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While this is a change to the previous schedule of analysing Liz Truss’s premiership, more about which next week, there are references below as to why hers and Kwasi Kwarteng’s plan was the right one for the UK.

Chancellor Jeremy Hunt delivered his Autumn Statement — a Labourite Conservative budget — on Thursday, November 17, 2022.

Compared with Kwasi Kwarteng’s fiscal event of September 23, this will be a disaster for most middle class Britons.

It was clear that Hunt designed this budget to placate the all-hallowed — for whatever reason — OBR (Office for Budget Responsibility) and the markets. Stability is their watchword. Growth, regardless of what Hunt said yesterday, plays little part in our economy for the foreseeable future.

Unlike Kwarteng’s, which did focus on growth, Hunt’s statement had little to no consideration of the British taxpayer in a cost of living crisis.

What Hunt said

Before going into Hunt’s address, Guido Fawkes has a brief summary and the full detail from the Treasury, a 70-page document.

Below are excerpts from Hunt’s Autumn Statement to the House of Commons (emphases mine):

… today we deliver a plan to tackle the cost of living crisis and rebuild our economy. Our priorities are stability, growth and public services. We also protect the vulnerable, because to be British is to be compassionate and this is a compassionate Conservative Government.

Remember when then-Chancellor Rishi Sunak told us we did not have to worry about the cost of borrowing and borrowing itself during the pandemic? Well, now we have to worry:

Most countries are still dealing with the fallout from a once-in-a-century pandemic. The furlough scheme, the vaccine roll-out and the response of the NHS did our country proud, but they all have to be paid for.

Hunt paid homage to the Bank of England and had a poke at Kwarteng for not doing so:

So the Bank of England, which has done an outstanding job since its independence, now has my wholehearted support in its mission to defeat inflation and I today confirm we will not change its remit. But we need fiscal and monetary policy to work together, and that means the Government and the Bank working in lockstep.

He delivered a deeper attack on Kwarteng:

I understand the motivation of my predecessor’s mini-Budget and he was correct to identify growth as a priority, but unfunded tax cuts are as risky as unfunded spending, which is why we reversed the planned measures quickly. As a result, Government borrowing has fallen, the pound has strengthened and the OBR says today that the lower interest rates generated by the Government’s actions are already benefiting our economy and public finances. But credibility cannot be taken for granted and yesterday’s inflation figures show we must continue a relentless fight to bring it down, including a rock solid commitment to rebuild our public finances.

He bowed before the all-powerful OBR, whose forecasts have not been terribly accurate over the past few years. Let us see if these come true in the coming months:

Richard Hughes and his team at the OBR today lay out starkly the impact of global headwinds on the UK economy, and I am enormously grateful to him and his team for their thorough work. The OBR forecasts the UK’s inflation rate to be 9.1% this year and 7.4% next year. It confirms that our actions today help inflation to fall sharply from the middle of next year. It also judges that the UK, like other countries, is now in recession. Overall this year, the economy is still forecast to grow by 4.2%. GDP then falls in 2023 by 1.4%, before rising by 1.3%, 2.6% and 2.7% in the following three years. The OBR says higher energy prices explain the majority of the downward revision in cumulative growth since March. It also expects a rise in unemployment from 3.6% today to 4.9% in 2024, before falling to 4.1%.

This is Hunt’s strategy, with the blessing of the OBR and borrowing Sunak’s morality from the August leadership campaign about leaving debts to the next generation:

I also confirm two new fiscal rules. The first is that underlying debt must fall as a percentage of GDP by the fifth year of a rolling five-year period. The second is that public sector borrowing over the same period must be below 3% of GDP. The plan I am announcing today meets both rules.

Today’s statement delivers a consolidation of £55 billion, and means inflation and interest rates end up significantly lower. We achieve this in a balanced way. In the short term, as growth slows and unemployment rises, we will use fiscal policy to support the economy. The OBR confirms that, because of our plans, the recession is shallower and inflation is reduced. Unemployment is also lower, with about 70,000 jobs saved as a result of our decisions today. Then, once growth returns, we increase the pace of consolidation to get debt falling. This further reduces the pressure on the Bank to raise interest rates, because as Conservatives we do not leave our debts to the next generation.

So this is a balanced path to stability, tackling inflation to reduce the cost of living and protect pensioner savings, while supporting the economy on a path to growth. But it means taking difficult decisions.

Hunt then discussed the fiscal drag elements of the budget. Fiscal drag means drawing the unsuspecting into paying new and more tax:

I start with personal taxes. Asking more from those who have more means that the first difficult decision I take on tax is to reduce the threshold at which the 45p rate becomes payable from £150,000 to £125,140. Those earning £150,000 or more will pay just over £1,200 more in tax every year. We are also taking difficult decisions on tax-free allowances. I am maintaining at current levels the income tax personal allowance, higher rate threshold, main national insurance thresholds and the inheritance tax thresholds for a further two years, taking us to April 2028. Even after that, we will still have the most generous set of tax-free allowances of any G7 country.

I was amazed he could talk about 2028 with a straight face. By then, we will probably have a Labour government. Oh well, he’s done their work for them.

Continuing on tax rises, he said:

I am also reforming allowances on unearned income. The dividend allowance will be cut from £2,000 to £1,000 next year, and then to £500 from April 2024. The annual exempt amount for capital gains tax will be cut from £12,300 to £6,000 next year, and then £3,000 from April 2024. Those changes still leave us with more generous allowances than countries such as Germany, Ireland, France, and Canada.

Because the OBR forecasts that half of all new vehicles will be electric by 2025, to make our motoring tax system fairer, I have decided that from then electric vehicles will no longer be exempt from vehicle excise duty. Company car tax rates will remain lower for electric vehicles, and I have listened to industry bodies and will limit rate increases to 1 percentage point a year for three years from 2025.

At least he kept one thing from Kwarteng’s statement:

The OBR expects housing activity to slow over the next two years, so the stamp duty cuts announced in the mini-Budget will remain in place but only until 31 March 2025. After that, I will sunset the measure, creating an incentive to support the housing market, and the jobs associated with it, by boosting transaction during the period when the economy most needs it.

He won’t even be Chancellor then.

Moving on to businesses:

I now turn to business taxes. Although I have decided to freeze the employers national insurance contributions threshold until April 2028, we will retain the employment allowance at its new higher level of £5,000. That means that 40% of all businesses will pay no NICs at all. The VAT threshold is already more than twice as high as the EU and OECD averages. I will maintain it at that level until March 2026.

Then came the windfall tax:

Can I just say that any such tax should be temporary, not deter investment and recognise the cyclical nature of energy businesses? So, taking account of that, I have decided that from 1 January until March 2028 we will increase the energy profits levy from 25% to 35%. The structure of our energy market also creates windfall profits for low-carbon electricity generation, so we have decided to introduce, from 1 January, a new, temporary 45% levy on electricity generators. Together, those measures will raise £14 billion next year.

Business rates have been a thorn in the side of those enterprises on our high streets. Here, it would seem, Hunt offered some relief:

Finally, I turn to business rates. It is an important principle that bills should accurately reflect market values, so we will proceed with the revaluation of business properties from April 2023, but I will soften the blow on businesses with a nearly £14 billion tax cut over the next five years. Nearly two thirds of properties will not pay a penny more next year and thousands of pubs, restaurants and small high street shops will benefit. That will include a new Government-funded transitional relief scheme, as called for by the CBI, the British Retail Consortium, the Federation of Small Businesses and others, benefiting around 700,000 businesses.

Then he turned to people on benefits, proving that Sunak’s furlough scheme during the pandemic was more than adequate:

… I am proud to live in a country with one of the most comprehensive safety nets anywhere in the world. But I am also concerned that we have seen a sharp increase in economically inactive working-age adults of about 630,000 people since the start of the pandemic. Employment levels have yet to return to pre-pandemic levels, which is bad for businesses who cannot fill vacancies and bad for people missing out on the opportunity to do well for themselves and their families, so the Prime Minister has asked the Work and Pensions Secretary to do a thorough review of issues holding back workforce participation, to conclude early in the new year.

Alongside that, I am also committed to helping people already in work to raise their incomes, progress in work and become financially independent. So we will ask over 600,000 more people on universal credit to meet with a work coach so that they can get the support that they need to increase their hours or earnings. I have also decided to move back the managed transition of people from employment and support allowance on to universal credit to 2028, and will invest an extra £280 million in the DWP to crack down on benefit fraud and error over the next two years. The Government’s review of the state pension age will be published in early 2023.

He then discussed foreign spending:

… I salute the citizens of another country right on the frontline … the brave people of Ukraine. The United Kingdom has given them military support worth £2.3 billion since the start of Putin’s invasion, the second highest contribution in the world after the United States, which demonstrates that our commitment to democracy and open societies remains steadfast. In that context, the Prime Minister and I both recognise the need to increase defence spending. But before we make that commitment, it is necessary to revise and update the integrated review, written as it was before the Ukraine invasion. I have asked for that vital work to be completed ahead of the next Budget and today I confirm that we will continue to maintain the defence budget at at least 2% of GDP to be consistent with our NATO commitment.

