Category Archives: Economic policy

Jeremy Hunt is helping rich instead of helping people into work, says thinktank

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IFS says budget pensions giveaway could open up loophole for avoidance of inheritance tax

Jeremy Hunt’s huge pensions giveaway for the wealthiest 1% may have no impact on increasing the number of people in work, while opening a loophole for avoidance of inheritance tax, a leading economic thinktank has warned.

The Institute for Fiscal Studies said the surprise measure in the chancellor’s budget “probably won’t play a big part, if any” in increasing the number of people in work.

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Hunt likely to save spending spree for polling day, not budget speech

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The chancellor has room for giveaways in this week’s budget, but business and consumer groups fear he will hold them back for the election

Jeremy Hunt is under pressure to be generous when he delivers his first budget speech since he became chancellor last October.

The public finances have improved dramatically from the chaotic days that followed Liz Truss’s mini-budget in September, which rocked international money markets and sent interest rates on government debt soaring. The cost of financing Britain’s debt has fallen in recent months and the cost of gas on wholesale markets has tumbled.

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China sets modest economic targets as it seeks to bounce back from Covid woes

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At the opening of the Communist party’s National People’s Congress, outgoing premier Li Keqiang confirmed a further rise in defence spending as well

China has set a target of 5% GDP growth in 2023, its outgoing premier has said in a speech to the ruling party’s rubber-stamp parliament – a goal that is at the lower end of analysts’ expectations and follows a 2022 figure that came in far below target.

The “work report” speech on Sunday also touched on foreign affairs and re-emphasised the Chinese Communist party’s (CCP’s) aim to annex Taiwan. Budget papers confirmed another consecutive rise in defence spending of 7.2%, slightly up on last year’s rise of 7.1%.

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Sunak sets out Northern Ireland trade deal to MPs as Labour vow to back agreement – as it happened

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Rishi Sunak and Ursula von der Leyen say ‘Windsor framework’ has been reached after four months of negotiations. This blog is now closed

Q: Why do you say you will back the PM’s deal when you have not seen the detail? And would you like to see Northern Ireland within the scope of the European court of justice, or outside it?

Starmer says he knows Northern Ireland well and knows the detail. Any deal will be an improvement on the status quo. That is why he is saying he would back it. He says the deal will not come as a surprise.

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Liz Truss expected to launch political comeback on Sunday

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Former PM whose No 10 stint ended after 49 days understood to have written piece for Sunday Telegraph

Liz Truss is expected to launch her political comeback on Sunday, months after her calamitous tenure in Downing Street ended after 49 days.

Her return is expected to begin with an opinion piece in this weekend’s Sunday Telegraph, as well as a number of planned media appearances.

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Jeremy Hunt to promote low-tax and private sector ‘re-tooling’ of industry

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Chancellor also expected to tell markets that government spending will remain within strict limits

Jeremy Hunt will defend the government’s vision for Britain’s economic future in a speech to City executives in London on Friday when he will lay out plans for investment and growth.

The chancellor will say he wants to promote policies that allow the private sector to re-tool the UK’s industrial base and re-skill the workforce to generate strong growth over the next decade.

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Rishi Sunak says people ‘not idiots’ and know why he cannot cut taxes

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PM suggests public understands what is affordable, but his stance could trigger fresh backlash from Tory MPs

Rishi Sunak has suggested the government cannot afford any immediate tax cuts, saying people are “not idiots” and understand what is unaffordable.

But the comments risked opening a fresh conflict with Conservative MPs who have been making the case for tax cuts in the spring budget, in light of improving economic forecasts and as a way to increase growth.

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Tax collectors lack ambition, say MPs, as £42bn remains unpaid

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Fraud and error have left ‘eye-watering’ amount owed to HMRC, says public accounts committee

The government has been criticised for failing to collect £42bn in unpaid tax from businesses and individuals amid concern over the strain on the public finances as the UK’s economy stands on the brink of recession.

The cross-party Commons public accounts committee (PAC) said that an “eye-watering” amount of tax was owed to HMRC, while also criticising tax collectors for lacking ambition to tackle fraud and error.

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Sunak strives to be reassuring but is five-point plan all sleight of hand?

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PM plans a ‘no tricks’ reset but with an inflation fall already expected this is more about hanging on at an election

In his first big speech since taking over at No 10, Rishi Sunak promised “no tricks, no ambiguity” as he announced his five promises to reset the government after a difficult year.

The prime minister said he would be focusing on halving inflation, growing the economy, reducing debt, cutting NHS waiting lists, and stopping small-boat crossings to the UK.

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Disabled people among hardest hit by cost of living crisis, finds study

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People with disabilities more likely to cut back on energy use and food, Resolution Foundation says

Disabled people in the UK are much more likely to struggle to heat their homes and cut back on food this winter, according to a report highlighting “massive” income gaps amid the cost of living squeeze.

Research from the Resolution Foundation found people with disabilities had an available amount to spend that was about 44% lower than that of other working-age adults, exposing them hugely to the rising cost of essentials.

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Welsh Labour is readying for snap general election, says Mark Drakeford

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First minister claims Tories in Westminster are ‘staggering’ and could be months away from collapse

The Welsh first minister has told the Labour party in Wales to be prepared for a general election in the new year, believing the UK government could be months away from sudden collapse.

