Business

In today’s fast-paced digital world, businesses need to come up with new strategies to get people’s attention and stay ahead of the competition.

Pay-per-click (PPC) ads have become an important tool in this search. Organic marketing strategies might take months or even years to show real results. PPC, on the other hand, gives businesses a quick way to get noticed right now. PPC is one of the most accurate and effective digital marketing methods accessible today since it lets brands show their products and services directly to consumers who are looking for them.

What Is Pay-per-click?

PPC is a type of online advertising model in which businesses pay every time someone clicks on their ad. This method is like renting a busy area on the internet for your digital billboard so that the correct people see your brand message at the right time. A pay-per-click agency can put your brand in front of your target audience right away, instead of waiting for your website to rise in the search engine ranks through SEO.

This kind of advertising doesn’t just work on search engines but also powers ads on social media sites, including Facebook, Instagram, Twitter, and LinkedIn. Google Ad Services and Bing PPC Ads are the most well-known avenues for e-commerce PPC marketing. Pay-per-click ads on these sites are made to reach target groups based on factors like their age, where they live, what they like, and how they act online. A local PPC agency can help your business reach its unique goals, whether they are to get more leads, make more sales, or get more people to visit your website.

How Does Pay-per-click Work?

Pay-per-click advertising services are based on a complicated but interesting system of auctions. Every time someone types in a keyword that has to do with your goods or service, an auction happens right away. The search engine’s algorithm looks at a number of things to decide how much each ad in the auction is worth. Your bid amount, or the most you’re willing to pay for a click, is one item that matters, but it’s not the only thing.

The quality of the ads is just as essential. Search engines want their customers to have the best experience possible, so they give rewards to advertising that are useful and relevant. Click-through rate (CTR), how well the ad copy relates to the keywords, and the quality of the landing page the ad leads to are all elements that affect your ad’s Quality Score. A high-quality score will help you get better ad positions and decrease prices per click, which will give you the most return for your revenue.

Different Types of PPC Ads

There are many different types of PPC ads, each with its benefits and uses. You might be most familiar with search ads. These text advertisements show up above or below organic search results, making them easy to see for people who are actively looking for specific products or services. Because they show up on search engine results pages (SERPs), people who see them are likely to want to buy or learn more.

Display advertising, on the other hand, is visible and can be seen on several websites in the form of a banner. These ads are great for getting people to know about your brand and keeping your business in the memory of people who aren’t ready to buy yet. Display ads can have pictures, animations, and interactive parts to get people interested and keep them interested.

Shopping advertising is a big deal for online stores. They show your products in search results with pictures, pricing, and descriptions, which makes it easier for people to compare options and buy. Video advertising uses storytelling and visual interaction to reach people in a more immersive and interesting way on platforms like YouTube. Lastly, social media advertising combines the accuracy of PPC and the reach of social media. This advertising lets you target people based on their interests, activities, and social interactions, making it easier than ever to reach people who are most likely to connect with your company.

Making a Successful PPC Campaign

Making a successful PPC campaign is both a science and an art. It starts with doing a lot of PPC keyword research. It’s really important to know what search phrases your target audience uses so that your advertising shows up in front of the correct people. Finding the most popular phrases isn’t the only thing keyword research is good for. It’s also good for finding long-tail keywords that show what a user wants and often have less competition.

The next step is to write persuasive ad copy. There are a lot of ads online, so yours needs to be clear, interesting, and directly address what the user wants or needs. This is your moment to show off what makes you special and get them to click. But a good ad is only one half of the puzzle. The page that consumers get to after clicking on your ad must be just as well thought out. A smooth transition from ad to landing page not only raises your Quality Score but also makes it more likely that visitors will become buyers.

You also need a good bidding strategy. You can pick between manual bidding and automated tactics that help the platform’s AI optimize bids for you, depending on your goals. These could include getting more clicks, conversions, or brand exposure. If you keep your budget and bids in check, you’ll get the most out of every dollar you spend.

