Economics newsletter
Can Reform really end benefits Britain?
Benefits claimants will be required to carry out 20 hours of community service a week under a Reform government, Robert Jenrick announced today. The party’s Treasury spokesman said those who are fit to work must help clean up high streets and parks and carry out minor repairs to libraries and town halls, or face penalties. The measure is the latest addition to Reform’s welfare blitz, which would strip all foreign nationals, including EU citizens, of access to benefits such as universal credit, housing benefit and pension credit. The party believes its cuts would save taxpayers £21 billion by the fifth year.
Britain’s economy is growing – but not enough
Prime Minister Andy Burnham and his Chancellor John Healey are not having a bad start. Sure, there’s trouble ahead: the Budget is going to be difficult, and Healey is going to have to find a way of making sure all the cheques his boss keeps writing can actually be cashed. But for now, the blitz of 6 a.m. announcements on the cost of living – no matter how trivial they are – appear to have worked and Burnham is experiencing a polling bounce. Britain’s economy has a terrible habit of performing relatively well in the first half of the year before slumping to a halt That good news continued this morning in the form of figures from the Office for National Statistics (ONS), which show that the economy grew by 0.4 per cent in the second quarter of the year – having grown 0.
Bribing Scots to stay in the UK won’t work forever
A country is not a fiscal transfer. It can be many things – a loose federation of diverging cultures, a constitutional shotgun wedding, an unattractive compromise of history – but it cannot be a cash transaction. There is no history in a debit made, no loyalty in a credit received. Peoples are bound together by heritage, creed, shared sacrifice, and common purpose, but not by block grants or spending allocations. Opponents of Scottish independence still cannot grasp this plainest of truths Opponents of Scottish independence still cannot grasp this plainest of truths. Twelve years on from the referendum on secession, they remain in campaigning mode, incapable of offering the electorate anything more than a bribe.
There’s one rip-off Andy Burnham will never crack down on
Trying to pay my taxes via the HMRC website the other week, my bank thought it had sniffed a rat. “Could this be a scam?” it popped up and asked. I went ahead and made the payment anyway, but the honest answer was yes, ‘scam’ is not an unreasonable way of putting it. Every year, my tax bill seems to sneak upwards while I seem to get a little less for my money. Every year, my tax bill seems to sneak upwards while I seem to get a little less for my money I don’t think that is quite what the Prime Minister meant, however, when he wrote a piece in the Guardian today promising to end “the rip-offs that British people hate”. He had more in mind hard-to-cancel subscriptions and shop ‘bargains’ which turn out to be not such a good deal after all.
Could the fat jabs wreck your pension?
Fat jabs are perhaps the largest development in healthcare since statins. Weight-loss drugs – or GLP-1s, as they’re properly known – will reduce the number of people having heart attacks, developing diabetes or getting cancer, and will generally let people live longer. With a population that’s two-thirds overweight or obese, it’s no surprise that already three million British adults are on the jabs. That’s twice as many as last year and the number is expected to double again by the end of 2027, according to consultants at PwC. Reinsurers such as Swiss Re say that weight-loss drugs could decrease all-cause UK mortality by as much as 5 per cent over the next 20 years. A health miracle, then.
The madness of crowds is keeping markets afloat
‘I’m done with Trump,’ fumed a normally MAGA-supportive retail trader as he watched an investment that was particularly Hormuz-sensitive collapse. But, perhaps surprisingly, his frustration at the war is not shared more widely by stock pickers. Despite the geopolitical turmoil of the war in Iran, equities (shares in listed companies) have been on an upward romp for the past year. Since Donald Trump was inaugurated for the second time, the Standard and Poor’s 500 index is up 25 per cent. Stock markets almost everywhere have been hitting record high after record high. It doesn’t make much sense. This hasn’t been a good year for the world economy. The constant closing and reopening of the Strait of Hormuz sent oil prices skyward.
Why some small tradesmen are turning to bartering
Holly, a 25-year-old sign writer and muralist, recently spent a couple of days staying in a shepherd’s hut an hour from her home. She didn’t pay for it – well, not in the way you or I would. The owner had a gypsy caravan with doors that needed painting. Holly could do the job. An agreement was struck, no money changed hands, and both sides walked away feeling they’d got a fair deal. Holly is one of a growing number of small tradesmen who have quietly decided to opt out of the traditional cash economy – or at least keep one foot outside it. She has been ‘paid’ in chiropractor sessions, pizza and someone cutting her grass. When she painted the Christmas windows of her local café, the owner told her to pop in for a free lunch ‘for the next ten goes’.
How to make your children rich
‘I was gifted a Premium Bond of £1 for my first birthday from my grandma,’ says Janice. ‘That was in 1970 and I have never won a thing.’ If I had a penny for every time I heard this kind of comment, I’d be a darned sight richer than Janice. She is one of many people I’ve spoken to since I started reporting on the shocking administrative failures at National Savings & Investments. Around 34,000 families have been unable to trace their loved ones’ accounts after their deaths. The total amount owed comes to £367 million. The scandal prompted NS&I’s chief executive, Dax Harkins, to resign and the pensions minister, Torsten Bell, to make a contrite statement in the Commons.
John Healey’s nightmare first day as Chancellor
John Healey has been hit with a triple whammy on his first full day as Chancellor of the Exchequer. The Office for National Statistics (ONS) has just published the latest figures on jobs, public sector finances as well as an update on their troubled Labour Force Survey (LFS). There’s bad news, news that only looks good because it’s less bad than usual and truly disastrous news. First of the three is the jobs destruction – kicked off by the previous Chancellor’s £25 billion National Insurance tax raid and hikes to the minimum wage. This has continued with 85,000 more employees disappearing from payrolls compared with a year ago, with the unemployment rate falling only slightly to 4.9 per cent. But the jobs figures are really bad news when you split them out by age group.
Andy Burnham would be mad to introduce rent controls
Andy Burnham’s government could be entertaining to watch but disastrous for the country. Reports suggest that one of the options Burnham could announce to immediately tackle the cost of living is some form of rent control. If true, he’s already lost the plot. He must surely know that rent controls do not work. They may immediately stop rents climbing in the subset of properties whatever controls he announces are applied to, but beyond that the result will be entirely predictable: a collapse in rental supply as landlords sell up and flee the market; staggering rent hikes when the freeze comes to an end; and trapped tenants because new lease prices will shoot up as landlords attempt to recoup losses from elsewhere.