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Ross Clark

Angela Rayner is the victim of a convoluted tax system

Here is a rather delightful fact. For 13 years between 2010 and 2023 Britain had a quango called the Office for Tax Simplification. You may never have heard of it, but it really did exist. Its annual report for 2021/22 shows that it was chaired by someone called Kathryn Kearns and had a budget of £1.057 million, £868,000 of which was paid in staff wages. But here’s the thing. In 2010, when it was founded, Tolley’s Tax Guide – the accountant’s bible – ran to 867 pages. The 2023 edition – the year the Office for Tax Simplification was wound up – ran to, er, 1,020 pages. No one should

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Ross Clark

No, Ed Miliband: zonal pricing won’t cut energy bills

Is Ed Miliband going to announce a move towards a zonal electricity market, where wholesale prices would vary between regions of Britain? It would appear to be on cards following the Energy and Climate Secretary’s interview on the Today programme in which he said he was considering the idea. Miliband’s apparent support for the plan follows intense lobbying by Greg Jackson, CEO of Octopus Energy as well as support from the National Energy System Operator (NESO), the new government-owned company which oversees the grid. However, zonal pricing is bitterly opposed by others in the energy industry, including Chris O’Shea, the generously-moustached CEO of Centrica, and Dale Vince, CEO of Electrocity

Martin Vander Weyer

Would it be worth Trump buying Greenland?

London’s capital market needs a kick in the pants, as I write every week, and ‘activist investors’ are no bad thing if they provoke sharper corporate performance. The assault by the New York hedge funder Boaz Weinstein on seven UK investment trusts – demanding shareholder votes to replace directors with his own people and take the management of the trusts into his own firm, Saba Capital – looks like the kind of intervention that might bring positive change to the UK’s historic investment trust sector, which accounts for a third of FTSE 250 companies but according to critics offers lacklustre returns, with share prices too often stuck at discounts to

Unmade in Britain: we’re becoming a zero-industrial society

The French sociologist Alain Touraine coined the term ‘post-industrial society’ in 1969. By the 1980s it had become shorthand for the kind of services-based, individualistic economies most major developed nations had created. Today, the UK is moving its economy beyond that. We are creating what might be called a ‘zero-industrial society’. Climate change targets, soaring energy prices and rising taxes on employment are killing off Britain’s small and vibrant industrial base. Last week, Ineos closed its ethanol plant in Grangemouth, Scotland, with its chairman Sir Jim Ratcliffe warning of ‘the extinction of our major industries’. The previous month, Airbus announced it was cutting 500 jobs. In October, JCB cut 230

Ross Clark

Rachel Reeves’ tinkering won’t rescue Britain’s economy

The news just seems to get worse for Rachel Reeves. After the slight relief of last week’s inflation and GDP figures, this morning brings headlines that are even grimmer than economists expected. The government was forced to borrow £17.8 billion in December, more than twice the £6.7 billion which Rishi Sunak’s government borrowed in December 2023. In just one month, taxpayers had to spend £8.3 billion to service the government’s debt. Interest payments are now consuming over 8 per cent of government expenditure – more than is spent on education or defence – and very nearly as much as the welfare bill, which is itself ballooning. The Chancellor’s immediate problem is that

Michael Simmons

Employment suffers largest fall since pandemic

Rachel Reeve’s £25 billion National Insurance rise is beginning to bite. According to the latest data on our labour market, released this morning by the Office for National Statistics, payrolled employment fell by 47,000 last month — the sharpest fall since the pandemic. Meanwhile, the number of vacancies in the economy fell for the 30th consecutive period, unemployment rose to 4.4 per cent and there have been 21,000 more redundancies than in the same period a year ago. In a boost to those British workers still in jobs, pay is on the up. The ONS’s figures show that once inflation is removed the average worker experienced a 2.4 per cent pay rise

Kate Andrews

Donald Trump has promised the world

‘The golden age begins right now’ said the 47th President of the United States as he began his inauguration speech in the Capitol Rotunda. What followed was a 30-minute speech, during which Donald Trump stayed both on script and on message, reiterating his promise to declare a border crisis, deport foreign criminals, return America’s title of energy independence and to ramp on tariffs on foreign countries to ‘protect American workers and families’.  Trump aides had promised that, eight years on, the President’s second swearing-in speech would be different. Gone were the days of promoting ‘American carnage’. Today, the message was to be one of unity.  Here, the President took baby

Why would Trump give Starmer a trade deal?