The Benefits of PPC Ads

There are many strong reasons to use PPC. One of its best features is that it can get results right away. It can take months for SEO efforts to pay off, but a well-run PPC campaign can get your brand to the top of search results in only a few minutes. PPC also lets you target people with unmatched accuracy. You get to choose your audience based on factors like age, geography, device, hobbies, and even the time of day they see your advertising. This implies that your advertising money is targeting the people who are most likely to buy, which brings in better leads for your business.

One of the best things about pay-per-click ads is that they give you a lot of control. You can change campaigns in real-time, try out alternative ad versions, and stop campaigns if you need to. PPC lets you track and analyze every click, conversion, and impression in detail. This makes it easier to improve your approach and get the most out of your investment.

How to Deal with Common PPC Problems

PPC has a lot of benefits, but it also has some challenges that marketers need to be ready to deal with. Bidding on popular keywords can get expensive in really competitive fields, which raises your cost per click. To deal with this, many advertisers focus on long-tail keywords that are more particular and less expensive. This gives them a higher chance of reaching niche consumers.

Ad fatigue is another issue. People may stop clicking on an ad after viewing it several times, which can lower the click-through rate over time. To stop this from happening, you need to change your ad creatives often and try out different messaging and pictures to keep your audience interested.

It is also an ongoing process to keep a high-quality score. Not only do ads that aren’t relevant or are poorly targeted cost extra, but they also do poorly in the auction system. Your Quality Score and the success of your campaign will stay high if your ads are closely related to what users want and your landing pages are set up to get people to convert.

Conclusion: The Key to Success Online

Pay-per-click (PPC) advertising is one of the most potent tools that businesses have. It gives you the speed, accuracy, and ability that you need to do well in today’s digital economy. When used wisely, PPC may change the way you market your business by bringing in a continuous supply of high-quality visitors, increasing conversions, and driving long-term growth.

To understand PPC, you need to know more than just the technical details. You also need to see how it may help you interact with your audience in important instances. You can unlock the full power of PPC and take your business to new heights in the digital age by leveraging Vooba’s PPC marketing services. They are the best in the field!

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Your Ultimate Guide to Understanding PPC

Sir Keir Starmer has unveiled a £1 billion investment package aimed at scaling up the UK’s computing power twentyfold, in a major push to solidify Britain’s status as a global technology and artificial intelligence leader.

Opening London Tech Week this morning, the prime minister said the investment would form part of the government’s long-term ambition to be “the best state partner for tech entrepreneurs anywhere in the world.”

The funding boost is expected to play a central role in the forthcoming spending review by Chancellor Rachel Reeves, with industry leaders anticipating further announcements on the development of AI growth zones. These zones would expedite planning approvals and guarantee access to clean energy for data centres—key enablers of AI development and deployment.

The move comes as tech giants and investors increasingly highlight the UK’s potential in AI, but also warn of infrastructure bottlenecks. Speaking at the same event, Nvidia’s chief executive Jensen Huang described the UK’s AI sector as “the envy of the world,” but added that the country lacks one crucial element: “If you’re in the world of AI, you do machine learning. You can’t do machine learning without a machine.”

Huang’s comments were echoed in conversations with Starmer and Baroness Gustafsson, the new minister for investment. “The ability to build these AI supercomputers here in the UK will naturally attract more start-ups,” Huang said, signalling that AI infrastructure will be key to maintaining the UK’s competitive edge.

The government’s AI strategy, outlined in January, promised a roadmap for national AI infrastructure within six months. Today’s announcement marks a major step towards that goal, addressing industry calls for greater clarity and investment in the physical and digital foundations needed to support advanced computing and innovation.

Starmer’s pledge is likely to be welcomed by tech investors and entrepreneurs, many of whom have argued that, despite the UK’s academic strength and entrepreneurial culture, its progress in AI has been held back by limited access to high-performance computing and grid-ready energy infrastructure.

The Prime Minister’s remarks also signal a shift towards a more collaborative relationship between government and the tech industry, with an emphasis on long-term, joined-up planning. “This is not just about creating infrastructure,” Starmer said. “It’s about creating confidence—confidence that the UK is a place where innovation can thrive, where start-ups can scale, and where the state is an active and reliable partner.”

