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Speaking at the Centre for Policy Studies fringe event at Conservative party conference this afternoon, Jeremy Hunt reiterated once again that there would be no big tax cuts this year. ‘Debt interest payments have gone up so much in the past six months’, he told CPS director Robert Colvile, taking estimates for debt servicing payments over the £100 billion mark this fiscal year. The Autumn Statement, the Chancellor said, will lay bare just how dire the situation is: ‘It’s likely that our debt interest payments… are going to go up by more than £20bn pounds a year in the Autumn Budget compared to what was predicted in the spring.’ In other

The whispers going around last year’s party conference largely centred on the state of government – how it was deteriorating so quickly. This year’s whispers are about something that is by no means as dramatic, but possibly as existential to the future of the party: the prospect of tax cuts. The official line is simple: no tax cuts this year. Chancellor Jeremy Hunt has spent his summer trying to quell expectations that his Autumn Statement next month will include any major changes to the tax burden, which is set to reach a post-war high by the time of the next election. This morning he said now is ‘not the right

The last time a Conservative Chancellor was in the business of cutting taxes, he pointed out that they reduce the incentive to work, invest, and start a business. This was why Kwasi Kwarteng proposed to abolish the 45 per cent additional rate of income tax last year. We really, really, shouldn’t have a tax system that can have a 68 per cent marginal rate, let alone a 20,000 per cent one He was right about the impact taxes have on incentives, but he was wrong to focus on 45 per cent as the highest rate of tax people pay in the UK. In fact, there are millions of people paying

Bond yields are soaring. The cost of debt, and very soon mortgages, is rising. And the government is getting nervous about how it is going to borrow the next ten or twenty billion. This might sound like the opening of a one-year-on post-mortem of Liz Truss’s ill-fated mini-Budget (we have all been treated to those recently). But in fact, it is a description of what is happening right now across Europe. The eurozone is facing its Liz Truss moment, and the results are likely to be every bit as catastrophic.  Across Europe the bond markets are starting to look jittery. Over the last couple of days, the yield on ten-year

No one was expecting a big tax cut this year. Rishi Sunak’s government has been clear that 2023 is for the ‘difficult decisions’. If the Tories are to offer up a tax cut, it is much more likely to be announced in the Budget next March. Still, that didn’t make Jeremy Hunt’s comments on LBC last night any cheerier. Speaking to Andrew Marr, the Chancellor said that tax cuts were ‘virtually impossible’ due to soaring interest payable on government debt.  Hunt has a point: one of the many painful consequences of soaring inflation and higher interest rates has been the impact on public finances. In July, interest payments reached their highest

Will the government have room for tax cuts before an election? Politically, it’s thought to be non-negotiable that they must. Having put the tax burden on course for a post-war high by the end of this Parliament, Rishi Sunak and Chancellor Jeremy Hunt are going to have to relieve some of that pressure on taxpayers before going head-to-head with Labour next year. But will the public finances allow for it? On the surface, today’s update from the Office for National Statistics (ONS) appears to offer up some good news: public sector net borrowing in August came in at £11.6 billion. That’s £3.5 billion higher than August 2022, but £1.4 billion below the Office for

Jeremy Hunt has been warning for weeks that inflation could rise over the summer due to an increase in fuel prices. Economists said much the same: the consensus was that the headline rate would jump to 7.1 per cent on the year in August. But this morning the Office for National Statistics (ONS) revealed that the rate of inflation continued to slow last month: rising to 6.7 per cent on the year in August, down from 6.8 per cent in July. This is a rare occasion where ministers have under-promised on the inflation figures, triggering headlines like ‘surprise fall.’ In truth, it’s the smallest of dips – and prices are still going

In his promised review of net zero policies, Rishi Sunak has already ruled out postponing the proposed ban on the sale of new petrol and diesel cars from 2030. Indeed, from the end of the year manufacturers are going to be under a mandate to make sure that a certain proportion of their sales are electric – although the details have not yet been published. But what chances of the car industry actually getting there? While sales of electric cars might seem to be healthy – the Society of Motor Manufacturers and Traders (SMMT) records that 193,221 pure electric cars were sold in the first eight months of 2023, up

Was Liz Truss a fiscal hawk inside No. 10? That is the rather startling claim made by the former prime minister, speaking today at the Institute for Government about the future of economic growth. She has claimed public spending would be £35 billion lower over the next few years had her plans been followed, due to the real-term spending cuts that would have followed from not reopening the latest Spending Review. Moreover, she insists that her mini-Budget was not just about going for growth, but rather a ‘three-pronged approach’ that included ‘targeted tax freezes and reductions, supply side reform and holding public spending down.’ This is the first time we’ve

Train drivers will strike for two days in the coming weeks, on 30 September and 4 October. These dates are no coincidence: they directly overlap with when MPs and attendees will be travelling to and from the Conservative party conference in Manchester. This move from Aslef and the RMT is far from subtle: the unions may be locked in a pay battle with train companies, but it’s the government’s attention they are hoping to get. The train strikes add to a growing list of other walkouts planned over the next few weeks. Consultants and junior doctors will also be walking out separately this month. But then in an unprecedented move,

The closure of 400 Wilko stores – at the cost of 12,500 jobs – spells more misery for the high street. Wilko joins a pantheon of big brand names who have been forced to shut their doors since the pandemic. We have seen the loss of Debenhams, the Arcadia Group (which owned Dorothy Perkins, Topshop and Topman), Victoria’s Secret, Paperchase, Oasis and Warehouse, Made.com and Cath Kidston among many others.  According to the British Retail Consortium, the crisis on our high streets goes back further, with 6,000 storefronts closing since 2018. Last year was the worst year for retail in five years, seeing the loss of 150,000 jobs from the high street and out of town shopping centres. The situation has become so bad

The Trades Union Congress (TUC) has vowed to report the government to the UN workers’ rights watchdog over its controversial strikes bill, but how seriously can we take this threat? The TUC’s leader, Paul Nowak, certainly sounds like a man on a mission: earlier this year, Nowak claimed the legislation was ‘almost certainly illegal’, a curious assertion given it was going through parliament at the time. Now that the bill has received royal assent, it appears the TUC is doubling down on its war on the strikes bill. Yet it’s hard not to see the TUC’s complaint as anything other than a stunt designed to further denigrate the Tories who, to the