Money

Kate Andrews

The Tories’ migration crackdown will have many victims

The UK’s immigration system must be ‘fair, consistent, legal and sustainable’, proclaimed the new Home Secretary as he presented his ‘five-point plan’ to reduce legal migration in parliament. James Cleverly billed these changes as ‘more robust action than any government’ has taken before to reduce the headline net migration figure.  They involve increasing the skilled worker earnings threshold from £26,200 to £38,700 from next spring; increasing the NHS surcharge (paid every time most migrants secure or renew their visa), from £624 to £1,035; ending the 20 per cent salary reduction for shortage occupations (as well as reforming and reducing the list); increasing the minimum salary for a family visa to

Kate Andrews

Starmer offers a heavy dose of the big state

Keir Starmer wants to set expectations early. Speaking at the Resolution Foundation’s economy conference later today, the opposition leader used his speech to emphasise just how little scope he’d have at the start of any Labour government to splash the cash. His party will not ‘turn on the spending taps’, he told an audience of economists and policy analysts. Anyone expecting them to do so is ‘going to be disappointed.’ The speech seemed to deliberately echo the infamous ‘I’m afraid there is no money’ note left for the incoming Tory government by a Labour minister.  Starmer responded to the spending trap laid out in the Autumn Statement last month: where

Fraser Nelson

The thinking behind Rishi Sunak’s common sense Net Zero approach

Rishi Sunak has a new approach to Net Zero, defining himself against ‘zealots’ and acknowledging the side effects of proposed green taxes. He’s replacing the old, often hyperbolic precautionary-principle logic and bringing in the language of tradeoffs: stressing the importance of democratic consent and the futility of green taxes that voters will not accept and are likely to rebel against. The Prime Minister has just taken his case to the UN ‘Cop’ Climate Summit in Dubai and his short speech deserves more attention than it has received. The standard form, in such events, is for leaders to try to outdo each other in ‘dark green’ jeremiads and say ‘we’ must

Kate Andrews

When will Rishi Sunak see sense on the Triple Lock?

When Jeremy Hunt announced his ‘Autumn Statement for Growth’ last week, there was a slight problem: the Office for Budget Responsibility (OBR) had actually revised down its growth forecasts. Apart from this year and the last year for the forecast, GDP gains are expected to be smaller than were predicted back in March. Yes, the government can still technically say it is making good on its pledge to ‘grow the economy’ — but best of luck to any minister who stands up and sincerely insists that 0.6 per cent or 0.7 per cent growth is something to boast about. The OBR is not, of course, the only forecaster. There are

Opec’s split is good for the West

It largely slipped under the radar, but there was a rare bit of good news for hard-pressed consumers and businesses this week: the next meeting of Opec+, originally scheduled for today, has been pushed back almost a week amidst rumours of splits between its members. Most people struggling with inflation and the cost of living probably don’t look for salvation in the depths of the international and business pages. Few organisations cast a longer shadow over economic life in the West than the Organisation of Petroleum Exporting Countries (Opec) and its tag-alongs in Opec+. Ever since it was first established in 1960, the purpose and mission of this organisation has

Is Javier Milei already defying his critics?

Critics of Argentina’s president Javier Milei have already made up their minds: he is a lunatic and his plans will collapse on first contact with the real world. Argentina’s money will run out and the economy will grind to a halt. To some commentators, he is a ‘hard-right’ ideologue who will crash the economy within weeks. They say he’s like Liz Truss and Kwasi Kwarteng on roller-skates. If you listen to those attacking Milei, you’d be forgiven for thinking the man in charge in Buenos Aires will precipitate yet another economic calamity in a country which has been stumbling from one disaster to another for almost a hundred years. But

Stephen Daisley

The Scottish Greens’ oil crusade is coming unstuck

‘Well, well, well,’ as the meme goes. ‘If it isn’t the consequences of my own actions.’ The news that Grangemouth, Scotland’s last oil refinery, is to close by 2025, with hundreds of jobs thought to be at risk, has elicited statements of concern from across the political spectrum. But no one is likely to improve upon that from Scottish Green MSP Gillian Mackay, who posted on Twitter/ X: There couldn’t be a more dazzling display of radical cluelessness. Mackay’s party, which is in government with Humza Yousaf’s SNP in Scotland, has made a crusade of harrying the oil and gas industry out of operation north of the border. Earlier this

Isabel Hardman

Rachel Reeves borrows an attack line from Ronald Reagan

Rachel Reeves is getting used to being nicknamed ‘the copy-and-paste shadow chancellor’ by the Tories. Today she leaned into that name by repeating a phrase she’s been using for a while; one she copied and pasted from another politician. Ronald Reagan’s 1980 question of ‘Are you better off now than you were four years ago?’ was the central theme of her Autumn Statement response. Her recast of it was ‘the questions that people will be asking at the next election and after today’s autumn statement are simple: do me and my family feel better off after 13 years of Conservative governments? Do our schools, our hospitals, our police today work

Why is the public sector so unproductive?

