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The Policy Initiative Andy Burnham has said he would consider cutting some employers’ national insurance contributions, and proposed a cut to business rates for pubs and small, family-run enterprises, in his first significant policy initiative during the Makerfield byelection. The Business Rates Proposal Burnham’s plans amount to a notable criticism of Keir Starmer’s policies in these areas. In his announcement on business rates, the Greater Manchester mayor said: “Labour have got it wrong on small businesses.” Pubs, clubs and music venues would receive a 20% cut next year Smaller, independent hospitality, leisure and retail companies would have the threshold for paying business rates raised for the first time since 2017 The Impact Analysis The cuts would be paid for, according to the proposal, by higher levies on giant warehouses operated by online firms such as Amazon, and targeting the owners of empty high street properties. “I am willing to be honest about where we have fallen short and say that my party has got this wrong in government,” Burnham said in the statement. “They have undervalued the contribution these businesses make to our livelihoods and our communities. The Prediction Burnham is hoping to return to Westminster in the byelection on 18 June, a contest triggered after the sitting MP, Josh Simons, stepped aside in the hope that the Greater Manchester mayor would take his place and go on to challenge Starmer for the Labour leadership. Speaking during a BBC Question Time special on Thursday evening, Burnham confirmed that this was his intention if elected. He said the former health secretary Wes Streeting appeared to want to challenge Starmer, and if that happened “I would seek to join it”.

The Plight of Taxpayers Waiting for Rebates Multiple individuals have faced substantial delays in receiving tax rebates from HMRC, with some waiting up to a year or more for their refunds. These delays have caused significant financial strain, forcing some to use their savings or sell assets to cover costs they believed they owed. Case of a Year-Long Wait for a £153,500 Rebate A father, aged 86, applied for a rebate a year ago after overpaying inheritance tax. Despite HMRC confirming he was owed £153,500 eight months later, he waited another two months without hearing back. His situation worsened as he had to use his savings and sell a field to pay the tax he thought he owed, leaving him short of money. 13-Month Wait for a £5,094 Refund CK, living in Spain, faced a 13-month delay for a refund of £5,094 due to an HMRC error. She had initially paid £8,000 for class 3 national insurance contributions, only to discover she was eligible for the much cheaper class 2. Despite alerting HMRC and receiving a calculation, she waited months for her refund. Efforts to Address the Delays HMRC has acknowledged the issues, citing 'handling errors' and a surge in applications. The government has urged HMRC to improve its response times, and the agency has recruited additional staff. In some cases, intervention led to immediate resolution, with refunds being processed and paid out quickly. A Happy Ending for Some In a positive note, some individuals have seen swift resolutions after their cases were raised with HMRC. For instance, JI, 83, received £63,872 in overpaid tax after a five-month wait, following intervention. The Data Analysis: Financial Impact of Delays £153,500: The amount owed to a father in inheritance tax rebate. £5,094: The refund owed to CK for an overpayment in national insurance contributions. £63,872: The amount of overpaid tax returned to JI. The Impact Analysis: Why Taxpayers Are Affected The delays in tax rebates have significant implications for taxpayers, particularly the elderly and those with limited financial resources. These delays force individuals to use their savings or take on debt, exacerbating financial difficulties. The Prediction: Future Outlook for HMRC's Tax Rebate Process With HMRC's efforts to recruit more staff and address handling errors, there is hope for improvement in the tax rebate process. Enhanced efficiency and communication are crucial to preventing future delays and ensuring taxpayers receive their refunds in a timely manner.

