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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

Spotlight

Featured economics news and data.

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

Michael Simmons

Who should Labour target to ‘get Britain working’?

Labour talks of having the ‘bold ambition of an 80 per cent employment rate’. But who should they target to get there? The government published its white paper this week on ‘getting Britain working’ and tackling the growing health and disability benefits bill, which is forecast to hit £120 billion.  Figures slipped out by the Office for National Statistics today give more insight on which groups could perhaps be better targeted. These figures split out employment rates by parental status, and show that already more than 80 per cent of married (or cohabiting) mothers and 93 per cent of married (or cohabiting) fathers with dependent children are working. This doesn’t leave a

The hypocrisy of Labour’s plan to solve youth unemployment

The government has today announced a £45 million work drive, with proposed changes to the welfare and out-of-work support systems, in a bid to get more people back in work and off benefits. In particular, the government has said that it wants to tackle the statistic that one in eight young people aged between 18 and 24 not currently in employment, education or training. It plans to do so by offering skills training to teenagers with institutions such as the Premier League, Royal Shakespeare Company and Channel 4. There is no doubt that we need to get young people earning or learning again. Over three quarters of a million young

Trump’s tariffs threats are going to cause chaos

It turns out it wasn’t just China after all. Mexico, and indeed Canada, are just as much in the firing line. President-Elect Trump announced last night that he will impose an immediate 25 per cent tariff on imports from both of the US’s two largest land neighbours, threatening huge disruption to their economies. Trump may think he is being clever by weaponising access to the American market, and in the short-term he may even by right. The trouble is, he is going to break the global trading system – and it will be very hard to put back together afterwards.  This is a recipe for constant market chaos It is

Rachel Reeves deserves a rough ride at the CBI

Rachel Reeves was probably expecting to be cheered for restoring ‘stability’, for rebooting ‘growth’ and crafting a British version of Bidenomics to create ‘the industries of the future’. Instead, the Chancellor’s ‘fireside chat’ at the Confederation of British Industry (CBI) conference today is likely to be rather uncomfortable. There probably won’t be any heckling, walk-outs, boos and cat-calls. Yet the business world has made it all-too-clear that Reeves’s Budget will hit both jobs and growth hard. Reeves is going to get a rough ride this afternoon – and deservedly so. Labour’s relationship with business is now broken beyond repair The CBI made it clear this morning what it thinks of

Katy Balls

Rachel Reeves faces a frosty reception at the CBI summit

At the beginning of the year, Rachel Reeves was being praised all round for her efforts repairing relations between the Labour party and business. In February, the Chancellor hosted a business conference – attended by leading figures – where she pledged to cap the headline rate of corporation tax at its current rate of 25 per cent if Labour entered government. Since her party’s election triumph, Reeves has stuck to her word on that promise – although other announcements from the Chancellor have caught the business community by surprise and led to strain. It means that Reeves will face a frosty reception when she appears at the Confederation of British

Why young Brits think the social contract is crumbling

Something is stirring. In WhatsApp groups and Westminster pubs, wherever wonks, spads, and other SW1 types gather, there’s a name on everybody’s lips. It’s like John Galt in Atlas Shrugged or Tyler Durden in Fight Club. It’s at once a wail of despair and a call to arms. Who is this man they whisper of? Who is “Nicolas (30 ans)”? The hard-done-by in society, on this increasingly popular account, are not Barbour-wearing farmers “Nicolas (30 ans)” is the protagonist of “Le contrat social”, a meme posted onto Twitter, as it then was, in April 2020. It was popularised by a French account which goes by the nom de plume Bouli, after an obscure

The truth about the lesbian pay premium

Some lesbian and gay campaigners might have you believe that life is hard for gay people. Of course, for many it is. But my experience of being a lesbian is that it is mostly a privilege rather than an oppression. Lesbians can avoid the multiple disadvantages of navigating relationships with men, some of whom have absorbed messages of how they are superior to women. There’s another perk, too: what the Financial Times calls the ‘lesbian pay premium’. An analysis of studies from 1991 to 2018 found that lesbians typically earn 7 per cent more than their heterosexual counterparts. The LGBTQ umbrella term can be suffocating for lesbians That life is

Businesses give Reeves’s Budget a ‘thumbs down’

What did businesses really think of Rachel Reeves’s Budget? Today we have one of the first economic indicators reflecting their responses to Labour’s tax and spend changes – as well as global events like the US presidential election. The Purchasing Managers’ Index (PMI) fell below 50 in November, which suggests the private sector economy is now contracting after a year of expansion.  Firms said that employment has been shrinking for two months and they are not replacing staff who leave voluntarily in order to offset the coming rises in the cost of workers. They also reported subdued customer demand – something shown in the retail sales figures Ross Clark examined this morning.  This

Ross Clark

Falling retail sales shows how fragile the UK economy is

Until a few weeks ago it seemed as if the government had inherited if not a golden economic legacy then an improving economic picture. But this morning’s figures for retail sales show just how faltering the economy is. During October the volume of retail sales fell by 0.7 per cent. Worst-affected was textile and clothing sales, which plunged by 3.1 per cent. Online retail suffered along with physical stores. Not only that, the figures for September were revised downwards from 0.3 to 0.1 per cent growth. Comparing year on year, sales volumes were still up 2.4 per cent. Sales in the three months to October were also up, by 0.8

Ross Clark

Labour’s promise to cut energy bills looks more foolish than ever

After reneging on its manifesto pledge to not raise National Insurance, Labour is starting to struggle with another promise: to cut energy bills by £300 a year. This morning Ofgem has announced that its Energy Price Cap will rise in January so the average household will be paying £21 a year more. Together with the £149 rise in the price cap in October it means that average bills will soon be £170 higher than they were when Labour came to power.  Together with the loss of Winter Fuel Payment – either £200 or £300 depending on your age – it means that pensioners will be worse off to the tune

Can anything stop benefits spending hitting £120bn?

