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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

Kate Andrews

Rachel Reeves’s new gamble

Credit to Rachel Reeves: while some chancellors opt to take part in the Sunday shows ahead of a fiscal event, the Chancellor has decided to do the media round the Sunday after her first Budget. Rather than spending the entire interview refusing to say what will be announced in the week ahead (the information is considered to be market-sensitive), she is instead having to answer difficult questions about what she announced on Wednesday. It wasn’t an easy morning, as Labour’s Budget narrative continues to get tested to breaking point. Reeves was played a video on Sky News this morning of her comments back in June, when she said no tax increases would

The Scottish budget must prioritise economic growth

Rachel Reeves’s Budget, announced on Wednesday this week, signalled a significant fiscal policy change. In it was a major shift in strategic direction on public investment, and a big early push on spending, especially on health and education. Two points are worth noting regarding government spending compared to this year’s spring Budget plans under the previous Conservative government. First, the Chancellor listened to the advice of many economists who urged her to modify the fiscal rules to avoid a bias against public investment in the previous debt regulation. Certainly her change in the debt (investment) rule to focus on a broader measure of debt is similar to what International Monetary Fund economists have

Can Republicans be trusted with the US economy?

When it comes to the economy, Americans typically trust the Republicans. They’re the party traditionally aligned with big capital; and their policies – low taxes and minimal government interference – sound sweet in a believer’s ear. Donald Trump, leading the GOP for the third election in a row, is a famous businessman; and the party’s previous nominee, back in 2012, was Mitt Romney – the co-founder of one of the largest private equity firms in the world. The Republicans, you might think, are a safe pair of hands. However, despite the Republicans prioritising the economy, it’s the Democrats who have the far superior record. Of the eleven recessions since World

Ross Clark

Can the OBR be trusted?

It was the absence of the Office for Budget Responsibility’s judgment that was blamed for the bond market crisis after Liz Truss’s mini-Budget. Truss and her chancellor Kwasi Kwarteng had rushed to enact their vision for a fast-growing economy without waiting for the wisdom of the government’s official fiscal watchdog. For Truss, the OBR is just another part of the establishment that was out to get her. But then, can the OBR be entirely trusted anyway? It seems that it has created a black hole of its own making – by overstating Public Sector Net Financial Liabilities (PSNFL). PSNFL is the measure that Rachel Reeves has chosen to use for

Ross Clark

Will the ‘value for money’ tsar really overrule Rachel Reeves?

Is there any word more laughably misapplied than ‘tsar’? We have already had an ‘antisemitism tsar’ and now we are going to have a ‘value for money’ tsar. Had you suggested to a Russian peasant that their monarch was value for money I suspect you might have ended up floating on the Neva River alongside Rasputin. Admittedly, that is not David Goldstone’s official title – we are supposed to call him Chair of the Office of Value for Money. But he does come with a CV that includes involvement in all kinds of public projects associated with tsarist excess. He was in charge of the delivery authority for the London Olympics, which

Kate Andrews

Can Labour save its Budget?

After the Office for Budget Responsibility’s assessment of the Budget was published on Wednesday, the cost of government borrowing started to rise. Yesterday, those costs hit their highest levels this year, with the 10-year gilt yield peaking just over 4.5 per cent and the five-year gilt yield exceeding 4.4 per cent, before settling slightly by the end of the day.  Labour need this trend to stop. The further borrowing costs rise and the pound falls, the more expensive Reeves’s Budget becomes, as investors demand a higher return for lending to the UK. Moreover, the longer jitters persist, the more certain it will seem that markets have not bought Labour’s fiscal

Britain can grow faster than the OBR thinks

The UK economy may end up growing a bit faster by the end of this decade than the Office for Budget Responsibility expects – but if it does that will be no thanks to Rachel Reeves’s Budget.  The OBR’s projections are unambitious. This is their summary: ‘Having stagnated last year, the economy is expected to grow by just over 1 per cent this year, rising to 2 per cent in 2025, before falling to around 1½ per cent, slightly below its estimated potential growth rate of 1⅔ per cent, over the remainder of the forecast. Budget policies temporarily boost output in the near term, but leave GDP largely unchanged in five years.’

Labour’s farm tax makes no sense

Amid the furore over Lord Alli’s contributions to Lady Starmer’s wardrobe the new environment secretary, Steve Reed, was able to stay under the radar. Most of us weren’t aware that he had been schmoozing his way around British farms during the election campaign wearing brand new, top of the range Le Chameau wellies – also apparently gifted by the ubiquitous Lord Alli. At the time Reed was promising that Labour had no intention of changing Agricultural Property Relief. In fact, responding to an accusation by his Tory opponent, Steve Barclay, he dismissed it as ‘desperate nonsense’. The efforts of the generations before me may all have been for nothing So