With London Tech Week serving as a global platform for UK tech ambition, today’s announcement sets the tone for a pivotal summer in digital policy and investment. Whether this promise will translate into the infrastructure, skills and energy reforms the sector demands will likely be revealed in Reeves’s detailed budget plans later this week.

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Starmer pledges £1bn investment to supercharge UK tech and AI infrastructure

Artificial intelligence may be revolutionising everything from admin to healthcare, but would you trust it with your legal affairs? According to a new survey by The Legal Director, half of UK adults would — a finding that has sparked both fascination and concern across the legal sector.

The poll found that 50% of Brits would turn to AI over a traditional solicitor for legal decision-making, and a further 56% would trust it to interpret contracts or terms and conditions. That figure rose among younger respondents and men, with 55% of men and over 60% of Gen Z respondents saying they would rely on AI for legal guidance. By contrast, just 39% of over-75s would consider doing so.

Perhaps most surprisingly, a third of respondents said they would trust AI over friends for legal advice, while nearly half (46%) said they’d use it before seeking health advice. But while the appetite for digital decision-making is growing, experts are sounding a note of caution.

Kiley Tan, a lawyer at The Legal Director, warned that AI tools – especially large language models not trained on verified legal material – are not yet fit for purpose in a legal context. “Legal services can be expensive, and there’s no doubt that AI seems like a clever workaround. But the results, though convincing, can be wildly inaccurate,” he said. “And in law, close isn’t good enough.”

Tan also pointed out that most contracts are not publicly available and so fall outside the datasets on which most AI systems are trained. This lack of access to real-world legal documents further limits AI’s ability to offer sound advice or draft enforceable contracts.

While tech evangelists praise AI for its speed and cost-efficiency, the survey revealed that trust in AI drops sharply as tasks become more personal or consequential. Two-thirds of respondents said they wouldn’t let AI perform surgery on themselves or a loved one. Over half wouldn’t trust it to plan their wedding or handle their bills.

Sarah Clark, Chief Revenue Officer at The Legal Director, echoed these concerns: “AI is brilliant at sorting data and automating admin, but when it comes to law, nuance matters. Context, consequences, emotional insight — these are all vital when interpreting the law or negotiating a legal outcome.”

Even among the most tech-forward demographic — those aged 18 to 29 — scepticism remains. While they were the most likely to consider AI for legal support, 43% still said they wouldn’t fully trust it, and nearly 40% wouldn’t rely on AI to read a contract on their behalf.

Ultimately, just 15% of the UK public said they would trust AI to perform all the tasks they were asked about — a clear indication that the human touch still matters in areas of judgement, risk and responsibility.

As AI continues its march into professional services, the message from the legal world is clear: use technology to assist, not replace. For now, when it comes to navigating legal complexity, there’s still no substitute for the trained eye of a human expert.

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Half of Brits would trust AI for legal advice, survey finds – but experts urge caution

Global business leaders are becoming increasingly paralysed by a relentless cycle of crises, with their excessive caution now posing a significant threat to growth, according to BDO’s Global Risk Landscape Report 2025.

The annual report, based on a survey of 500 C-suite executives at firms with revenues over $100 million, reveals that 84% of decision-makers believe the global risk environment is now defined by constant crisis—up from 76% last year. In response, nearly seven in ten (69%) say their organisations are now ‘risk averse’ or actively ‘risk minimising’, compared with 61% in 2024.

Alarmingly, the number of executives describing their risk management strategy as ‘very proactive’ has plummeted to just 7%, a sharp decline from 19% last year and 29% in 2023.

The top concerns dominating boardroom agendas include regulatory risk, supply chain fragility, talent acquisition and retention, geopolitical instability, environmental challenges, and cybercrime. While regulatory oversight is increasing, only 39% of respondents believe it significantly reduces company risk. The majority—57%—see it as only ‘somewhat helpful’, while a growing number of CEOs are expressing frustration over compliance costs they feel deliver limited strategic value.

Alisa Voznaya, partner and head of risk consulting at BDO, warned that too many leaders are responding to uncertainty with defensive stagnation. “The risk landscape for businesses has been in flux for more than a decade and shows no sign of stabilising,” she said. “Faced with this relentless volatility, some business leaders are being too hesitant to take decisions and are paralysed by fear. But this safety-first approach means businesses are missing out on opportunities and limiting their growth prospects.”

