers and employees in the UK, are scheduled to increase by 1.25 percentage points at the start of the new tax year in April. The tax increase is a manifesto-breaking move by the Conservative party, aimed at raising £12 billion to support NHS funding amid the pandemic. 

However, former minister David Davis, amongst others, has urged the government to abandon its plans because of the financial pressure households are already facing amid inflationary cost increases and the imminent increase in the energy price cap. 

Speaking on Monday on BBC Radio 4’s Today programme, Davis said, “It was a judgment made on, frankly, quite a lot of wrong data.” 

They didn’t know at the time that by April we would have the highest inflation rate in 30 years, they didn’t know that interest rates would be going up, council tax would be going up, the fuel price is about to jump by £700 a year for the average family. Therefore they didn’t know quite what pressure there would be on ordinary people.”

Speaking on Tuesday, Sunak announced a £1 billion fund including cash grants of up to £6,000 per premises for each eligible business as well as $30 million to support England’s theatres and museums. Sunak also announced that the Government would support some firms with the cost of sick pay for Covid-related absences. 

The chancellor called the new support measures “generous” as he recognised the difficult situation many hospitality businesses continue to face in the run-up to Christmas. However, Sunak did not comment on whether further support would be offered to businesses should additional coronavirus restrictions be introduced.

As covid cases continue to soar, the Government is under mounting pressure to act to reduce the virus’ spread. On Monday, a further 91,743 covid cases were reported in the UK, marking the second highest daily total on record since the pandemic began in 2020.

UKHospitality boss Kate Nicholls has made a plea for VAT discounts and business rates relief to be extended, warning that the sector has been hit harder than expected by the Government’s “Plan B” restrictions and public concern around rising coronavirus cases. 

Nicholls said hospitality sales have already dropped by over a third in the past 10 days with £2 billion of trade already lost in December as people cancel bookings for festive celebrations. 

Across the hospitality sector, businesses are asking for an extension of the discounted 12.5% VAT which is currently set to revert to the original 20% rate in March 2022. UKHospitality is also requesting a deferral of business rates.

It is quite clear that the impact of the current guidance and restrictions has been more hard-hitting on an already beleaguered hospitality sector than expected,” Nicholls said.  “It is imperative that local authorities release the discretionary grants and rate relief they have to affected businesses immediately and VAT and rate relief support is extended and not turned off prematurely.”

Perpertuus - a small company based beside the River Tawe in Swansea - climbed substantially up the UK government’s business agenda this month. In fact, the business secretary, Kwasi Kwarteng, ordered a review into its activities. Not to offer a grant, or to give business advice, but because it produces graphene. 

 Controversy struck when Kwarteng said the government would investigate the potential takeover of the Welsh business by Taurus International or any companies associated with Dr Zhongfu Zhou, a Chinese academic, on the grounds of national security. The whole saga has shone more of a light on the international race to develop and commercialise graphene, as it edges out of university labs and slowly integrates with everyday products.  

But what actually is graphene?  

 In 2004, graphene was discovered at the University of Manchester. It is a single layer of graphite. Graphite is an allotrope of carbon, meaning it possesses the same atoms, but they’re arranged differently. In its purest form graphene’s atoms are arranged hexagonally, and at one atom thick, the properties it takes on are diverse and will be at the heart of the fourth industrial revolution. It is one of the strongest but lightest materials known, flexible, transparent, highly conductive, and impermeable to most gases and liquids.  

 Not only do the properties of graphene make it an asset for the defence industry, as the UK Government has observed in the Perpetuus affair, but they also are being exploited across industries ranging from concrete, construction, and highways, to batteries, electronic microchips and even textiles. Graphene companies in the UK today want to realise these ambitions to change industries and society whilst driving economic growth.  

Where does the UK lie?  

Britain has always been at the heart of the world’s research, development, and innovation. Tim Berners-Lee wrote a proposal for what became the World Wide Web in 1989; the world’s first SMS message was sent over the UK’s GSM network; Dolly the sheep was born at the Roslin Institute in Scotland in 1996 – and those are just some examples in recent history. 

Bringing it back to the modern-day, the Global Innovation Index shows the UK still ranks high in terms of global innovation, with the country ranking fourth globally in 2021. However, despite the UK often ranking well in such indices, the UK has not been great at commercialising its strong record of innovation and world-leading research and technology. In the tech space alone, in 2010, Britain had fewer than a dozen tech groups valued at more than £1 billion amid the Silicon Valley boom. 

However, the UK government has started to make significant inroads to overcome the barrier to the effective commercialisation of innovation. This year saw the government announce its Innovation Strategy, with the aim for the UK to become a global hub for innovation. Backed with public investment of a record £22 billion in R&D, the notion behind this strategy focuses on how the government can support innovative business by making the most of the UK’s research, development, and innovation system. But as well as facilitating the supply of innovative and transformative technology and products, an innovation strategy needs to consider who will bring those products to market. 

 UK the hub of Graphene

The Innovation Strategy also promises to reduce complexity for innovative companies by developing a finance and innovation hub between Innovate UK and the British Business Bank and creating more advisory services. Reducing the complexity of accessing these services seems to be a lesson learnt from the pandemic, where speed and routes to market needed to be rapidly increased.  

During the vaccine rollout, for example, we saw the government facilitating streamlined routes to market. Public procurement can be used similarly to create early markets for new products and services and ensure that the British economy benefits.  

Graphene is due to erupt in every industry internationally, and much of the innovation propelling it originates from Britain. The review of Perpetuus on the grounds of national security is therefore also in the commercial interests of the UK. By protecting and nurturing graphene companies in the UK, the government can take advantage of the fiscal benefits they will bring as those organisations grow and thrive.  

Today, innovative companies want to realise their ambitions to change their industries, improve society and drive economic growth in the UK, and we have witnessed the impact of this during the pandemic. As every nation looks for new ways to recover from the economic plight of COVID-19, it’s clear there is a battle for dominance of innovation and research in which graphene will play an integral role. The UK government has realised that graphene is currently a pawn in the geopolitical arena - but if it reaches the other side of the board, it has the potential to become something more powerful.  

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