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William Moore

Soul suckers of private equity, Douglas Murray on Epstein & are literary sequels ‘lazy’?

First up: how private equity is ruining Britain Gus Carter writes in the magazine this week about how foreign private equity (PE) is hollowing out Britain – PE now owns everything from a Pret a Manger to a Dorset village, and even the number of children’s homes owned by PE has doubled in the last five years. This ‘gives capitalism a bad name’, he writes. Perhaps the most symbolic example is in the water industry, with water firms now squeezed for money and saddled with debt. British water firms now have a debt-to-equity ratio of 70%, compared to just 4% in 1991. Britain’s desperation for foreign money has, quite literally,

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

Kate Andrews

Is Rishi’s tax cut pledge enough to rally MPs?

Rishi Sunak has a reputation for sleek and snazzy presentation, and his leadership launch this morning was no exception – by Westminster standards, anyway. The air-conditioning was on full blast as young activists lined up with their ‘Ready For Rishi!’ signs, next to heavily branded backdrops. And the guest list was long. MPs in attendance included many who had already declared for Sunak: Bim Afolami, Claire Coutinho, Helen Whately, and Liam Fox. There were also surprise guests, including the Deputy Prime Minister Dominic Raab, who introduced Sunak and credited him for delivering ‘the biggest tax cut for working people in a decade’ by lifting the National Insurance threshold for millions.

Cutting taxes isn’t irresponsible

Everyone is supposed to have their 15 minutes of fame. Perhaps I have just had mine, after the contenders for the Tory leadership were invited to endorse the ‘charter for tax cuts’ that I co-wrote for Conservative Way Forward. It was certainly pretty cool to be namechecked at the launch event on Monday both by the new Chancellor, Nadhim Zahawi, and by a strong candidate to be the next prime minister, Suella Braverman. The thinking behind the charter was simple. I wanted to summarise the case for tax cuts and respond to some of the arguments against; including that we cannot afford them, or that they would be inflationary. The

Susanne Mundschenk

The problem with euro-dollar parity

The euro is nearly level with the dollar. It should not matter in theory, because of the relatively low share of the US in EU trade. But it does in practice. Some predict that the euro will fall below parity. There is a straightforward explanation for this: the war in Ukraine and unpredictable Russian gas supplies to Europe make the dollar a safe haven for investors. On top of this, US interest rates offer a higher return on investment. But it is not only the dollar. Looking at the broader picture, the European Central Bank’s measure of the euro’s real effective exchange rate against 42 partner countries confirms this trend

Kate Andrews

Is Sunak really a big state believer?

There’s something strange happening in Tory politics. It’s not surprising to see leadership candidates taking special aim at the current frontrunner Rishi Sunak. But the attacks being used are redefining the economic philosophy of the Tory party in a way that could soon backfire, regardless of who wins the top job.Take, for example, Liz Truss’s most recent pitch to MPs: get behind one Tory right candidate or risk sending Sunak into No. 10. Allies of Suella Braverman are reported to be making a similar pitch. The vast number of candidates in this race has indeed caused a lot of uncertainty and increases the likelihood of surprise results – something leadership

How to fix Britain’s childcare problem

Childcare in the UK is among the most expensive in Europe. A full-time nursery place for a child under five costs in the region of £14,000 per year; if there are multiple children, this easily rises to an amount that means women would be paying to go back to work after maternity leave. The result: if a couple can’t afford to support a family on a single income until children are school age, then quite likely they can’t afford to have a family at all. One typical reason given for these high costs is that regulations for the number of adults per child are more stringent than in many other

Kate Andrews

Will the Tory hopefuls deliver on their tax promises?

Rather unsurprisingly, the bulk of MPs who have declared their leadership bids so far are promising lower taxes. Also unsurprisingly, very few details are on offer explaining how they’d do it. In Nadhim Zahawi’s early pitch to the public — he is expected to share more tomorrow — he’s asserted that ‘taxes for individuals, families and business need to be lower – and will be on my watch.’ Tom Tugendhat’s ‘clean start’ manifesto made a similar point: ‘Taxes, bluntly, are too high,’ he asserted, ‘and there is an emerging consensus across the party that they must come down.’ Penny Mordant’s leadership pitch today promises ‘new economic vision’ — something we

Fraser Nelson

Are the Tories ready for a real contest?

