Economics newsletter
How Labour plans to justify its tax hike
Oh, the suspense. It seems that we will have to wait until next week to discover the details of the £20 billion ‘black hole’ which chancellor Rachel Reeves has supposedly discovered in the public finances. Don’t get too excited, though. The revelation will be no greater a surprise than the ending of James Cameron’s blockbuster film
Letting the worst universities collapse would be an act of kindness
Nobody said much about it before the election, but the new government inherits a ghastly financial problem with the higher education system. Rising costs, stagnant tuition fees, and a big drop in foreign student enrolments have left several universities tottering like ivory Jenga towers. We probably have too many universities This week we got an inkling of
Liz Kendall promises a game-changer on welfare
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
Labour will struggle with its plan to get Britain back to work
Liz Kendall wants Britain to get back to work. The Work and Pensions Secretary has unveiled a target for the country to reach an 80 per cent employment rate. But hold on: that ‘ambition’, as the government is calling it, is completely unrealistic. Labour’s plan to reverse the dire labour market and drive up Britain’s employment
Why Labour should avoid Gordon Brown’s stealth taxes
During the election campaign, Chancellor Rachel Reeves made bold promises – no increases to Income Tax, National Insurance, or VAT. She also sought to echo the ‘prudence’ mantra of her predecessor as chancellor Gordon Brown, though his tenure was marked by significant spending increases rather than prudent restraint. True to form, over the weekend Reeves
Keir Starmer has made his first misstep as Prime Minister
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
Keir Starmer is deluding himself about the EU
‘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
Is the great worker shortage finally coming to an end?
British workers have just experienced their highest pay rises for two years. With inflation remaining at the Bank of England’s target, the average worker has now seen their real term pay increase between March and May this year by just over 2 per cent – a level not seen since 2022. However, in cash terms
The Tories must share the blame for Labour’s illiberal smoking ban
When Rishi Sunak called a summer election, the Tobacco and Vapes Bill didn’t make the pile of ‘wash up’ legislation to be rushed through Parliament. His plans for a generational smoking ban, and a crackdown on vapes, were paused. But this was never going to be more than a brief delay. Labour has used the
Labour will regret making the OBR all powerful
It might seem like smart politics. And it will reassure the markets. The legislation in the King’s Speech today to ensure all Budgets are assessed by the Office for Budget Responsibility (OBR) no doubt seems like a good idea right now. And yet, there is a catch. The incoming Labour government has now completed the