Ross Clark

Ross Clark

Ross Clark is a leader writer and columnist who has written for The Spectator for three decades. He writes on Substack, at Ross on Why?

Truss is foolish to block Rees Mogg’s energy saving campaign

From our UK edition

When you have defined yourself against the nanny state and scorned the idea of limiting supermarket ‘two for one’ offers, it is only natural that you will go on to reject the case for a £15 million public information campaign to try to persuade people to take fewer baths and turn their thermostats down. The Prime Minister has rejected such a campaign in spite of it being backed by her business secretary, Jacob Rees Mogg – putting Rees Mogg in the unlikely position of the nation’s nanny-in-chief. These kind of campaigns have a bit of a poor history, as anyone who remembers the 1976 drought will recall.

Oil giants aren’t government cash cows

From our UK edition

According to Labour, solving the energy crisis is really very simple. Rather than funding an energy price cap through borrowing, as Liz Truss wants to do, it should be funded by a windfall tax on oil giants instead. In other words, let’s grab some of more of the gargantuan profits being made by these polluting companies and use it for the social good. But hang on a minute. Is there really such a bottomless well of money to be exploited? This morning’s profit warning from Shell suggests otherwise. We have been conditioned into thinking that companies such as Shell have been coining it in all year – not least thanks to the foolish remarks by BP chief executive Bernard Looney in February comparing his company to ‘a cash machine’.

Scrapping inheritance tax is a terrible idea

From our UK edition

There is no hole deep enough that a Conservative minister cannot muster the spadework to excavate it to even greater depths. No sooner had Kwasi Kwarteng announced that he was dropping his proposed reduction in the upper rate of income tax, than Andrew Griffith, one of his ministers at the Treasury, declared that he would like to see inheritance tax abolished. ‘I have lots of my fantastic local association [members] with me here and they will know because they asked me at my selection meeting 27 months ago which tax, if I had the choice, I would most like to see eliminated. History will record it was inheritance tax, ’he told Conservative party conference.

How to stop a blackout

From our UK edition

Will the lights go out this winter? A letter from the energy regulator Ofgem reveals just how seriously it is taking the prospect, and lays out what would happen if the UK can't get sufficient gas to meet demand. Ofgem declared that ‘here is a possibility that GB entering into a gas supply emergency’ this winter and lays out what would happen in the event of this happening i.e. when insufficient gas is available to supply the gas network at any wholesale price. It turns out that Ofgem would seek to reduce demand by telling the largest gas users to switch off their plant. These, it adds, ‘will likely be large gas-fired power stations’.

The problem with nationalising energy

From our UK edition

Is nationalisation the vote-winner which Keir Starmer believes it to be? We will find out in due course, but my hunch is that the British public as a whole care a lot less about who owns the train carriages they ride in and the power stations which generate their electricity than Labour MPs do.  No one who remembers British Rail will be under any illusions that public ownership is a panacea What they care about rather more, surely, is whether their trains arrive on time and whether their lights stay on. No one who remembers British Rail will be under any illusions that public ownership is a panacea for a functioning railway, and neither will anyone who remembers the three-day week be fooled into thinking a public-owned power industry guarantees keeping the lights on.

Slashing stamp duty would be a wise move

From our UK edition

The ‘rabbit out of the hat’ in Kwasi Kwarteng’s mini budget this Friday is likely to be a cut in stamp duty on property purchases. If so, it will be a popular and wise decision. Not only might it help generate extra activity in a housing market which looks like flagging as interest rates bite – or maybe mitigate a decline in activity – it should help to promote labour mobility by making it easier for job-seekers to move around the country to look for work or further their careers. Moreover, depending on at what level it is set, a stamp duty cut might well generate extra revenue, too.  Never was there a better demonstration of the Laffer Curve in action than with stamp duty in the UK property market.

Is a weak pound bad for Britain?