Will this leadership contest provide a debate? The Tories got into this mess because have spent years asking who can bring them power, rather than what they stand for or who has the best ideas for the country. The leadership contest should come in two stages: first discussing what has gone wrong and then next who best to remedy. So far, this is my test for the candidates. Have they said anything that moves beyond platitude and cliche? Do they show any signs of being thoughtful? Do they recognise that there is a fight ahead, and that they are prepared for that fight? I fervently hope the Tory party abstain

Mark Galeotti

Russia is militarising its economy

The ‘special military operation’ in Ukraine isn’t a war – there’s a law and a possible maximum sentence (though no one seems to have faced it yet) of 15 years in prison to stop you claiming it is in Russia. Yet Russia does seem to be inching towards a wartime economy, for all Vladimir Putin’s recent bullishness. At the recent (if rather sparsely-attended) St Petersburg International Economic Forum, Putin struck a triumphalist note, crowing that ‘the economic blitzkrieg against Russia never had any chances of success,’ and ‘gloomy predictions about the Russian economy’s future didn’t come true.’ That’s both true and not true. There has been no meltdown, not least

What the Tories should look for in their next leader

The Conservatives are selecting a new leader, who will become Prime Minister. What sort of a person should that be? It needs to be someone with the spark or edge of a leader, able to carry others with them – not just a clubbable ‘Yes Man’ type. It needs to be someone able to press a vision and policy agenda across a range of issues, not just something narrow like finance, defence, international relations or legal issues. It needs to be someone able to convey an optimistic message, but have a serious mode that can be turned on when necessary. Someone who is willing to be unpopular, taking tough decisions

Kate Andrews

The Tory leadership candidates’ tax cuts promises won’t be enough

What does Boris Johnson’s resignation mean for the economy? The pound started its rebound yesterday from a two-year low against the US dollar after Johnson resigned. A few economists were quick to point out though that it had dropped so much, there was only one place it could really go: up.  It’s very likely this leadership race turns into a competition over who would cut taxes hardest and fastest, which is no bad thing Had Johnson managed a few more months in the role, we would have almost certainly seen some deficit-financed tax cuts, led by the new Chancellor Nadhim Zahawi. ‘We were 24 hours away from reversing the corporation tax

If the EU disliked Boris, they’ll hate his successor

Three, five, or perhaps even ten whole minutes. In a more civilised, parallel universe, perhaps Europe’s big wigs would have allowed a slightly more dignified period of silence following Boris Johnson’s resignation speech before cracking open the foie gras and champagne. In this one, however, the gloating started immediately.  ‘The departure of Boris Johnson opens a new page in relations with Britain,’ wrote ex-chief Brexit negotiator Michel Barnier. ‘Boris Johnson’s reign ends in disgrace, just like his friend Donald Trump,’ tweeted the former Brexit coordinator of the European parliament Guy Verhofstadt. No doubt we will see a lot more in that vein in the hours and days ahead. But hold

Kate Andrews

Why Rishi Sunak quit

On Tuesday, the last cabinet meeting with Sajid Javid as health secretary and Rishi Sunak as chancellor passed without any hint that either was about to resign. The ministers did not co-ordinate their resignations, but they had both been tipped over the edge by growing evidence that No. 10 had misled MPs by declaring Boris Johnson had no prior knowledge of Chris Pincher’s behaviour. Sunak had also grown tired of the Prime Minister’s economic ‘cake-ism’ – the fantasy of wanting both high spending and low taxes. The contradictions had become untenable. In that cabinet meeting, Johnson offered more cake. He was his usual ebullient self, promising a morale-raising speech to

Martin Vander Weyer

Is our card-only culture fuelling inflation?