The Office for Budget Responsibility’s (OBR) forecasts on Budget day included the startling figure that spending on health and disability benefits is set to pass £100 billion in five years’ time. Figures from the Department for Work and Pensions (DWP) today, which are based on a broader range of benefits and recipients, put the amount even higher: £120 billion.  The DWP’s figures include housing benefit for health and disability benefit recipients. In real terms, spending on this definition is forecast to rise by 20 per cent (or £18 billion) over the next five years. The share of government spending that goes on these benefits will be at a record level this year,

GDP has lost its usefulness as a measure of real growth

Paul Samuelson, the famous American economist and author of the bestselling textbook Economics, gave the now quaintly old-fashioned example of the pitfalls in GDP accounting by pointing out that if a man married his maid, GDP would fall. The example was dropped after the third edition. A more relevant example today would be if a middle aged person stops working full-time to look after an elderly relative at home. The GDP economy loses part of the contribution of the middle aged person plus the demand of the elderly person for care in a private care home. Yet in most cases that elderly person is much happier staying in their own

Ross Clark

Britain is addicted to spending beyond its means

Imagine what the government could do with an extra £9.1 billion a month. It could build HS2 in its entirety within the space of a year. Or better still, it could double the defence budget and still have some money left over to build the 40 new hospitals which the Conservatives promised – as well as a few schools, too.  That sum – £9.1 billion – is what the government paid in debt interest in October alone, according to the figures on public finances released by the Office for National Statistics this morning. Overall, it was forced to borrow £17.4 billion over the course of the month – only just

The Scottish Tories must go further on tax cuts

Russell Findlay has a tough job. His party is not on track for a good 2026 election and the new Scottish Tory leader needs to figure out quick how to present Scots with a vision worth voting for come the Holyrood poll. He must prove the Scottish Conservatives are not only different from the soft-left SNP, Labour and Lib Dems – but also different from the surging Reform UK, which according to today’s Survation poll is neck-and-neck with the Scottish Tories despite having no leader, no policies and no campaign. Enter Findlay’s ‘common sense’ agenda, which this week turned to tax. The centrepiece of the proposal was an income tax

The EU is heading for fresh financial doom

If it came from Nigel Farage no one would be very surprised. Or from one of the band of German professors who launched the far-right AfD party. But the latest warning of a fresh crisis in the eurozone comes from a far more unexpected source: the European Central Bank (ECB). In its financial stability review published today, the ECB warns that the single currency could soon be plunged into a replay of the trauma of 2011 and 2012. Unfortunately, it is almost certainly right.  The review, published twice a year, is intended to warn the markets of impending risks to the system. Today’s update explores a familiar cocktail of risks,

Michael Simmons

Inflation surge hits Britain’s ailing economy

Inflation rose to 2.3 per cent in the year to October, up from 1.7 per cent in September – its lowest level since the early weeks of the first lockdown in 2021. This surge above the Bank of England’s 2 per cent target was higher than economists and markets had expected. Worryingly, core inflation (which excludes more volatile goods like food and energy) has also increased slightly to 3.3 per cent – up from 3.2 per cent in September. The largest contributors to the rise in inflation were from the effects electricity and gas prices are having on household costs. The Office for National Statistics’ Chief Economist Grant Fiztner blamed

Farmers won’t be quick to forgive Labour

12 min listen

Thousands of farmers descended on Westminster today to protest the inheritance tax changes proposed in Labour’s Budget. Amidst a sea of tweed and wellington boots, speeches and support came from the likes of Kemi Badenoch, Ed Davey, Nigel Farage and Jeremy Clarkson. To what extent is this just a fringe issue that the government will be able to brush off? Or has the issue exposed a rural blind spot for Labour? And how lasting could the damage be? Katy Balls and Spectator editor Michael Gove discuss with James Heale.  But first, William Moore has been out and about getting the views of farmers directly from the protest… Produced by Patrick

Britain should side with Trump over Europe

It may well be the biggest and most significant choice the Starmer administration will have to take. If Donald Trump decides to impose huge tariffs on China, potentially sparking a global trade war, the UK will have to decide whether it backs America, or tries to steer a softer path with the European Union. All the indications are that it will choose Europe. The trouble is, that will prove a huge mistake – the British economy is very different from the rest of Europe, and we will be thrown overboard as soon as it is convenient.  The contrast has ground to a halt, and it makes little sense to tie

Michael Simmons

How many farmers will be hit by Labour’s inheritance tax raid?

Tens of thousands of farmers will descend on Westminster in their tractors tomorrow to protest at inheritance tax changes that could see them pay death duties when they hand down their farms. The government doesn’t understand the fuss. It says they are just targeting wealthy land buyers trying to dodge tax. Meanwhile the farmers argue their way of life risks being wiped out. Who’s right? Two in five farmers are over the age of 60, so it’s not impossible the tax ends up having to be paid soon The government says the changes ‘are expected to affect the wealthiest 500 estates each year with smaller farms not affected’ – and

Can Kent’s hop industry survive?

There is something quintessentially English about hop fields. Rows of ten foot wooden stakes rise from the grass, perhaps three feet apart, holding up a network of wires. In the summer, hops grow up these wires like vines, forming a fragrant, uneven wall of green shades: darker leaves with soft lime-green cones. The industry has shaped Kent for centuries with terraces of former pickers’ cottages lining the lanes, and dark clay cone-shaped oast houses – remnants of a time before hops were dried industrially – dotting the landscape. Local museums preserve the testimonies of poor Londoners who escaped here from the East End in the early 20th century to spend