Money

Wednesday

Lloyd Evans Lloyd Evans

PMQs: Boris let slip his election attack lines

Covid is ancient history. And Ukraine has ceased to dominate PMQs. Today, ideological warfare between the parties broke out again. The old politics is back. Sir Keir Starmer accused the Chancellor of fibbing during last week’s bogus budget. Tax hikes had been camouflaged as tax cuts. Boris denied this and praised his Chancellor for delivering a historic bonanza of golden giveaways. ‘The biggest cut in fuel duty ever. And the biggest cut in tax for working people in the last 10 years.’ Sir Keir silenced him. ‘Cut the nonsense and treat the British people with a bit of respect.’ The tax burden is soaring, he said, and for every pound

Ross Clark Ross Clark

Scrapping free car parking for NHS staff is long overdue

The private motor car is, of course, an environmental vandal which needs to be driven out of our towns and cities for the good of the planet and for the benefit of residents who are being killed by traffic fumes. We know this because we keep being told by some of those on the left that parking charges, congestion charges and fines must all be ramped up and the proceeds used to improve public transport and encourage cycling and walking. But there seems to be an exception. When the motorists in question are NHS staff, their fondness for their cars ceases to be an outrage. On the contrary, it is

Isabel Hardman Isabel Hardman

Are we falling out of love with the NHS?

Clap for carers now feels like ancient history. Public satisfaction with the NHS is at its lowest since 1997, according to a new study out today. The British Social Attitudes Survey finds overall satisfaction with the health service at just 36 per cent, a record-breaking fall of 17 points since 2020. People often relate to the health service through GPs and their experience of A&E. The latter has experienced a record-breaking 15 point fall, now at 39 per cent satisfaction, its lowest level since the BSA started asking questions about A&E in 1999. It’s worth remembering that in 1997, when public satisfaction with the NHS as a whole was at just 34

Tuesday

Kate Andrews Kate Andrews

Is this the end of borrow and spend?

Since the spring statement last week, Rishi Sunak has been dealing with complaints from all sides: the right have been arguing he should have been bolder with tax cuts, the left insists more support is needed to help people with the rising costs.  With the Office for Budget Responsibility projecting the biggest fall in living standards since records began, rumours of U-turns and further announcements started bubbling over the weekend. The media, the opposition, and even some Tory MPs have been asking Treasury representatives over and over again: is that all? In a keynote address hosted by the Institute of Economic Affairs this morning, chief secretary to the Treasury Simon

Annabel Denham

Stop attacking billionaires

The $5.79 trillion budget plan Joe Biden submitted to Congress yesterday was more notable for what it didn’t include, rather than what it did. There were no line items on the environment or education – key pillars of his ‘Build Back Better’ agenda – but it did call for a new minimum tax requiring ‘billionaires’ to pay at least 20 per cent of their income in taxes, including on the gains on investments that have not been sold. This will, apparently, reduce the government deficit by $360 billion over the next decade. The President is in a tight spot. Since the turn of the year, his approval ratings have fallen

Ross Clark Ross Clark

The rouble’s astonishing recovery

The tank columns are stalled; one or two towns captured from the Ukrainians have been retaken. Russia’s war effort has been going nowhere fast for the past fortnight – unless you count the constant pounding and destruction of apartment blocks a form of progress. But then is the economic war being waged against Russia making any greater progress? True, Muscovites can no longer get a Big Mac, and western-made luxury goods have disappeared from the shelves. Yet look at the dollar’s march against the rouble and it is starting to look like a convoy of Russian armoured vehicles. For the first few days, the rouble sank inexorably as sanctions kicked in.

Monday

Katy Balls Katy Balls

‘Do you think people are stupid?’ Rishi Sunak grilled by MPs

After unveiling his spring statement on Wednesday, Rishi Sunak found himself under attack from all sides: his personal approval ratings dived amid a media backlash and criticism from his own side. So, the Chancellor’s appearance this afternoon before the Treasury Select Committee on paper made for a painful session.  Over the course of several hours, the committee of MPs quizzed him on whether he thought people were ‘stupid’ when it came to his pre-election tax cut, the impact of Brexit on trade and why he had borrowed a Sainsbury’s worker’s Kia for a publicity shot. When it came to the latter question, Sunak admitted that his team has asked a supermarket worker

Matthew Lynn

Is Biden trying to crash the economy?

