@Frencheconomics What is your understanding of the relationship between social housing stock and welfare costs?
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Nick Williams
55 posts
The OBR is not the arbiter here, it will be Gilt markets. If Rayner wants to expand capital spending (for social housing) she will need to show a simultaneous liberation of the supply side of the economy to avoid bond markets pricing in a higher UK inflation premium (notwithstanding the lower clearing price for more Gilt issuance) as it runs into capacity constraints. The problem she has is she is associated with policies that have made the supply side less flexible (Employee Rights Act, Renters Rights Act) - albeit her approach to migration looks more liberal. OBR scoring only holds if creditors believe it.
Steven Swinford@Steven_Swinford
Exclusive from @breeallegretti Angela Rayner has privately criticised the OBR and suggested that Labour has 'over-corrected' in the wake of the Tories In a private call with City investors organised by BNP Paribas she said that the official forecaster had failed to recognise the benefits of increased public spending Rayner attacked the scoring methodology used by the OBR, which measures the expected cost and growth gains of government policies to calculate the amount of fiscal headroom, based on the chancellor’s rules She said that the government's drive to build more social housing was considered a cost without any recognition of the social benefits She argued that the OBR is 'preventing' the government from greater public spending because it 'doesn't account for the returns' properly Expect this to be a growing fault line as the elections in May approach thetimes.com/uk/politics/ar…
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@FraserNelson Fraser you've been studying welfare closely. What is the relationship between social housing stock and the cost to the exchequer of housing benefit?
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Significant story. Suggests a Rayner premiership would use OBR criticism to do more borrow and spend - on grounds that it would pay for itself.
Problem is that no other forecaster sees it her way. Nor would the markets
Steven Swinford@Steven_Swinford
Exclusive from @breeallegretti Angela Rayner has privately criticised the OBR and suggested that Labour has 'over-corrected' in the wake of the Tories In a private call with City investors organised by BNP Paribas she said that the official forecaster had failed to recognise the benefits of increased public spending Rayner attacked the scoring methodology used by the OBR, which measures the expected cost and growth gains of government policies to calculate the amount of fiscal headroom, based on the chancellor’s rules She said that the government's drive to build more social housing was considered a cost without any recognition of the social benefits She argued that the OBR is 'preventing' the government from greater public spending because it 'doesn't account for the returns' properly Expect this to be a growing fault line as the elections in May approach thetimes.com/uk/politics/ar…
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@iainmartin1 In your latest podcast, you briefly mentioned nationalisation and moved on. Interested in your thoughts on whether BP's strategy to double ROCE from 8% to 16% over the next two years is consistent with our energy security being at risk?
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I mean, sure. But can we start having an honest national conversation about trade offs and vulnerabilities? Renewables are often reliant on Chinese technology and kit, a major risk given what is actually happening in the world.
Faisal Islam@faisalislam
“A wake up call” the CEO of Britain’s biggest domestic energy firm told me last night about the possibility of long term impact to global gas and oil infrastructure… but he pointed to electrification as the main lesson, while domestic gas would be preferable to shipped gas: “wake-up call that gets us to electrify more of our economy and get more of our energy from homegrown sources.” "The irony is, right now, we're emailing millions of customers saying their energy prices are going to fall..." "You can't protect yourself against these global markets forever." "Traders are really worried about how long it's going to take these facilities to get back online." "Our electricity system's too inefficient. We need to reform that markets so that people get the benefits of our homegrown resources." “my own view is that shipping gas around the world is more inefficient and has more leaks of methane than if you use local gas. But we shouldn't kid ourselves. North Sea gas wouldn't meaningfully bring the price down because we're paying the global price. If we got more out of the North Sea, it would simply be sold to other countries at these very high prices or here at these high prices. And we can't kid ourselves we're going to be self-sufficient in gas again. What we can do is have a much cheaper approach to electricity than we have today. Our electricity system's too inefficient. We need to reform that markets so that people get the benefits of our homegrown resources.
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@Frencheconomics Was stability, investment, reform in Mais 2024
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Subtle change in messaging from Stability, Investment, Growth to Stability, Investment, Reform. A pitch to her own party to stay patient in the face of a leadership challenge in May?
Simon French@Frencheconomics
There is a lot to like in this Mais Lecture from Rachel Reeves. Elegantly describing the problems of scarcity and rationing. 👏👏 But describing it remains the easy bit. Can she convince her colleagues to truly embrace an ideology-free supply side agenda.