I was pleased to hear that overseas aid will stay at 0.5%:

Another important international commitment is to overseas aid. The OBR’s forecasts show a significant shock to public finances, so it will not be possible to return to the 0.7% target until the fiscal situation allows. We remain fully committed to that target, and the plans I have set out today assume that official development assistance spending will remain around 0.5% for the forecast period. As a percentage of GNI, we were the third highest donor in the G7 last year, and I am proud that our aid commitment has saved thousands of lives around the world.

Net Zero is still going ahead:

I also confirm that, despite the economic pressures, we remain fully committed to the historic Glasgow climate pact agreed at COP26, including a 68% reduction in our own emissions by 2030.

He discussed schools, beginning with those in England:

we have risen nine places in the global league tables for maths and reading in the last seven years.

… as Chancellor I want to know the answer to one simple question: will every young person leave the education system with the skills they would get in Japan, Germany or Switzerland? So, I have appointed Sir Michael Barber to advise me and my right hon. Friend the Education Secretary on the implementation of our skills reform programme.

Some have suggested putting VAT on independent school fees as a way of increasing core funding for schools, which would raise about £1.7 billion. But according to certain estimates, that would result in up to 90,000 children from the independent sector switching to state schools, giving with one hand only to take away with another.

So instead of being ideological, I am going to be practical: because we want school standards to continue to rise for every single child, we are going to do more than protect the schools budget—we are going to increase it. I can announce today that next year and the year after, we will invest an extra £2.3 billion per annum in our schools.

He has asked a former Labour MP, Patricia Hewitt, to help him reform the NHS. Oh, my days:

I have asked the former Health Secretary and chair of the Norfolk and Waveney integrated care system, Patricia Hewitt, to help me and the Health Secretary to achieve that by advising us on how to make sure that the new integrated care boards, the local NHS bodies, operate efficiently and with appropriate autonomy and accountability. I have also had discussions with NHS England about the inflationary pressures on their budgets.

More money will be pumped into the system:

With £3.3 billion for the NHS and £4.7 billion for social care, there is a record £8 billion package for our health and care system. That is a Conservative Government putting the NHS first.

Barnett consequentials, which come from the hard-pressed English taxpayer, will also increase:

The NHS and schools in Scotland, Wales and Northern Ireland face equivalent pressures, so the Barnett consequentials of today’s decisions mean an extra £1.5 billion for the Scottish Government, £1.2 billion for the Welsh Government, and £650 million for the Northern Ireland Executive. That means more resources for the schools and hospitals in our devolved nations next year, the year after and every year thereafter.

A new energy strategy will be forthcoming from the Business Secretary.

These are Hunt’s infrastructure commitments:

… today I can announce that I am not cutting a penny from our capital budgets in the next two years, and I am maintaining them at that level in cash terms for the following three years. That means that although we are not growing our capital budget as planned, it will still increase from £63 billion four years ago to £114 billion next year and £115 billion the year after, and will remain at that level—more than double what it was under the last Labour Government.

Smart countries build on their long-term commitments rather than discarding them, so today I confirm that because of this decision, alongside Sizewell C, we will deliver the core Northern Powerhouse Rail, HS2 to Manchester, East West Rail, the new hospitals programme and gigabit broadband roll-out. All these and more will be funded as promised, with over £600 billion of investment over the next five years to connect our country and grow our economy.

Our national Conservative mission is to level up economic opportunity across the country. That, too, needs investment in infrastructure, so I will proceed with round 2 of the levelling-up fund, at least matching the £1.7 billion value of round 1. We will also drive growth across the UK by working with the Scottish Government on the feasibility study for the A75, supporting the advanced technology research centre in Wales and funding a trade and investment event in Northern Ireland next year.

He is bringing devolution to England in the form of mayoralties:

Our brilliant [Conservative] Mayors such as Andy Street and Ben Houchen have shown the power of civic entrepreneurship. We need more of this inspirational local leadership, so today I can announce a new devolution deal that will bring an elected Mayor to Suffolk, and deals to bring Mayors to Cornwall, Norfolk and an area in the north-east to follow shortly. We are also making progress towards trailblazer devolution deals with the Greater Manchester Combined Authority and the West Midlands Combined Authority, and soon over half of England will be covered by devolution deals. Taken together, that £600 billion investment in our future growth represents the largest investment in public works for 40 years, so our children and grandchildren can be confident that this Conservative Government are investing in their future.

Hunt is altering the Truss-Kwarteng investment zones to be more in line with Michael Gove’s aspirations for levelling up:

I will also change our approach to investment zones, which will now focus on leveraging our research strengths by being centred on universities in left-behind areas, to help to build clusters for our new growth industries. My right hon. Friend the Levelling Up Secretary will work with Mayors, devolved Administrations and local partners to achieve this, with the first decisions announced ahead of the spring Budget.

The Truss-Kwarteng energy support plan remains in place until the end of March 2023:

I pay tribute to my predecessor, my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng), and to the former Prime Minister, my right hon. Friend the Member for South West Norfolk (Elizabeth Truss), for their leadership in this area. This winter, we will stick with their plan to spend £55 billion to help households and businesses with their energy bills—one of the largest support plans in Europe. From April, we will continue the energy price guarantee for a further 12 months at a higher level of £3,000 per year for the average household. With prices forecast to remain elevated throughout next year, this will mean an average of £500 of support for every household in the country.

There is more help for the most vulnerable:

At the same time, for the most vulnerable, we will introduce additional cost of living payments next year of £900 to households on means-tested benefits, £300 to pensioner households and £150 for individuals on disability benefit. We will also provide an additional £1 billion of funding to enable a further 12-month extension to the household support fund, helping local authorities to assist those who might otherwise fall through the cracks. For those households that use alternative fuels such as heating oil and liquefied petroleum gas to heat their homes, I am today doubling the support from £100 to £200, which will be delivered as soon as possible this winter. Before the end of this year, we will also bring forward a new targeted approach to support businesses from next April.

But I want to go further to support the people most exposed to high inflation. Around 4 million families live in the social rented sector—almost one fifth of households in England. Their rents are set at 1% above the September inflation rate, which means that on current plans they are set to see rent hikes next year of up to 11%. For many, that would just be unaffordable, so today I can announce that this Government will cap the increase in social rents at a maximum of 7% in 2023-24. Compared with current plans, that is a saving for the average tenant of £200 next year.

Labour started a commotion at this point. Hunt then announced a rise in the minimum wage:

This Government introduced—[Interruption.] I thought they cared about the most vulnerable! This Government introduced the national living wage, which has been a giant step in eliminating low pay, so today I am accepting the recommendation of the Low Pay Commission to increase it next year by 9.7%. This means that, from April 2023, the hourly rate will be £10.42, which represents an annual pay rise worth over £1,600 to a full-time worker. It is expected to benefit over 2 million of the lowest-paid workers in our country, and it keeps us on track for our target to reach two thirds of median earnings by 2024. It is the largest increase in the UK’s national living wage ever.

Benefits will increase by the rate of inflation:

today I commit to uprating such benefits by inflation, with an increase of 10.1%. That is an expensive commitment, costing £11 billion, but it means that 10 million working-age families will see a much-needed increase next year, which speaks to our priorities as a Government and our priorities as a nation. On average, a family on universal credit will benefit next year by around £600. To increase the number of households that can benefit from this decision, I will also exceptionally increase the benefit cap by inflation next year.

Finally, I have talked a lot about the British values of compassion, hard work, dignity and fairness, but there is no more British value than our commitment to protect and honour those who built the country we live in, so to support the poorest pensioners I have decided to increase pension credit by 10.1%, which is worth up to £1,470 for a couple and £960 for a single pensioner in our most vulnerable households, but the cost of living crisis is harming not just our poorest pensioners but all pensioners.

The triple-lock stays:

Because we have taken difficult decisions elsewhere today, I can also announce that we will fulfil our pledge to the country to protect the pension triple lock. In April, the state pension will increase in line with inflation, an £870 increase, which represents the biggest ever increase in the state pension. To the millions of pensioners who will benefit from this measure, I say: “Now and always, this Government are on your side.”

Hunt did not receive a jubilant reception from Conservative MPs, some of whom had concerns.

Dr Liam Fox asked about quantitative easing and interest rates:

I congratulate my right hon. Friend on a balanced and skilful statement prioritising fiscal stability. He will be aware that some of us believe that the Bank of England maintained monetary conditions that were too loose for too long, but that it would also be a mistake to maintain monetary conditions that are too tight for too long. Can he therefore confirm that the anti-inflationary measures that he has taken today will mean that the pressure to raise interest rates will be minimised, and that there is a much greater chance that they will fall earlier than would otherwise have been the case?

Hunt replied:

My right hon. Friend is absolutely right to focus on this issue, because every 1% increase in interest rates is about £850 more on the average mortgage, so it is hugely important to families up and down the country. The OBR has said that the measures that we have taken today will mean that inflation is lower than it would otherwise have been. That means that the Bank of England is under less pressure to increase interest rates, which for reasons that he knows are such a worry for so many families.

Sir William Cash was concerned about the ever-increasing costs of the HS2 rail project:

My right hon. Friend argued for sound money and sound foundations. Would he be good enough to explain how it is that High Speed 2 will continue beyond Birmingham at a verifiable cost of at least £40 billion, when every independent report on HS2 condemns the project and confirms that phase 2 will make rail services to all west coast destinations north of Birmingham much worse? I ask him to make a clear commitment to keep this matter under review at all costs; it is in the national interest.