Voznaya argues that overreliance on compliance frameworks is leading to a box-ticking culture that distracts from the active management of real-world risks. “Many would do well to adopt a more proactive approach, engaging in regular scenario planning and anticipating the things that could go wrong so they can start to identify opportunities,” she added. “Businesses shouldn’t lose sight of the fact that there can be competitive gains to be made from responding positively to challenging circumstances.”

The research highlights a tension between the pressure to maintain resilience and the need to invest in future growth. With regulation increasing across almost every sector—from financial services and life sciences to manufacturing and private equity—executives report being bogged down in compliance rather than focusing on innovation or agility.

BDO’s findings suggest that risk management must evolve beyond static frameworks to become more dynamic and opportunity-led. As Voznaya concludes: “It’s time to move from paralysis to purpose. Businesses that can shift their risk mindset from reactive to resilient will be best placed to thrive in an era defined not by certainty, but by adaptability.”

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Business leaders paralysed by risk warn BDO as caution stifles growth

The number of inheritance tax (IHT) investigations launched by HM Revenue & Customs has soared by more than a third over the past year, as the government intensifies efforts to crack down on underpayment and boost Treasury revenues.

New figures obtained through a Freedom of Information request by accountancy firm Price Bailey reveal that HMRC opened 4,171 formal IHT investigations in the year to April 2025, up from 3,028 the previous year—a 37% jump.

The surge underscores a renewed focus from the tax authority as it seeks to recover what it believes are significant sums lost through misreporting or under-valuation of estates. HMRC recovered a record £8.2 billion in inheritance tax in the past year alone, driven in part by frozen tax thresholds, rising property prices, and growing asset values.

Executors responsible for managing estates are required to file an IHT return within 12 months of death, though any tax owed must be paid within six months to avoid accruing interest—currently charged at 8.25%. Where HMRC suspects an estate has been undervalued—whether through innocent oversight or deliberate evasion—it can trigger an investigation.

Experts say the investigations are often prompted by undervaluations of property, omitted assets, or complex gifts that fall under the “seven-year rule”, which allows gifts to escape IHT if the donor lives for at least seven years after giving them.

“The tax office has significant powers at its disposal,” said Nikita Cooper, tax partner at Price Bailey. “We’ve seen a notable rise in the number of cases where HMRC is using detailed data—including bank statements, investment histories and even foreign currency transactions—to scrutinise IHT returns more closely.”

Damian Bloom, partner at law firm Taylor Wessing, said the rise in investigations was being driven in part by greater access to data and increasingly sophisticated analytics. “As HMRC adopts more artificial intelligence tools, we expect this trend to accelerate,” he added.

IHT is charged at 40% on the value of an estate above the nil-rate band of £325,000. For estates that include a home passed on to a child or grandchild, a further £175,000 residence nil-rate band may apply, subject to the estate being worth less than £2 million. Together, a married couple or civil partners can pass on up to £1 million tax-free. These thresholds have been frozen until at least 2030.

More families are now finding themselves caught in the IHT net, particularly as property and pension values have soared over the past decade. From April 2027, the rules will tighten further, with unused defined contribution pension pots included in the taxable estate—likely adding to both liabilities and compliance risk.

Fiona Fernie, partner at Blick Rothenberg, said: “As families and advisers adapt to these new rules, we’re likely to see more mistakes—or perceived mistakes—leading to further scrutiny from HMRC.”

She added that while many people believe the system is unfair, especially amid rising asset inflation, attempts to reduce tax liabilities—however legal—can often trigger closer inspection.

HMRC insists that the “vast majority” of estates pay the correct tax and that investigations are only opened where there is evidence of underpayment. “Cases can range from genuine errors to deliberate attempts to evade tax,” a spokesperson said, adding that those who disagree with an HMRC assessment can appeal.

For families navigating bereavement and estate administration, the message is clear: careful and transparent valuation of assets—and early expert advice—can reduce the risk of being caught up in an IHT probe.

