Money

The tax burden in the UK is nearing a 70-year high — but that’s not stopping ministers from mulling over plans to hike taxes further. According to reports this morning, Boris Johnson and Rishi Sunak are close to agreeing an increase to national insurance to help address the NHS backlog (five million patients in England, and counting). They also want to fill the long-standing black hole in the social care budget: something Johnson promised he’d address nearly two years ago to the day when he first entered Downing Street. The rumours have immediately led to criticism of the government’s willingness to break its manifesto pledge, not to raise income tax,

This month’s announcement of a new economic advisory council formed by the Scottish government came with the usual flow of superlatives. The 17-member group will publish a strategy paper later this year to help deliver the ‘transformational change Scotland needs’, according to economy secretary Kate Forbes. We are promised ‘bold ideas’ that will bring ‘new, good and green jobs’. We have been here before. This group replaces a previous Council of Economic Advisers set up by Alex Salmond in 2007. It too had a remit to galvanise the Scottish economy. It provided 14 years of strategic advice (seven of those under Nicola Sturgeon’s leadership) to the SNP administration with no

The European Commission’s Fit-for-55 emission plan, with its extended emission trading scheme and the new carbon border tax, will be fighting an uphill battle. The carbon border tax scheme — the first of its kind in the world — could become Europe’s opening bid to get moving internationally beyond mere discussions. If there is an international agreement in the end, it would have served a purpose. If not, it may only end up creating new battle lines between trading partners. There may be broad consensus on the goal of reducing carbon emissions, but questions remain: who is to shoulder the bill? Europe’s carbon-intensive industries fear a technocratic monster The carbon

What is the point of the National Food Strategy? When Henry Dimbleby was hired as Britain’s ‘food tsar’ several years ago, the idea was to develop some blue sky thinking and to have someone look at the issue with a fresh pair of eyes, but when he produced his first report last year, it contained the same generic, flat-pack, bone-headed, nanny-state recommendations that every other voice of the establishment had been calling for. So predictable were his conclusions that the government had already committed itself to implementing most of them by the time it was published and he resorted to moaning about Percy Pigs to give himself an angle. The

Inflation is on the rise again. For the third consecutive month, the Consumer Prices index outpaced the forecasters’ consensus, landing at 2.5 per cent in June, up from 2.1 per cent in May.  It’s not just that inflation is overshooting expectations that should trouble us, but that its pace of growth is so fast: at the start of the year, the headline rate was still close to the ground, coming in at 0.7 per cent in January and March, and 0.4 per cent February.  It is becoming harder for the Bank of England to stick to its prediction that inflation will peak around three per cent Now, it’s ahead of the

Could Italy’s triumph on Sunday result not just in a trophy for the azzuri, but a baby boom for a nation with one of Europe’s lowest fertility rates? The anecdotal evidence would support this theory. Nine months after Iceland beat England in a Euro 2016 match, it experienced an unprecedented increase in births. This was the first time the nation had ever qualified for a major European tournament, and close to 10 per cent of its 300,000 population watched the game in person. Spain’s birth rate also shot up 16 per cent nine months after Barcelona won the 2009 Champions League. Yet a new paper from Luca Fumarco and Francesco

So is this what the new era of global co-operation looks like? The EU has agreed to delay the introduction of its proposed digital levy until the autumn to allow negotiations for a global minimum corporation tax. Biden had demanded that the digital tax be dropped, seeing it as a direct attack on US tech giants. In other words, the EU appears keen to compromise in the face of US pressure — something that it would have been less likely to do under Donald Trump. The move makes it more likely that a global minimum corporation tax of 15 per cent will now become reality. Is that a cause to

Two billion? Five billion? Perhaps ten billion to make it a nice round number? For colluding on diesel emissions you might think the European Union would hand out a pretty stiff fine to the big German auto-manufacturers. After all, it has hit American tech giants with huge penalties for far lesser transgressions.  Yet in the end, its response was predictable: the EU has largely let them off the hook. The reason? It turns out that protecting German auto manufacturers is what the Commission really cares about – and nothing else matters. According to Margrethe Vestager, the EU’s anti-trust chief, German manufacturers ‘possessed the technology to reduce harmful emissions beyond what was legally required under EU

At yesterday’s press conference, Boris Johnson announced that his government was shelving plans for domestic ‘Covid certificates’ (i.e. vaccine passports), at least for the time being, although this won’t stop private businesses or venues from deciding to use them.  We also learned today that it won’t stop the creation of a two-tier system (as Lara Prendergast warned months ago) for the ‘jabs and jab nots’. New policies have been confirmed that will allow for the double-jabbed to skip quarantine if they’ve been in contact with someone who tests positive for Covid-19 (with exemptions granted to under-18s as well). It’s hard to herald ‘freedom day’ when younger people risk being forced back inside by

The government will ‘Buy British’ whenever possible. A new law would force every public body to publish the percentage of supplies bought from domestic suppliers. And Gareth Southgate will be appointed as the country’s new management tsar, tasked with turning every worker into a winner. Okay, I admit I made that last one up. The rest, however, were among the blizzard of policy announcements from Labour’s shadow chancellor, Rachel Reeves, over the weekend. Less than three months into her new role, she, along with Sir Keir Starmer, has clearly decided to shift Labour economic policy towards tub-thumbing economic nationalism. But hold on. Is that really a good idea? Sure, it

The furlough scheme begins to wind down today, as employers will now pay 10 per cent of their staff’s salaries, while the government continues to stump up 70 per cent of their wages. Employees won’t notice a change to their income, which will still be 80 per cent of their monthly wage, with a cap of £2,500. The question, however, is to what extent employers feel the financial sting, and whether it leads them to scale back their workforce. The numbers on furlough have been coming down steadily since economic activity liberalised in April. According to official government estimates, May alone saw one million people come off the scheme, as