Mark Drakeford claimed the Conservative government in Westminster was “staggering”, and that at any moment it could be “overwhelmed” and forced to call a snap UK election.

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Inflation, waiting lists, strikes, rail chaos, climate emergency: the 2022 polycrisis

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Almost every facet of life in the UK – courts to cost of living, transport to healthcare, environment to asylum system – is at breaking point

In mid-November Rishi Sunak was asked in a Channel 4 interview to name one public service that “was working, adequately, working properly”.

The prime minister didn’t give a direct answer. But the exchange feeds into an ever-more-common discourse: that the UK is facing “polycrisis” in almost every facet of life in Britain. From courts to the cost of living, transport to healthcare, environment to the asylum system – everywhere appears to be affected.

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Chuka Umunna advises Czech tycoon accused of Royal Mail plot

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Ex-Labour MP and former critic of privatisation risks claims of hypocrisy over advisory role with Daniel Křetínský

The MP turned banker, Chuka Umunna, is advising a Czech tycoon who was accused of planning a secret takeover of Royal Mail by union leaders.

The former Labour MP is one of a team of bankers working on Daniel Křetínský’s British business interests, many of which are held within Vesa Equity Investment, including a 23% stake in Royal Mail’s parent company, International Distributions Services (IDS).

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UK rail system described as ‘broken’ as 2022 data reveals extent of disruption

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Delays and cancellations linked to 20 years of privatisation, rising costs and labour shortages worsened by pandemic, say experts

Rail passengers have been delayed or disrupted on more than half of all train services departing from 15 of Great Britain’s busiest stations in the last year, Guardian analysis shows, exposing what has been described as a “broken” railway system that cannot easily be fixed.

Experts said the figures – which show rail services in the north and Midlands as the hardest hit – demonstrated the impact of two decades of privatisation, which had increased costs and public subsidies, combined with labour shortages exacerbated by the pandemic.

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UK government looks to lure early retirees back to work, reports say

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People who quit during pandemic may be offered ‘midlife MOT’ as way to address labour shortage

Plans to coax middle-aged retirees back into work to boost the economy are being considered by the government, according to reports.

Older people who have given up work could be offered what is being described as a “midlife MOT” to entice them back into employment, the Times has reported.

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Elon Musk polls Twitter users over stepping down as CEO – business live

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Elon Musk says he will honour the results of a Twitter poll asking whether the should resign as head of the social media platform

Telsa investors seem to pleased with the way that Musk’s Twitter poll is leaning towards his potential resignation, with shares up 4% in pre-market trading:

Economic data interlude:

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Bank of England raises interest rates to 3.5% in ninth increase in a year

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Majority of MPC rate-setters back hike of 0.5 percentage points despite fears UK is entering a long recession

Mortgage payers are braced for higher borrowing costs, after the Bank of England pushed up its base rate by 0.5 percentage points to 3.5% despite saying inflation has peaked and Britain is about to enter “a prolonged recession”.

The Bank hiked interest rates on Thursday for the ninth time in a year, to the highest level in 14 years, but told borrowers to prepare for fresh increases in the new year.

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Scotland to spend extra £1bn on health by raising taxes on higher earners

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Scottish government promises to tackle health and social care crisis to protect weakest and poorest

The Scottish government has promised to spend another £1bn on tackling the crisis in health and social care by raising taxes on higher earners and holiday homes.

John Swinney, Scotland’s acting finance secretary, said the burden of increasing NHS funding would fall heavily on everyone earning more than £43,663 in Scotland as part of a “social contract” to protect the weakest and poorest.

The abolition of a cap on council tax increases next year, alongside £550m extra for councils.

The uprating of all Scottish welfare benefits by 10%, increasing welfare spending by £433m.

£222m on school support for the poorest and extra free school meals in primaries.

£15m for a pilot project to scrap peak-time rail fares.

£336m on home energy efficiency and reducing fuel poverty.

The abolition of non-domestic rates for 100,000 smaller shops and businesses and a freeze in business rates charges, which would cost £356m.

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Kwarteng had ‘all the advice’ but disregarded warnings on mini-budget, MPs told

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Treasury officials tell select committee they set out impacts of £45bn plan for former chancellor

Kwasi Kwarteng disregarded warnings that his £45bn mini-budget could trigger a backlash on the financial markets, Treasury officials told MPs today.

The department’s permanent secretary, James Bowler, said he was “absolutely confident Treasury officials set out the right advice” to the then chancellor.

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Liz Truss and I ‘got carried away’ writing mini-budget, admits Kwasi Kwarteng

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Sacked chancellor says he and ex-PM failed to consider political and economic consequences

Kwasi Kwarteng has admitted he and Liz Truss “got carried away” when they wrote the disastrous mini-budget that led to both of them leaving their jobs just weeks after they entered Downing Street.

Kwarteng announced a raft of tax cuts without any reduction in spending in September, which led to the pound crashing against the dollar, pension funds nearly collapsing, a £65bn Bank of England bailout, soaring mortgage costs, and the cost of government borrowing increasing. He also said he would remove the cap on bankers’ bonuses.

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