Michael Simmons

Rachel Reeves wants Britain to become a shareholder democracy. In her annual Mansion House speech to the City’s bankers, accountants and financial advisors, she said ‘for too long, we have presented investment in too negative a light’. She’s right. These changes are unlikely to unleash the ‘big bang’ of prosperity and tax revenues the Chancellor badly wants and badly needs The Chancellor meant that regulation – which she called the ‘boot on the neck of business’ – has led to too many scary warnings about the risks of investing and not enough talking up of the benefits. She’s referring to the legally mandated ‘investment carries risk’ type messages you hear on any investment adverts – including on our own Coffee House Shots podcast.

‘We are becoming a welfare state with an economy attached,’ said Kemi Badenoch in a speech on sickness benefits today. She’s right, though anyone who read the Office for Budget Responsibility’s (OBR) dire report this week knows we’re past becoming: we already are. The figures are staggering. The bill for sickness benefits is heading towards £100 billion a year. Soon, one in every four income tax pounds will go just to cover these payments. Meanwhile, a million young people are doing nothing at all –not in work, not in education, not in training. Badenoch called this not only ‘unaffordable and unjustifiable, but immoral’. Again, she’s right.

The public won’t forgive and nor will I, said Health Secretary Wes Streeting of plans by junior doctors to strike over his refusal to cave to demands for 29 per cent pay rises. Speaking to the Times he said: ‘There are no grounds for strike action now. Resident doctors have just received the highest pay award across the entire public sector. The Government can’t afford to offer more and it wouldn’t be fair to other NHS workers either, many of whom are paid less’. He’s completely right.  Just shy of half of the British Medical Association’s (BMA) junior doctors (they’re now called resident doctors) voted for strike action, but because of low turnout it meant an overwhelming majority of those who did vote backed walking out.

Britain is in trouble. That’s the judgement of the Office for Budget Responsibility (OBR) in their ‘fiscal risks and sustainability’ document released this morning. The language is polite, matter of fact and bureaucratic. But read between the lines, look at the numbers and it paints a damning picture of the risks we face as a country. In the 1950s, the state pension accounted for 2 per cent of GDP. Within 50 years it will cost nearly 8 per cent. This is not something an aging population can afford After a series of economic shocks, the report says, Britain is in a ‘relatively vulnerable position’. Our deficit (nearly 6 per cent of GDP) is around 4 percentage points higher than the average for advanced economies and the third highest among European countries.

Labour MPs are obviously going to panic when told their votes might plunge just one person into poverty – let alone 250,000. That was the original estimate for the fallout from Liz Kendall’s reforms to Personal Independence Payments (PIP) and Universal Credit. Yesterday, the DWP released a revised figure after Starmer caved to a rebellion by 126 MPs. The new number? Some 150,000 pushed into poverty. A marginally better headline, at a £2.5 billion cost to the taxpayer, but still enough to spook Labour’s already jittery backbenches. Frustratingly, these numbers, put out by the government, are completely meaningless.

The Office for National Statistics (ONS) has confirmed the economy grew by 0.7 per cent in the first three months of the year. The figures, released this morning, are the ONS’s second attempt at estimating growth in the first quarter and, unusually, the GDP growth number was unrevised from the initial estimate. The strong growth – the fastest pace in a year – between January and March could be the last bit of economic good news Chancellor Rachel Reeves is able to celebrate this year as this set of numbers cover the period before her £25 billion raid on employer national insurance came into effect. It does, however, confirm that Britain was the fastest growing country in the G7. The growth was driven by the services sector with both production and construction growing too.

As Sir Keir Starmer offers concessions to 126 rebels to water down his welfare reform bill, a scandal that undermines the entire Universal Credit system goes ignored. The Spectator has seen figures revealing that the HMRC data feed which powers Universal Credit payments to low-paid workers may be so error-strewn that as many as one in four claimants has been underpaid, overpaid or not paid at all. When Universal Credit was introduced 11 years ago to modernise benefits, it required a robust data system to drive it. HMRC’s answer was the ‘Real Time Information’ (RTI) system – hailed at the time as the most significant overhaul of the tax system since PAYE’s introduction in 1944.

The poorest Brits now owe £6.6 billion in unpaid council tax – a record high and up some 85 per cent since before the pandemic. That’s according to data released this morning by the Ministry of Housing, Communities and Local Government, which suggests Britain is plunging back into a cost-of-living crisis. What’s more, a report also out today by the Centre for Social Justice (CSJ) finds that between 2022 and 2024, some 400,000 more households slipped into arrears, taking the total number of people in debt to their local council to 1.8 million. The CSJ’s report also finds that 97 per cent of those in arrears have at least one ‘personal vulnerability’ compared to 47 per cent in the whole population.

Britain will lose 16,500 millionaires this year, taking $90 billion of wealth with them. That’s according to a new report from Henley & Partners. If their projections are right, that’s more than double the number of dollar millionaires expected to leave China in 2025. As I wrote for the magazine last month, changes to the non-dom regime – first initiated in the dying months of the last government and worsened by the current Chancellor – have pushed many of the wealthiest over the edge. The effects are already becoming visible. Research from estate agent Knight Frank shows that sales of expensive homes slowed between March 2024 and this May, leading to £401 million less in stamp duty for the Treasury.

Interest rates have been held at 4.25 per cent. The Bank of England’s Monetary Policy Committee (MPC) voted by six to three to hold rates after cutting them in May. The move mirrors that of the US Federal Reserve, which yesterday held rates for the fourth time in a row. Their decision came despite badgering from President Trump, desperate for a rate cut as inflation remains hard to tame and forecasts predict sluggish growth and rising unemployment. In Britain, the cost of borrowing on credit cards rose to its highest ever level on record in the second quarter of the year, according to Moneyfacts – despite the rate cut from the Bank last month. The average rate and fees on cards between March and June was just under 36 per cent.