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Farmers Rally Against Government’s Inheritance Tax Reforms, Calling It a ‘Betrayal’

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Thousands of farmers gathered in Westminster to protest the government’s proposed inheritance tax reforms, which they argue will jeopardize family-owned farms and threaten their future. The rally, organized by the National Farmers’ Union (NFU), was held at Church House, where attendees expressed their anger over the government’s failure to consult with the farming community before announcing the policy changes.

Tom Bradshaw, president of the NFU, received a standing ovation from the 600 farmers present as he condemned the proposed reforms as “the straw which broke the camel’s back.” Bradshaw criticized the government for pushing forward with the policy without consulting the farming sector, calling it a betrayal. “To launch a policy this destructive without talking to anyone in farming beggars belief,” he said. He also highlighted the severe inflation and difficult weather conditions that farmers have faced over the past 18 months, emphasizing that the sector had already given all it could. “It’s wrong on every level and, just as bad, it won’t achieve what the Treasury wants to achieve,” he added.

The government’s inheritance tax reforms are aimed at raising £520 million annually by 2029, targeting wealthy individuals who invest in large estates to reduce their tax liabilities. However, Bradshaw warned that the reforms would have unintended consequences. He argued that they could incentivize people to withdraw money from pensions to invest in agricultural land, potentially undermining the policy’s intended goal.

In an emotional address, Bradshaw spoke of the “unacceptable human impact” on elderly farmers, many of whom risk losing their life’s work under the proposed changes. “We know that any tax revenue raised will be taken from our children and raised from those who die in tragic circumstances or within the next seven years,” he said.

A key point of contention is the government’s seven-year gifting rule, which exempts gifts from inheritance tax if the giver survives for seven years after the transfer. Farmers argue that this rule would not apply to them, as many rely on pensions from the farm after passing it to the next generation. Additionally, if farmers continue living on the land, they would need to pay rent to avoid inheritance tax charges.

Farming leaders have accused the Treasury of working with flawed data, citing discrepancies between Agricultural Property Relief (APR) claims and Business Property Relief (BPR) claims, which are vital for machinery and livestock. The NFU insists that Treasury officials have overlooked the full scope of the tax reliefs that farmers rely on.

The rally’s charged atmosphere was underscored by a direct message to the government: “Government needs to halt this policy. The policy is broken and based on the wrong evidence.” Farmers also expressed their frustration with Labour, which, while in opposition, had promised not to alter inheritance tax. Sir Keir Starmer had assured farmers at the NFU conference in 2023 that his party would provide “certainty” for the sector.

As tensions mount, the farming community remains steadfast in its demand for the government to reconsider the inheritance tax reforms, warning of long-term damage to family-owned farms across the UK.

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Treasury Intervenes in Supreme Court Case Amid Motor Finance Mis-Selling Concerns

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The Treasury is seeking to intervene in a landmark Supreme Court case that could expose Britain’s motor finance industry to a mis-selling crisis on a scale comparable to the notorious PPI scandal. The government is urging the court to consider the broader implications for investor confidence in the UK’s regulatory framework and to ensure any compensation awarded is “proportionate.”

The Supreme Court will decide whether to permit the Treasury’s intervention, but the move highlights mounting concerns over potential liabilities for motor finance providers. Analysts estimate these liabilities could reach £44 billion, approaching the £50 billion total banks paid in PPI claims.

A Treasury spokesperson said: “We want to see a fair and proportionate judgment that ensures compensation to consumers that is proportionate to the losses they have suffered and allows the motor finance sector to continue supporting millions of motorists.”

Market Reaction

The announcement provided a lift to banks involved in motor finance. Close Brothers, a merchant bank with significant car finance operations, saw its shares surge by 20% to 294p. Lloyds Banking Group, owner of Black Horse vehicle finance, experienced a 4% increase to 61p.

RBC Capital Markets called the Treasury’s involvement “clearly positive for the UK banks with motor finance exposure.” However, it cautioned that the ultimate decision rests with the five Supreme Court judges.

Industry Alarm

The case follows an October Court of Appeal ruling that undisclosed commissions on motor loans were unlawful, leaving lenders liable to refund borrowers. The Financial Conduct Authority (FCA) has been scrutinizing the sector’s commission practices, with its review reaching back to April 2007.

As vehicle financing underpins approximately 80% of car purchases in the UK, the potential fallout could be enormous. Banks have already begun preparing for potential payouts. Lloyds has set aside £450 million, while Santander’s UK division holds £295 million. Close Brothers has yet to make provisions but recently suspended its dividend and sold its wealth management arm to raise £400 million in capital.

High Stakes

Jefferies analysts emphasized the importance of proportionate compensation. “The argument that any compensation due should be proportionate is key,” they stated.