The Crisis in Youth EmploymentThe boss of Next, Lord Wolfson, has issued a stark warning about a "dramatic fall" in entry-level jobs across the UK, highlighting how this trend is driving up youth unemployment. The clothing and homeware retailer, where Wolfson has been chief executive since 2001, typically received 10 applications for every job in its shops in 2024, but that number has now surged to 19."That doubling of applicants for shop jobs is indicative of just how big the crisis is in youth unemployment at the moment," Wolfson told the BBC. His comments come as a government-commissioned report is expected to find that Labour has failed to tackle the soaring number of people not in education, employment or training (Neet), with almost a million young people in this category.Changing Retail Landscape and Employment PracticesThe retail industry is undergoing significant transformation, with Next increasingly adopting automation and other technologies such as self-scanning lockers for customer returns, reducing the need for staff on tills. This technological shift is part of a broader trend where entry-level roles are most vulnerable to the advent of artificial intelligence.Wolfson specifically pointed to the upcoming ban on zero-hours contracts, included in the government's Employment Rights Act, as a factor that will make hiring more difficult. "While I am in favour of eliminating zero-hours contracts in most sectors, the new rules are tricky for retail, because the risk is you then have to contract for those hours forever," he explained.More than a million people in the UK are currently working on a zero-hours contract basis, spanning hospitality, warehouses, and even the NHS. The new legislation will require employers to offer guaranteed hours to casual workers, a change Wolfson suggests will make it "much harder" for Next to offer more flexible hours to its staff.Economic Pressures on Businesses and Young WorkersWolfson, who received a record pay package of more than £7m last year and could be paid up to £9.27m this year, called on the government to reverse the rise in national insurance contributions (NICs) employers have to pay, alongside minimum wage increases. These cost pressures, he argued, have led Next to reduce staffing levels in individual stores while its online business continues to thrive."Traditionally, young people often get their first week experience at a shop stacking shelves or serving drink and food in a restaurant, cafe or pub," Wolfson noted. "Because of the cost increases, we have fewer staff in individual shops."A Treasury spokesperson countered: "Cutting wages for the lowest paid during a time of global uncertainty is not the answer. Increasing the national minimum wage boosts pay for over 200,000 young workers, and employer NICs are lower when hiring under‑21s."Industry Transformation and Labor Market ChallengesThe retail sector's evolution reflects broader changes in the UK labor market. Alice Martin, head of research at the Work Foundation at Lancaster University, emphasized that "young people are entering one of the toughest labour markets in years, facing intense competition for a shrinking number of entry-level jobs."Retail and other sectors are changing rapidly, with more online sales and fewer staff needed on the shop floor. This transformation has contributed to a sharp fall in vacancies, leaving many young people facing repeated rejection as they try to enter the workforce."A difficult labour market is no excuse for undermining pay or job security," Martin added. "The ban on exploitative zero-hour contracts is long overdue. One in five workers in the UK is in severely insecure work, without predictable pay or basic protections."Future Outlook for Youth EmploymentWolfson suggested that ultimately, the best way to improve the jobs market is through economic growth. "Youth unemployment is really a symptom of wider problems with employment in the economy, and of course, if you've got fewer jobs, the people who suffer most are the people with the least experience and that is the youngest," he explained.The government's upcoming "system reset" to address the Neet crisis will likely need to address multiple factors simultaneously, including the changing nature of work, technological displacement of entry-level positions, and the need for better pathways for young people into sustainable employment.As Next continues to invest in its online operations while reducing physical store staffing, the company's experience may serve as a microcosm of broader economic shifts that will require innovative solutions to ensure young people can successfully transition into the workforce.

Catastrophic Systems Failure in Youth Employment StrategyLabour has failed to tackle soaring youth unemployment and must launch a "system reset" involving a fresh attempt to overhaul health and disability benefits, a report commissioned by the government is to warn. Alan Milburn, who is leading a review into why almost a million young people are not in education or work, said ministers had so far responded with a series of disjointed jobs programs.The Milburn Review's Stark Assessment"It's going in the wrong direction," Milburn said. "When you look at that picture I guess our conclusion is it's a catastrophic systems failure." The former Labour health secretary will say in a highly anticipated report due to be published that the government must take a fresh approach to overhauling Britain's system of welfare and jobs support for young people.UK's Youth Unemployment Crisis in NumbersExperts have warned of a crisis in youth jobs, with official figures expected to show the number of young people not in education, employment or training (Neet) is close to breaking through a million. Britain has the third-highest rate of 16-24-year-olds who are neither earning or learning among wealthy European countries.Policy Conflicts and Economic PressuresThe figures come with Labour under pressure from business leaders who argue that the £25bn increase in employers' national insurance contributions by the chancellor, Rachel Reeves, and an attempt to equalise minimum wages between young and older workers have contributed to soaring rates of youth joblessness.Path Forward: Welfare Reform with Employment FocusMilburn criticised Labour's previous attempts for prioritising cost savings over outcomes for people with health conditions and disabilities. "If you frame welfare reform through a cost-out lens, guess what you get? That's not the way to approach this," he said. "It's needed more for moral reasons than for fiscal reasons. It can't be right that young people who want to work are not being supported to do so."