Hunt said:

My hon. Friend is right that the increases in the budget for HS2 are disappointing, but a strong economy needs to have consistency of purpose, and that means saying we will make sure that we are a better connected country. The lack of those connections is one of the fundamental reasons for the differences in wealth between north and south, which we are so committed to addressing. There is a bigger issue about the way that we do infrastructure projects: it takes too long, and the budgets therefore get out of control. We are just not very good at it, and we have to sort it out.

Theresa Villiers rightly asked how soon we could move to a lower-tax economy if the forecasts are wrong. For me, this was the question of the day:

I thank the Chancellor for the announcement on schools funding, which, as he knows, is something that I raised with him as being crucial. Can he also confirm that, if current forecasts about economic recovery and inflation prove to be overly pessimistic, we will move more quickly than he has announced today towards delivering a lower-tax economy?

Hunt was non-committal:

My right hon. Friend is an immensely experienced colleague. She is right to point out that there is always inaccuracy in any forecast, and there is always variation from fiscal event to fiscal event, so we keep all those decisions under review in the round. I think it is still important to have forecasts—that is better than not to have them—but we keep all those decisions under review.

Virginia Crosbie from Ynys Môn in Wales asked how soon the new nuclear programme would begin:

This Government’s commitment to Sizewell C and large-scale nuclear is welcome, and it was noted that Labour’s shadow Chancellor failed to mention nuclear. When will the launch of Great British Nuclear be announced, and will its scope include large-scale gigawatt nuclear at sites such as Wylfa in my constituency, as well as small modular reactors?

Hunt was encouraging:

There is no more formidable advocate for big nuclear investment on Ynys Môn than my hon. Friend. Indeed, when I went on a family holiday to Ynys Môn this summer, she tried to persuade me to visit the potential site of a nuclear power station with my children. I apologise that I did not take her up on the offer, but it shows her commitment. My right hon. Friend the Business Secretary will be making an announcement soon on things such as the launch of Great British Nuclear—I hope before Christmas, but if not just afterwards—because we want to crack on with our nuclear programme.

Richard Drax was concerned about the burden on the taxpayer, another excellent question:

I have huge sympathy for my right hon. Friend. We are facing severe financial challenges for the reasons he explained so well, but Members on both sides of the House are promising to spend billions and billions more pounds. I remind the House that it is the private sector, and hardworking people through their taxes, who pay for Government expenditure. Does my right hon. Friend agree that raising taxes on both risks stifling the growth and productivity that he and I both want, and that would counter the recession we are now in?

Hunt defended his budget:

My hon. Friend is right to make the case for a lightly taxed dynamic economy, and I would like to bring taxes down from their current level. We are faced with the necessity of doing something fast to restore sound money and bring inflation down from 11%, which is why we have made difficult decisions today. But yes, my hon. Friend is absolutely right: there is no future for this country unless we get back on the path to being a lower taxed economy.

Mark Pawsey asked about small businesses:

My constituents in Rugby and Bulkington will not enjoy the tough decisions that the Chancellor has had to make today, but they will understand the need for sound finances after the huge expenditure that the country has made on the pandemic and supporting people with their energy costs as a consequence of the war in Ukraine. They will also want to know that businesses will continue to invest to grow and to create jobs. Will he speak about the incentives that still exist for businesses to do exactly that?

Hunt pledged his support:

I am happy to do that. My hon. Friend is quite right to raise those issues. We are doing a lot of short-term things, including help with energy bills as well as business rates. As we move to a new business rates system, we are freezing the levels at which business rates can increase and introducing a 75% discount next year for retail, hospitality and leisure businesses. Fundamentally, as a Conservative Government, we know that we cannot flourish as an economy without flourishing small businesses, and we will back them to the hilt.

Greg Smith asked what Hunt was doing about reducing fuel duty:

I absolutely agree with my right hon. Friend when he talks about the inflationary pressures coming from the aftershocks of the pandemic and the war in Ukraine. We see that at the fuel pumps and, more significantly, our haulage and logistics sector sees it with the enormous level of taxation on diesel in particular driving inflation to get food and goods on to our shelves. As he prepares for the March Budget, will he look at the inflationary impact of fuel duty on top of the high cost of diesel and see whether we can reduce it?

Hunt said he was looking at the issue:

I assure my hon. Friend that I will absolutely do that. We have a little time, and I know that fuel duty is an important issue to him and many other colleagues.

March 2023 — fuel duty hike

Hunt’s answer to Greg Smith on the fuel duty hike sounded reassuring, but GB News’s economic editor Liam Halligan uncovered a planned fuel duty hike of 23% for March 2023 from the OBR forecast. It would be the first since 2011:

Here’s Liam Halligan talking about it:

Forbes noticed it, too, bringing the news to an even wider international audience:

Fiscal drag

The Times had an article on the upcoming fiscal drag following Hunt’s budget:

Disposable incomes, after adjusting for inflation, will fall by 4.3 per cent in 2022-23, which would be the largest fall since records began in the 1950s. It is set to be followed by the second largest fall — in 2023-24 — of 2.8 per cent.

… Despite the aspirations of Rishi Sunak to create a low-tax economy, Britain is on course for its biggest ever tax burden as hundreds of thousands of workers are dragged into higher income tax bands by the freezing of thresholds and allowances while businesses also face a jump in levies, including employment taxes.

The tax burden is set to rise to 37.5 per cent of GDP in the financial year ending 2025, reaching the highest level since records began shortly after the Second World War.

The level of taxation as a share of the national income will rise to 36.4 per cent of GDP this year and 37.4 per cent in the financial year ending 2024, breaking the previous record.

Recovery is not likely to begin until 2025, several months after the next general election. This is accurate only if Conservatives are still in power by then:

GDP is expected to rise by 4.2 per cent this year before falling by 1.4 per cent next year, only returning to pre-pandemic levels by the end of 2024. However, growth is expected to pick up to 2.6 per cent the following year and 2.7 per cent in 2026, following a recovery in real incomes, consumption and investment.

The Telegraph also had an article on fiscal drag:

Nearly a quarter of a million workers will be dragged into paying the 45p rate of income tax after Jeremy Hunt slashed the threshold at which it is charged.

The salary on which the additional rate is payable will be reduced from £150,000 to £125,140 effective next April, Chancellor Jeremy Hunt announced in the Autumn Statement, and frozen until 2028, forcing 232,000 workers into paying the top rate of tax for the first time and costing these quarter of a million taxpayers £620 on average, according to wealth manager Quilter.

The number of workers paying 45pc has more than doubled since the rate was first introduced in 2010 – rising from 236,000 to 629,000 today – as wage inflation has pushed more taxpayers into the highest income tax band.

Lowering the threshold will cost the 629,000 workers earning over £150,000 who are already impacted by the 45pc tax an additional £1,250 …

Just two months ago, then-Chancellor Kwasi Kwarteng promised that the top rate would be abolished altogether. But now the Government is hoping to earn £420m in 2023-24 by catching more taxpayers in the 45pc net, and almost double that – £855m – in 2027-28.

Neela Chauhan of accountancy firm UHY Hacker Young said the move was “a major attack” on higher earners.

She added: “It’s going to bring in people into the upper rate who feel that they are far from being rich.”

Tax firm RSM said that there are also unexpected consequences of slashing the additional-rate threshold and the Chancellor had opened the door to a new 67.5pc tax rate.

Taxpayers earning over £100,000 lose their personal allowance at a rate of £1 for every £2 of income.

This means for every £100 they earn between £100,000 and £125,140, a worker takes home just £40 – because £40 is lost to income tax and another £20 to the tapering of the personal allowance – creating a 60pc tax trap.

Dismal headlines

The Guardian has a breakdown of last Friday’s front pages, which were bleak.

The Telegraph noted the austerity of George Osborne, Chancellor when the Conservative-Lib Dem coalition took over from in 2010, and the Labourite policies of his predecessor Gordon Brown. At the bottom of the page is an analysis from Lord Frost:

Lord Frost’s analysis is pro-Truss/Kwarteng

Lord Frost points out that the OBR are predicting what Liz Truss did just a few weeks ago:

This was a very curious Autumn Statement. For the last month, we have been told that Britain needed to re-establish the confidence of the markets and put in place renewed fiscal discipline, supposedly so carelessly squandered by Liz Truss. “Eye-wateringly painful decisions” were coming for all of us …

… public spending will be at its highest since the 1970s and taxation the highest since the Second World War. Both only start to fall, gently, in the late 2020s, and then only because of some pretty heroic assumptions about growth. Indeed, under Liz Truss we were told that 2.5 per cent growth was impossible – yet the Office for Budget Responsibility (OBR) is predicting exactly that for 2025 and 2026.

How do we explain this?

To do so, I think, we have to go back to that extraordinary week in mid-October, when Truss’s government blew up on the launch pad

She was levered out of Downing Street with the argument that she had been careless about the public finances, casual about fiscal discipline and had lost market confidence. An emergency correction was needed – tax rises or spending cuts, and probably both.

Yet on taking office, our current government will have found – as the OBR has now acknowledged – that we were already into a deepening recession. Tightening fiscal policy with growth collapsing and interest rates increasing globally would clearly have been an insane policy, one at variance with what virtually every economist would suggest. But, having destroyed the Truss administration for being insufficiently fiscally disciplinarian, the Government could hardly overtly change course itself.

