Economy

Twice a year, every year, the changing of the clocks debate begins. So is it time to finally drop daylight saving and stick to British Summer Time all year round? Boris Johnson thinks so: the future Prime Minister weighed in on the subject back in 2011, claiming BST would ‘expand the economy and cheer everyone up’. Boris is right on both points, not least on the economic case for ditching the old habit of changing the clocks. Dark winter evenings, made longer by daylight saving, make around half of Brits feel more depressed, according to one poll. Other surveys suggesting we’d exercise more were it lighter longer. Perhaps this point should be taken with a

The big tax and spend budget. More Gordon Brown than George Osborne. Sunak’s spending spree. However you wish to describe it, one thing is clear: Rishi Sunak’s budget marks a radical departure from previous Conservative chancellors. And while it might have ruffled the feathers of some Tories, it’s also causing problems for the SNP. In some ways the break from Tory convention is no surprise. Calls by the International Monetary Fund (IMF) in 2020 for rich countries to spend their way out of the pandemic – and then further calls this year to shell out to boost recovery – signalled a new economic orthodoxy that Sunak has tapped into. Austerity is

The amount the state takes out of the economy will rise to the highest level in 70 years. An unreformed public sector will be showered with cash, with the health service allowed to spend whatever it likes. A tax system that was already creaking under the weight of its own complexity has just been made slightly more complicated, and it has been made a lot less competitive. The Chancellor Rishi Sunak with his usual panache sailed through his Budget yesterday. The problem, however, is this. While he might get away with pushing up taxes and spending for now, sooner or later it is going to catch up with him. And

It was a tale of two chancellors at today’s high-spending Budget. Rishi Sunak began by embracing the big-state profligacy pursued by Cameron and May, and maintained by their successors, Boris and Carrie.  The Chancellor reeled off stacks of figures indicating that the economy is roaring back to life. ‘Growth up! Wages up! Employment up!’ he shouted. And he announced that government spending sprees will also surge by £150 billion. He plans to restore the 0.7 per cent spending target for foreign aid by the end of this parliament. And he has ordered civil servants across Whitehall to find more stuff to buy.  ‘A real-terms rise in spending for every single

Rishi Sunak has released photos of his Budget prep, as he prepares to stand up in the House of Commons tomorrow to deliver not just the government’s latest fiscal decisions, but the results of its three-year spending review. (Photos include a shot of his pre-Budget Twix and Sprite snack, which Sunak revealed to Katy Balls on Times Radio over the weekend). As I say in the Telegraph today, this Budget is a difficult balancing act for the Chancellor. On the one hand, he has some big-spenders to please, not least the Prime Minister, who is adamant that the Conservative party’s days of austerity have come to an end. On the

The best thing that can be said about the government’s latest anti-obesity scheme is that it’s cheap. For now. The new HeadsUp app, which will track people’s diet and exercise regimes and reward them with cinema tickets, clothes vouchers and the like, has a price tag of £3 million. This is peanuts in public health terms. The NHS burns through £3 million every eight minutes. It amounts to 4p for every man, woman and child in the UK. The bad news is that it is only a pilot scheme. If bribing people with their own money is seen to ‘improve rates of physical activity and inspire healthier eating’, as the Office

Is Rishi Sunak losing his battle within the Cabinet to promote fiscal responsibility? We’ll find out this week, when he unveils his Budget and three-year Spending Review on Wednesday, but there were hints this morning that more spending is coming down the track. Speaking to Andrew Marr on BBC One, Sunak laid out the principles that guided his Budget process this time round: ‘Strong investment in public services, driving economic growth by investing in infrastructure, innovation and skills, giving businesses confidence and then supporting working families. Those are the ingredients of what makes a stronger Budget and that’s what we will deliver next week.’ This is not the language of

In a 368-page document published this week, the government announced its strategy to cut emissions to net zero by 2050 and confirmed its target for all electricity to come from low carbon sources by 2035.  It’s difficult to imagine worse timing for the release. An energy crisis is exposing the failures of decades of massive state meddling in the market. Insulate Britain have been picnicking on the M4 and M25. And on Wednesday a leak of documents showed Saudi Arabia, Japan and Australia are asking the UN to play down the need to move rapidly away from fossil fuels. None of this has weakened the Prime Minister’s resolve, though that’s

Whisper it, but Rishi Sunak looks to be heading into the Budget next week with the public finances in a far better state than once predicted. The Office for National Statistics update on public sector net borrowing showed September’s total — £21.8 billion — coming in several billion pounds below the Office for Budget Responsibility’s official forecast and economists’ consensus. It fits a trend: total borrowing for 2021/22 is over £40 billion lower than expected, giving Sunak far more leeway than he thought he’d have at the start of the year. On the whole, tax receipts have been higher than forecast, as growth (while somewhat lacklustre over the past few

Boris Johnson wants to turn your house green. This week, he published the plan for doing it. In fact, the strategy for delivering net zero carbon emissions is, in essence, to convert the whole economy — including your home — to electric power and then to deliver most of that power using offshore windfarms. We are rapidly approaching a time when wishful thinking collides with reality The fundamental problem with this approach, however, is what we will do when the wind isn’t blowing, or, just as importantly, when it unexpectedly stops blowing. The failure to address this issue upfront means that net zero is likely to fail, expensively. The stubborn refusal

Whatever happened to the inflation surge? Last month, when the Consumer Prices Index (CPI) surged to 3.2 per cent, the country started fretting about a return to the 1970s. This month’s CPI figure, though, has fallen to a not-very-1970s like 3.1 per cent. Forty five years ago inflation, on a slightly different measure, peaked at over 20 per cent. So are we really heading for an inflationary surge? It turns out that the biggest contribution to this month’s slight fall in CPI is in restaurant prices. This might come as a surprise to people running restaurants — yesterday the Food and Drink Federation complained of a ‘terrifying’ rise in the

Imagine you run an independent store on the high street. Your business has already been ravaged by repeated lockdowns, which boosted the likes of Amazon at your expense. You are already at a huge disadvantage to online retailers because of your fixed costs. At great risk, you have invested in setting up your own online operation – which obviously costs you a lot more per unit of sales than it costs the online giants. In your shift online you have effectively become shunted up a side street, while Amazon, eBay and the like occupy the prime spots on the high street. How, then, are you going to react to the