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HMRC inheritance tax investigations surge 37% as treasury seeks to plug revenue gap

Electric vehicle charge point operator Believ has secured £300 million in funding to install at least 30,000 public EV chargers across the UK, in a move that cements its position as one of the country’s best-backed providers and significantly boosts Britain’s charging infrastructure.

The investment—led by Believ’s joint owners Liberty Global and Zouk Capital, along with four major banks: Santander, ABN Amro, NatWest and MUFG—will accelerate the rollout of accessible, reliable charging facilities nationwide. It comes at a critical time as the UK government pushes towards its target of 300,000 public charge points by 2030. Currently, fewer than 85,000 are installed.

“This funding recognises the scale of investment required and the urgency of the need,” said Believ CEO Guy Bartlett. “Confidence in EVs will continue to grow as drivers see more infrastructure going into the ground. At Believ, we are proud to be at the heart of this journey.”

The £300 million funding facility is set to be used for the development of a diverse mix of on-street residential charge points, rapid and ultra-rapid charging hubs, and charging infrastructure in rural and underserved areas. The expansion will ensure a more equitable transition to electric mobility, particularly for drivers without access to off-street parking.

Backed by the UK Government’s Charging Infrastructure Investment Fund, co-managed by Zouk Capital, the initiative showcases how private capital and public partnerships can work together to scale green infrastructure. Massimo Resta, partner at Zouk Capital, called the investment “a major moment not just for Believ, but for the UK’s electric future,” adding that the company is “poised to deliver what communities and landowners need—at real scale and pace.”

The news comes amid a wider national push for EV adoption. The government has pledged £2.3 billion in total support, including a £200 million fund to scale public charging and a dedicated £381 million Local Electric Vehicle Infrastructure (LEVI) Fund. Recent Believ wins include Suffolk County Council’s pioneering LEVI contract, alongside a strong pipeline of private sector deals.

Lilian Greenwood MP, Minister for the Future of Roads, welcomed the investment: “Believ’s investment is a brilliant vote of confidence in the transition to electric and another fantastic example of Government and industry working together. We’re delivering our Plan for Change by investing in EV charging infrastructure, securing trade deals and backing British carmakers to drive forward net-zero growth.”

Jonathan Pearson, Chairman of Believ and CFO of Liberty Growth at Liberty Global, added: “This shows what’s possible when public and private sectors collaborate on critical infrastructure.”

With delivery partner Virgin Media O2 and support from Liberty Global’s financial and operational expertise, Believ is now positioned to roll out tens of thousands of charge points in key locations—including town centres, residential streets, and high-traffic routes—ensuring no community is left behind in the transition to cleaner transport.

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Believ secures £300m to roll out 30,000 public EV charge points across the UK

Senior US and Chinese officials are meeting in London today for high-level talks aimed at easing trade tensions between the world’s two largest economies, amid growing market optimism and mounting pressure from slowing export growth and political unrest.

Scott Bessent, the US Treasury Secretary, is expected to be joined by top aides from President Trump’s administration as they sit down with Chinese counterparts at an undisclosed London venue. The meeting marks the latest attempt to resolve the protracted trade war that has dominated global economic headlines since early 2024.

Markets responded positively to the news, with Asian stocks rallying on hopes of a diplomatic breakthrough. Japan’s Nikkei 225 and Hong Kong’s Hang Seng index both gained around 1 per cent in early trading, buoyed by signs that the US and China may be inching closer to compromise. European markets are expected to open with more caution.

The backdrop to the talks is a fresh set of economic data from Beijing showing Chinese export growth slumped to a three-month low in May, under pressure from the latest wave of US tariffs. Analysts say the softening figures may increase Beijing’s urgency to de-escalate the trade conflict, which has already dented supply chains and global investor confidence.

The summit also comes amid unrest in the US, with protests erupting in Los Angeles over President Trump’s immigration policies. The political pressure at home may be weighing on the White House’s appetite for further economic disruption.

While no major breakthrough is expected immediately, today’s meeting is seen as a crucial step in resetting diplomatic ties and laying the groundwork for a broader agreement. With the global economy slowing and both nations facing domestic headwinds, analysts say the incentives for compromise have never been clearer.

