Economy

A millionaire I know has a tradition every year: he buys a bottle of vintage wine with his Winter Fuel Payment and invites friends to drink it. His point is that it’s ludicrous that people like him are given handouts by the government – and today, finally, Rachel Reeves is doing something about it by cutting it for those not on benefits, saving the taxpayer some £1.5 billion a year. Gordon Brown brought in this payment when it was taken for granted that pensioners were significantly poorer than people of working age. Pensions were linked to inflation – there was no triple lock.  Over the past 25 years pensioners have

How much can Rachel Reeves be trusted? A Chancellor’s credibility counts for a lot with the markets, who are asked to lend HM Government tens of billions a year. Reeves claims to be serious, straight and candid in a way her Tory predecessors were not. But now she seems to be channeling Liz Truss and coming up with her own assessment of the public finances while dispensing with the service of the Office for Budget Responsibility (OBR). She intends to declare a £20 billion hole, we’re told, and say she is shocked – shocked! – at what a mess the finances are in. Cue an excuse for tax rises, more

It doesn’t buy anything anymore. It is not enough to put into a charity box, and it just takes up space in your pocket or a purse. On one level, it will save us all a lot of trouble when one penny and two penny coins finally become extinct. The Treasury has told the Royal Mint not to make any new ones this year; and although there are plenty behind a sofa somewhere, this means they could eventually vanish completely. We will miss them when they are gone.  Rachel Reeves, the new chancellor, is keener on increasing government budgets than reducing them. One cut that may well be made, however,

Figures out today show a country with levels of surveyed crime still at historic lows (just a quarter of the 1995 peak) but with two big exceptions. Personal theft rose by 40 per cent compared with the year before, and shoplifting is at its highest level since records began in 2003. What’s going on? ‘These figures show the disgraceful dereliction of the last Tory government on law and order,’ said Yvette Cooper, the Home Secretary. Is this fair? Today’s figures show total crime at roughly half the level the Conservatives inherited from Labour in 2010. Incidents of theft from the person peaked at 708,000 in 2009 – and hit a

Seven Labour MPs had the whip suspended after voting against the two-child benefit cap, but this is a small taste of what awaits Labour. In her first major, Liz Kendall has set herself a target of hitting an 80 per cent employment rate – bolder than anything the Tories ever shot for. It is higher not only than today’s 72 per cent but (far) higher than the all-time, pre-lockdown record of 74 per cent. It is precisely the right target, for economic and social reasons. But it is one that can only be achieved via serious, game-changing welfare reform. The new Work and Pensions Secretary has inherited a full-blown welfare

In dodging calls from his party to remove the two-child cap, Sir Keir Starmer is making one of his first noteworthy mistakes as Prime Minister. Both John McDonnell, the far-left former shadow chancellor, and Anas Sarwar, the soft-left Scottish Labour leader, have called for the Coalition-era policy to go. The cap limits the payment of Universal Credit to a family’s first two children, with subsequent offspring meriting no additional payment. According to the Institute for Fiscal Studies, keeping the cap will mean an extra 670,000 children worse off by the end of this Parliament while scrapping it would reduce relative child poverty by half a million. The annual cost of

As the dust around the election settles, a question Tory MPs and supporters still grapple with is why Rishi Sunak called the election when he did – not least because economic indicators point to improvements over the summer and autumn, as inflation returns to target and growth starts to pick up. But Rachel Reeves, the new Chancellor, is having none of this narrative. ‘I really don’t buy this idea that somehow we’ve been handed a golden inheritance,’ she told Laura Kuenssberg on the BBC this morning, in her first sit-down interview since she entered No. 11. ‘If the former prime minister and chancellor had thought things were so good, they

Is the retail sector ever going to recover from Covid-19? The rest of the economy seems to be purring quite nicely at the moment, with GDP up 0.7 per cent in the first quarter (not adjusting for population growth). But the good times have yet to reach the retail sector, where sales volumes fell by 1.2 per cent in June. This followed a surprise 2.9 per cent rise in May, but over the second quarter as a whole sales were down 0.1 per cent. Compared with the second quarter of 2023, sales were down 0.2 per cent. Overall, sales were 1.3 per cent lower last month than they were in

‘We cannot let the challenges of the recent past define our relationships of the future,’ declared the Prime Minister ahead of today’s meeting of the European Political Union at Blenheim Palace. The meeting, he added, ‘will fire the starting gun on this government’s new approach to Europe’. The subtext to this is: the grown-ups are back in charge, and from now on we are going to have a far more constructive relationship with the EU. Keir Starmer has even promised a renegotiation of Britain’s trading relationship with the EU, which is supposedly going to make life easier for our exporters. Keir Starmer has even promised a renegotiation of Britain’s trading relationship