From our UK edition

Should we despair that the pound has slumped again today, falling below $1.14 for the first time since 1985? Or should we rejoice? It was, after all, a collapse in the pound following Black Wednesday in 1992 – along with dramatically lowered interest rates -- which precipitated a lasting economic recovery. It is all too easy to see the value of the pound as a national virility symbol, and think that the stronger it is, the better. In reality, a weak pound – or let’s say a pound set at a realistic level, which properly reflects the costs of wages, goods and services in Britain – can help stimulate the economy by making our exports relatively cheap.

Can we trust the official employment figures?

From our UK edition

In this week of mourning, much of the news which would normally get covered has sunk without trace. Even so, this morning’s news of a drop in unemployment has managed to catch the eye. The unemployment rate has fallen by 0.2 to 3.6 per cent – below where it was at the beginning of the pandemic and at its lowest level for 48 years. This, at a time when economic growth is more of less static and the bank of England is warning us to expect a severe recession next year, is extraordinary. I only wish that the official unemployment figure could be trusted.

Tory ministers shouldn’t fall for these purity tests

From our UK edition

Liz Truss’s ministers had not even got their feet beneath the cabinet table before they were treated to a barrage of objections to their appointments. Talk about playing the man rather than the ball. No sooner had Jacob Rees-Mogg been appointed business secretary than Caroline Lucas was declaring him unfit for the position because he has previously expressed sceptical views on climate change. She didn’t even wait to learn that Rees-Mogg will not, in contrast to his predecessor Kwasi Kwarteng, also hold the climate brief, which has gone to Graham Stuart.

Liz Truss’s energy price freeze would be a mistake

From our UK edition

It is not unusual for promises made during an election campaign to fail to survive a headlong impact with reality, but if, as expected Liz Truss, announces an energy price freeze tomorrow, it will leave many Conservative party members who voted for her feeling somewhat cheated. For most of the leadership campaign Truss denounced the idea of government help with energy bills and insisted she would tackle the problem with tax cuts instead. Taxing people and then giving them some of their money back in handouts, she said, was ‘Gordon Brown economics’. Yet it now seems that not only will she spend large amounts of money to bail out householders’ energy bills, but she will seek to outdo Keir Starmer.

What Boris should do next

From our UK edition

Just what do you do with the rest of your life if, aged 58, you have been prised out of the biggest job in Britain? It is a question that Boris Johnson, having delivered his valedictory speech outside No. 10, is now having to answer. The possibility of him returning to Downing Street, as has been mooted by some supporters, is so unlikely that it can be dismissed. He said this morning: ‘I am like one of those booster rockets that has fulfilled its function and I will now be gently re-entering the atmosphere and splashing down invisibly into some remote and obscure corner of the Pacific.’ Yet for him to disappear from public life into obscurity seems too remote a prospect.

Are the markets scared of Liz Truss?

From our UK edition

Look at the chart for interest rate expectations in isolation, and you might come to the conclusion that Rishi Sunak is right about Liz Truss’s fiscal policies. In June, markets were expecting rates to peak at around 3.5 per cent next year; now they are expecting them to reach close to 4.5 per cent. Moreover, as Truss’s victory came to be seen as inevitable, the FTSE 100 plunged from 7,550 on 19 August to 7,230 this morning – a fall of 4.2 per cent. The pound has fallen from $1.22 on 10 August to $1.15 now. Markets could be forgiven some apprehension But hang on a minute. Markets have been revising their interest rate expectations all year.

Putin’s closure of Nord Stream 1 has left Britain exposed

From our UK edition

Few will be minded to believe Russia’s explanation for cutting off Nord Stream 1 pipeline – that it is a maintenance issue – and I don’t suspect we are expected to believe it, either – any more than we were expected to believe that the would-be Salisbury assassins had an interest in cathedral spires. It is pretty blatant what game Vladimir Putin is playing: Europe has announced, grandly, its intentions to wean itself off Russian gas and oil and Putin has set out to pre-empt that, to cut off the gas while Europe is still pretty much reliant on it. Gas supplies to Germany from Russia were already down to 20 per cent of the level they were before the Ukraine invasion. No one should count on the gas being turned on again.

Will Sunak’s heating bill plan be quashed by Truss?