The government has achieved its promise to halve inflation from last December’s level, borrowing has come in at little under the predictions made in March’s budget, and the Chancellor has felt able to lower taxes. But one thing isn’t going well: productivity. Little-noticed figures released by the Office for National Statistics (ONS) this week show that output per worker has fallen by 0.1 per cent over the past 12 months and output per hour is down by 0.3 per cent. While productivity in the private sector has risen by around 30 per cent since 1997, in the public sector it has hardly risen at all The problem is especially acute in

Why we should all welcome Hunt’s tax break for businesses

Rishi Sunak has made ‘long-term decisions’ the leitmotif of his government. Today’s Autumn Statement announcement on permanent full expensing – which will allow businesses to write off capital investment costs against corporation tax immediately and in full – shows his Chancellor is singing from the same hymn sheet. While it might sound dry, this tax reform is a vital step towards fixing one of the key structural weaknesses in the British economy: lacklustre business investment. Hunt’s announcement today will help boost productivity, economic growth and wages. In due course, full expensing should make us all – businesses, workers and consumers – better off. The current version of full expensing, introduced

Martin Vander Weyer

Rishi Sunak can’t take the credit for falling inflation

Even the best-run companies have occasional leadership crises. But if you asked ChatGPT to come up with a blockbuster boardroom-bloodbath movie scenario, I doubt it would propose anything as extreme as this week’s events in its own San Francisco-based parent company, OpenAI. Chief executive and co-founder Sam Altman was fired last week for failing to be ‘consistently candid’ with OpenAI’s board, though no one was prepared to say what he had not been candid about. By Monday he had a new job leading AI research at Microsoft, OpenAI’s 49 per cent shareholder. One inside source claimed 743 of OpenAI’s 770 staff had signed a letter supporting him and many of

Don’t be deceived by Jeremy Hunt’s tax ‘giveaways’

When Jeremy Hunt takes to his feet in the Commons this afternoon to deliver his Autumn Statement, he’ll be trying to woo voters with some tax ‘giveaways’: VAT thresholds might be raised to help small businesses and the basic rate of National Insurance could be reduced for the rest of us. But hold on. Before the Chancellor gives anything back, both he and the Prime Minister Rishi Sunak need to do something far more important: they should apologise for all the tax rises the Tories have imposed. We don’t know the final figure yet, but it turns out that the Chancellor has around £13 billion to £15 billion of ‘headroom’,

Isabel Hardman

Will the Tories’ ‘carrot and stick’ benefits plan work?

Rishi Sunak wants to frame a benefits crackdown in tomorrow’s Autumn Statement in compassionate terms, with ministers saying people with mobility problems and mental illnesses can no longer be ‘written off’ thanks to advances in technology making it easier to work from home. Instead, they will be expected to look for work or face benefits sanctions. The ‘carrot and stick’ approach being proposed will include a promise to claimants that their right to benefits won’t be reassessed if they look for work, as well as better support in the package of reforms being developed by work and pensions secretary Mel Stride. In lots of ways, this is compassionate: being out

Kate Andrews

Can Jeremy Hunt cut taxes in good conscience?

When the government announces a range of tax cuts tomorrow, it has pledged to do so in a ‘sustainable’ way. What counts as sustainable, however, is going to be hotly contested – especially in light of this morning’s update from the Office for National Statistics, which saw the UK borrow more than forecast or expected last month. Public sector net borrowing came in at £14.9 billion in October – more than a billion pounds higher than forecast by the Office for Budget Responsibility and £4.4 billion more than was borrowed during the same month last year. There are two ways to look at the data. The first is to note that while

Kate Andrews

Sunak makes more pledges – but what happened to his last five?

In his speech in north London his morning, the Prime Minister confirmed that tax cuts are coming this Wednesday, as is another attempt by the government to get Britain’s 5.5 million missing workers back into employment. But Rishi Sunak didn’t stop there. Having achieved one of his five pledges for the year last week — the inflation rate halved in the year to October, slowing to 4.6 per cent — the Prime Minister decided this morning to offer up five more. Now in addition to the ‘five promises’ made in January — halving inflation, growing the economy, reducing public debt, cutting NHS waiting lists and ‘stopping the boats’ (a pledge

Kate Andrews

The UK labour market is beginning to cool

Slowly but surely, the labour market in the UK appears to be cooling down. Data from the Office for National Statistics this morning shows the number of job vacancies across the economy fell by another 58,000 between July to September, taking the total figure to an estimated 957,000. This is still far above pre-pandemic levels, but the number has been dropping constantly, and is down again for a sixteenth consecutive period. Meanwhile, both the UK’s unemployment figure and inactivity figure have remained ‘largely unchanged on the quarter’: sitting at 4.2 and 20.9 per cent, respectively. This bodes well for an economy that is trying to dodge the dreaded label of ‘stagflation’. The UK

Snooping on benefit claimants’ bank accounts won’t cut fraud

Another day, another wheeze from a desperate government as it tries to move the polls. Benefit claimants could soon have their bank accounts checked each month to ensure they are not lying about their savings. The law change, designed to crack down on benefits fraud, appears to be the government’s answer to the fact that welfare payments have exploded in recent years. It will reportedly be unveiled in the Autumn Statement, with estimates suggesting it could save the taxpayer £100 million a year. But will it make a difference? The Department for Work and Pensions’ total proposed expenditure for 2023/24 is set to reach £279 billion (almost half of which is pensioner benefits).

James Kirkup

Are we diluting the meaning of ‘mental health’?

What does ‘mental health’ mean? Is the answer to that question undergoing a generational change, as younger people become more aware of – and likely to talk about – their mental state and to discuss it in terms of ‘mental health’? And will that cultural change have economic effects? These are some of the questions I’ve explored in a Radio 4 Analysis show that’s broadcast on Monday night.  There might be a generation of workers who are inclined to take a day off work because they’re feeling a bit worried about a big meeting and so on It includes the voices of several fascinating people, but in particular I’d draw

Ross Clark

What’s stopping a housing crash?

Should we really believe that house prices rose by 0.9 per cent in September, as claimed by the latest release from the Nationwide House Price Index? The unexpected rise moderates the annual fall in house prices from 5.3 per cent in August to 3.3 per cent in September. There is a health warning on the Nationwide’s figures – and one which also applies to the monthly Halifax figures. Both these indices are derived from data on mortgage approvals for their own customers. When the market slows and there are fewer sales, it means there is less data on which to base the monthly figures, which inevitably makes them less reliable.