Britain hates prices. It’s no wonder we’re getting poorer - "In the pursuit of “fairness” – and its weaselly cousin “equality” – British politicians and media figures have spent fifteen years obsessing over distributional analyses at Budgets where growth has been notable by its absence, handed the power to retrospectively determine the value of wages to an activist judiciary, and fought a guerilla war against the idea of the price mechanism. The visible, surface-level extent of the British state is one thing, commanding and controlling resources, reallocating incomes in line with that pursuit of fairness. But while the distortions introduced by the long list of price caps, subsidies, cross-subsidies and other deviations from real prices are harder to spot, they are no less damaging. In its effort to ensure that everyone gets what they deserve, and everything is valued as it should be in a fair society, Britain has declared war on the price mechanism. Rather than showing what people are willing to pay for a service, showing would-be entrepreneurs where value can be created, and matching supply to demand, prices are more a morality play. High prices are condemned as greed, low prices are imposed on in-demand items, and the state pursues an apparent goal of bringing all economic activity into alignment with its grand vision. Energy bills, for instance, contain a unit price cap, a lump sum discount for chosen households funded by higher bills for others, additional fees to pay for debt forgiveness, and levies to subsidise green energy. There is no mechanism to reflect variation in the cost of providing your electricity. Should you choose to install a boiler, you will pay a premium to account for the fines associated with manufacturers failing to sell heat pumps. If you post a letter, the uniform price obligation means that dense areas directly subsidise rural, sparsely populated regions. When you drop children off at childcare, some parents benefit from free, subsidised hours. Others pay market rate. When your parents enter a care home, local authorities bid down the rate charged to government-subsidised patients, with self-funding patients carrying the balance. When you go to work, the minimum wage lifts the floor of your earnings, compressing the wage distribution and disincentivising training. Your wages are open to being reset by judges, when they determine that some work is of equal value. When you study to improve your earnings regardless, the tuition fee cap holds down what you pay, and debt forgiveness shifts the burden of your repayments onto those who manage to hold down jobs for extended periods. If you rent, a panoply of social rents, affordable rents and subsidised units are on offer to those who know how to game the system. And even when the price signal is still able to operate – in housing, where every indicator is screaming that supply is desperately needed in the South East – the market is not allowed to respond, with planning laws blocking new construction, and the Government occasionally making a half-hearted attempt to redistribute through further demand subsidies or taxes on assets. At times, the result resembles a sort of cargo-cult where we act out the ritual of a market without the core organising component and then wonder why we aren’t richer: after all, look how much officially endorsed output we’ve produced. Until we make our peace with the price mechanism, however, we will stay stuck in our Potemkin economy, wondering why things seem to be getting worse."
Sorry Rachel, but we've had enough of sacrifices for our NHS - "I recently co-authored a paper on the topic for Policy Exchange. It argued that in the medium-term we should be moving towards a system of social insurance to fund the NHS. Whenever I mention this idea, I am engulfed by a chorus of protests. People say: “Surely you can’t be advocating that we should adopt the American model.” Let me make this clear: under no circumstances should we go anywhere near the American model of healthcare. It consumes far more of GDP than our system, and yet delivers, on average, outcomes that are far worse. But throughout the world, there are many countries that place a far smaller burden on their taxpayers to fund their healthcare systems and yet deliver much better average outcomes than the UK. If we were to be really ambitious, we should look to the example of Singapore. People will doubtless dismiss that case, though, on the grounds that Singapore is, well, Singapore. Perhaps they would deign to look closely at the Netherlands. It underwent a major reform of its health system in 2006, taking it from one not that far different from our own to one based mainly on social insurance. The Dutch system of healthcare consumes about 1 per cent of GDP in public funding, compared to 9 per cent in our case. Of course, adopting such a significant change cannot be done overnight. It would take major consultation and preparation. In the meantime, however, there is much that could be done to improve the workings of the NHS and reduce the burden that it places on the taxpayer. For example, we should introduce a small charge for visiting GPs, say £20 a visit, with exemptions for those on very low incomes, and introduce charging for the provision of more comfortable accommodation for hospital patients. This is what happens in many other countries, including France and Italy."