From our UK edition

When the next prime minister is installed in Downing Street on Monday, we can expect a package of initiatives to help households with their heating bills. But will Rishi Sunak’s existing scheme – which promised £400 worth of handouts to every household – survive if, as expected, Liz Truss walks into No. 10? The scheme has already been heavily criticised because it is not means-tested and fails to target help towards the poorest. But this morning came bad news: the Office for National Statistics has decided to treat the £400 handout as extra income, not as a reduction in bills as was intended. This matters because it means the scheme will not help to reduce inflation.

It’s time to kickstart North Sea oil

From our UK edition

It is reported this morning that one of Liz Truss’s first acts as prime minister, assuming she wins the Conservative party leadership election, will be to grant new licences for North Sea oil and gas extraction. But will it be enough – and quick enough – to alleviate the energy crisis? There are still substantial known oil and gas reserves in the North Sea left to be exploited. According to a report produced by the Oil and Gas Authority last September, known reserves of oil and gas in the North Sea at the end of 2020 amounted to 4.4 billion barrels of oil equivalent (BOE). This is just a tenth of the 45.9 billion BOE which have already been extracted. However, that ignores that exploration for oil is an ongoing business.

The four-day working week is a sham

From our UK edition

The challenger bank sector has been such a graveyard in recent years that I don’t hold out much hope that Durham-based Atom Bank will ever quite displace the likes of Lloyds and Barclays. Nevertheless, I wish it well. It is just that its claim to have increased productivity by changing to a four-day week does not fill me with confidence. Not only does the bank intend to make four-day working a permanent fixture, it wants other businesses to copy its example. 'We firmly believe the four day week is the future of working life,' says ‘chief people officer’ Anne-Marie Lister. 'We hope that Atom’s experiences will encourage other businesses to make the shift permanently.

Could Macron trigger British blackouts?

From our UK edition

‘We are living the end of an era of abundance,’ according to Emmanuel Macron, ‘the end of the abundance of products and technologies, the end of the abundance of land and materials, including water.’ It is hard to see how water has become less abundant, being the ultimate renewable resource, which evaporates before falling back to Earth as rain. Rewind a year and people in parts of Europe, you may remember, were complaining about a super-abundance of water – in the form of the Rhineland floods. But let’s leave that aside and assume that Macron’s remarks were more immediately prompted by a shortage of energy.

The problem with Biden’s student debt plan

From our UK edition

In Europe it is handouts to help pay our energy bills – even for people who could easily afford to pay them. In the US, it is student debts being written off. With remarkable speed the West is emerging into a new age of big – no, make that huge – paternalistic government. Today, Joe Biden announced that graduates who earn less than $125,000 a year, and who live in a household whose joint income is less than $250,000, will have $20,000 worth of student debt written off. For those who work in the non-profit sector, the military, or federal or local government, the write-off will be 100 per cent.

Are Russian sanctions working?

From our UK edition

Soaring gas and electricity prices are giving us an idea of the cost of imposing sanctions on Russia – a cost which may be worth bearing if it helps to defeat Russian aggression, but a cost nonetheless. But how complete and effective are the sanctions? Trade figures released by the Office for National Statistics (ONS) today reveal that Britain, at least for now, has achieved one of its chief objectives: it has weaned itself off Russian oil and gas. In June there were no imports of fuels from Russia. In the 12 months to February, by contrast, 5.9 per cent of Britain’s crude oil imports, 24.1 per cent of our refined oil imports and 4.9 per cent of gas imports came from Russia. Overall, there were £33 million of goods imports from Russia in June, a 96.

What’s to blame for the crash of the euro?

From our UK edition

Since June 2016 we have settled into a pattern. Whenever the pound plunges, it is followed by cries of 'I told you so'. It is all the fault of Brexit and a result of international investors fleeing Britain and taking their money elsewhere. And when the euro plunges? We hardly hear a thing. Yet today, the euro has passed a milestone which ought not to be ignored: it has fallen below parity with the dollar for the first time since 2002. It is quite a tumble given that in 2008 it was trading at $1.5. Against the pound, the euro is now back to where it was in 2012, long before Britain’s departure from the EU became a serious prospect.