John Healey wants to tell an ‘optimistic story’ about the British economy, he announced today. Perhaps that’s why he refused to say whether taxes will be going up in next month’s Budget.
Healey also announced he is cutting the discount rate on government infrastructure projects, a dry-sounding reform – but one that could create a herd of taxpayer-funded white elephants. More below in Ben Ramanauskas’s piece for CapX today. And still no explanation from the Chancellor on how more public control is supposed to save us all money.
Unsurprisingly, groups defending private enterprise seem increasingly disillusioned with their treatment by the Government, with the CBI calling on Healey to ease the burden on business and the British Chambers of Commerce proposing to scrap the pensions triple lock to pay for lowering employers’ National Insurance on young workers.
Little chance of either of those wishes being granted. But there was some very good news on private sector wages today from the courts. The retailer Next won an appeal as part of the ongoing litigation over an equal value pay ruling which had prevented it from paying warehouse staff market rates where these exceeded pay for shop assistants. The legal arguments continue, but we should be grateful for a partial victory for common sense.
Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.
Marc Sidwell
Editor, CapX
Today’s Takes
Fresh thinking from CapX
Is John Healey crowding out private infrastructure?
Ben Ramanauskas
‘The Chancellor is right to point to the importance of fiscal discipline but lowering the discount rate undermines his stated commitment.’
Today, in his first major speech as Chancellor, John Healey sketched his plans for growth. Among them, he lowered the discount rate from 3.5% to 3% to encourage more infrastructure projects to be built. Unfortunately it will crowd out private projects and risks burdening the country with white elephants, while sticking taxpayers with the bill. Read More
Dear Andy, leave us alone
Ted Grainger
‘Please do not try to be our father, we do not need you or a paternalist state to make our lives better. As Morrissey said, leave me alone.’
Andy Burnham loves Oasis and The Smiths but he clearly hasn’t listened closely to their lyrics. If he had, he would realise how pro-freedom they are. Many problems like high unemployment and crackdowns on free speech have been caused by the state. To remedy them Burnham should instead encourage the self-determination and autonomy that Manchesterism is supposed to embody. Read More
Stat of the Day
Best of the Web
Labour can’t keep blaming Liz Truss
Julian Jessop, City AM
‘The claim that there is still a “Truss penalty” in the cost of UK government borrowing is both lazy and silly.’
In his first big speech as Chancellor, John Healey blamed Britain’s high borrowing costs on the 2022 mini-Budget. But his predecessor has had two years to rebuild fiscal credibility – so why are UK yields still an outlier? The real problem is a new Government set to double down on Starmer and Reeves's bad decisions. Read More
Labour’s rental reforms are hurting tenants
Tim Leunig, Telegraph 🔒
‘No government will get everything right. … But when a clear mistake is made, I learned that the best thing to do is to reverse course.’
The Renters’ Rights Act was an effort to make life better for Britain’s renters, but some measures are producing perverse outcomes. For example, a ban on landlords inviting bids over the asking price has led to flats being advertised at excessively high prices instead. To empower tenants, we need to build more houses. Read More
Why London won't build its next Canary Wharf
Michael Dnes
The Capitalist 🎧
Burnham’s growth plan won’t work
And if you want more...
– How the AfD won in Saxony-Anhalt (The Spectator)
– Expensive energy is bad for British science (Substack)
– What if AI isn’t a job-killer after all? (Noahpinion)
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