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@Steven_Swinford @wright_oliver I'm afraid your last point is just wrong. Household debt has fallen considerably since the last energy shock and cash savings are much higher. Energy debt is higher, but concentrated among a minority of households - this points to targeted support which you argue against.
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The Times weekend read with @wright_oliver:
* How long will the war in Iran go on for? The latest intelligence assessments are the it will go on for up to six weeks, based in part on the amount of munitions the US and Israel have at their disposal
* But there are concerns that even if Trump decides to call it a day the Iranians will not follow suit. The nightmare scenario being discussed in Whitehall is that Tehran refuses to stop targeting US and Gulf assets in the region and the conflict drags into the Summer
* The present view is that if the crisis is limited to six weeks then petrol prices could rise to about 155p per litre, or 20 per cent higher than pre-crisis levels.
* When the energy price cap is updated in June, household gas and electricity bills could rise to about £1,900 for an average dual-fuel household — up 15 per cent from £1,641 in April.
* If the war drags on into the summer then petrol could hit £2 a litre and energy prices could be more than £500 higher as the country prepares for winter
* If that scenario transpires, the government wants to take a targeted approach to helping households with energy bills, focusing on poorer households
* During the Ukraine crisis the govt opted to take a blanket approach - helping every household - but at the time it had no choice. The data marrying up household incomes to energy bills did not exist. The combined energy support packages cost £40bn
* The Treasury is working on a new system to enable payments to poorer households rather than all. There have been discussions about some kind of social tariff, which was also looked at when the Tories were in power
* But the trouble is that there will be cliff edges and clear winners and losers. As govt discovered when it stripped millions of pensioners of winter fuel payments, thresholds can be politically toxic. It's a very crude way of delineating who should get support
* Household finances are in a worse position now than they were in 2022. Then the total amount that households owed in unpaid debt to energy companies was just over £2 billion. That now stands at around £5.5 billion and was expected to hit £7 billion by the end of this year, even without the crisis in the Middle East
thetimes.com/uk/politics/ar…
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Britain now has as many political leaders who worked at McDonalds (Badenoch & Polanski) as went to Oxbridge (Starmer & Davey) via @TimesDiary
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@Jenx123_ @Frencheconomics I don't see the comparison, when consenting tie backs - which is government policy - would increase supply.
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@_NJWilliams @Frencheconomics Isn’t that the same reason used by Nick Clegg to justify not building nuclear power stations more than ten years ago..?
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If only the UK had a natural hedge to the fiscal and BoP deterioration triggered by these events in oil & gas markets. And imagine if that hedge also reduced total carbon emissions…. 🤯
Dr. Jeevun Sandher MP@JeevunSandher
Oil price is spiking this morning. Three major implications: 1) Makes life less affordable here. Bad news for democracy. 2) Russia will get more revenue from oil sales 3) Time for us to get off these fossil fuels
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@FraserNelson @afneil What reason is there to expect unemployment to fall?
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Important context from The Times today: unemployment is expected to now be near a peak, but also expected to stay high for years
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@JohnRentoul This is up there in the pantheon of egregious wastes of time
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Will Keir Starmer use his nuclear option to try to head off a leadership challenge? independent.co.uk/voices/keir-st…
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@s8mb 50 per hectare? That's ghastly. Friggin' chicken coops again. That's a 200 m2 plot for house and garden max, before even considering roads or paths. That's a tennis court - inside the singles lines too. Why is this sort of shit a victory?
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I've given them a lot of flak for a lot of their housing policies, but if this actually survives politically this will be massive and they deserve enormous credit for it. The first genuinely big and worthwhile move on housing they've made so far.
YIMBY Alliance@yimbyalliance
1. Homes within walking distance of train stations well-connected to jobs will be allowed so long as they have a minimum density of 50 homes per hectare. This also applies across the green belt! This will have a huge impact:
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@s8mb Yes it might not turn out that way, but that's what the language meant.
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@_NJWilliams That's very optimistic, but nothing else this government has done warrants that degree of optimism. It needs to lash itself to the masts to have a hope of doing any of this.
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Good news: the written text of the speech is much stronger than what the Chancellor said in the House:
"The government warmly welcomes it and endorses its approach, and accepts the principle of all the recommendations it has set out."
I genuinely don't know what "accepts the principle of all the recommendations" means though. Do they accept all the recommendations, or not?
Sam Bowman@s8mb
The Chancellor has completely bottled the Nuclear Taskforce response. No commitment to accept any of it at all: they'll come back with their plans in *three months*!! Pathetic.