The Rise of the Neet Rate and Structural CausesBritain is facing a 'crisis' in youth employment, with the number of 16- to 24-year-olds not in education, employment, or training (Neet) reaching nearly 1 million—the highest level in over a decade. The Resolution Foundation has identified the UK as having the third-highest Neet rate among Europe's richest countries, trailing only Italy and Lithuania.2019 vs 2025: The Neet rate for 18- to 24-year-olds rose from 13% to 15%.Scale: There are now 900,000 Neets in the UK.Comparison: The UK rate is higher than Germany and Denmark, and more than three times that of the Netherlands.The thinktank attributes this decline to a 'quartet of causes': a rise in ill-health, weak vocational education, a hands-off benefits system, and a deteriorating jobs market.The Economic and Policy Drivers Behind the SurgeThe deterioration of the UK's youth labor market is not solely due to economic cycles but is driven by specific policy decisions and systemic failures. The Resolution Foundation highlights that a weaker jobs market contributed to just over half of the recent rise in Neets since 2019.Employer Costs: Chancellor Rachel Reeves's £25bn rise in employer national insurance contributions (NICs) has been criticized by business leaders for driving up employment costs.Benefits System: Unlike peers with lower Neet rates, the UK has a distinct benefits system where 300,000 young people receive benefits with no requirements to engage with the Department for Work and Pensions.Mental Health: A significant portion of the remaining rise in Neets is explained by rising ill-health, particularly mental health issues.The Societal Cost of a Failing Transition to WorkThe widening gap between the UK and its European peers signals a deeper societal issue regarding the transition from education to the workforce. Lindsay Judge, the Resolution Foundation's research director, argues that the current system 'both expects and provides too little' to claimants.The stark contrast with countries like the Netherlands, which maintains a Neet rate a third of the UK's, underscores the need for a fundamental rethink of how young people interact with the benefit system and access vocational training.The £2.5bn Youth Guarantee and Future Policy OutlookIn response to the alarming statistics, the government is pivoting toward a 'working state' rather than a 'welfare state.' The upcoming policy measures aim to address the barriers preventing young people from entering the workforce.Youth Guarantee: A £2.5bn investment is being deployed to deliver a million opportunities, ensuring every young person has the chance to earn or learn.Independent Review: Former Labour health secretary Alan Milburn is expected to publish findings next month on the barriers stopping young people from getting into work.Disability Support: An additional £3.5bn is being allocated to provide tailored employment support for sick or disabled people.

