Economy

What is the primary purpose of a tax: to raise revenue to fund public services or as a tool to help engineer society in a way which the government favours? It should disturb us that Darren Jones, the shadow chief secretary to the Treasury who is likely to be holding the real job by Friday, seems to believe the latter. Addressing a public meeting in Bristol in March he hinted that Labour will seek to increase inheritance tax, telling his audience ‘you need to think of the inheritance tax as a way to redistribute money’. He added that a Starmer government will seek to use the tax to tackle ‘inter-generational

The 2024 general election ‘should be the immigration election’, Nigel Farage has said. The Reform leader’s wish has been granted: the topic of immigration is a major focus of debate. It’s also a big issue in the United States’ presidential election. Much of the debate in both countries depicts immigrants as a burden that receiving countries should accept (if at all) only out of altruism or a sense of obligation. But this is misleading, and ignores the many benefits of migration to Britain and other receiving countries. Open migration is not just charity for migrants Accepting migrants is the right thing to do, in part because it saves many thousands of

We’re five weeks into the election campaign – and just days away from polling day – and voters have plenty of parties, and numbers, to consider. Labour will raise everyone’s tax bill by £2,000, claim the Conservatives. Mortgages will rise by £4,800 under another Tory government, insist Labour. Is any of it true? ‘I would suggest that voters entirely ignore all of those sorts of numbers and calculations’, says Paul Johnson, director of the Institute for Fiscal Studies, in The Spectator’s office. ‘I think they’re broadly fictional.’ They are impossible claims to make, partly because ‘we don’t know what would happen under these different governments, because they really haven’t told

If you didn’t have time to watch the presidential debate between Donald Trump and Joe Biden last night you could have just watched the share price of a little-known Chinese company called Wisesoft instead. Its Chinese name ‘Chuan Da Zhi Sheng’ sounds very like ‘Trump Wins Big’ in Mandarin, and local speculators piled in as it became clear just how catastrophically the incumbent had performed. In reality, that verdict is going to be repeated when Wall Street opens later today. Investors, though, have already made up their minds. Trump is going to win, and nothing can change that now.  The markets are already buying up all the assets that will

‘We are the masters now,’ I chirrup to my Holborn and St Pancras neighbours – misquoting Labour attorney-general Hartley Shawcross from 1946. I don’t mean I’ve decided to throw in my vote with the predicted Labour landslide: frankly, I’d rather give it to the candidate calling himself Nick the Incredible Flying Brick. What I mean is that as constituents of the incoming prime minister, we’re the heirs to Blair’s Trimdon Labour Club crowd in 1997. The world’s media will be all over us: we’ll be the first archetypes of the age of Starmer. But how will we feel in five years’ time? Will our shopkeepers, small traders and restaurateurs have

Over the weekend, a leaked document revealed by the Guardian outlined different tax hikes the Labour party could impose, including changes to capital gains tax and inheritance tax. It’s evidence of what has long been suspected: that what’s been left out of the party’s manifesto (almost every tax) remains on the table. How might Labour justify not being more upfront about this ahead of the election? As I have noted on Coffee House before, Labour has gone to great lengths to insist all its plans are costed by tax increases that have already been announced. The lack of specificity in the manifesto, we’ve been told, is evidence that the party isn’t planning to

Big business will be brought onside. The bond markets will be mollified. And there will be plenty of reassuring words about dealing with the budget deficit. With the first round of voting in France’s parliamentary elections set for this week, Marine Le Pen’s Rassemblement National is preparing for government. This week it has set out a programme designed to keep investors, if not exactly happy, at least under control. There is just one catch. It is also a programme for stagnation – and that means France’s out-of-control debts are going to grow and grow.  Nothing that Bardella is proposing will do anything to lift France out of its rut With

Judges on the Supreme Court appear to have joined Just Stop Oil. In a landmark ruling, with profound implications for the UK energy industry, they’ve said that Surrey County Council cannot give permission to drill new wells on an existing extraction site, Horse Hill, which already has a couple of them. This is because the oil might be burnt – which admittedly tends to happen with hydrocarbon fuels. Net Zero campaigners who brought the original action against the ‘Gatwick Gusher’ as they called it back in 2019 are ‘over the moon’. The Scottish government, however, is not quite so sanguine. The Supreme Court’s ruling is illogical Could the ruling mean the end

The Bank of England has, unsurprisingly, held interest rates at 5.25 per cent for the seventh time in a row. Markets downgraded their expectations for a June rate cut some time ago. Once Rishi Sunak called a general election in late May, the prospect of an early summer rate cut became even more unrealistic. The Monetary Policy Committee notes in its minutes that ‘the timing of the general election on 4 July was not relevant to its decision at this meeting’. Instead, its decision was based solely on ‘what was judged necessary to achieve the 2 per cent inflation target sustainably in the medium term’. Central banks never want to

Why is Britain’s productivity so stubbornly low? Output per worker increased just 0.1 per cent in the year to April. Across swathes of the economy it is in absolute decline.  One theory, posited by those brave enough to voice unfashionable opinions, is that working from home is dragging down productivity growth. This has been dismissed by unions and the Labour party, who go to great lengths to show flexible working boosts output. Workers, they say, will get more done with fewer breaks, take fewer sick days, and are less likely to change jobs.  Such claims should be taken with a pinch of salt. According to new data from the Office for National Statistics,

Is Trussonomics making a comeback? That’s the suggestion today, as Jeremy Hunt was recorded on the campaign trail telling students that Liz Truss’s goals for the economy were a ‘good thing to aim for’. As Chancellor, he said, he was ‘trying to basically achieve some of the same things’ as Truss, but ‘more gradually’ compared to the former prime minister’s timeline. Is this a gotcha moment? Labour think so, insisting that Hunt’s comments show an ongoing ‘addiction to dangerous Trussonomics’. It’s a stretch, not least because Hunt is credited with undoing almost every part of Truss’s so-called mini-Budget, when he replaced Kwasi Kwarteng as Chancellor just weeks into her premiership. Hunt is