Michael Simmons

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.

Rachel Reeves may finally have seen sense. A report in this morning’s Financial Times suggests she is ‘exploring’ performing a 180 on the changes to inheritance tax rules which meant non doms would have to pay the death tax on their global assets – even on wealth earned before they came to the UK. As I explained in our magazine cover piece last month, the fact that these changes – which came into force in April – would apply retroactively is what really sent non-doms over the edge and led them to flee the country in large numbers, taking their wealth and not insignificant tax revenues with them.

Rachel Reeves’s spending review was the ‘most incomprehensible speech I’ve ever heard from a chancellor’, according to Paul Johnson of the Institute for Fiscal Studies. He spoke to me on today’s edition of Coffee House Shots. In this special episode, I was also joined by Ruth Curtice, chief executive of the Resolution Foundation, to take a wider look at Britain's fiscal and economic problems. Why, despite record tax levels, do our public services feel as if they’re in managed decline? Why do voters’ expectations of the state seem so out of whack with what we actually deliver? We discussed whether Ruth’s predecessor, Torston Bell, was right to claim Labour has ended austerity, and how much the lingering effects of Covid still shape where we are today.

Writing about Britain’s spending plans has started to feel a bit like swimming through treacle. It’s not that there aren’t lots of interesting observations to make about Wednesday’s £300 billion spending announcement. Such as the fact that the NHS sucks up the bulk of the resource spending with a 3 per cent rise in real terms, while every other department combined only grows by 0.2 per cent. Or that the health service will soon take up nearly half of all day-to-day government spending on services. Or that only 13 per cent of Rachel Reeves’s capital spending increase is classed as ‘growth-focused’.It’s hard to pay attention to this because of the sense that the looming fiscal crisis is being largely ignored.