As President Trump takes office later today, Keir Starmer has assembled his top team, tasking them with landing a trade deal with the United States. It’s a nice idea, sure, but he is not going to get a deal – and he will simply embarrass himself by very publicly failing.  The Prime Minister has put together a ‘mini-Cabinet’, made up of the Chancellor Rachel Reeves, the Foreign Secretary David Lammy, the Business Secretary Jonathan Reynolds and Jonathan Powell, with help from the UK’s incoming ambassador to Washington, Peter Mandelson. It would be hard to describe any committee that includes David Lammy as the ‘A-Team’, but still, Starmer is at least

Kate Andrews

Trump has upended the Davos dominion

It’s fitting that Donald Trump’s inauguration day coincides with the first day of the World Economic Forum’s infamous Davos conference. The new and the old world orders are, in theory, competing for attention. But this is not a competition. It’s not even close. This year’s conference theme is ‘Collaboration for the Intelligent Age’: an idea that means little to nothing if the world’s largest economy – and leader in AI development – is not on board. And ‘collaboration’ is hardly a word that suits the lead-up to inauguration day, as the 47th President of the United States has been gearing up for the return to an ‘America First’ policy, which

Why Britain’s economy doesn’t work

The great virtue of markets is that they are coldly actuarial and politically indifferent. Win them over and you can get a lot done. Just ask Javier Milei, President of Argentina. Milei has defied his left-wing critics and the distrust engendered by a lengthy history of defaults to slash public spending, rebuild reserves and tackle inflation. Fall out of favour and it is a different story. Bond markets are no longer buying Labour Chancellor Rachel Reeves’ proclamations that she is ‘going for growth’ with her plans for a tax-financed state expansion and debt-financed investment splurge which she laid out in her first Budget. Markets fear her plans will add to

Will the SNP come to its senses on North Sea oil?

Drill, baby drill. The mood on Net Zero is changing in the Scottish parliament where a majority of MSPs have signed a petition calling for a reversal on the ban on new oil and gas licenses in the North Sea. This sea change in attitudes to the black stuff, if you’ll excuse the pun, could portend a dramatic reversal of the Scottish government’s opposition to fossil fuels in SNP leader John Swinney’s long-delayed energy strategy. The “presumption against offshore drilling” has been the centrepiece of SNP energy policy since Cop26 in 2021, when Nicola Sturgeon posed for selfies with Greta Thunberg. Sturgeon is gone, of course – and her clean

Kate Andrews

Will the IMF regret its backing for Labour’s Budget?

International investors may be jittery about the UK’s future, but the International Monetary Fund appears to be more optimistic. The IMF has published its World Economic Outlook report for January, which forecasts the UK will have the third-fastest growth in the G7 this year. It revises upwards its projection for 2025, by 0.1 per cent, to 1.6 per cent. The UK falling in after the United States and Canada does not make good on Labour’s promise to be the fastest growing advanced economy. But after a tumultuous week of gilt fluctuations, bad growth figures and an even worse retail sales update, it’s a good way to be ending the week.

Rachel Reeves tries deregulation, but she’s bad at that too

If it was a Netflix mystery series, it would be the moment for the ‘big reveal’. After months of boasting about how she would make the UK the most competitive, dynamic, and indeed fastest growing economy in the G7 we finally have some idea of what Rachel Reeves is going to do to deregulate the UK. There is just one problem. She has opted for the worst possible way of loosening the rules – and Reeves will end up sparking an asset bubble.  After summoning regulators to Downing Street yesterday to tell her how to boost growth, some details have started to emerge of what Reeves is planning. According to

Regulators don’t create growth 

Perhaps you could gather a group of traffic wardens and ask them how to build a racetrack. Or get the leaders of the Salvation Army over to suggest some cool ideas for a cocktail bar. Think up any improbable brainstorming sessions, and it will still be hard to imagine anything more awkward than the gathering of regulators Chancellor Rachel Reeves summoned to Downing Street today to give her some ideas on growth. After all, that is her job, not theirs.  Just the concept of frog-marching regulators into the Chancellor’s office and demanding ‘growth ideas’ is ridiculous It hardly sounds like fun. The chief executives of such august sounding bodies as

Ross Clark

Starmer should bite the bullet and scrap the triple lock

Could the government be preparing itself for a spending cut which would eclipse the ending of the winter fuel payment? In his mini-reshuffle in response to the resignation of Tulip Siddiq, Keir Starmer has appointed the newly-elected MP for Swansea West, Torsten Bell, as pensions minister. It is an interesting choice because, in his former life as director of the Resolution Foundation, Bell was a loud critic of the triple lock, which he called ‘a messy way of achieving the objective of a higher state pension’. He advocated raising the state pension in line with average earnings instead. The Prime Minister quickly moved to scotch suggestions that the triple lock