That is why we got what we got. Keep growing spending, raise taxes now on unpopular groups, defer deficit reduction and everything else until 2025, and meanwhile talk a lot about austerity and discipline to disguise the reality that this is likely a similar fiscal policy to what Truss’s would have been, just at higher levels of tax and spend. Then, after the election, if the Conservatives are still in power, it can all be looked at again …

… Taxes on business wreck investment and growth. Taxes on the (not very) rich destroy incentives. Britain’s hard-won reputation for being a low tax country is permanently lost. And we all have less of our own money and are less free.

Another defence of Trussonomics

The Mail reminds us that the Truss plan was to cap energy prices for two years. Hunt has reduced this to the end of March 2023:

Average energy bills will rise to £3,000 a year from April as Chancellor Jeremy Hunt confirmed he was scrapping previous Government plans.

In his Autumn Statement to the House of Commons, Mr Hunt revealed changes to the ‘Energy Price Guarantee’ would leave Britons facing higher gas and electricity payments next year.

When former prime minister Liz Truss first announced the cost of living support in September, she outlined how average energy bills would be frozen at £2,500 a year for the next two years

Delivering details of an altered plan today, Mr Hunt revealed the Energy Price Guarantee would now be set at a higher level of £3,000 a year for average households until April 2024.

Of course, those who use less energy at home might have less to pay:

The plan only caps the cost per unit that households pay, with actual bills still determined by how much is consumed.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said:

The fact that this comes on top of so many other price rises means life is going to get even tougher next spring.

More Trussonomics

The Spectator‘s editor Fraser Nelson wrote an analysis of the budget for The Telegraph, ‘This could turn out to be the week that the Tories lost the next election’.

I noted above that some of what Hunt said points far into the future.

Fraser Nelson also observed that fact:

Suspiciously, almost all of this austerity is due to take place after April 2025, after the election. The Tory benches were very quiet during Hunt’s speech, perhaps because they were piecing all this together. It was not just an Autumn Statement being written, but the next Conservative manifesto, too – with all the bad stuff saved for after the vote. Hardly the behaviour of a party expecting to win.

As one minister put it: “This was the day we lost the election.” This is how some Tories see the Autumn Statement: a suicide note, wrapping a poison pill for a Keir Starmer government to swallow.

This is the alarming rate of borrowing today. Factor in the previous QE and the generous Sunak pandemic programmes when he was Chancellor:

Even now, the Government is borrowing £485 million a day – or £20,000 by the time you finish this sentence. It all needs to be repaid. And the interest we all have to pay for such debt is, broadly, treble what it was a year ago.

The new forecasts show a UK Government expecting to pay £484 billion in debt interest over the next five years – almost £300 billion more than was expected this time last year. This year alone it’s £120 billion, twice last year’s sum.

This extra £60 billion has had to come from somewhere. It’s enough to double the size of the military, treble the police force or rebuild every school or hospital. But instead it is dead money, servicing an old debt – and things need to be squeezed to make room for it. For years, Tories wrote cheques, for HS2 and more, barely thinking about the cost. Now the bill has landed.

Nelson doesn’t mention the number of times long-serving Conservative backbenchers warned Sunak over the past two years that the bill would come due, but I saw them in parliamentary debates being duly ignored. To Sunak, those men were mere Thatcherites, so last century. Rishi told us we could borrow with little consequence. Not so.

He created a lot of our current problems and campaigned in August that he would be the candidate to get us out of this situation.

Now he is No. 10, just as he wanted to be from the beginning:

Sunak can’t be blamed for the debt interest. But he might have been expected to have better ideas of how to get out of the mess.

Of the Autumn Statement, Nelson writes:

Liz Truss said her message was “growth, growth, growth,” but Sunak’s seems to be “brace, brace, brace”. A massive fiscal impact lies ahead, he says – and our mission is to recognise it, make our peace with it, and accept that talk about a low-tax future is futile. So his Autumn Statement did not kick-start a recovery. It was, instead, a requiem for growth.

Of the August leadership campaign, he reminds us:

During the leadership debate, Truss was asked what advice she would give to Sunak. Don’t be so fatalistic, she told him. Don’t go along with narratives of decline. She had a point. Groundless optimism ended her premiership very quickly, but groundless pessimism can also be deeply damaging.

Nelson wonders how a government can so quickly discount its people:

A million more Brits, for example, are expected to join the 1.7 million already claiming disability or health-related benefits over the next five years. They will, in turn, join the 3.5 million others on out-of-work benefits. Was it so unreasonable to hope that this number might go down, with people helped back to work? We’ve been promised a review into all this, but not much else.

Another assumption is that most of the 400,000 who have dropped out of the economy since the pandemic started, citing long-term sickness, will never work again. It’s hard to find many other countries giving up so readily on such a stunningly large chunk of the population.

Is a uniquely British malady at work here? Or is the real problem a kind of Tory fatalism, where an exhausted governing party thinks the country is now too old, too sick or simply too workshy to get back to where it was in January 2020?

Many conservative voters said at the time that Rishi’s furlough scheme was a bit too helpful — and we were paying for it.

Now we are paying even more for it.

Nelson concludes:

the risk is that voters make up their mind now – and associate Toryism with chaos, broken promises and a general counsel of despair. Labour just needs to promise to do things better. As things stand, it’s not a very high bar.

Feeling fleeced yet?

The Telegraph‘s editorial warned, ‘Hard times ahead for British taxpayers’:

Unlike the tumultuous response to Kwasi Kwarteng’s unfunded growth measures in September, the market reaction was muted, which is precisely what Mr Hunt hoped for, even if the pound fell against the dollar amid forecasts of a year-long recession …

… benefits and the old age pension will rise in April by 10.1 per cent, the inflation rate in October.

This continues a trend of recent years whereby working people are expected to pay more in tax to protect social programmes that successive governments have been reluctant to reform. Although headline tax rates have not risen, the extended freeze on allowances at a time of double-digit inflation is a serious hit to the incomes of millions who will be dragged into higher bands. Some three million earners will pay income tax for the first time.

This year will see the sharpest fall in living standards on record, while the tax burden rises to its highest level as a share of GDP in decades. More than 47 per cent of national income will be spent in the public sector. In fact, spending will actually rise in real terms. The cuts are to planned budgets.

Rishi Sunak and Mr Hunt consider this social democratic approach to be fair and compassionate, closing off attack lines from Labour as a general election approaches. But there are consequences for the long-term well-being of the country if working people and businesses feel they are being fleeced to prop up failing public services and a benefit system in need of a drastic overhaul.

Essentially, the productive part of the economy is being squeezed to prop up the unproductive. The problem Mr Sunak faces is that, by 2024, the Conservatives will have been in office for 14 years and they need to offer voters a better slogan than “Labour will be worse”. In fact, Labour would support many of the measures in the Autumn Statement, from loading more tax on the wealthy to increasing windfall taxes on the energy companies.

ministers need to prepare for the worst and could proactively address the biggest drags on the economy, above all the NHS, social care and welfare benefits. The health service continues to soak up huge sums – with another £6 billion announced yesterday – and yet produces worse outcomes. Its shortcomings are causing problems throughout the economy, with treatment backlogs contributing to acute manpower shortages which the Government intends to fill by increasing immigration.

The Spectator‘s political editor James Forsyth, a close friend of Rishi Sunak’s, explained in The Times why this recession is different to previous ones and why we need more people in the workforce. I hope his friend pays attention to this:

One bright spot amid the gloom is the unemployment rate, which is just 3.6 per cent, down from 3.8 per cent this year. This is close to historic lows. But even this glimmer is tarnished. The low unemployment number disguises how many people have left the labour force: one in five working-age Brits are economically inactive, meaning they are neither in work nor looking for it. More than five million are claiming out-of-work benefits.

The recession may last a year, perhaps two — but it will be different. Unemployment, as formally defined, won’t exceed 5 per cent even during the worst of the downturn — in the 1980s it went into double digits. Seldom have there been more vacancies in the economy. It’s an odd form of recession where almost anyone who wants a job can find one, but that’s the situation we’re in. Almost every month, the number of those not looking for work grows: it jumped by 169,000 in the three months to August. That is more than the population of Oxford.

This has consequences. The OBR thinks the cost of health and disability benefits will rise by £7.5 billion — quite a sum. A shrinking labour market is also one of the reasons why the Bank of England thinks potential growth is now a mere 0.75 per cent even in 2024-25. The Tories desperately need to get back to moving people from welfare into work — not just to reduce the welfare bill but also to boost the economy

Alongside those not in work nor looking for it, there are 970,000 people on Universal Credit who are working very limited hours in an economy where employers are offering shifts. Hunt announced that about 600,000 of them will now be required to meet a work coach to try to increase their hours. This signals a return to Tory welfare reform …

to ensure taxes don’t need to keep going up indefinitely, two things are needed. The first is a renewed emphasis on public-sector reform. The Tory mantra used to be more for less from public services. But in recent years, it has felt like the opposite is the case. As the Institute for Fiscal Studies pointed out this week, the NHS has more money and more staff than it did before Covid yet is treating fewer people on the waiting list. This needs reversing if the tax burden is not to continue climbing ever higher.

