Money

Labour avidly disagrees with the Tories’ plan to fill budget gaps by hiking National Insurance. So what would they do differently? This was one of the many tasks Rachel Reeves had today as the shadow chancellor delivered her speech at Labour party conference. Reeves not only had to set out an alternative tax-and-spend policy but also take aim at the financial decisions made by Boris Johnson’s government. Did Reeves succeed? No doubt her job was made much easier over the weekend as an energy crisis, which the government should have seen coming, continued to splash across the front pages, exacerbated by fuel shortages at the pumps brought on by a lack of

There is about to be a two-phase onslaught on the living standards of those on low-to-middling incomes. On 1 October the energy price cap, for dual fuel, rises from £1,150 to £1,277. This is a rise of 11 per cent, at a time when furlough is ending and just a few days before the £1,000 a year uplift to Universal Credit is removed (which presumably Boris Johnson will not be swanking about in his big speech to Tory conference). That’s the first hit to living standards. There’ll then be a gradual further erosion of living standards with rising food inflation (of around five per cent, as per what Tesco’s chairman John

A perfect storm is battering the UK’s energy sector. Due to a mix of high demand, maintenance issues at some gas sites, and lower solar and wind output, wholesale gas prices are up 250 per cent since January, and a handful of energy firms have folded. Some economists are suggesting the huge rise in gas prices could be an indicator of nascent inflation, and senior Tories have warned that a looming ‘cost of living crisis’ could erupt into the biggest political issue of the decade. Ofgem has announced that it has appointed British Gas to take on 350,000 customers from People’s Energy, one of two smaller suppliers which collapsed last

For years it seemed as though China’s massively inflated property bubble would just keep on expanding, seemingly defying the laws of economics, as well as regular warnings of the dire consequences for the economy should it burst. Now that moment may have been reached, as the country’s biggest developer teeters on the brink of bankruptcy. Evergrande is the biggest debtor in China – and in the world. It owes an estimated US$300 billion to Chinese banks, suppliers and foreign investors, and is struggling to meet interest payments. Some $US84 million of bond interest is due this Thursday, but the company has run out of money. Stock markets across the world are falling as the implications become more clear. By one estimate Evergrande has taken deposits for

Private members’ bills don’t normally make for exciting reading. They give MPs and peers a chance to let off steam if they have a bee in their bonnet, and more importantly to lay down fairly cheap political markers. Most sink without trace, since the government through its control of the Commons legislative timetable has an effective veto. But some are worth a second look. One such is Lord Hendy’s Status of Workers Bill, which got its second reading in the Lords last Friday. Currently, businesses love the idea of designating as much of their payroll as possible as self-employed independent contractors rather than employees. And not surprisingly: it saves them

On BBC One’s Andrew Marr show Sajid Javid confirmed that plans for domestic vaccine passports in England were on the way out, even before they were formally brought in: ‘We should keep it in reserve,’ he said of the government’s plans to link vaccine status to entry into nightclubs, but ‘I’m pleased to say we will not be going ahead with plans for vaccine passports.’ Vaccine passports have been a roller-coaster policy for months now, with claims made by members of the Cabinet at the start of the year that they weren’t being considered: that nothing so ‘discriminatory’, in the words of vaccine minister Nadhim Zahawi, would be implemented. Since then,

The arrival of ‘freedom day’ on 19 July enabled people to return to concerts, festivals, and ditch social distancing, but these rediscovered freedoms did not revive the economy. The ONS said this morning that growth was just 0.1 per cent in July, far lower than the consensus forecast. It was particularly disappointing given the growth seen in the locked-down months of June (one per cent) and May (0.6 per cent). The Pingdemic – and concerns about the Delta variant – cancelled out any animal spirits around reopening. August’s GDP boost is going to need to be much stronger for the more bullish forecasts to pan out Nightclubs reopened and the entertainment

One of the most dubious and meaningless parts of today’s health and social care plan is the pledge that the new tax will be a ‘legally hypothecated levy’ – ring-fenced so that the money raised can only go to health and social care services.  It’s dubious in the same way that the Tory manifesto pledge not to raise taxes turned out not to be worth the paper it was printed on. And it’s meaningless because a government that wants to unlink the tax could just pass a law doing that – and no legal ring-fence can stop it. It’s also worth remembering that the ring-fence around health and social care is

It is a curious thing to exclude a vast group of generally quite well-heeled voters from funding a policy innovation that they will benefit from more than any other group. One might almost call it blatant favouritism. But Boris Johnson’s plan to pay for a big increase in resources going into social care long-term and the NHS short-term amounts to just that. By opting for a National Insurance increase to fund his proposals, the PM is ensuring that nobody over the state pension age of 66 will have to put their hands in their pockets. Neither will the extra financial burden fall on so-called ‘unearned’ income such as dividends on

Boris Johnson pledged to ‘fix the crisis in social care’ over two years ago. Next week, the Prime Minister is set to announce his plan to do just that. In doing so, he is also expected to opt for a major break from his manifesto pledge not to raise key taxes. So what is Boris’s solution, and will it work? The Prime Minister remains wedded to the 2011 Dilnot reforms to answer today’s problems. This includes bringing in a cap on the cost one would be required to pay for their social care. At least a 1p tax hike on National Insurance is also expected, to raise around £6bn. This pot of

As Covid-19 swept through care homes in the spring of last year, the public watched on with horror and helplessness. About a third of all Covid deaths in England took place among residents of these homes. It was worse overseas. In Spain, care home residents accounted for 40 per cent of Covid deaths last year. In the Netherlands and Sweden, it was around 50 per cent. In Canada, almost 60 per cent. But this doesn’t provide much comfort. Britain may belong to a large club of countries that got their pandemic policy wrong — but the results, regardless, were deadly. The huge holes in Britain’s social care system have been

Andy Haldane’s departure from the Bank of England opened up one of the most influential roles in guiding UK monetary policy — and that role has now been filled. Huw Pill has been announced as the BoE’s new chief economist, taking up the post from next Monday. Some of the snap reaction is focusing on Pill’s similarities to those who came before him. Despite resources being poured into diversity teams to recruit a mix of applicants, it was Pill who was selected, a former Goldman Sachs economist and most recently a senior lecturer at Harvard Business School. Pill won’t take kindly to ideas about reneging the Bank of England’s independence