Marketing Newscast

(Edited 28 January 2025)

Billionaire Sir James Dyson has again hit out at Chancellor Rachel Reeves, saying her Budget means British family businesses are being “fleeced”. In a letter to The Times, he wrote she will “kill off” British family businesses with her “vindictive” tax hikes, saying that in introducing significant Inheritance Tax (IHT) increases she is “killing the geese that lay the golden eggs”. Businesses are currently exempt from IHT but, from April 2026, those with assets over £1m will be charged 20%, half the standard rate. “Reading The Sunday Times Tax List, I calculate that at least 60 of the top 100 UK taxpayers are owners of family businesses, with an annual tax contribution to the Exchequer of £3bn,” Dyson said. “Such companies employ 14m people and contribute many more billions ­ year in, year out - funding vital public services. “This is what Rachel Reeves will kill off with her budget”. In the immediate aftermath of Reeves’ first Budget, Dyson branded it “ignorant” and “spiteful”.

Food prices have risen this month at their fastest pace since May 2023, up by 0.5% month-on-month, and on top of a 0.1% increase in December. The data, provided by The British Retail Consortium’(BRC) show “early signs of what is to come,” according to BRC CEO Helen Dickinson. The BRC forecasts food prices will rise by an average of 4.2% in the second half of this year as manufacturers and retailers deal with £7bn in extra costs as a consequence of the Budget. “Higher Employer NICs increased National Living Wage, and a new packaging levy mean that prices are expected to rise across the board,” Dickinson said. However, annual food inflation eased to 1.6% in January, down from 1.8% previously, to the lowest level since November 2021. Non-food prices also fell as a result of the January sales, meaning shop prices overall fell by 0.7% cent in the year-to-date.

Most alcohol prices will rise next week, on 1^st February, as new duty rates on wine and spirits come into force, linked to their (abv). Wine with a higher abv will see the biggest price increase, with the duty on a 14.5% wine rising by 20%, or 54p on average. However, duties on 11.5% wine will fall 5%. “There are no winners under the UK’s punishing alcohol tax regime – higher duty rates mean people buy less which results in reduced income to the Exchequer, businesses are being squeezed and consumers have to pay more,” Miles Beale, CEO of the Wine and Spirit Trade Association said.

The Government is proposing to ease restrictions on how defined pension schemes are managed in an attempt to boost economic growth. The Treasury says such schemes, which are linked directly to a worker's salary and length of service, have a total surplus of £160bn, meaning they have more money in them than is needed to meet pension commitments but, under the current rules, much of that money cannot be invested. A consultation is to be launched on how this money might be freed up for investment, and trustees given more flexibility over their management. The pensions industry has said it is willing to back the plans provided retirees are given “appropriate protection” by the Government. “Lowering the legislative threshold for allowing returns of surplus could encourage trustees, in conjunction with their employers, to adopt a more ambitious mindset and take on slightly riskier investment strategies, including greater investment in UK assets,” Zoe Alexander, director of policy and advocacy at the Pension Lifetime Savings Association, said. Jonathan Lipkin, from the Investment Association agreed, saying: “With the right guardrails in place, the government’s proposals could help channel more funding into the economy, by enabling schemes to invest more widely and take on greater risk, while allowing for members to receive an uplift to pension benefits.” Reeves and Prime Minister Keir Starmer are set to meet with business leaders in the City of London today to outline the reforms.

Frasers Group owner Mike Ashley has called on the Chancellor to hold HMRC “to account” after winning a victory over the taxman in a data protection court battle. The High Court said HMRC had taken “too narrow an approach” when it refused to hand over personal information to Ashley following a subject access request he made to ascertain what information it held on him. HMRC initially claimed the price of properties the billionaire sold in 2012 had been inflated and he owed an additional £1.6m in tax on the sale, but ditched the claim after a challenge in 2022. [1]Ashley’s lawyers then made a request for HMRC to share his personal data in connection to the inquiry. HMRC provided some data 17 months after the request was made, and a month after the legal action was filed, the court heard. Barrister James Cornwell for HMRC, said the tax body “frankly accepts” that it previously failed to comply with obligations. An HMRC spokesperson said: “We take our data protection obligations very seriously and respect the rights of taxpayers who wish to access the personal data we hold about them. We acknowledge the court’s findings and its helpful guidance, and we will reconsider our response to the request made by Mr Ashley.”

Amazon has unveiled plans to launch Britain’s first drone delivery service in Darlington, saying it will seek permission to launch the deliveries from its warehouse on the outskirts of the County Durham town. Amazon said customers will be able to opt in to drone delivery, or have orders delivered as usual. No time scale has yet been given for the new service. Amazon’s first UK drone test flights began in Cambridgeshire a decade ago but repeated setbacks led to the UK programme being cancelled.

Good Energy has recommended shareholders accept a takeover bid worth £99m from Dubai's Esyasoft. The cash offer represents a 66% premium to Good Energy’s closing price on 25^th October.

US chipmaking giant Nvidia suffered the largest stock market slump in history yesterday after the launch of DeepSeek, an advanced Chinese artificial intelligence (AI) model, raised doubts about the future of what is currently the world’s most valuable company. Nvidia closed over 17% down on Wall Street, losing almost $600bn in value. The loss was equivalent to just over a third of the total market capitalisation of the FTSE 100 and more than the value of Exxon Mobil, American’s largest oil company. DeepSeek has produced a highly advanced AI model said to be developed for just $5.6m (£4.5m), a tiny fraction of the cost of those made by Silicon Valley tech giants, and despite US bans on the sale of its most advanced AI microchips to China. In stark contrast to DeepSeek’s claimed spend, Microsoft plans to invest $80bn in AI this year; Mark Zuckerberg’s Meta has announced at least $60bn in investments on Friday; and Japan’s SoftBank, ChatGPT-developer OpenAI and US software company Oracle last week announced combined plans to invest $500bn into AI in America over the next four years. Jim Reid, a strategist at Deutsche Bank, told The Telegraph: “DeepSeek’s development has been in an era where China has been restricted from accessing the highest-end AI technology and chips, with limited access to Nvidia’s products. So for now this raises the potential for stratospheric valuations in US tech firms to be questioned.” US President Donald Trump said DeepSeek should act as “a wake-up call for our industries that we need to be laser-focused on competing to win.”

And finally… A prototype of a passenger jet meant to succeed Concorde will attempt to break the sound barrier for the first time today. Boom Supersonic’s XB-1 demonstrator is set to exceed Mach 1 (770 mph) in a series of four-minute runs above the Mojave Desert in California. The test model is one third of the size of the Overture passenger jet the company plans to use for passenger flights. Eventually, Boom aims to produce 33 aircraft a year at its factory in North Carolina and sell them for around £200m each. Each will transport around 65 passengers at cruising speeds of Mach 1.7, twice the speed of the fastest commercial aircraft today. Outline orders have already been received from airlines including United and American.

[1] Editor’s note: I am checking how additional tax was due on an inflated property sale with HMRC.