The second is the economy needs to grow. Meat needs to be put on the bones of the growth agenda that Sunak and Hunt set out this week, with further incentives for businesses to invest.

After the debacle of the mini-budget, this autumn statement was always going to be about steadying the ship. Yet satisfying the markets is a necessary but not sufficient condition for a successful government. Sunak and Hunt must now deliver on public service reform, moving people from welfare into work and getting more out of the health and education budgets.

The Telegraph had more on the parlous state of the NHS, despite more taxpayer money being dumped into it, all for nought:

An analysis by the Institute for Fiscal Studies shows the health service in England carried out 600,000 fewer procedures in the first nine months of 2022, compared with the same period in 2019.

The NHS’s budget rose from £123.7 billion in 2019-20 to £151.8  billion in 2022-23, with the extra funding tied to a target of increasing elective hospital activity by 30 per cent compared with pre-pandemic levels. This will not only be missed but matters have worsened. Why is no one being held to account?

Record sums have been poured in for years, yet there is now a waiting list of more than seven million patients. Working practices remain stuck in the past, with consultants complaining that hospitals are “like the Mary Celeste” at weekends, while most GP surgeries are only open on weekdays, pushing patients to overstretched A&E services.

The NHS unions are not helping in their demands for more money.

The article concludes:

There is something fundamentally wrong with the NHS which politicians must confront before it crashes and brings the rest of the economy down with it.

Hunt puts economic hope in migrants

It seems the OBR, a quango started by the Conservative Chancellor George Osborne and staffed by Labourites, has convinced Jeremy Hunt that he should increase our already heavy migration levels to boost the economy.

That’s a left-wing idea that has never worked.

Home Secretary Suella Braverman will oppose that, but can she succeed? Only a few weeks ago, a 90-minute argument with Liz Truss and Hunt resulted in Braverman’s resignation. Her security violations were a likely smokescreen for what really happened.

The Telegraph reported:

Jeremy Hunt is relying on a surge in net migration to more than 200,000 people per year to help deliver economic growth as he oversees a sharp rise in the tax burden to its highest ever peacetime level.

The Office for Budget Responsibility (OBR) predicted net migration – the numbers entering the UK minus those leaving – will be 224,000 next year, before gently declining to settle at 205,000 a year from 2026 onwards.

This is dramatically higher than the OBR’s March estimate, when it predicted that net migration would be between 139,000 and 129,000 in the same years, some 80,000 lower.

It is also significantly higher than the long-term “ambition” of Suella Braverman, the Home Secretary, to reduce net migration to below 100,000 – similar to the target of Theresa May, one of her predecessors in the post.

The increase in migrant labour will help to buttress Britain’s economy as Mr Hunt imposes higher taxes on earnings, jobs and investment. The OBR said that an increase in migration would help add to the potential size of the economy.

However, rising costs from tax are creating “growing disincentives to work”, reduce business investment and depress wages, according to the OBR itself.

Business groups were even more damning. The Chancellor talked a lot about “hard work” and “fairness” in his Autumn Statement. But workers, entrepreneurs and businesses have been left to pick up the bill to keep Britain’s welfare state on the road.

The OBR are being deeply irresponsible in advocating city-sized populations coming from abroad each year.

Where will these people live? How is our infrastructure — medical facilities, schools, water supply — increase to meet this demand year upon year?

Anyone travelling by Tube can pick up a copy of the Evening Standard to read about how many British twenty-somethings in London cannot find a room to rent. In many cases, there are 100 of them chasing every available room. The Standard interviews them. Their stories are heart-breaking. These young people are signed up to every rental app, to no avail.

Council tax increasing

On top of all of this, The Times reported that Hunt has given the green light to councils to increase council tax:

… the chancellor announced “more council tax flexibilities”, enabling councils in England to raise council tax by 3 per cent a year (up from 2 per cent) from April 2023 and increase the adult social care precept by 2 per cent a year (up from 1 per cent) without having to hold a referendum — leaving councils free to raise the tax by up to 5 per cent next year.

Their article has charts of various council tax rates and offers this example:

If they decide to increase council tax by the full 5 per cent, council tax band D payments would rise by £115 from £2,300 to £2,415 a year in Rutland in the East Midlands — the local authority with the most expensive tax bills in England — while in Westminster in central London, the cheapest authority, they would increase by just £43 from £866 to £909 a year.

Short takes

The Telegraph has an article on winners and losers from the Autumn Statement. There are only two groups of winners: housebuyers and pensioners/benefits claimants.

The Guardian interviewed some of Hunt’s constituents in leafy South West Surrey. They are unhappy with him as MP and are equally unhappy with the Government.

Guido Fawkes’s sketchwriter summed up Hunt’s announcement as follows:

What was the job of the day? To persuade the markets that all was under control. That debt-to-GDP would fall in reasonable time, that things would get back to normal in his cool, technocratic, managerial hands.

It’s what we all need, to believe that someone knows how things work and that they know what they’re doing. That there is such a thing as “sound money”. That the great, communal hallucination of financial reality may be preserved.

In Guido’s view, the Chancellor did exactly that. (Pound crashes, housing market collapses, the global financial architecture disappears into the Pacific Trench)

The readers’ comments near the end of that post have to do with the raw deal Liz Truss got. Here’s the exchange:

I find it impossible to believe that Liz Truss did so much damage in a couple of weeks with a mini budget which was never even enacted to require today’s grotesque socialist budget. Hunt and Rishi must be following an ideological policy and using Truss as their excuse.

Yes, she’s been made a convenient scapegoat by the WEF shills, to cover all their earlier and current mistakes and wrongdoings.

She went too far too fast and, by doing so, gave the one nation Tories and SunakHunts the opportunity to bring her down. The real villains are Sunak and Bailey [Bank of England governor] with their money printing and inflation denial. We are paying for their mistakes.

She didn’t go too far too fast. That is the Conservative spin. The Socialist spin is that she crashed the economy. It was cautious and a promising start, a direction of travel being set, nothing more – except for that huge two year package on the gas bills which was pure socialism and not mentioned by anyone.

The true Conservative spin is that, as an experienced Cabinet minister, she didn’t scan the political and financial hinterlands and underestimated the faux Conservative forces ranged against her. Once she u-turned she was done for.

On another of Guido’s posts, a reader posited that this is all about reversing Brexit:

The champagne socialist billionaire Rishi Sunak and arch remainer narssisist Jeremy Hunt have nailed the final nails in the socialist party AKA as the Conservative party coffin. They will be wiped out at the next GE for a generation. They want to tank the economy and make everyone feel financial pain so they can say BREXIT didn’t work. They will then seem to come to the rescue with every excuse on the planet and join us up first to the single market and customs union. Then kicking and screaming back into the EU. Why do you think they staged this remainer coup and got rid of Truss? The Truss budget of low tax, high wages, high growth, low government spend and the scrapping of the 2300-3000 EU laws retained on the UK statue book would have taken advantage of BREXIT and boosted the economy. They could not allow that to happen. They want to ditch plans to scrap the EU laws as that will make it harder to leave. They have folded on the NI Protocol and leaving the Jurisdiction of the ECHR. Why? Because they want to rejoin. We now are having forced on us a low wage, high tax, low growth, high government spend economy that will cripple most people financially and small businesses. Who wants to invest in the UK now?

On that note, another reader posted a photo of Hunt and Sunak sharing a laugh, with this fictitious caption:

Hunt: Told you you didn’t need the support of the members.

Sunak: Yes, it was so easy to stab Truss in the back, too. Who needs democracy?

What taxpayers can do

All is not lost for taxpayers. There are ways to mitigate the effects from Hunt’s statement.

Anyone who needs to cut back on food costs, protein in particular, should start eating eggs, which are cheap and the best source of protein around. Supposedly, they’re in short supply, but I bought a dozen only yesterday.

The Telegraph has an excellent article on various egg preparations, whether sweet or savoury. It’s well worth reading.

The paper also has a helpful article about what taxpayers can do to mitigate Hunt’s raid on their money. Some will require advice from a financial planner. The most important tip is to get one’s capital gains in order and start liquidating shares or funds to put into an ISA — a process called ‘bed and ISA’ — without exceeding the CGT thresholds. This has to be started well before the end of the 2022-23 tax year in April, when the current capital gains threshold of £12,300 expires and becomes £6,000 for one year, then £3,000 the year after that.

Good luck!


Since the pandemic ended, I have been puzzled by the difficulty that British businesses have had in finding employees.

A month or so ago, employers encouraged older people to come out of retirement to fill in the gap. Not on your Nelly, folks. They were the ones who wanted us to retire because, for some, it was like working with their parents.

A year ago, it was great news to discover that the British government granted 6 million EU citizens settled status, allowing them to stay post-Brexit. That was twice the number that Home Secretary Priti Patel expected two years ago.

Then there are all the non-EU immigrants who have come here legitimately in recent years.

Therefore, one would imagine that we would have enough employees at the ready to fill our vacancies. After all, this influx has increased England’s population by approximately 10 per cent.

Not so.

On August 20, 2022, The Spectator reported on what is actually happening in Britain’s employment market: ‘Don’t blame Brexit for our lack of workers’.