The hysteria seems almost as bad as in Canada, and private healthcare isn't even really banned
Young Britons’ attitudes hardening on crime and welfare - "For the first time in a decade the majority of British adults believe the generosity of the welfare system stops people from supporting themselves, according to the National Centre for Social Research (NatCen)... Luke Tryl, executive director of polling company More in Common, said there was a broad feeling of a “broken social contract” as a growing cohort of young adults felt let down by the system, giving the example of a young criminal barrister “who’s struggling to get by and still flat-sharing heading into his 30s”. This was making younger people critical of people who were “not seen to be doing their bit” and sceptical of mainstream political parties. “There is this sense that I’ve done the things that I was supposed to do and it’s not getting me anywhere,” he said, adding that this “zero sum attitude” was no longer confined to deprived areas and had become common in focus groups with young professionals. NatCen’s data also reveals hardening attitudes towards criminals. More than two-thirds of those aged 25-34 said offenders should be given stiffer sentences, with the share strongly agreeing jumping from 23 per cent to 34 per cent over the past year... “Young people are scathing about business and the role they played in breaking the social contract, profiting from the cost of living crisis,” he added. “We’re seeing a move towards populist economics, with scepticism of people who are on benefits but also of big business.”"
Reform’s biggest problem is obvious. These charts prove it - "Add up everything the British state spent on health last year, from medical research to administration to the NHS in England, Scotland, Wales and Northern Ireland. Now take everything it spent on defence, from procurement and wages for personnel to foreign military aid. Together, these came to about £305bn. The benefits bill this year is set to reach £303bn. Track spending from the start of the pandemic to the present day, and it’s been growing by roughly £18,000 every minute. If it takes you 76 seconds or so to read this piece, then by the time you’ve finished the entire tax contribution – income tax, capital gains, stamp duty, VAT, the lot – of the average Briton has been added to the total. Getting a grip on this spending is problematic. Line up all the seats in Westminster by the share of adults claiming benefits, from Universal Credit to the state pension, and there are about 38 seats in Great Britain where more than half the population is on welfare. Lower the threshold to 40 per cent, and the figure is 355: enough for a comfortable majority in the Commons. Small wonder, then, that politicians of all colours have tended to conclude that reforming welfare is simply not worth the hassle. This approach, however, is running out of road. The deficit in 2029 is currently forecast to be about £74bn, or 2.1 per cent of GDP. This is just about sustainable territory – below forecast growth, allowing the debt burden to shrink gradually over time. But with the long-term forecast indicating explosive growth in the debt to GDP ratio, pressure is ratcheting up to address spending today... Which constituency in Britain is the most dependent on welfare? Farage’s own seat of Clacton, where almost 60 per cent of adults claim at least one benefit... Map the population share of the white British working-class (including welfare claimants) against Labour’s vote, and there is essentially no pattern. Despite stereotypes, Labour is not particularly a party of the white working-class anymore... Reform’s votes, on the other hand, are strongly linked to the white British working-class population share in a seat"
Tony Blair sounds alarm on Labour’s employment bill - "Wealth manager Rathbones said fears of higher taxes were pushing entrepreneurs and investors to consider moving abroad. One in eight entrepreneurs, business owners and bosses are already planning to relocate, its survey found. Camilla Stowell, chief executive of Rathbones’ wealth division, said: “The Chancellor should ignore the siren song of a seemingly simple, but ultimately counterproductive, form of ‘wealth tax’ on the highest earners and business owners. “We estimate that at least £100bn of wealth could leave the UK or move into less productive assets if a wealth tax in some form is imposed.” Shanker Singham, chairman of the Liz Truss-backed Growth Commission, urged Ms Reeves to stop blaming Brexit for Britain’s economic troubles and instead seize its opportunities. “There are long-standing reasons for the economic stagnation from which the UK is suffering going back several decades, long before Brexit appeared on the agenda,” Mr Singham said. “Sticking to costly energy policies, failing to address burgeoning welfare bills that have resulted in a bloated state and the failure so far to address planning reform with any seriousness are just some of the far more pertinent reasons for the flat-lining economy than the decision to leave the EU.”"
