Money

It’s ‘blame the Tories’ day in Westminster as Rachel Reeves prepares to take centre stage. The new Chancellor will this afternoon publish a ‘spending audit’ of the financial challenges Labour has ‘discovered’ on entering government. Reeves will address the Commons chamber detailing these spending pressures before giving a press conference at the Treasury early this evening. It comes after Cabinet Office Minister Pat McFadden wrote to colleagues ordering them to ‘bring out the dead’ and identify looming crises in their departments. Expect high doses of political theatre throughout the day from Labour as they attempt to hammer their point home. What tax rises is Reeves planning and will Labour face

How much can Rachel Reeves be trusted? A Chancellor’s credibility counts for a lot with the markets, who are asked to lend HM Government tens of billions a year. Reeves claims to be serious, straight and candid in a way her Tory predecessors were not. But now she seems to be channeling Liz Truss and coming up with her own assessment of the public finances while dispensing with the service of the Office for Budget Responsibility (OBR). She intends to declare a £20 billion hole, we’re told, and say she is shocked – shocked! – at what a mess the finances are in. Cue an excuse for tax rises, more

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 Titanic (spoiler alert: a large ship hits an iceberg and sinks). As Paul Johnson of the Institute for Fiscal Studies pointed out before the election and has done so again: the state of the UK government’s finances are not exactly a secret – they are already open to anyone who cares to examine them. You

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 what education secretary Bridget Phillipson and higher education minister Jacqui Smith are thinking of doing about this mess. Not surprisingly, big money bail-outs are out (chancellor Rachel Reeves won’t allow them), as are increases in student fees (which backbenchers wouldn’t stand for). Instead, apart from telling the institutions in trouble to tighten their belts, the

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 not only than today’s 72 per cent but (far) higher than the all-time, pre-lockdown record of 74 per cent. It is precisely the right target, for economic and social reasons. But it is one that can only be achieved via serious, game-changing welfare reform. The new Work and Pensions Secretary has inherited a full-blown welfare

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 Universal Credit to a family’s first two children, with subsequent offspring meriting no additional payment. According to the Institute for Fiscal Studies, keeping the cap will mean an extra 670,000 children worse off by the end of this Parliament while scrapping it would reduce relative child poverty by half a million. The annual cost of

‘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 in charge, and from now on we are going to have a far more constructive relationship with the EU. Keir Starmer has even promised a renegotiation of Britain’s trading relationship with the EU, which is supposedly going to make life easier for our exporters. Keir Starmer has even promised a renegotiation of Britain’s trading relationship

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 King’s Speech today to confirm that it will see Sunak’s smoking ban through. Or rather, the party might argue that it’s reclaiming the idea. It was Labour, after all, that floated the policy before the Tories adopted it at their party conference last year.  One day, a 63-year-old will be able to purchase a tobacco

As opposition leader, Sir Keir Starmer long struggled to define what ‘Starmerism’ is, other than ‘not Corbynism’ and ‘not Toryism’. Last Autumn, he belatedly stumbled across a policy theme which he has since tried to make his own: ‘Yimbyism’, a positive ‘Yes In My Back Yard’ attitude to development: the antidote to Nimbyism.  Labour’s rhetoric on housing has been confrontational In her first major speech on economic policy, Chancellor Rachel Reeves picked up this ‘Yimby’ theme in order to bolster her pro-growth credentials. Policy announcements include bringing back mandatory housebuilding targets, removing green belt protection from bits that are clearly not green (the ‘grey belt’), and overturning the ban on onshore wind. 

Just Stop Oil continued its campaign by spreading orange paint over road junctions in Westminster this week, but why bother when the organisation seems now to be in power? Energy and Climate Change Secretary Ed Miliband is said to be weighing up blocking new licenses for oil drilling in the North Sea. Labour has previously said that it wouldn’t allow exploration of entirely new fields but wouldn’t stand in the way of the continued exploitation of existing fields. Yet even this limited exploration now looks in doubt. How is the government going to generate that income if oil and gas companies are not going to be allowed to drill? The Department for

What country ever went wrong with a sovereign wealth fund? It is easy to envy Singapore and Norway – the latter of which now has £1.3 trillion squirrelled away, equivalent to £240,000 for every citizen. Britain would be in a much better situation now had it, like Norway, invested its windfall from the North Sea, rather than chucking it into the pot of general day-to-day expenditure. Paying state and public sector pensions liabilities out of tax revenue rather than from a long-term investment fund is going to become an ever more serious burden on the state. We shouldn’t, then, sniff at Rachel Reeves’ idea for a ‘national wealth fund’. It is just that what