Britain’s national debt is on course for £3 trillion this year. Servicing it costs £30 billion a year at 1% interest and £150 billion at 5%, near where long-dated gilts have recently been trading. That’s a number so big it almost becomes meaningless. So, let’s try another way: it’s about the yearly gross pay of […]
After the Government’s timid attempt to slow the growth of welfare spending collapsed under pressure from its own backbenchers and disability activists, ministers needed a way out. Their answer was to agree to the Timms Review of Personal Independence Payment (PIP) ‘co-produced’ with disability groups. It never stood a chance. With a steering group overwhelmingly […]
Keir Starmer says he is fighting to stay. The problem is that is all he is doing. Last week’s King’s Speech was written to save his skin, not to fix anything. Take the spiralling welfare bill, which even his own Chancellor recently admitted desperately needs gripping. But there was no Welfare Bill in the King’s […]
This week saw Labour’s key benefits reforms come into force. Ministers and their outriders in the press and social media have been arguing that measures like abolishing the two-child benefit cap will cut poverty. But everybody else sees people who work paying higher taxes to fund benefits for those who don’t, with senior journalists like […]
Too many of Britain’s next generation are in danger of being cut adrift from the world of work. The latest figures show that one in eight of those aged 16-24 are currently not in education, employment or training – or NEETs. Such a figure – which equates to more 957,000 people – has been unimaginable […]
If the definition of political success is when other people start claiming your ideas as their own, then this week’s speech by Richard Tice committing Reform UK to creating a UK sovereign wealth fund ought to count as a pretty big win. I first proposed the idea in a policy paper more than a decade […]
Although it is early days, it does now look as if a cyclical recovery is starting in the UK economy. The best evidence is the recovery in retail sales from its six-year post-Covid slump. Since consumer spending is around 60% of GDP, a consumer recovery is critical to getting GDP rising. The recovery is also […]
Britain’s economic debate rests on a dangerous assumption. Debt crises are things that happen elsewhere. Greece, perhaps. Argentina, certainly. But not the United Kingdom – a mature economy with its own currency, deep capital markets and centuries of institutional credibility. History offers little comfort to countries that think this way. Countries rarely enter fiscal crisis […]
Adam Smith attributed the ability of one man to do the work of many to the ‘invention of a great number of machines which facilitate and abridge labour’. Writing at the dawn of the Industrial Revolution, Smith witnessed one of the most profound reorganisations of human capital in history: the transition to mechanised production. The […]
One of the most common public policy misconceptions is that higher public spending, and higher taxes to fund that spending, results in better welfare. For years, many British politicians have looked at Scandinavian public services with envy. The assumption that if you want Scandinavian-style welfare, you need Scandinavian levels of tax, has gone largely unchallenged. […]
Keir Starmer’s child poverty taskforce is set to recommend scrapping the two-child benefit cap, increasing pressure on the Government to do it. The taskforce was established by the Prime Minister to look at how to bring down child poverty, and was initially supposed to publish its findings earlier this spring. However, the taskforce, which is […]
The Government’s screeching u-turn on reforming Personal Independence Payments has distracted attention from a more fundamental problem with Britain’s broken benefits system. Regardless of whether the right people are getting the right kinds of benefits or not, too few of them stop claiming once they’ve started. We’ve got a ‘Hotel California’ system where people check […]
Today, Kemi Badenoch said that the UK is in danger of becoming a ‘welfare state with an economy attached – 28 million people in Britain are now working to pay the wages and benefits of 20 million others’. She’s right. Changes to the system are sorely needed. In April, the OBR forecast that the cost […]
Eventually, all governments run out of steam. No leader, no matter how powerful, no matter their past achievements, can stave off the inevitable. Political scientists in America refer to the natural development of political fatigue as the ‘six year itch‘. After six years in office, the public’s growing dissatisfaction with the president, their party and their agenda, coincides with a […]
A Chancellor’s Spending Review is a chance to set out the Government’s fiscal priorities for the years ahead, and signal which political issues are most important. But there was one giant, gaping hole in the Review. No mention of welfare at all. It was barely an asterisk in the reams of documents and announcements. That is odd […]
In recent months, the Labour Government has talked tough about welfare reform, particularly in its apparent willingness to make difficult choices on disability benefits. The current system, according to the Prime Minister, could not be defended on ‘economic or moral terms’. In announcing the reform package, the Secretary of State for Work and Pensions Liz […]