A war is raging in Ukraine. Inflation has risen to a 30-year high and may have started to spiral out of control. The country is on the brink of recession, and a gaffe-prone leadership is under increasing fire. You could be forgiven for thinking that President Biden has more than enough problems right now. But he is about to make his already miserable term in the White House a whole lot worse. How? By adding a stock market crash, and the destruction of America’s best companies, to the already worryingly long list of self-inflicted disasters. It is hard to think of a single tax that could be worse for growth

Thursday

Ross Clark Ross Clark

Can we trust economic models?

Rishi Sunak shared a delightful moment of honesty on the Today programme on Thursday. Mishal Husain asked him how households will cope if, as the Office for Budget Responsibility has forecast, energy bills rise by a further £830 a year – on top of the rises already due to take effect in April. No, no, no, said the Chancellor, you can’t believe the OBR forecast on energy prices: ‘They just take what the market expectation is at a given time, and since they closed their forecast actually the forecast for energy bills in the autumn has come down by £400.’ It was a fair point. Except, if the Chancellor doesn’t think

Katy Balls Katy Balls

Is Sunak’s spring statement starting to unravel?

The Chancellor woke this morning to a grim set of headlines as the newspapers chew over his spring statement. Despite dangling the carrot of an income tax cut by 2024, most papers focus on the OBR’s projection that inflation will lead to the biggest fall in living standards since records began in the 1950s. While left-leaning papers such as the Guardian accuse Sunak of forgetting the poorest in society, the papers on the right aren’t that much better for him. The Express asks about the ‘forgotten millions’, while the Telegraph roundly criticises his economic package. The Daily Mail has run with a slightly more welcome tone for Sunak but ultimately calls for more tax cuts

Wednesday

Robert Peston Robert Peston

Has Rishi Sunak just destroyed his relationship with Boris?

I said yesterday that I expected the Chancellor to increase universal credit by more than planned. I was misled. I was wrong. Today, Rishi Sunak’s official forecaster, the Office for Budget Responsibility, is explicit about how painful Sunak’s refusal to increase benefits will be for those who rely on them. It says:  ‘Lags in CPI (or inflation) uprating of benefits mean they fall almost five per cent in real terms in 2022-23, reducing their real value by £12bn, and take up to 18 months to catch up fully with higher inflation’. It means those who are unemployed, on very low incomes, or who rely on the state pension, are going to be in

Ross Clark Ross Clark

Fact check: What’s the truth about Sunak’s Brexit tax cut claim?

Labour’s Chris Bryant was quick to try to scotch Rishi Sunak’s claim that it was only thanks to Brexit that he was able to remove VAT on a number of home energy improvements, such as the installation of solar panels. Within a few minutes of Sunak making the claim, Bryant had tweeted:  ‘Contrary to what Sunak said, there is already a VAT exemption on solar panels and heat pumps already happens in the EU, so this is not a benefit of Brexit.’ After we have left the EU, Brussels wants to copy our example So who is right? Is it Brexit wot gave us our VAT-free solar panels or is

Isabel Hardman Isabel Hardman

Labour’s economic plan? Reheated Miliband

Rachel Reeves is, as Labour frontbenchers go, pretty experienced. She’s not been in government, but then neither has her leader because there are now young teenagers who have never experienced a Labour government. Reeves has been on and off her party’s frontbench ever since she was elected in 2010, and that long experience was on show in her response this afternoon to the spring statement – in both good and bad ways. This was one of the more confident responses I’ve watched from a Labour frontbencher to an economic statement over their 12 years of opposition. Reeves had a really clever section where she mocked the difference between Rishi Sunak’s reality and

Kate Andrews Kate Andrews

Did Rishi Sunak deliver on his tax-cut promise?