The Lead: High-End Club's Service Charge ControversyExclusive Mayfair club Annabel's has admitted using more than £70,000 of staff service charge money to pay bonuses to managers, prompting a significant staff revolt. Restaurant tycoon Richard Caring, who owns the venue that has hosted celebrities, financiers and even royalty, called the practice a "dumb mistake" after being approached by The Guardian. The club has since implemented changes and made additional payments to staff, but workers continue to protest demanding better pay and transparency in how service charges are distributed.The Event Details: Service Charge Distribution at Annabel'sAnnabel's, located in London's prestigious Mayfair district, is known for its exclusive clientele who can spend more than £10,000 at a single table. Guests pay an optional 15% service charge, which is intended for staff, plus a £3-per-head cover charge kept by the company. The club can collect over £100,000 in service charges in just one week, with prices ranging from £6 for a latte to £125 for a ribeye steak.The service charge is distributed through a system called a tronc, which is shared among approximately 280 hospitality workers. Cash tips are divided separately. More than 60% of frontline staff are paid the £12.76-an-hour rate, which is just 5p above the legal minimum wage, making them heavily reliant on these gratuities to pay their bills.Workers discovered that their share of the bumper pre-Christmas service charge had been reduced by £70,000 to fund bonuses for about 50 managers. This revelation caused widespread anger among staff, with one noting, "everyone got mad" when they realized what had happened.The Financial Impact: Pay Structure and Legal ImplicationsAnnabel's staff are predominantly on zero-hours contracts and paid £12.76 an hour, with their earnings supplemented by tronc payments based on seniority. This pay structure means that tips constitute a significant portion of their income, with one worker stating, "There's really no fixed salary at all, it's low" and another noting, "Tips are a huge bit of pay. We cannot rely on minimum wage."Businesses do not pay national insurance contributions on service charges and tips, making this payment method financially advantageous for employers. Under UK law implemented in October 2024, employers must share 100% of service charges and tips with workers in a "fair and transparent manner," and employees have the right to know how these payments are allocated.Following the controversy, Annabel's made a "goodwill payment" of £103,000 to hourly workers at the start of April. The club claims it held a "full consultation" in 2024 on its previous policy of using "surplus tronc" to fund manager incentives, and maintains that it fully complies with the 2024 legislation.The Industry Impact: Changing Practices in UK HospitalityThe Annabel's controversy highlights broader issues in the UK hospitality industry regarding pay transparency, zero-hours contracts, and tip distribution. The incident comes as Richard Caring is selling a majority stake in his hospitality empire—including Annabel's, Harry's Bar, The Ivy restaurant group, and other upscale establishments—to Abu Dhabi's Sheikh Tahnoon bin Zayed al-Nahyan for a reported £1.4bn.The Ivy chain is currently defending legal action from a waiter who claims he was refused details about how the restaurant group calculated his share of tips and service charges, indicating that Annabel's situation is not isolated.The IWGB union, representing dozens of Annabel's workers, is demanding that staff be paid at least London's independently verified living wage of £14.80 per hour, with greater transparency in service charge distribution and contractually guaranteed hours. Henry Chango Lopez, the union's general secretary, highlighted the disparity between the club's affluent clientele and struggling staff: "The billionaires and A-listers who make up Annabel's clientele can spend more on a single meal than the club's [little more than] minimum-wage, zero-hours staff take home in a month."The Future Outlook: Reform and ResistanceAnnabel's has announced plans to offer contracts guaranteeing at least 20 hours of work per week, with the aim of implementing them before an effective ban on zero-hours contracts takes effect in September 2025. Caring acknowledged that the club's tronc system could be more transparent, stating, "I believe in openness … Everybody should know what they are getting."Despite these changes, some Annabel's workers remain dissatisfied and plan to protest outside the Mayfair club. The controversy reflects growing pressure on high-end hospitality establishments to address wage inequality and improve working conditions as UK consumers become more conscious of how their tips are distributed.This case may set a precedent for other venues in the UK hospitality sector, particularly as enforcement of the 2024 tip-sharing legislation continues to develop. The industry faces increasing scrutiny as workers become more organized and aware of their rights, potentially leading to widespread changes in how service charges and tips are managed across the sector.