If the Supreme Court upholds the Court of Appeal’s decision in April, lenders could face a wave of refunds, forcing a costly restructuring across the sector similar to the PPI debacle.

For now, the Treasury’s intervention provides some optimism for motor finance firms while underscoring the high stakes in what could become one of Britain’s most significant financial crises.

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Volkswagen Warns of Economic Fallout from Proposed US Tariffs on Mexican Imports

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Volkswagen has issued a warning about the potential economic consequences of the US administration’s proposed tariffs on Mexican vehicle imports. The automaker cautioned that such measures could negatively impact American consumers and disrupt the global automotive industry.

The warning follows statements from President Donald Trump, who indicated plans to impose tariffs of up to 25% on vehicles from Mexico and Canada by February 1. The proposed move is part of an effort to address concerns over migration.

Volkswagen, which operates a major manufacturing plant in Puebla, Mexico, expressed its opposition to the potential tariffs. The Puebla facility, Volkswagen’s largest outside Europe, produced nearly 350,000 vehicles in 2023, most of which were exported to the United States.

“The Volkswagen Group is concerned about the harmful economic impact that proposed tariffs by the US administration will have on American consumers and the international automotive industry. We remain a strong advocate for free and fair trade,” the company said in a statement.

Tariff Impacts on the Auto Sector

Volkswagen has invested over $10 billion in the US market and highlighted that open markets have historically driven global economic growth. Analysts from Stifel estimate that 65% of Volkswagen’s US sales are sourced from vehicles made in Mexico. Should the proposed tariffs take effect, Volkswagen may face significant challenges, with the brand’s competitiveness in the US market potentially at risk.

Volkswagen shares fell by 0.5%, dropping €0.50 to €96.35, amid the uncertainty. Shares of rival Stellantis also declined by 1.3%, closing at €12.68. Stellantis, which imports about 40% of its US-sold vehicles from Mexico and Canada, has supported initiatives to strengthen US-based manufacturing. John Elkann, Stellantis chairman, recently met with Trump and senior administration officials to discuss trade and manufacturing policies.

Broader Trade Implications

The proposed tariffs could jeopardize the US-Mexico-Canada Agreement (USMCA), which succeeded the North American Free Trade Agreement (NAFTA). Both Canada and Mexico have vowed to retaliate with counter-tariffs if Trump proceeds, raising the risk of a new trade war.

Financial markets reflected these concerns, with the Canadian dollar and Mexican peso weakening against the US dollar. By mid-morning, the Canadian dollar had dropped 0.9%, while the Mexican peso fell 1.2%.

As the automotive industry braces for potential disruptions, the proposed tariffs could have far-reaching implications for trade relations and market stability across North America.

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Bitcoin Hits Record High as Investors Bet on Pro-Crypto Trump Administration

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Bitcoin surged to a new all-time high ahead of Donald Trump’s second-term inauguration, topping $109,000 before settling at $108,214, marking a 6.5% increase. This surge in the popular cryptocurrency reflects growing optimism that the incoming administration will adopt a more favorable stance towards digital assets.

The rise in Bitcoin’s price, often referred to as the “Trump effect,” has spurred hopes that the president will use his executive powers to ease the regulatory burden on crypto firms. Investors are optimistic that Trump will integrate digital currencies into the mainstream financial system. Trump, who initially expressed skepticism about cryptocurrencies, has recently reversed course, pledging to make America the “crypto capital of the planet” and to create a “strategic reserve” of Bitcoin.

Reports indicate that Trump may sign an executive order early in his presidency to establish a “crypto advisory council,” a proposal he first mentioned in July. Additionally, Trump is expected to remove Gary Gensler, the chairman of the Securities and Exchange Commission (SEC), who has been a leading figure in the regulatory crackdown on the crypto industry. Gensler is reportedly stepping down on Monday in anticipation of his dismissal.

In a further push to embrace digital currencies, Trump launched a new “meme coin,” called $Trump, over the weekend, while his wife, Melania Trump, introduced her own token, $Melania. The couple has also ventured into the cryptocurrency space through World Liberty Financial, a family-run business focused on trading digital assets.

The promise of a crypto-friendly White House has also provided a boost to traditional markets. The FTSE 100 saw a modest rise of 0.14%, closing at 8,518.12, while the British pound strengthened by 0.18% against the dollar, reaching $1.2197. Investors are hopeful that Trump’s anticipated flurry of executive orders, potentially as many as 200 on his first day, will stimulate both the digital currency and equity markets.

Bitcoin, which was virtually worthless when it was created in 2008, has seen a dramatic rise in value. Five years ago, it was trading at just $7,333, and it crossed the $100,000 mark early last month. The cryptocurrency’s rise is further fueled by expectations that Trump’s administration will help integrate digital currencies into the financial mainstream, making them more accessible and appealing to a broader range of investors.

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