Ross Clark

There really is no good news for Rachel Reeves as she prepares her second Budget. This morning’s borrowing figures are not just bad; they hint at a sense of hopelessness, that Britain is sliding inexorably towards a very deep fiscal crisis. This is yet another fiscal black hole for Reeves to fill, along with another about to be created by the OBR In August, the government had to borrow £18 billion, £3.5 billion more than in August 2024. This is in spite of £40 billion worth of tax rises (or rather tax rises which were hoped to raise an extra £40 billion) in last year’s Budget. Government receipts are indeed up over the past year, £4.8 billion higher than they were in August 2024. Trouble is that spending was £8.

For some time, the Budget on 26 November has been looking as if it might be Rachel Reeves’ final fling before she is pulled away from the levers of the UK economy. But if so, it appears she may be preparing to go out in style. According to a report in the Financial Times, she is planning, yet again, to raise taxes while using as an excuse a supposed black hole left behind by the Tories. The Office for Budgetary Responsibility (OBR) has warned the Chancellor that the productivity estimates it has been using for its economic forecasts have been too optimistic. Rather than growing at 1.1 per cent in coming years, it seems this will be downgraded to growth of 1.0 per cent or 0.9 per cent.

Keir Starmer should be thankful for Lord Mandelson. Were it not for scandal over the Mandelson’s connections with Jeffrey Epstein, more people might have noticed an even greater disgrace this morning. The Prime Minister’s promise of ‘growth, growth, growth’ has ploughed spectacularly into the ground. The Office of National Statistics (ONS) reports today that there was zero growth in the economy in July, and just 0.2 per cent of growth in the three months to July. Besides being lousy news in itself, it is likely to lead to a further downgrading of future growth forecasts, resulting in the Chancellor having an even bigger black hole in her Budget, necessitating even more growth-destroying tax rises. And on goes the vicious cycle.

Are Britons getting sicker and sicker – or is our health improving? There seems to be something of a paradox. According to figures from the Chartered Institute of Personnel and Development (CIPD) the number of sickness absences has increased from an average of 5.9 days per worker in 2019 to 9.4 days in 2024. Interestingly, the sharp increase in the number of sick days has coincided with a rise in working from home Remarkably, it has increased by 1.6 days in a single year – it was 7.8 days in 2023. This is based on a survey of 1,100 employers, which also found that the most common reasons for work absences of more than four weeks were mental health (41 per cent) followed by musculoskeletal conditions (31 per cent).

Here is a rather delightful fact. For 13 years between 2010 and 2023 Britain had a quango called the Office for Tax Simplification. You may never have heard of it, but it really did exist. Its annual report for 2021/22 shows that it was chaired by someone called Kathryn Kearns and had a budget of £1.057 million, £868,000 of which was paid in staff wages. But here’s the thing. In 2010, when it was founded, Tolley’s Tax Guide – the accountant’s bible – ran to 867 pages. The 2023 edition – the year the Office for Tax Simplification was wound up – ran to, er, 1,020 pages. No one should have a shred of sympathy for her Governments cannot help themselves.

What’s the most idiotic question ever posed by an interviewer? There was the real-life Sally Jockstrap who asked David Gower whether he considered himself a batsman or a bowler. Or the Radio 1 DJ who asked Marc Almond – at the height of his fame with Soft Cell – whether he was going steady with a girl. But my nomination goes to Anna Foster on the Today programme this morning. In the midst of an interview with economist Mohamed El-Erian about Britain’s dire fiscal state, she suddenly posed: 'Would raising taxes at this stage, would that help growth?' I had to listen back on the catch-up facility to check that she really had said these words, but there it was loud and clear.

Rachel Reeves’s error before last autumn’s Budget might have been written off as the act of a ministerial rookie. She kept making us miserable by telling us about fiscal black holes and telling us that huge tax rises would be required to fix it – with the result that, come Budget day, the outlook for the government’s finances was worse than it should have been. Reeves had helped to stall economic growth by damaging confidence. When you and I bleat on about how bad the economy is, nothing much happens. The same even applies to a shadow chancellor. But when you are in office, making the decisions, you have to be a lot more careful what you say. Talking down the economy can all too easily become a self-fulfilling prophecy if you start discouraging people from investing.

Quietly, without even a press release let alone a fanfare, Britain over the past 12 months has just passed a grim milestone. The number of people on out of work benefits has surpassed the peak reached in the early 1990s. Indeed, it is higher now than it was at the peak of Covid-19 in 2020. There are now 6.5 million people living on out of work benefits Remember when unemployment of three million used to generate headlines every week, in the early 1980s and then again a decade later? Well, there are now 6.5 million people living on out of work benefits. Yet it hardly causes a ripple in the political pond because most of them are not officially ‘unemployed’ – they are either on disability benefits or on Universal Credit, many of them without any requirement to look for work.