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@Mr72Capital @AaronBastani And so when Nigel Lawson equalised CGT in the 1980s, did everyone stop investing?
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@AaronBastani CGT is levied on risk income derived from post tax money.
Income tax is unrisked income on untaxed money.
No one will take risk, invest and /build/grow the economy if the rewards are taxed at the same level as unrisked income.
Incentives matter.
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This is REALLY good.
I’d equalise CGT and tax on dividends, certainly, and we need to re-configure council tax so London millionaires get such a sweet deal.
But the truth is we need to increase tax across the board. It’s not just the rich. That would be nice though!
Financial Times@FT
If I asked you which country has the most progressive tax system in the developed world — where high earners hand over an especially large share of their income relative to the average worker — what would your answer be? The answer is in fact Britain. on.ft.com/3KfzmDq
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@DGWilkinson @LoftusSteve Now do their income after housing costs and compare to a working age person.
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@LoftusSteve Where did you get the £21k figure as Grok gave me the one I cited. Regardless even at £21k they get less than somebody on minimum wage and all their pension and any interest or wages they may get are taxed at the normal rates.
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Honestly, I'm tired of the argument that retirees should never pay more. Why not?
Why should everyone else have to pay more tax and retirees skate?
Steve Loftus@LoftusSteve
I'm actually for this. Administering two systems that are general taxation is foolish. This should be done every year until it's all income tax.
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@Rosetti83700607 @watling_samuel They are taxed less than everyone else, and still would be after this change.
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@watling_samuel What, specifically taxing pensioners more than anyone else?
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This would be a fantastic move if she pulls it off.
Politics UK@PolitlcsUK
🚨 NEW: Rachel Reeves is considering a 2p rise in Income Tax but a 2p cut in National Insurance in the Budget Around 30 million workers who pay both taxes would pay the same amount, but pensioners and landlords - who don’t pay NI - would be hit [@Telegraph]
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@DanNeidle I imagine (but please correct me) that most of the 60k claims are small circumstantial spend being chanced. What do you think about an R&D expenditure floor? For argument sake, set at the wage of a full time researcher. Can't think genuine R&D performing firms would get caught.
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I’ve a piece in the Observer: reform corporation tax - radical simplification that will incentivise investment.
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This:
- Starves local govts of revenues
- Reduces their incentive to allow new development
- Partially goes to landowners via higher rents
- Subsidises less popular businesses (the way charity shops are propped up now)
- Does nothing for economic growth
This is a dumb policy!
Ben Riley-Smith@benrileysmith
Exclusive: Tories will today pledge to scrap business rates for 250,000 pubs, restaurants and other small firms to help boost the high street Hospitality, retail or leisure firms that pay £110k a year or less in biz rates will get 100% relief. Costs £4bn telegraph.co.uk/politics/2025/…
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@stephenlondoner @technopopulist Thatcher's first budget increased employer NICs by twice as much (as a % of GDP) as last Autumn Budget.
Over her first 4 years, Thatcher's govt increased tax from 31% to 37% of GDP.
The Thatcher that lives inside people's heads is quite distinct from the facts of history.
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Thatcher’s policies quickly generated growth - Starmer’s policies promote unemployment, and economic decline.
The bizarre talking down of the economy when they first came in, the hike in the cost of employing people, throwing sand in the gears of the rental and employment markets, whilst talking of growth- they are clueless.
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Starmer won’t lose sleep over this. His SpAds will be whispering two things in his ear: (a) Thatcher was loathed in the 80s yet kept winning (true); and (b) Labour’s policies just need time to bear fruit, and the public will come around.
Two problems. First, Thatcher was a force of nature - she could get people who despised her to still vote for her. Second, Labour’s supposed ‘fruit’ isn’t ripening. The orchard is already rotten.
Alex Armstrong@Alexarmstrong
Keir Starmer is now the most unpopular Prime Minister on record. Via Ipsos 11th - 17th September
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@s8mb Catherine has argued that the PIB and Part 3 in particular doesn't go far enough for infra (as have BR). She has been behind Lords amends on Habs. I haven't stalked her LinkedIn, but I know she has engaged eNGOs to generate support for her changes to strengthen the PIB for infra
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@_NJWilliams What do you make of her work with environmental groups in their lobbying against Part 3 of the PIB?
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Oh dear. This is quite a bad appointment: Howard is smart, but incredibly status quo-minded. Will probably be more unambitious and cheems than the civil service is.
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