Starmer workers’ rights bill will cripple job market, warns Labour’s favourite think tank - "Labour’s flagship workers’ rights bill risks crippling the jobs market, the party’s “favourite” think tank has warned in a fresh challenge to Sir Keir Starmer. The Resolution Foundation has told The Telegraph it would come out against plans championed by Angela Rayner, the former deputy prime minister, that will give workers a day one right against unfair dismissal. It said the policy risked blighting the job prospects of millions of people while offering “little obvious gain to workers”. It also warned that the new rule would “inhibit hiring”, risked plunging tribunal courts into crisis and would “only benefit employment lawyers”. The foundation warned that the jobs market was already slowing down, with the number of employees on payrolls falling by 127,000 over the past year in the wake of increases to National Insurance. It added that businesses were already going bust while being dragged through the courts for unfair dismissal claims. Almost 30,000 businesses have collapsed since Labour came to power, official figures show. The rebuke by an organisation with close links to Downing Street marks a significant escalation in the backlash against the policy. The Resolution Foundation wields significant influence over Labour thinking, with multiple former staff now working in Downing Street... It raises the prospect of another Labour U-turn, following climbdowns on welfare reform, winter fuel and a national inquiry on grooming gangs... Official statistics show the backlog of employment tribunal claims is already rising...
Forced collective bargaining is back and a whole new generation of business owners and managers will relearn why Britain went so badly backwards in the 1970s. Those businesses that remain, of course... The Government’s own impact assessment says the bill will heap £5bn of costs on businesses – on top of the headwinds they are already facing from higher National Insurance, business rates and the packaging tax. As it stands, this bill will make it almost impossible to remove underperforming staff."
Tories urge OBR to measure anti-growth impact of workers’ right bill - "Senior Tories are urging Britain’s budget watchdog to lay bare the economic damage of Labour’s workers’ rights bill in the Budget... The Government’s own analysis has warned the plans will cost companies up to £5bn a year to implement... The OBR warned in March that piling more pressure on businesses would likely have a “material” and “net negative” impact on jobs, prices and growth."
Poland’s economic success has put Britain’s decadent elite to shame - "Twenty years ago, so a story goes, the Polish Ambassador was in a coffee shop in London and speaking in his native tongue when a member of the public sidled up to him and asked: “Are you Polish? Because I’m looking for a cleaner.” The Ambassador, slightly taken aback, replied: “so am I”. Britain is in decline. But is any country’s path set in stone? No, and we need only look to our Polish friends for the pick-me-up we desperately need. Two decades ago then the gulf between earning opportunities in Poland and the UK was vast. The UK’s GDP per capita was $39,228 compared to Poland’s $13,936. Poles with university degrees and qualifications were willing to undertake menial work in the UK because they would still earn more than in professional-class jobs back home. For them, it made financial sense to be the proverbial “Polish cleaner”. Not anymore. In the two decades since, the trajectories of the UK and Poland could not have been more starkly different. Since 2008, the UK’s GDP per capita has grown an average of 0.7 per cent a year. Meanwhile, for the past thirty years, Poland has enjoyed the longest, uninterrupted period of economic growth in European history (bar a short blip during Covid). It means today our GDP per capita is $60,620 and Poland’s is $50,378. If the underlying trends continue, Poland is forecasted to overtake Britain in a decade. It should be a wake up call for our political establishment, though I doubt it will be. The Polish government has done the basics well – and put our own political leaders to shame. So how did they do it? In lightning speed, they transitioned from the central planning of Communism to a dynamic free market economy. They now boast a low corporate tax rate of 19 per cent, a simplified tax code, generous tax relief for businesses that invest in research and development and special economic zones that make our freeports look like pale imitations. Unsurprisingly, enterprise has boomed. And they’ve backed their relatively light-touch tax regime with a deregulatory agenda, making it easier for businesses to hire employees. Unlike the UK, there are strict conditions on benefits payments too. The result? Poland currently has a record low unemployment rate of around 3 per cent, compared to the UK’s 4.8 per cent. While our labyrinthine planning process has effectively mothballed big infrastructure projects, Poland has a single decision process which has seen new motorways, train lines, and airports pop up. Warsaw’s skyline once had one skyscraper, built in 1956 to honour Joseph Stalin – today it now has dozens, including the tallest building in the European Union, with the city now covered with cranes and a hum of activity... even on the most optimistic timelines it will take four more years from a spade to enter the ground for a third runway at Heathrow (a project the UK Government first supported way back in 2009). And I will eat my hat if that timetable is met without total reform of the present system. And it’s not just Poland’s economy either. They’ve not been afraid to assert their national interest to defend their borders, suspending the Schengen rules in defiance of the EU when border crises arise. Earlier this year, they passed a law that allows them to suspend asylum rights on their border with Belarus, dismissing the howls of outrage from the open-border NGO networks. In short, Poland’s leaders made sensible decisions in the long-term interests of the country. They rejected the path of stagnation and took on established thinking. Meanwhile, our own leaders and institutions were complacent about our success. They thought it was a given, not earned, and indulged in conveniences the country could not afford. How wrong they were. We can now either double down on our failed consensus, or we can change course. Poland proves stagnation isn’t inevitable – things can get better. In fact, it can be saved in the course of a single generation. But their experience tells us that if you want that better future, you need a radical break from the past."