Today’s spring statement may not have been a proper Budget – but it could prove to be one of the most significant moments in Rishi Sunak’s time as Chancellor.  At a time when families are facing the double-edged sword of soaring bills and wages falling behind inflation, Sunak was under pressure to offer reassurance. But inflation, which we found out this morning is heading for a 40-year high, is also biting the Treasury. The Chancellor’s response to this dilemma came in the form of several major tax announcements, all targeted at reducing costs for the lowest paid. But Sunak also doubled down on less welcome policies which he insisted are vital for

James Forsyth James Forsyth

Rishi Sunak has just defined the next election

The biggest surprise of Rishi Sunak’s spring statement was the announcement that the basic rate of income tax will be cut by one penny come 2024. This is the first cut in the basic rate since the cut to 20p announced by Gordon Brown in his last Budget in 2007, which was of course partly paid for by abolishing the 10p starting rate of tax. Cynics will be quick to suggest that there is a long way to go before 2024 and so the tax cut might not happen. But this is to ignore the politics. The most likely date for the next election is May 2024. It would be bizarre,

Ross Clark Ross Clark

Welcome to the new era of high inflation

There was a time when a chancellor would have bitten off the hand of a national statistician who offered him an inflation rate of 6.2 per cent. But that takes us back to the days of Denis Healey and the early months of Geoffrey Howe’s time in Number 11. There is little disguising this morning’s grim news, however. The last time the Consumer Prices Index (CPI) was at 6.2 per cent was in March 1992 – although at that time the index was little used as the government’s preferred measure of inflation was then the Retail Prices Index (RPI). The worst thing about today’s figure is that it doesn’t even

Tuesday

Robert Peston Robert Peston

What to expect at the spring statement

The big story of Wednesday’s spring statement by the Chancellor will be the impact of inflation – which has soared from almost zero just over a year ago to perhaps 10 per cent in coming months – on living standards and the public finances. I expect Rishi Sunak to provide limited protection from the ravages of inflation to those on low and middling incomes, probably by increasing universal credit and the threshold for paying national insurance.  But quite how far the Chancellor inflation-proofs the take home pay of low earners will be the most important question he will answer tomorrow. Inflation that makes all of us poorer will create the

Connor MacDonald

Can Sunak save British business from the cost of living crisis?

Many Chancellors had their economic vision dashed by political and economic events. The post-war consensus buckled under the pressure of the 1970s oil shock. Gordon Brown stayed around long enough to watch New Labour defeated by a financial crisis. George Osborne’s smaller-state, tight public spending model couldn’t politically sustain itself past Brexit. Remarkably, Rishi Sunak may be a Chancellor to buck this trend, as the economic shocks have occurred before he has put his economic vision into practice. This was in stark relief when the Chancellor delivered his agenda-setting Mais Lecture on the day Vladimir Putin invaded Ukraine. Covid-19 and now a cost-of-living crisis, choppy economic waters indeed. The challenge

Kate Andrews Kate Andrews

Will Rishi Sunak stick to his ‘golden rule’?

Here’s the Rishi Sunak paradox: he proudly defines himself as a low-tax Tory but under his watch taxes are reaching a 71-year high. There are plenty of Tories who want to ditch next month’s National Insurance increase but Sunak is firmly opposed – mainly because he wants to link up in people’s minds that more money for the NHS and social care doesn’t manifest out of thin air. But pressure is on at tomorrow’s spring statement to make clear what kind of Chancellor he really is. Does he come from the long line of Tories who like tax cuts in theory but not in practice – or does he have

Annabel Denham

Does anyone still believe in low taxes?

Speculation over which taxes the Chancellor will slash or, more likely, hike at tomorrow’s spring statement seems to have settled on two areas. First, a cut to fuel duty and, second, an increase in National Insurance thresholds, a way of tweaking the already announced tax hike to reduce the burden on the poorest.  On the first point, a cut in fuel duty could cost the Treasury around £2.5 billion a year (although the government is unlikely to get much political credit if Sunak does go down this route given how quickly energy costs are rising). On the second, it looks almost certain that the Chancellor will proceed with his planned 2.5 point rise in NI