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US and China hold London talks to ease trade war tensions

British dads are being called to take part in the world’s first “Dad strike” this week, as growing frustration over the UK’s lack of meaningful paternity support reaches a tipping point.

Organised by campaign group the Dad Shift, the protest will see fathers and babies gather outside the Department for Business and Trade in London on 11 June to demand better rights and pay for new dads and non-birthing partners.

The strike comes in response to what campaigners call “Europe’s least generous” statutory paternity leave system – just two weeks at a flat rate of £187.18 per week. For many working fathers, especially those who are self-employed or on lower incomes, taking time off after a child’s birth is simply unaffordable.

“The UK’s rubbish paternity leave system means from the day our kids arrive, most fathers are forced to make an impossible choice between providing financially or being present,” said George Gabriel from the Dad Shift.

Despite early pledges, Labour’s proposed “day one” right to paternity leave under its flagship Employment Rights Bill has come under fire for failing to guarantee statutory pay. Campaigners say this omission threatens to entrench the inequality new mothers already face, and makes it harder for families to share caregiving responsibilities equally.

Polling from Whitestone for the Dad Shift suggests parents overwhelmingly support change, with 86% agreeing that children benefit when both parents are equally involved in caregiving. Yet today, the average British father spends 57% fewer waking hours with their child in the first year than mothers – 1,403 hours compared to 3,293.

Pete Target, who works in local government, said he would be joining the strike after his own experience of being “wrenched away” from his newborn just two weeks after birth. “It’s time to be more open about the struggles dads face,” he said. “We have needs too.”

High-profile backers, including self-employed podcaster Marvyn Harrison and workplace campaigner Chris Britton of Reward Gateway, say modern dads want to be present for their families but are being held back by outdated policy and workplace culture.

“Traditional views of parenthood no longer reflect modern society,” said Britton. “Fair paternity leave benefits everyone – mothers, fathers, children and employers. The beginning of parenthood is precious and fleeting. Parents should not have to compromise.”

The strike comes as companies like the BBC and Aviva lead the way with generous leave policies, offering up to 52 weeks for co-parents, while many others – including major firms like HSBC and KPMG – still offer only the legal minimum.

Campaigners are calling on the government to introduce six weeks of well-paid leave for fathers in the baby’s first year, and to make paternity pay more accessible for self-employed and lower-income workers.

With only 31.6 fathers in every 100 births receiving paternity pay – far below the OECD average of 57 – the UK ranks 40th out of 43 nations. Campaigners say without urgent reform, that figure will remain stagnant and women will continue to bear the brunt of parental responsibility at work and home.

Dads are now being urged to take the afternoon off, with businesses including creative agency The Romans and trades platform On The Tools pledging their support. For many, the strike is about sending a message not just to government, but to society at large: fathers deserve time, dignity and choice when it comes to family life.

As Gabriel puts it: “This is a revolutionary moment. We’re not just fighting for time off – we’re fighting for the right to be present from day one.”

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British fathers urged to join landmark ‘dad strike’ over poor paternity leave

Workers undergoing IVF treatment should be legally entitled to paid fertility leave and flexible working arrangements, the GMB union has declared at its annual congress in Brighton.

A motion passed on Sunday calls for new legislation to protect the rights of parents going through fertility treatment, amid growing concern that current employment policies are failing to support the thousands of people undertaking IVF each year.

More than 50,000 people undergo fertility treatment annually in the UK, yet many are forced to use up annual leave, take unpaid time off, or use sick leave to cover absences caused by appointments, procedures, or the emotional toll of failed cycles. The GMB said this lack of structured support disproportionately affects women and is leaving couples to navigate a deeply personal and medically intensive process without proper workplace protections.

The union has now committed to launching a national fertility rights campaign and will lobby the government to introduce new legal rights during this parliament.

“For many, IVF isn’t a choice – it’s the only option to start or grow a family,” said Majlinda Perlesi, a GMB delegate and council worker from Sheffield. “Yet despite the physical, emotional and financial toll it takes, there remains little to no structured workplace support.”

Perlesi stressed that infertility is recognised by the World Health Organization as a medical condition, yet those undergoing IVF are treated differently from people receiving other types of medical care.