Labour lord quits Britain for Dubai - "A former Labour minister made a life peer by Gordon Brown has quit Britain for Dubai. Lord Carter of Barnes’s move will fuel fears that Labour’s tax policies are sparking an exodus of wealth and talent... Lord Carter is the latest business leader to quit Britain. Nikolay Storonsky, the billionaire founder of Revolut and one of Britain’s richest men, recently moved to the UAE. Richard Gnodde, Goldman Sachs’s vice chairman in Europe, said in April he was relocating to Milan. The departures have been linked to Labour’s decision to scrap non-dom tax status and fears of a raid on the wealthy in the upcoming Budget. Rachel Reeves is expected to announce a mansion tax on homes worth more than £2m and is considering raising income tax. Labour has also raised capital gains tax to 24pc for higher earners and imposed taxes on pensions inherited as part of estates from April 2027."
‘Labour seem to hate people like me’: Britain’s wealthy head for the exit - "Business owners Simon and Selena Barr spent 15 years building two successful media companies that turn over £5m and employ 50 permanent staff as well as 120 freelancers. But as last year’s general election neared, all of their goals – putting their daughters through private school, eventually selling the businesses and retiring early – felt under threat. “We were looking at the Labour manifesto. We were going to be deeply penalised for the successes that we are now getting from the businesses. We felt that we had no option but to vote with our feet and leave the UK,” Barr says. Two days before Labour won the biggest landslide victory in a quarter-century, they had packed up their life in Edinburgh and boarded a plane to the Middle East. A few months later Rachel Reeves unveiled her £40bn tax-raising Budget, proudly targeting symbols of wealth: private schools, private jets and private equity bosses’ profits. As another autumn Budget nears and speculation grows over how she will fill a black hole of as much as £50bn, they are confident they made the right decision... The Left of the Labour Party is pushing hard for taxing the rich more ahead of the Budget... The HMRC’s own research shows that raising capital gains levies further after last October’s hikes would actually lose the Exchequer money... Further moderate attempts to rattle yet more pennies out of the piggy bank would also fail, the HMRC believes. Increasing the higher rate by five percentage points would cost £870m, while even a one percentage point rise comes with a £30m hit. Taxing second homes more through stamp duty would also land the Treasury with a bill rather than a cheque, HMRC believes... Introducing all of these increases simultaneously was risky, says Stuart Adam, at the Institute for Fiscal Studies. Coming back for more only a year later is even more fraught. “Almost any tax rise will tend to lead to some behavioural response, as people try to minimise the liabilities. Further loading taxes on to a small group of highly responsive people increases the risk that you get a big response and not very much revenue,” Adam says... At the last Budget, Reeves raised capital gains taxes for higher and additional rate taxpayers by four percentage points to 24pc on most assets. “If it changes again, that may see further wealthy individuals in the UK – whether foreign originally or not – revisiting their cost-benefit analysis of life here. It’s not a historical first if you look at the brain drain in the 1960s and 1970s, with the UK having at that time comparatively high rates of tax,” says Gibb. The UK is more reliant than many similar countries on its highest earners. The best paid 10pc generate more than 60pc of the Exchequer’s income tax receipts. The same goes for capital gains, with the Office for Budget Responsibility estimating only 6,000 individuals who make gains of more than £2m a year will pay most of the extra £2.5bn Reeves is expected to raise from her raid... For Barr and his wife, who are now based in Dubai, it was ultimately a sense of getting little in return for their contributions that made them leave. “We were putting no strain on the system. We were paying for private healthcare. We were paying for private education. All we were doing was putting in, and we were getting zero benefit,” Barr says. “It just felt like the country was falling apart, and we were paying more and more towards a system that was fundamentally broken,” he adds. Tax experts warn that the UK is a more open economy than neighbouring countries like Germany and France, with wealth creators who are well connected around the world. That increases the risk of a backlash against the Treasury. Barr says he feels the message to entrepreneurs is clear: your aspiration and ambition will not be rewarded. “We personally funded the beginning of our businesses – no support from bank loans, parent loans, anywhere else. We should be celebrated for creating something from the kitchen table. We are bringing revenues in from outside the UK, employing people. We’ve created something from nothing,” he says. “I’m in potentially the most productive period of my life. I could be on a pathway to retirement in my mid-50s to late-50s. If I stay in the UK, I will have to continue working till I’m 70. No question. I can’t see us wanting to come back whilst Labour is still in power.”