The treasury

Time to ditch the pension triple-lock for good

Perhaps it’s finally dawned on the government that they have an intergenerational inequality problem on their hands. The decision to suspend the pension triple-lock for one year to avoid an 8 per cent increase to the state pension would suggest so. Asset wealth is already excessively concentrated in the over-55s. To even this spendthrift government, a massive bump in pensions while the rest of the economy languishes is a step too far. But that’s exactly what happens every year anyway under the triple-lock. The policy means that even when the rest of the economy stagnates, pensioners receive a boost. It is a feature of the system, not a bug, which came into place

Isabel Hardman

Tories brace for more tax rises to fund NHS

Any Tory rebellion on social care is unlikely to be very big this evening when the Commons votes on a resolution introducing it. There are a number of reasons for this, not least that voting against a money resolution, particularly one on an issue that is as big as a budget, is a much bigger deal than rebelling on normal legislation. Then there’s the prospect of a reshuffle, with everyone in Westminster busily trying to read runes about whether Boris Johnson will move around his front bench tomorrow. If it doesn’t happen, disappointed MPs are hardly going to complain in public that they’d supported the policy in the hope of career

Patrick O'Flynn

The rise and rise of Rishi Sunak

When Victoria Beckham noticed that her husband David had developed a winning way, not just with her but with almost everyone else too, she came up with a wry nickname for him: Goldenballs. What billionaire’s daughter Akshata Murthy calls her husband Rishi Sunak within the confines of their family homes is anybody’s guess but there is no doubt that he is on a golden run of his own right now. As his rivals to succeed Boris Johnson blow up — both Foreign Secretary Dominic Raab and Home Secretary Priti Patel are currently subject to heavy speculation about imminent demotion — nobody seriously believes that Sunak’s position as Chancellor is in jeopardy.

Ignore the gloomsters, the economy is roaring back

The horror! Yesterday we discovered that UK economic output — as measured by GDP — fell by 1.6 per cent in the first quarter of the year, 0.1 per cent worse than the 1.5 per cent originally reported. This is practically a rounding error. To put it in context, as recently as March the Office for Budget Responsibility, which crunches the numbers for the Chancellor, was forecasting that GDP would fall by 3.8 per cent in Q1. As well as still beating these gloomy expectations, the latest figures are also old news. But if anything, the detail is encouraging. The downward revision to headline GDP was largely due to a bigger decline

Is Covid really to blame for HS2’s runaway costs?

Covid has doomed the public finances — not just because the cost of mitigating it has been high in itself but because it has normalised high public spending. When you have just allocated £37 billion to Test and Trace and spend £54 billion on the furlough scheme, a £106 billion high-speed railway to Manchester and Leeds looks relatively good value — at least taxpayers will have something lasting for their money. And who would even notice if the budget for that railway quietly crept up by a further £1.7 billion? That is exactly what has happened today. The construction costs of the first phase of the railway, from London to

Rishi Sunak tries to calm coronavirus crunch fears

Following Tuesday’s bleak headlines over the effect the coronavirus lockdown could have on the economy, the Chancellor attempted to strike an optimistic note in the daily government press conference. With the OBR projection suggesting three months of lockdown followed by a partial easing could lead to the UK economy shrinking by 35 per cent, Sunak said that while the prediction was worrying the figures were in some ways unsurprising as these are unprecedented times. However, the Chancellor stressed that it was simply ‘a possible scenario’ and it ‘may not even be the most likely’.  Sunak said the important takeaway is that the economy would likely ‘bounce back quickly’ once measures are lifted. He said

What the reshuffle means

As the dust settles, it is clear that the big story of the reshuffle is that Boris Johnson has created the most powerful central government operation in living memory. He has yoked together Number 10, the Treasury and the Cabinet Office. As I say in the Sun this morning, no department or agency will be able to resist the power of this new centre. The rationale behind this move is simple. Boris Johnson’s view is what is the point of being in power if you are not actually in charge. He wants to bring an emphatic end to a decade of weak government. He believes that this new set up

Why has Sajid Javid quit as Chancellor?

Why has Sajid Javid quit as Chancellor? Because he wanted his political advisers to be his own courtiers and servants, as is the tradition, and not those of Dominic Cummings, the prime minister’s chief aide. To the contrary, Johnson agreed with Cummings that Javid’s current special advisers should be dismissed and replaced with new advisers who would answer and report to Cummings. The PM and Cummings believe the success of the government in these challenging times require Downing Street and the Treasury to act, as far as possible, as one seamless unit. According to one of Johnson’s close colleagues, the current Prime Minister admires how Cameron and Osborne acted as