Is anything anywhere getting noticeably better – economically speaking – or at least less bad? Are commodities and manufactured goods beginning to move more freely, for example, to ease the demand pressures that are stoking inflation? It’s good news that the number of container ships anchored off Los Angeles-Long Beach waiting to unload has fallen from more than 100 in January to around 20 at the latest count, but I note also that dockers there are demanding a 10 per cent pay rise. Drewry’s World Container Index – the handiest indicator of global shipping costs – has fallen 32 per cent from its peak last autumn, but remains five times

Kate Andrews

Rishi Sunak will be missed as Chancellor

We will never know the counterfactuals of the past few years. What if another MP had been made Chancellor when Sajid Javid resigned (the first time)? What if a green chancellor Rishi Sunak hadn’t had a pandemic to manage? While we can’t answer these questions, it’s hard to imagine any MP – certainly on the left, even on the right – taking fiscal responsibility as seriously as Sunak did when he had the permission of his party – and politicians the world over – to throw it out the window. I suspect it won’t take long for us to start missing the former Chancellor and the critical role he played

Rishi Sunak won’t be missed as Chancellor

Rishi Sunak’s resignation was, without question, a brave, honourable and dignified decision. By stepping away from the cabinet, the Chancellor Rishi Sunak may well have done enough to salvage his reputation among Conservative MPs and party members. Perhaps he might even have rescued what was once seen as a potentially meteoric career. But although he may be missed as a politician, one thing is clear: Sunak won’t be missed as Chancellor. In reality, he was a catastrophe in the role – and now that he has gone, his successor will have a chance to reverse his policies. The Chancellor leaves a worse legacy than perhaps any predecessor of modern times Whether Sunak

Kate Andrews

There’s little to celebrate on the NHS’s birthday

Birthday celebrations for the NHS this year are relatively quiet. In recent years the health service has received multi-billion pound top-ups from the taxpayer, not to mention high praise from politicians across the political spectrum. This may be in part because the government has already seen to the big NHS pledges, including the 2.5 per cent National Insurance hike, split between workers and employers, which is bringing in roughly £6 billion to pay for Covid catch-up. But no doubt this year’s notable silence is also linked to just how bad that catch-up is going. It’s never been credible to claim the NHS is the ‘envy of the world’; the health

Gus Carter

The rise of the neo-Luddites

Yesterday, a pair of Just Stop Oil protesters glued themselves to a John Constable painting in the National Gallery, covering The Hay Wain with a printout of an alternative vision of England. The cart crossing the River Stour in Suffolk is perhaps Constable’s most famous painting. But instead of a bucolic, biscuit tin Albion, Just Stop Oil’s version shows the Stour tarmacked over, a belching power plant in the distance and a commercial jet overhead. The message is clear: our modern world is sick. I have some sympathy with these student activists, or at least I envy their certainty. Their view of the world is simple: bad things like fossil fuels,

Susanne Mundschenk

Turkey’s grain diplomacy

Recep Tayyip Erdogan is once again using Turkey’s geopolitical position for his own ends, this time dictating grain shipments from Ukraine through the Black Sea. Turkish customs authorities detained a Russian cargo ship carrying Ukrainian wheat on Sunday, following a request of Kyiv. The Russian cargo ship Zhibek Zholy left the south-eastern port of Berdyansk over the weekend carrying 7,000 tons of grain, worth about £1.75 million. The Russian-appointed head of the occupied region had hailed it as the first commercial ship to leave a Ukrainian port after months of war. He said this would take desperately-needed supplies to friendly countries, according to Politico. The reality is, of course, that

German industry is grinding to a halt

The Soviet Union had only just collapsed. John Major was still a relatively fresh-faced Prime Minister. And the internet consisted of a few desktop computers linking together a handful of laboratories. The world was a very different place when Germany last posted a trade deficit way back in 1991. But on Monday, the country recorded that imports outstripped exports for more than 30 years. True, other countries are recording huge deficits, not least the UK. For Germany, though, it matters more. Its entire economy has been built around creating an industrial machine that dominates global markets. That machine is now grinding to a halt. By the standards of Britain, the

Kate Andrews

Britain avoids a recession – for now

The UK’s economy grew by 0.8 per cent between January and March this year, according to this morning’s update from the Office for National Statistics. This means real GDP is now just 0.7 per cent above its pre-pandemic levels. On the face of it, it’s fairly grim news. The spectacular growth originally forecast for this year, making up for lost time in lockdown, did not transpire in the first three months of the year. Signs of a weak economy are starting to show. While consumer spending was up by 0.6 per cent in the first quarter, business investment fell by the same amount, down 9.2 per cent overall from its pre-pandemic levels. Signs