Rachel Reeves’s Budget plan is much worse than you think

‘No plan for the economy’ is the charge being made against the government, as Conservatives take to the airwaves following the Budget. The problem is that, in this case, the charge is simply untrue. Labour do have a plan for the economy. It is called securonomics: a worldview set out in some detail by the Chancellor herself in the Spring during her Mais Lecture. And as Paul Mason put it earlier in the year in this magazine, securonomics constitutes a ‘coherent, well founded’ plan for the economy, rooted in a ‘clear political philosophy’. Securonomics will make Britain more lethargic, more risk averse Securonomics, at its most basic level, is a

Labour’s Budget is a missed chance to solve Britain’s benefits problem

‘Fixing the Foundations’ is the phrase the Labour government wants in your head after the Budget. But the thin gruel for dealing with the challenge presented by our ill-health and disability benefits system suggests those words don’t count for much. Apart from the defence of the realm, there is nothing more foundational to society than the way it treats its most vulnerable and most disadvantaged. Some people are, through no fault of their own, not able to work. Its the duty of the government to ensure that a safety net is in place to help these people; it must balance this by ensuring that the system is fair to the

The true cost of Labour’s Budget is impossible to calculate

No sombre music accompanied Rachel Reeves’s Budget, nor was there a reading from Corinthians. Yet, those details aside, one point is surely clear: Labour’s first Budget in 14 years was a requiem for entrepreneurial Britain. The four decades from the Thatcher reforms of the early 1980s, that turned the UK into one of the best places, at least in Europe, to start and build a company, are now officially over. Britain’s economy will be a lot poorer thanks to the Labour government. In Labour land, entrepreneurs might as well not exist True, the Budget might not have been quite as bad as some of the advanced speculation suggested. Even so,

Ross Clark

The markets don’t like this Budget much

It has been a good day for investors in the Alternative Investment Market (Aim), with the index of the top 100 Aim shares up 4.3 per cent. But that merely serves to undermine the damage that Rachel Reeves had done to the market by previously suggesting that she might remove the exemption whereby Aim shares were free of inheritance tax (IHT). In the event, she made Aim shares liable for 50 per cent of the normal rate of IHT – hence the relief rally. Yet Aim shares are still down 2 per cent since election day. By contrast, the Ftse small cap index – smaller shares within the main London

Eight graphs that expose the truth about Labour’s Budget

Rachel Reeves sounded triumphant as she delivered Labour’s first Budget in 14 years. ‘Invest, invest, invest,’ the Chancellor said. She claimed hers was a Budget for growth and prosperity and, that most of all, it was a Budget to help working people. But the Office for Budget Responsibility – the body set up 14 years ago by George Osborne to judge fiscal events – doesn’t seem to agree. Its report, published immediately after the Chancellor delivered her Budget, makes for grim reading. The stand-out chart in the OBR’s report shows the effect the increase in employer National Insurance contributions will have on Britain’s labour force. Reeves gets much of her

Labour has no idea how to break Britain’s spiral of decline

The government came into office promising to prioritise economic growth. Now, after their first Budget, I suppose we have some idea of what that means: more borrowing to fund public sector capital projects, and higher tax and regulatory burdens on business. This does not seem very likely to prove a successful recipe, and furthers the impression that this government is likely to fall into the same trap that ensnared its immediate predecessors: managing Britain’s relative economic decline, with no clear idea of how to break out of it. The biggest single item in the Budget is the £25 billion increase in employer National Insurance contributions. There are a few things

Kate Andrews

Labour’s Budget will crush growth

Rachel Reeves didn’t want to surprise anyone with this Budget. She didn’t want to shock the markets, nor did she want any accusation that she had played fast and loose with the public finances. So by the time the Chancellor stood up in the Commons today, the bulk of her big decisions were already public knowledge, with just the details to come.  Still, that won’t make today’s fiscal event any less memorable – or painful. This Budget ushers in a new era: one where the tax burden sits at its highest level since the war, where tax hikes push more people out of the labour market, and where growth forecasts

As it happened: Rachel Reeves raises taxes by £40 billion in Labour’s first Budget

Taxes will rise by £40 billion following Labour’s first Budget for 14 years. The Chancellor announced: • An increase in employers’ National Insurance contributions from April to 15 per cent, raising £25 billion • That the freeze on income tax and National Insurance thresholds will not be extended past 2028 • That the lower rate of capital gains tax will be raisedfrom 10 per cent to 18 per cent, and the higher rate from 20 per cent to 24 per cent • That fuel duty will remain frozen for the next two years • The introduction of VAT on private school fees from January

Ian Williams

Why billionaires are fleeing China

‘To get rich is glorious’ is perhaps the most over-used slogan attributed to Deng Xiaoping, the paramount leader who reformed China and opened its economy up to the world. There is no evidence that he actually said it, but regardless it seemed to capture the mood of that era. In the China of Xi Jinping, to get rich is decidedly dangerous, which may account for why the number of super-rich (or at least those admitting to it) is in sharp decline, with many now clambering for the exit to protect their wealth and their liberty. According to a rich list compiled by Hurun, a research group, the number of dollar