For once, the British economy has surprised on the upside. ONS statistics show that the economy grew by 0.4% in July – hardly stellar, but far better than the zero growth that many expected. The growth is mainly in professional services, with AI-related services playing a leading role.
The retail, hospitality and construction sectors have not fared so well. One of Britain’s largest housing developers, Berkeley, warned the Labour Government it may not make enough money to start new projects. It certainly won’t reassure the public that the Government will be able to meet their housebuilding targets. This will also be a big issue for the new Mayor of London, where Berkeley primarily operates.
Meanwhile Andy Burnham is under pressure for apparently delaying the decision to bring the Jackdaw gas field online until after the Holborn and St Pancras by-election. Continuing the long run of slow and confusing decision-making around the North Sea isn’t going to bring bills down.
Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.
Oscar Gill-Lewis
Deputy Editor, CapX
Today’s Takes
Fresh thinking from CapX
Burnham has chosen to feed the welfare monster
Ross Clark
‘If you are not prepared to shave a penny off benefits, not only are you going to fail to fund defence properly, you have little hope ever of balancing the public books.’
Andy Burnham said that he won’t sacrifice welfare spending for national security spending. He has tried to backtrack from that statement since but it shows where his priorities really lie. With the Budget approaching, it also leaves his Chancellor in a bind. John Healey resigned his post under Keir Starmer over insufficient defence spending. But finding new money for defence without cutting the welfare bill is a non-starter. Read More
Why our Overseas Territories must join the UK
John Penrose
‘Rather than being embarrassed by embers of empire, Ministers should fan this post-imperial afterglow into a roaring, modern flame.’
Countries like Argentina and Spain are keeping a close eye on Britain’s Overseas Territories. Whenever they smell weakness from our government they are ready to leap in. We need to offer our territories the opportunity to fully become a part of the UK with voting rights and their own MPs. Read More
Stat of the Day
Best of the Web
Britain is growing. Will Healey mess it up?
Michael Simmons, The Spectator
‘It has been this government’s MO for any tax rises to fall hardest on businesses.’
Despite many forecasts suggesting another month of zero growth, the economy grew by 0.4% overall in July. The growth was led mainly by AI-related and professional services, which were able to cancel out weaker figures in other sectors. Chancellor John Healey needs to be careful not to stop this unexpected growth in its tracks. Read More
Miliband is back in Labour’s driving seat
Patrick Maguire, The Times 🔒
‘At the top of government the striking irony of recent events has been noted: Starmer was supposed to be the foreign policy prime minister, and Burnham his domestic corrective.’
It is no secret that Ed Miliband wanted to be chancellor. But even in his current position he is helping this Government to define itself. His use of moralistic language in his impassioned speech sanctioning Israeli settlers on the West Bank is something we would have never seen under Keir Starmer. It may be performative and self-defeating, but he is still setting Labour’s agenda. Read More
Ministers need to take more risks
Stephen Webb
The Capitalist: our debt is now a national security threat
And if you want more...
– Bono’s hard-won lesson about poverty (The Daily Economy)
– Our future will be built on the shoulders of data centres (Centre Write)
– Quotas won’t solve inequality (UnHerd)
Can we make CapX better?
Or reply to this email to let us know your thoughts.
We'll be back on Sunday, with the Weekly Briefing.