Excerpts follow, emphases mine:

It has become received wisdom that Brexit has condemned Britain to chronic labour shortages …

It is a notion which is easily disproved, however, by a simple figure published this week by the Office for National Statistics which went woefully under-reported. There has been no drop in migrant workers in Britain. On the contrary, there were 6.3 million foreign-born workers at the last count – a record high. This amounts to an extraordinary 19 per cent of all workers – higher even than the United States. We don’t hear much debate about these numbers. Perhaps that’s because, since Brexit, immigration has become less controversial – as one would expect with the system now being under democratic control.

It is true that the number of EU-born workers in Britain has fallen slightly, from 2.44 million to 2.39 million. But this has been more than offset by the rise in foreign workers from outside the EU. This figure has risen from 3.37 million to 3.86 million. Indians, Nigerians and South Africans are now among the biggest groups of incomers.

Post-Brexit, entry requirements were lowered for non-Europeans and we now welcome as many migrants as at any point in our history.

Then we have the other side of the story, which is the number of working-age people on benefit:

Why does the number of vacancies stand at a near record high? The mystery can be explained by another under-reported figure released this week. While there may be just 1.5 million officially unemployed, there are 5.3 million on out-of-work benefits – sickness, incapacity and so on. That amounts to on average 13 per cent of the working-age population, and closer to a quarter in Hartlepool, Middlesbrough and Blackpool. Nearly a fifth of the population are on out-of-work benefits in Birmingham, Glasgow, Liverpool and Hull.

As necessary as it was during the time, furlough during the pandemic did not help. When furlough ended, it seems that a large number of people living in Britain qualified for benefits. Many people are now used to living on less and are content staying at home:

Studies show that the longer people go without work, the harder it is for them to rejoin the world of employment – and furlough proved that point. As the pandemic subsided, extra effort should have gone into providing job coaching and other support. Instead, that provision dropped. Now, those on Universal Credit can avoid having a weekly meeting with a job adviser by taking on just nine hours of work a week. Given the sheer number of job vacancies in Britain, the requirement should be raised to (at least) 20 hours.

The fact that 5.3 million are being kept on out-of-work benefits ought to be one of the most discussed aspects of British public life. But this scandalous number is not published by the government: it can be found only by diving deep into the official DWP database and even then it comes with a six-month lag. The figure is published regularly on The Spectator’s data hub, but nowhere else. Such is the lack of attention paid by the Tories to the welfare reform project that was the defining mission of David Cameron’s coalition.

The Spectator‘s data tracker can be found here. Benefits statistics are at the bottom of the page.

The new Prime Minister can spearhead reform in this area starting now:

Inflation is now officially over 10 per cent – with predictions that it may hit 13 per cent in October. But there are signs that it may then fall quite quickly.

That means now is the time for bold economic reform. For as long as the official number of job vacancies stands at almost twice the average of the last decade, there is no excuse for the Tories not to help people back into work.

Let us hope that Liz Truss and her relevant new Cabinet members will be willing to take on this reform. It will be an arduous task, and it would be easier to do nothing. However, this type of reform is something that only the Conservatives can — and should — do.

There is so much to write about the EU Referendum that it would take days.

However, here is a penultimate post with a set of topics to consider before voting on Thursday, June 23.

Tone of the arguments presented

The Chancellor of the Exchequer, George Osborne, has threatened the UK with a ‘punishment’ budget if we vote Leave.

This makes no sense because we already have our budget for the year and, even if Leave wins, we are still fully part of the EU for the next two to four years until the government negotiates our full exit.

Therefore, one can conclude only that this is the final scare tactic of Remain’s Project Fear.

One of the comments following The Guardian‘s story on the ‘punishment’ budget makes excellent points about the way both Remain and Leave presented their respective arguments (emphases mine):

LEAVE is about hope, independence and a national identity our children can be proud of. REMAIN, is all about fear, threats and bullying. In the history of the UK peoples, when have we ever given in to threats and fear? Because the electorate simply WON’T do as our elitist, privileged superiors tell us. They threaten Armageddon, they use fear for they lack reason and honesty. The Guardian is legitimising FEAR as a means to subdue a democracy. Wonderfully liberal, precisely what the wealthy, know best political elites have done for decades. A vote to remain, is a vote for the same. Or we refuse fear, we refuse bullying, we vote to leave and raise two defiant fingers to their smug arrogant faces!

Five questions the government won’t answer

The surge in EU migration to the UK in recent years has raised questions in people’s minds — sometimes prompted by television documentaries, newspaper exposes or personal observation — about UK benefit money sent abroad. Child benefit figures prominently.

On June 15, the Daily Mail had an article describing how four Conservative MPs have accused Cabinet Secretary Sir Jeremy Heywood of showing ‘contempt for Parliament’ by refusing to reveal the amount of child benefit sent to other EU countries.

The MPs have accused Sir Jeremy of politicising the civil service in order to protect Prime Minister David Cameron’s Remain campaign. Other ministers are also implicated.

These are the five questions the government refuses to answer:

Q. To ask the Secretary of State for Education, what her policy is on taking account of the effect on the demand for school places caused by immigration (a) in general and (b) from nationals from other EEA countries.

A. It has not proved possible to respond in the time available.

Q. To ask the Chancellor of the Exchequer, what estimate he has made of annual claims made for (a) tax credits and (b) child benefit by EU nationals who remain in the UK for less than one year in each of the last three years.

A. The information requested is not available.

Q. To ask the Chancellor of the Exchequer if he will estimate the cost to the public purse of child benefit payments paid to non-UK citizens in each financial year since 2010-11.

A. Around 7 million people are receiving Child Benefit. To extract and collate the value of all payments made to EU migrants for children living outside the UK in the format requested could only be provided at disproportionate cost.

Q. To ask the Secretary of State for Health, how many nationals of other EU member states registered with a GP in each of the last 10 years.

A. The requested information is not collected centrally.

Q. To ask the Secretary of State for Work and Pensions, how many people from other EU member states were in receipt of housing benefit in each of the last 10 years; and what the total cost to the public purse was of those people claiming that benefit in each of those years.

A. The information requested is not available and could only be provided at disproportionate cost.

Conservative MP William Wragg co-ordinated the written complaint, supported by fellow MPs Bernard Jenkin, Anne Main and Karl McCartney.

Wragg said:

The public will be appalled and surprised to learn that the Government refusing to tell us how mass uncontrolled migration from the EU is affecting these vital public services.

Remaining in the EU means that there will be more demand on the NHS, more pressure on schools, more pressure on social housing, and more costs to taxpayers in benefits being paid to EU migrants, some of whom send benefits home to their children who do not even live in the UK.

However the public will be shocked to see that the Government either don’t care, or lacks the courage to admit this.

The Cabinet Office had no comment.

Fishing stocks and quotas

On June 15, an early evening edition of Question Time on BBC1 featured Justice Secretary Michael Gove answer questions from the audience about his case for Leave.

Nearly all the questions he received were from people who backed Remain.

At one point, Gove brought up the control we would have over our fishing stocks. He described how his father had to close his own fishing business in Aberdeen in the 1980s because of EU rules. Notional moderator David Dimbleby said that was untrue, because The Guardian had interviewed Gove’s father who said EU regulations had nothing to do with it per se. There were a myriad of local factors which caused him to wrap up his company.

Gove accused The Guardian of misquoting his father. The paper then reprinted the full transcript of the reporter’s conversation with Gove Sr. The Mail reported:

After the newspaper approached the Cabinet Minister for reaction to his father’s remarks, a clarification was issued.

Mr Gove Snr said he would be voting Leave and was proud of his son for standing-up for people who lost their jobs due to the EU.

“I don’t know what this reporter is going on about,” Mr Gove Snr said, according to The Guardian.

Everybody in the north-east knows it was Europe that did such damage to the fish trade. The common fisheries policy was a disaster not just for Aberdeen but all of Scotland. There wasn’t any future for my business. It closed as a direct result of Europe,” the statement added.

However, how did the UK get into such a situation? A 1996 article from The Independent provides the answers. Excerpts follow:

Everyone agrees that too many European boats are chasing too few fish. Britain, along with other EU states, has agreed three Europe-wide programmes to pay off fishermen and scrap their boats. But the British Government refused at first to fund its share (30 per cent) of the compensation, so for many years the scheme was not available to British fishermen.

Why not? The Treasury blocked the scheme because it would have reduced the annual UK budget rebate from Brussels. Whatever the EU spent on paying off British boats would be deducted from the celebrated Thatcher cash- back scheme, which reduces Britain’s net budget deficit with the EU. The Government preferred to spend both its money, and the EU money, in other ways. Fisheries were not a priority.

Spanish and Dutch fishermen became a problem during the 1980s because of the way the British government allowed our fishing boats to be sold and the rights that went with the sale:

British trawler owners sold their boats to the Spanish and Dutch. Or in some cases they sold them to British brokers, who sold them to the Spanish and Dutch. Why? Because they were offering the best price.

The main alternative – EU scrapping grants – were not on offer in Britain. Why were the foreign skippers so keen to buy British boats? Because under British, not EU, regulations, if you bought the boat, you also got the licence to fish and a guaranteed share of the national quota.

It is a purely British government policy to break down the national quota boat by boat, and allow the sale of quotas, in this way. Other EU governments have other ways of enforcing (or in some cases failing to enforce) the Common Fisheries Policy.