Lead: OECD Flags Record Rise in UK Tax WedgeThe Organisation for Economic Cooperation and Development reports that the UK’s tax wedge – the total tax burden on labour – jumped by 2.45 percentage points in 2025, the steepest increase among the 38 OECD members.The Surge in Britain’s Tax WedgeAccording to the OECD’s annual study, the rise was driven by Rachel Reeves’s 2024 autumn budget, which lifted employer National Insurance Contributions and allowed fiscal drag to intensify.Numbers Behind the Rise: International ComparisonUK tax wedge: 32.4% (still below the OECD average of 35.1%)Next biggest increase: Estonia, +1.95 ppOther >1 pp gains: Germany +1.34 pp, Israel +1.09 pp24 of 38 OECD countries saw a rise; 11 fell and 3 were unchanged.Implications for the UK Labour Market and Fiscal PolicyThe higher tax burden adds pressure on low‑pay sectors such as hospitality, leisure and retail, where employment has already slipped. Labour’s promise not to raise taxes on workers is challenged by the inclusion of employer‑paid NICs in the wedge measure. The chancellor argues the steps are needed to repair public finances after 14 years of Conservative rule.Outlook: Future Tax Burden and Economic RisksThe International Monetary Fund projects that UK taxes as a share of GDP will climb at the fastest rate in the G7 through 2031, especially if the Iran‑related global recession deepens. Continued fiscal drag and higher NICs could further suppress take‑home pay and exacerbate unemployment risks.

Britain is confronting the most severe energy shock since the early 1970s, as exports of oil, gas and fertiliser from the Middle East have abruptly stopped. The government says a response plan exists, but details remain vague. It is unclear whether the UK is better prepared for the fallout from Donald Trump’s war with Iran than it was for the pandemic six years ago. Ministers are sending a "we have your back" message to the public while simultaneously signalling to financial markets that any assistance will be limited and targeted. Contingency planning is especially difficult when dealing with an unpredictable leader like Trump. Britain’s heavy reliance on imported energy and food means that reassurance can only hold for a short time. The economy entered the conflict already on shaky ground: unemployment rose steadily throughout 2025 and growth stalled to a virtual standstill in the final quarter of that year. The sudden loss of Middle‑East energy and fertiliser supplies now adds a colossal supply shock. Last year, Trump’s “liberation day” tariff hikes served as a dry run for a far more serious confrontation. This time, the war is taking place in a region that is both volatile and crucial to the global economy. In the past two weeks, the repercussions have been felt across Asia – the Philippines declared a state of emergency, Sri Lanka introduced a four‑day work week, and South Korea announced budget measures to help households cope with soaring energy bills. The continent is the most dependent on Gulf‑exported energy, making the impact there the sharpest. The International Monetary Fund warned that the shock will drive higher prices and slower growth worldwide. Shortages push fuel and food prices up, eroding disposable income, prompting businesses to cut staff, and increasing the risk of recession. The UK, already projected to be one of the poorest‑performing major economies in 2026, could see its fresh graduate cohort face a brutal job market. Trump’s claim that the war could end within two or three weeks appears desperate. Even a rapid cease‑fire would leave substantial collateral damage, creating a stagflation scenario that could hurt Republican prospects in the upcoming mid‑term elections. British officials hope a swift resolution will limit economic damage, allowing a short‑term inflation spike to subside and the Bank of England to resume interest‑rate cuts. Treasury plans include scrapping the planned autumn fuel‑duty rise and providing targeted help for the poorest households, though the path is unlikely to be that simple. Currently, the Treasury is hesitant to act boldly for fear of unsettling bond markets. History – the 2008 banking collapse and the 2020 pandemic – shows that governments can act decisively without triggering a market backlash, using tools such as aggressive rate cuts, increased borrowing, and quantitative easing. The Bank of England has warned of a "substantial negative supply shock" and is expected to soften markets for future rate cuts, which are inevitable. Finance Minister Rachel Reeves could mitigate labour‑market pain by reversing recent increases in employers’ National Insurance contributions, subsidising public transport, and even lowering speed limits to conserve energy. The war, like the pandemic and Russia’s invasion of Ukraine, underscores the fragility of global supply chains and the need for greater British self‑reliance. Investing heavily in renewable energy is essential, but the UK also imports roughly 40% of its food and has not run a manufacturing trade surplus since 1982. In a world of disrupted supply lines, a robust plan for economic self‑sufficiency is more urgent than ever. Larry Elliott is a Guardian columnist.