Kate Andrews

The UK economy is in a rut

The UK economy has grown for the first time in three months. The Office for National Statistics (ONS) reports that the economy expanded by 0.1 per cent in November after it contracted by 0.1 per cent in both September and October. This uptick is largely thanks to an increase in services output, which grew by 0.1 per cent in November 2024, after falling by 0.1 per cent in October (a downward revision from last month’s estimate that there had been no growth. So has the economy turned a corner? It’s very difficult to spin this morning’s news in a wholly positive light. Yes, it’s good that the economy did not

Why inflation figures may have given Labour false confidence

The relief from Downing Street at yesterday’s inflation data – which showed that it dipped to 2.5 per cent in the 12 months to December, down from 2.6 per cent the month before – was palpable. Darren Jones, the Chief Secretary to the Treasury, cast a breezy image as he described his boss, the Chancellor Rachel Reeves, as “brilliant”. The choices facing Reeves and Starmer would be bleak Keir Starmer will now be able to offer his Chancellor more than lukewarm assurances that she is not facing the chop. The news will abate the recent cycle of media criticism and with President Trump’s inauguration next week, focus will soon turn elsewhere.  Her

Kate Andrews

Inflation dip marks a welcome surprise for Rachel Reeves

Rachel Reeves has found brief respite this morning, with the Office for National Statistics confirming that inflation dipped to 2.5 per cent in the 12 months to December, down from 2.6 per cent the month before. This is a smaller rise than had been expected (the consensus was 2.6 per cent) and roughly in line with the Bank of England’s forecast from November, which had predicted a 2.4 per cent increase. It’s welcome news for a Chancellor who is under pressure. Core inflation slowed too, from 3.5 per cent in the year to November, to 3.2 per cent in December. This competes for the best news in the update, as core

How much longer will Starmer back Reeves?

It’s not been a happy new year for Sir Keir Starmer. The Prime Minister’s Treasury minister Tulip Siddiq has been forced out following an anti-corruption investigation in Bangladesh. Siddiq’s job became untenable following questions over links to her aunt, the former prime minister of Bangladesh, Sheikh Hasina. Siddiq has denied wrongdoing and an independent investigation found that she had not breached the Ministerial Code, but it was clear over the weekend that Siddiq’s position was untenable. Starmer, however, bafflingly allowed to her to stay on until yesterday afternoon. ‘Starmer dithered and delayed to protect his close friend,’ says Tory leader Kemi Badenoch. It’s hard to disagree with that assessment. Reeves’

Kate Andrews

Rachel Reeves is getting ready for the next market test

Rachel Reeves did her best to keep today’s China visit statement on topic. The Chancellor wanted to talk about ‘cooperation’, ‘competing where our interests differ,’ her efforts to break down market barriers and the £600 million she secured in investment. But other MPs had other ideas.  ‘I know the Chancellor has been away,’ said the Shadow Chancellor Mel Stride. ‘So let me update her on the mess she left behind.’ So began the battle between the Chancellor – to stay on topic – and her opposition to bring up the long list of economic woes that have come to the forefront this week: not just the substantial rise in borrowing

James Kirkup

Why Westminster is wrong about gilt yields

It’s gilts season at Westminster. This is one of those unpredictable events, like the passing of a comet, that sees the residents of the political village staring at the skies and imputing all sorts of divine causes to the curious flashing lights they see there.   Because of the ongoing excitement in the markets, a lot of political folk have, in the last few days, become authoritative commentators on yield curves. Welcome to the party, guys. A very long time ago, I covered bond markets for a City newswire, and hated pretty much every minute of it. I claim no particular expertise as a result, but I am still confident in

Ross Clark

Europe’s car industry is under attack on all fronts

It is half a century since Britain’s native car industry embarked on its long, painful decline, precipitated by Austin Allegros with rear windows falling off, endless strikes over the length of tea breaks and terrible commercial decisions such as to cede the hatchback market to overseas competition. But where Britain led, Germany and France now seem to be following. How much longer before names like Peugeot, Renault, and even Volkswagen, either disappear or become reduced to mere badges affixed to Chinese-designed and produced vehicles? The retreat of the European car industry has cropped up from time to time in recent months. In October, Volkswagen announced, for the first time, its intention to