In case of a Leave win, this would be renegotiated. One would hope so. Two suggestions follow, although both have a direct negative impact on British fishermen and fleet owners:

Britain could, for instance, insist that all British fishing boats must land a proportion of their annual catch (say, 30 per cent) for sale or processing at a British port. Until now, the Government has declined to do this. Why? Because many Scottish boats, in particular, like to sell their catches directly to Spain or France, where prices for some species are much higher.

Alternatively, EU officials say, the Government could introduce a law insisting that the crews of “British” fishing boats be covered by British social security and health insurance. This would drill several holes below the waterline of the economics of quota-hopping.

The Government has been reluctant to follow this up. Why? Because it would impose a new burden of regulation on British fishermen, as well as quota-hoppers. Many British fishing crews, who operate on a casual basis, would have to come fully into the social security system.

The television documentaries I’ve seen on fishermen over the past two years show them being paid in cash. Some of these men are regular crew. Others are occasional workers.

Fleet owners continue to sell directly to Europe, not only in Scotland but also in Cornwall.

Changes to either arrangement would be as challenging as they would have been 20 years ago.


No one says that leaving Europe would be easy.

However, is freedom and independence worth a few years of pain?

It is, when we consider the alternative of the EU evolving and expanding with new demands placed on us every year.

No one can accurately predict what sort of Britain Leave would produce.

However, nor can anyone predict what the EU will decide over the course of the next few years.

This is our last chance, Britain! Vote wisely on Thursday, June 23!

Tomorrow: Two must-see films on the EU

I have little time for Christians calling for a redistribution of wealth as a ‘Christlike’ principle. Charity is commonly practised among various world faiths to greater or lesser extents, to the poor and to strangers.

Charity, on its own, does not imply salvation unto eternal life.

As for our own faith, Christ told the Rich Man to give up his possessions which were becoming idolatrous to him. When the Rich Man in his supposed piety could not give these up, Christ left him to his own devices.

St Paul called for charity, but often in contexts meant for fellow church members, not the general populace. He also said that those who do not work shall not eat.

Since the early 1970s, Western welfare systems have become a way of life for some families, in certain cases, spanning three generations as far back as the 1980s.

The taxes — legislated ‘charity’ — on the part of the wealthy are subsidising many, including those who work at low- to medium-paying jobs. The middle classes in North America and Europe are continuously squeezed for more money at every turn.

More and more people are taking from society without putting anything back in — e.g. the famous 47% from the 2012 elections. The knock-on effect is that other services — insurance premiums — go up, too. Again, the middle classes feel this most acutely. Furthermore, how many elderly have had to budget between food and fuel during winter months? This penury has been going on in Britain since the 1990s.

Meanwhile, we read countless newspaper reports of families on the dole who are taking — sometimes scamming the system — and biting the hand that feeds them.

The latest example cited is the Tsarnaev family of the Boston Bombings on April 15, 2013. On April 29, the Boston Herald reported:

The Tsarnaev family, including the suspected terrorists and their parents, benefited from more than $100,000 in taxpayer-funded assistance — a bonanza ranging from cash and food stamps to Section 8 housing from 2002 to 2012, the Herald has learned.

“The breadth of the benefits the family was receiving was stunning,” said a person with knowledge of documents handed over to a legislative committee today.

The Commonwealth of Massachusetts has handed 500 pages of documents concerning the Tsaraev family to the state’s House Audit and Oversight Committee. They will be working with the welfare — ‘transitional assistance’ — authorities to investigate further.

HotAir’s Allahpundit asked how this involuntary and mandatory public generosity (those words are mine) could lead to such violence and hatred (emphases mine):

The Tsarnaevs are an interesting mix of mundane social pathologies associated with being poor and bigger ideological pathologies that most poor people never harbor. Allegedly, both mama and papa Tsarnaev were shoplifters. Dzhokhar dealt drugs for spending money, some of which may or may not have been put towards bomb manufacture. Tamerlan received welfare up until 2012, the same year he took off to do God knows what in Russia and long after he and mom supposedly had that phone call in 2011 about “jihad.” Instapundit linked this interesting Mickey Kaus piece from 2001 about a terrorism/welfare connection in Europe in which ethnic antagonism causes resentment among immigrants and welfare gives them free time to explore ideology, but I don’t know how much that applies to the Tsarnaevs. Dzhokhar, at least, seemed reasonably well integrated at school; “ethnic antagonism” from the public generally was probably less of a factor for them than for European Muslims because they’re white, although the anecdote in the update here suggests there may be more to it than meets the eye. And further muddying the waters of causation is the apparent fact that Tamerlan was simply a bad seed, especially towards women. What happens when you throw a radical, domineering personality into an already bad mix?

The Mickey Kaus piece from Slate in 2001 to which Allahpundit refers is useful. This has all happened before. Excerpts follow, more at the link. Emphases in the original:

Here are some suspected terrorists in the news:

  • Zacarias Moussaoui, the French North African charged with conspiracy in connection with the 9/11 attack, became an Islamic radical living in London “while drawing welfare benefits and studying economics,” Newsday reports.
  • Ahmed Ressam, the member of Algeria’s Armed Islamic Group who was arrested crossing the U.S. border with bombs designed to blow up L.A.’s airport, moved to Canada in 1994 where he “survived on welfare payments” and petty crime, according to terrorism expert Peter Bergen.
  • Metin Kaplan, who heads a German radical Islamist sect suspected of attempting to fly a plane into the Ataturk mausoleum in Turkey, “claimed social [welfare] benefits in Cologne for many years until 2m Deutschmarks ($1.2m) in cash was found in his flat,” reports the BBC.
  • Abu Qatada, the cleric who taught Moussaoui and is accused of having links to al-Qaida agents in six countries, avoided extradition to Jordan on terrorism charges by settling in England, where “[l]ike many other London-based Arab dissidents, [he] has received regular welfare checks from the British government—and government subsidized housing,” according to the Washington Post. Abu Qatada’s welfare payments were stopped when it was discovered he controlled a secret bank account containing approximately $270,000.

Kaus says that welfare is a way of keeping people isolated in poorer suburbs and cities. I’ll get to a few perspectives on that below. He says that work is a much better way of encouraging people to integrate:

Without government subsidies, they would have to overcome the prejudice against them and integrate into the mainstream working culture. Work, in this sense, is anti-terrorist medicine. (And if you work all day, there’s less time to dream up ways and reasons to kill infidels.)

Of course, this is not restricted to Muslim terrorists. Riots and wildings seem to have burst out of nowhere over the past few years in England, the United States and France. The most recent wilding was in Chicago’s main shopping district on Holy Saturday this year involving 500 youths and only 28 arrests. France’s trains are the target of immigrant youths attacking ticket inspectors and robbing passengers. England had a harrowing several days of riots in August 2011.

Most of these youngsters (!) are living off the taxpayer then have the ignominy to demand more from them through crime.

This is an intractable problem.

I’m not really interested in talking about the reasons behind it; we all (should) know what they are. I’ve discussed Marxism, the Frankfurt School, class struggle, the Fabians, Antonio Gramsci, Cloward-Piven Theory, maintaining voting blocs, materialism and so on.

This is a call, for what it’s worth, for welfare reform.

Reform could take decades, because there are too many who have an interest in maintaining what has become a cancerous status quo of state benefits. There are more than the recipients involved.

Inspiration Boost has a graphic of Benjamin Franklin along with his thoughts on the welfare state as he saw it first-hand in the 18th century:

Benjamin Franklin on poverty Inspiration Boost Benjamin-Franklin-Famous-Quotes

Ace at Ace of Spades explored this, taking into account the terrorism and unrest which welfare seems to breed (language alert in the comments, emphases mine):

I think there’s a sociological reason at play too. People will find something in their lives that gives them meaning.

For many people, work does give their lives meaning. Few like work, but most understand the accomplishment of standing on one’s own feet and providing for oneself (and one’s family).

The welfare state may put food in one’s mouth, but it does so at the expense at stripping a sense of accomplishment, belonging, and meaning from the recipient. And that void will be filled by something else. While people do not require meaning, as a strict biological matter, as they require food, water, air, and shelter, they do crave it– it’s probably on the level, as far as centrality to one’s being, as sex.

I knew an Episcopalian rector who often discussed the meaning that people sensed about their lives. He believed that our searches in life — in addition to salvation, of course — should involve one for meaning: meaningful relationships and meaningful work which help to identify most fully who we are.

Some of Ace’s readers said that the Tsarnaevs’ money wasn’t all that much in the grand scheme of things. Yet, a few others wondered just how many Tsarnaevs there are in America and the rest of the West. Reforming welfare would save money which seems increasingly poorly spent. Our societies see no return from it.

They discussed what welfare really means in reality. Sure, we say that it should be ‘a hand up, not a hand out’, but when three generations have made a lifestyle of sucking at the public teat, that’s hardly the case.

Ace’s readers posited that welfare today is protection money — although riots, wildings and terrorism seem to have put paid to that notion.

A few readers were affronted by their supermarket experiences. They searched for bargains and brandished discount coupons. Their shopping trolleys had minced beef when others had cuts of prime steak. One shopper in the juice aisle took advantage of an own-brand BOGOF; she says she saw a woman nearby put an expensive name brand of juice into her own trolley. Ace’s reader gently called the woman’s attention to the BOGOF. The other woman flashed her EBT (electronic benefits card) and said, ‘That means nothing to me’. 