... “Forget the financial side of things, I just don’t know how you can morally justify putting taxes on children’s education. It’s sick, actually. It’s wrong,” he says. “My wife and I pay taxes, which would otherwise go to cover state school places for our kids. We chose not to because of our own experiences at state school. We make certain sacrifices in our life to make sure that the children have that opportunity,” he adds. The final blow would be if rumours of a mansion tax in the Budget turn out to be true, Newton says. Reeves is said to be considering a property tax, which would hit wealthy homeowners in the South the hardest... “Nobody can plan anything at the moment. There’s no way you can plan a long-term strategy for your personal investments, your pension, your house, buying a second investment property, all of these things,” he adds... The first test is whether her non-dom overhaul will yield the promised cash. The reforms, which replaced the centuries-old arrangement with a four-year scheme, have been blamed for many high-profile exits. They include Richard Gnodde, a South African and Goldman Sachs’ best-paid banker outside of the US; and Nassef Sawiris, Egypt’s richest man. Changes to inheritance tax have also prompted British entrepreneurs to leave, as they can now escape the 40pc death duty after 10 years abroad. Among them are property brothers Ian and Richard Livingstone, now living in Monaco. Several studies have attempted to measure the scale of such exits. None gives a comprehensive picture. The most widely cited research, by Henley & Partners, shows a record exodus of millionaires from Britain, but has faced scrutiny over its reliance on LinkedIn profile data. More robust FT and Bloomberg analysis of Companies House data shows a sharp up-tick in company directors shifting their residence abroad in the last year. However, the real toll will only become clear in a couple of years when official tax figures are out... Reeves has taken a huge gamble by targeting the wealthy, but when it eventually becomes clear whether the move has paid off, she may no longer even be in power."
Empirical support for the Laffer curve. But left wingers don't believe that people respond to incentives and want to "tax the 'rich'" until they are no longer rich
Rachel Reeves should be sacked – but not for her rental flat imbroglio - "She’s arguably the country’s worst Chancellor since Anthony Barber. Possibly even since a clueless Winston Churchill decided to restore Britain to the gold standard. She’s a socialist in moderate’s clothing, seemingly a stranger to honest truth. Ex-Prince Andrew has probably displayed more contrition than she has for the damage she has wrought on our economy. Reeves is about to hike taxes when the after-effects of her last catastrophic Budget have yet to be fully felt. Household disposable incomes have shrunk, businesses have shuttered, private schools have closed their gates. That she has done all this whilst gender-bragging about her appointment is an insult to women. While her economic record is indefensible, it’s just about possible to summon a flicker of sympathy over this lettings misstep. That she and her husband tripped over our labyrinthine landlord regulations will come as no shock to anyone who’s attempted to let property... when even holier-than-thou ministers are guilty of infringements, it’s time to change the rules. Of which, by the way, there are a staggering 170 that apply to our private rented sector, shrinking by the minute under their weight. Hundreds of thousands of people are fined by HMRC every year for late payments for self-assessment, many erroneously. Penalties for failing to check a tenant’s legal right to rent surged 400 per cent in a single year, whilst the amount people are fined has doubled. This latest kerfuffle comes the week Labour’s Renters Reform Act became law – which will introduce effective rent controls and drive many more landlords from the market."
