Michael Simmons

One of the first magazine cover pieces I wrote as economics editor was: ‘Go – Why the Rich Are Fleeing Britain’. It claimed that changes to the non-dom regime, first enacted by the Tories and made more strident by Rachel Reeves, were leading to a wealth exodus from the country. Worryingly for me, though, reading today’s Financial Times, it seems I may have been wrong. The pink sheet reports: ‘Data suggests fears of UK “non-dom” exodus overblown.’ Its story says that claims – such as mine – that tax changes meant non-domiciled taxpayers were going to leave en masse were overdone. Data from HMRC shows that only 0.5 per cent of them have upped sticks and left. In raw numbers, that’s 400 fewer non-doms than the year before.

If John Healey wants to succeed as Chancellor, he needs to get a grip on the Office for National Statistics (ONS).  I’ve written about the troubles and tribulations of our hapless Newport-based statistics office many times now, both in this newsletter and the magazine, and the problems keep coming. Its most high-profile failure of recent years has been the delivery of the Labour Force Survey (LFS). That’s the main source of our knowledge about Britain’s jobs market: unemployment, inactivity, redundancies etc etc.  During the pandemic, response rates to the survey collapsed and the integrity of the data it produced was diminished. That set off a chain of errors.

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’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.

The Chancellor will be breathing a sigh of relief this morning as inflation holds steady. Figures just released by the Office for National Statistics (ONS) show that CPI in May remained at 2.8 per cent – the same as in April. That news is welcome and goes against the grain of economic analysis, which had forecast a rise to 3 per cent. The fall in April was largely deemed to be artificial, thanks to last year’s massive increase in regulated and inflation-linked utility bills falling out of the series. However, that did not come to pass. According to the ONS, a rise in transport costs, thanks to increased air fares, vehicle taxes and petrol prices, was offset by falling inflation in meat, dairy and vegetables, in what is surely welcome news for shoppers.