This is theft, friends. Ace’s readers are financing this woman as well as the prime steak purchaser.  Yet, the EBT cardholders feel no compunction to live modestly. Hmm.

There is also the notion that welfare, for some, is a form of reparations.

And, for others, it is a form of jizya — a Muslim concept of extorting or taking money from non-Muslims. Ace’s reader Hepcat posted this news story from February 2013 involving the radical preacher Anjem Choudary. Emphases in the original from The Sun, except for those in violet:

SCROUNGING hate preacher Anjem Choudary has told fanatics to copy him by going on benefits — urging: “Claim your Jihad Seeker’s Allowance.”

He cruelly ridiculed non-Muslims who held down 9-to-5 jobs all their lives and said sponging off them made plotting holy war easier.

The Sun secretly filmed him over three meetings also saying leaders such as David Cameron and Barack Obama should be KILLED, grinning as he branded the Queen “ugly” and predicting a “tsunami” of Islamic immigrants would sweep Europe.

Father-of-four Choudary, who has praised terrorist outrages, pockets more than £25,000 a year in benefits — £8,000 more than the take-home pay of some soldiers fighting the Taliban in Afghanistan.

He laughed as he told supporters:

“You find people are busy working the whole of their life. They wake up at 7 o’clock. They go to work at 9 o’clock. They work for eight, nine hours a day. They come home at 7 o’clock, watch EastEnders, sleep, and they do that for 40 years of their life. That is called slavery.

“And at the end of their life they realise their pension isn’t going to pay out anything, the mortgage isn’t going to pay out anything.

“Basically they are going to lose everything, commit suicide. What kind of a life is that, honestly. That is the life of kuffar (non-believer)” …

“Democracy, freedom, secularism, the parliament, all the MPs and the Presidents, all the kuffar’s ideas, everything the people worship, we have to believe that they are bad and we have got to reject them.

“Reject them with our tongue. Reject them with our heart. In our heart have hatred towards them.”

The French have a solution for the Abu Qatadas of this world. I do not know if this will continue under Hollande, but Chirac and Sarkozy followed the policy of deporting radicals first — then sifting through evidence and hearing appeals later. The Sun reports that that between 2001 and 2010, France deported 129 suspected Islamic extremists. During that same period, the UK deported only nine.

So, if a few reading this post still think there should be more wealth redistribution, they’re welcome to it. Only please don’t comment here. Your reasoning and your votes are part of the reason we’re in the state we find ourselves today.

It’s hard to pray for those who hate us and rob us, but, somehow, we must find a way. We must also pray for wisdom — in ourselves and others — to help us overcome this oppressive reality.

Recently, I spent many hours reading Karl Denninger’s insightful Market Ticker (see my ‘UK Libertarian and Other Sites of Interest’ in the left hand column), catching up on this year’s posts and comments.

I’ll go into some of Denninger’s insights on gun control at some point in the future. However, first, a post of his about the dramatic increase in disability benefits among Americans, especially those who are unemployed or have dubious chronic conditions:

The program blew $124 billion last year, with more than 10 million “beneficiaries.”

Many honest people find that, when it comes to claiming disability, the procedures and interviews are arduous. This is not restricted to the United States; it occurs in the UK, France and other Western countries.

Please note that this is in addition to standard welfare and family assistance benefit claimants, such as (a European example):

America is turning into France, welfare wise…

… women in France are paid welfare the moment they are pregnant and they can even get free government houses… so a lot of immigrants come in France and just have babies and are making 50 000+ euro a year with a free house.

That’s very true. There are frequent articles in the press and in French fora about dole claimants. The family assistance offices are normally near the city centres. I’ve seen the one in Cannes and was shocked. There were very few French (ancestrally speaking) people milling around outside. All the rest were relatively recent arrivals.

However, back to the United States and the problem of disability claims. One of Denninger’s readers said that it was very difficult to receive disability benefit for a legitimate illness. Another reader, Flaps10, replied about welfare in general (emphases mine):

You obviously tried to get in through the front door.

In my early 20’s I lived in an inner city area of Portland, OR with my kid’s mom (prior to having kids). We were dirt poor. We met some neighbors who had four kids and were straight up FSA crowd.

They knew the ins and outs of getting welfare, WIC, section 8 housing – the works. “It’s damn near a full time job” they’d say. They knew what to say to the social workers (e.g. the father of the kids didn’t live there) and what to declare and what to deny.

They were good friends but that was my first exposure to FSA mentality. 15 years later I was divorced and single father of my three boys, and their mom went full on FSA just like she’d been taught by our neighbors. She even had the fire department bring toys at Christmas. I was disgusted.

Another reader, Killersdad, explained more about this mentality when involving disability claims:

They keep going to different MDs until they find one that will sign off.

Or they network with other FSA members to find the “right” Doctor.

Have ex friends that pulled the mental bull****. I could not believe how easy it was. They learn which buttons to push.

The stories I could tell …

However, it is relatively straightforward for people to claim disability for the following —


Aztrader: The issue of what is a disability has become the scam. Being depressed is the easiest one to fake. Once a person has been approved for disability, then they qualify for medicare after 1 year. Add in minor children and the payments increase substatially. Each kid under the age of 18 gets between 50% and 80% of mom or dad’s payment. They basically copied the same benefits from the death of a parent and this can really kick up the money received for the family.


Banditfist: I was talking with my girlfriend this weekend. She is an allergist, so she sees a lot of asthma patients. She told me that you would be amazed at how fast the disablility paperwork comes in when a kid is diagnosed with asthma. The mom claims that she cannot work because she needs to take care of the kid. My gf has yet to sign off on the form. She is one who believes that asthma is treatable and controllable.

Going to be interesting when Obamacare goes in full swing. There is a big push for pharmacists to prescribe some asthma medicines….and there would be no liablity on the pharmacists.


Killersdad: Had a tenant, young girl about 25 years old got full disability because she was fat and had mobility problems.

Snowman: It appears the SSA looks very favorably [on] “obesity” being a condition for SS disability. At least according this this lawyer

The Smith, Dickey, Dempster, Carpenter & Harris law practice site (Snowman’s link) tells us that disability claims for obesity became more widespread after 2002 (G W Bush administration):

In September 2002 the SSA issued a new policy on obesity which it now follows to consider the effect of being overweight in a person’s disability claim. The remainder of this column will look at this new ruling on obesity and disability benefits. The SSA defines obesity as “a complex, chronic disease characterized by excessive accumulation of body fat. Obesity is generally the result of a combination of factors – genetic, environmental and behavioral.” The SSA uses a scale called the Body Mass Index (BMI) which was developed by the National Institute of Health to classify obesity in adults …

The SSA has three levels of obesity. Level I is for people with a BMI of 30-34.9; Level II is for people with a BMI of 35.0 -39.9, Level III is for people with a BMI of above 40. Joe’s BMI of 35 puts him at Level II. People at the Level III of BMI are described as having “extreme” obesity with the greatest risk of developing obesity related health problems

The SSA generally accepts the opinion of the claimant’s treating physician to establish a diagnosis of obesity. Obesity is considered by the SSA over a period of time. Temporary weight losses are not considered a cure for obesity. Even though obesity no longer has its own Listing to determine disability, the SSA can find that a person equals another listing as a result of health related problems due to obesity. Obesity is determined to be a “severe impairment” when either alone or in combination with another “medically determinable impairment, it significantly limits an individual’s physical or mental ability to do basic work activities.” The SSA does not have a specific weight or BMI rating that equals a “severe impairment”. The issue is whether the person’s obesity is so severe that it limits his abilities to do basic work activities.

As there is no specific Listing for obesity, the SSA can find a person “meets” the requirements of a Listing if he has another impairment that alone meets the requirement of a Listing. The example used by the SSA cites a case where “obesity may increase the severity of a co-existing or related impairment to the extent that the combination of impairments meets the requirements of a Listing.” The SSA finds this combination to be “especially true” when the obesity is combined with “musculoskeletal, respiratory, and cardiovascular impairments.” For example, there is an Orthopaedic Listing under which a claimant can be found disabled if he is “unable to ambulate effectively”, this is typically as a result of some sort of bone injury or illness such as arthritis, but obesity can be of such a degree that it can “substitute for the major dysfunction of a weight bearing joint.” Such a finding could allow the SSA to pay the disability claim of the person with arthritis and obesity.

If a person has a variety of health problems, none of which meet the level of severity that is required by the SSA for disability, the SSA can consider the impact of the person’s obesity with the other problems and find that he meets the Listing. The example used by the SSA is “obesity affects the cardiovascular and respiratory systems because of the increased workload the additional body mass places on these systems. Obesity makes it harder for the lungs to expand. This means that the respiratory system must work harder to provide needed oxygen. This in turn makes the heart work harder to pump blood to carry oxygen to the body” …

It seems as if the Cloward-Piven Theory — ‘bankrupt the system’ — has been working since its inception in the late 1960s, first tried among welfare claimants in New York State. (For more on the theory, read here and here.)

We have the same disability claims problems in the UK, some of which are occasionally outed in the press.

By no means should we automatically consider a depressive, an obese person or the parent of an asthmatic child as qualifying for disability. That said, this is a serious problem. Both leftists and conservatives are to blame. As are we, in part. It seems as if our sense of self-responsibility is flying out the window.

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