Lee Anderson: I got the ‘fittest man in Ashfield’ on benefits - "Lee Anderson, the Reform MP, said on Wednesday that it was so easy to game the welfare system he could get “the fittest man” in his home town on benefits. The MP for Ashfield told a press conference he was the “first point of contact” for disability claimants when he worked for the Citizens Advice Bureau before entering politics. He made the admission as Reform announced proposals to restrict Personal Independence Payments (PIP), which are claimed by 3.8 million Britons, by abolishing the benefit for people with anxiety unless their case is severe... “We were the first point of contact for people who wanted to claim PIP, or DLA as it was at the time, and we used to fill the forms out for clients before that application form came in. “And I can tell you, I know people who work for the CAB that got a 100 per cent hit rate on a benefit form.” Mr Anderson told The Telegraph that the experience “politicised” him, adding: “It becomes a game, getting claimants their benefits, and you forget what you’re doing. “It’s the same with asylum claims, I’d bet my life on it. Eventually, I took a long look at myself and said, this is wrong, I was wrong, and it was wrong what we were doing. I wasn’t being kind to people – the way you get people out of poverty is you get them back into work.” Reform would also consider introducing “mystery shopper” checks to institutions that help claimants fill out benefits forms, Mr Anderson said... The MP went on to hit out at the “anxiety generation” of under-25s, who Reform said were seeing the fastest growth of PIP claims... Earlier this year, Rachel Reeves attempted to reduce the size of the benefits bill by tightening access to PIP. But she had to back down in the face of a major backbench rebellion, and has put off major welfare reform until next year. The Chancellor decided against tightening eligibility for the Motability scheme, which gives tax breaks for disability claimants who qualify for a brand new car, earlier this week. The move could have saved taxpayers up to £1bn. But on Monday, Sir Stephen Timms, the social security minister, said there would be no changes to the PIP eligibility criteria until next year."
Meme - Tom Harwood @tomhfh: "Why does the massive surge in incapacity benefits bear no relation to the surveyed level of actual health issues in the country?"
"Incapacity benefit caseload vs 16-64s with long-term health problems (indexed, 2018 = 100)
*Incapacity benefits rising 40% from 2018 to 2024 and UKHLS, HSE and Health Problems staying the same or even decreasing*"
Clearly, this only reflects increasing diagnosis rates and reduced stigma, which is a good thing
Crime soars after Labour nationalises train company - "train cancellations had surged at SWR immediately after nationalisation, a fact likely to fuel calls for the Government to rethink its manifesto pledge to nationalise all passenger trains. Train companies are being nationalised about every three months"
Clearly the rise in crime is due to better reporting and the rise is cancellations is because of reactionaries sabotaging the system. They need to be rooted out and purged
Workers’ rights overhaul risks fewer jobs for women, Labour admits - "Plans for a sweeping overhaul of workers’ rights risk putting companies off hiring women, the Government has admitted. Officials said in new documents that incoming protections for pregnant women could have “unintended consequences” by scaring off bosses. Under the implementation of Labour’s Employment Rights Bill, pregnant women and new mothers will see their rights strengthened to make it much harder to sack them. This means businesses will only be able to sack them in special circumstances, such as cases of serious gross misconduct. However, this proposal could backfire, according to a new consultation document published by the Government, signed off by Business Secretary Peter Kyle and employment minister Kate Dearden. It said: “Employers may become more hesitant to hire or avoid hiring women, particularly those of childbearing age, if they assess there to be too many legal, procedural or practical difficulties when it comes to managing dismissals of pregnant women and new mothers.”... As well as introducing new guardrails for pregnant women, the bill also aims to ban zero-hours contracts, outlaw fire-and-rehire policies and empower trade unions. This includes new rules that will ensure trade unions can access a company’s workplace and communicate with disgruntled staff. Should businesses breach these rules by refusing trade unions access, they could face fines of up to £150,000. The proposal has prompted fresh criticism from the Conservatives. Andrew Griffith, shadow business secretary, said: “Union representatives will inevitably use this special access to pressure workers into joining them and supporting their political causes, which, naturally, are usually aligned with Labour. “Businesses will become playgrounds for activists rather than engines for growth.”"
Clearly, the solution is for even more regulation to stop discrimination against women