“Unlike other medical treatments, those undergoing IVF are often made to use annual leave, unpaid time off, or sick leave – sometimes even facing stigma, judgement or discrimination in the workplace,” she said. “This is not just unjust – it’s inhumane.”

The GMB’s call follows a growing national conversation around reproductive health in the workplace. Campaigners have long argued that the UK lags behind other countries in recognising and supporting employees undergoing fertility treatment.

While some employers have introduced internal fertility leave policies, there is no legal requirement in the UK for companies to offer paid time off for IVF. The GMB’s proposal would aim to introduce statutory protections, including paid leave and the right to request flexible working during treatment cycles.

With the motion now backed by the union’s membership, the GMB is expected to begin campaigning for reform across both public and private sectors, urging MPs to back legislative change.

Supporters say it would mark a vital step forward in ensuring reproductive health is treated with the dignity and support it deserves in modern workplaces.

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IVF parents should have right to paid fertility leave, says GMB union

The Bank of England has dismissed calls from Reform UK to end interest payments to commercial banks on reserves, despite mounting political pressure over what critics claim is a vast and unnecessary drain on the public purse.

In a letter to the Bank’s governor, Andrew Bailey, Reform UK’s deputy leader Richard Tice (Pictured) accused Threadneedle Street of “enriching City institutions” to the tune of tens of billions of pounds, saying the current system had become “an unaffordable luxury” at the taxpayers’ expense.

At the heart of the row is the legacy of quantitative easing (QE) — the Bank’s £895 billion bond-buying programme launched during the global financial crisis and expanded in response to the pandemic. When the Bank purchased government bonds from commercial lenders, it credited their reserve accounts at the central bank. Today, those reserves total about £700 billion and are remunerated at the Bank’s base rate, currently 4.25%.

Reform UK argues that paying interest on these reserves is unnecessary and should be scrapped immediately — a move they claim could save up to £35 billion annually and help fund a “Great British tax cut”. Tice labelled the payments “voluntary interest” on money that was “created out of thin air” and insisted that commercial banks “cannot believe their luck” as rising interest rates have delivered windfall gains.

Indeed, Britain’s biggest high street lenders — Barclays, Lloyds, NatWest and Santander UK — disclosed last year that they collectively earned £9.2 billion in 2023 in interest on their central bank reserves. Reform and other critics — including former prime minister Gordon Brown and ex-deputy governors Sir Charlie Bean and Sir Paul Tucker — say it’s time to rethink a policy they argue is outdated and overly generous.

But the Bank of England is standing firm. Speaking to the Treasury Select Committee last week, Bailey defended the current approach, warning that scrapping interest payments could backfire by encouraging banks to withdraw their reserves from the central bank and instead invest in government bonds. Such a shift, he argued, would neutralise any fiscal gain, making the supposed savings to the taxpayer “illusory”.

A spokesman for the Bank said: “The governor set out the Bank’s views on this matter to the Treasury Select Committee.” Bailey maintained that paying full interest incentivises banks to keep reserves with the central bank, which provides important financial stability benefits.

The UK’s current system, introduced in 2006, differs from those of some other central banks. For example, the European Central Bank (ECB) operates a tiered reserve structure, in which lenders earn no interest on their minimum required reserves. Advocates for reform, including some in Westminster, argue that adopting a similar model in Britain could help ease the fiscal burden without endangering stability.

However, the UK’s banking industry has pushed back strongly. UK Finance, the trade association for banks, said any changes to reserve remuneration “would have real consequences for the UK economy and likely lead to consumers and businesses facing higher banking costs”.

Meanwhile, former Bank policymaker Gertjan Vlieghe has warned that failing to pay interest in full could be viewed as tantamount to a debt default, undermining confidence in Britain’s financial institutions.

Though politically eye-catching, Reform’s proposals highlight the delicate balancing act facing the Bank of England — navigating financial stability, inflation control, and government borrowing costs, all while resisting political interference. For now, the interest payments continue, but pressure to reform the system looks unlikely to subside.

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Reform UK clashes with Bank of England over interest payments to lenders