Senior London Labour MP backs further inquiries into growing claims over Rachel Reeves CV and banking expenses
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Yahoo
an hour ago
- Yahoo
Debt-laden Italy now better for living standards than Britain
Britain's living standards fell behind those in Italy for the first time since 2001 in a fresh blow to Rachel Reeves's efforts to boost economic growth and renew the nation's competitiveness. Slow growth, rising worklessness and high inflation are all damaging Britain, raising fears that the UK is losing its status as a rich nation at the same as Italy shakes off its image as an economic basket case. Once adjusted for the cost of living, GDP per capita – a critical measure of wellbeing, and a favoured target of Sir Keir Starmer's Government - is now higher in Italy than Britain. According to the World Bank, Italy's GDP per capita rose to $60,847 (£44,835) last year, overtaking Britain's $60,620. It comes as unemployment rose to 4.7pc in the UK, spending on benefits balloons and inflation is forecast to hit 4pc – double the Bank of England's target – in the coming months. Britain's population is also rising rapidly, meaning GDP is stretched over a larger number of people. By contrast Italy's is shrinking, so even as its economy grows at roughly the same pace as the UK's, GDP per capita is rising more quickly as output is concentrated among fewer people. It comes despite Italy's Government debt of around 130pc of GDP – far above Britain's debt of around 100pc. In its manifesto last year, the Labour party promised to 'kickstart economic growth to secure the highest sustained growth in the G7 – with good jobs and productivity growth in every part of the country making everyone, not just a few, better off'. The Government has since indicated that GDP per head may be a target measure. But on the World Bank's measure, adjusted for living costs, Britain has fallen from fifth to sixth place among the group of seven major democracies, with only Japan further down the rankings. A study from the National Institute of Economic and Social Research earlier this year warned that 'economic stagnation over the past decade is now threatening the UK's position as a place for a high standard of living.' The think tank found the poorest Britons are now worse off than the lowest-income households in countries, including Lithuania and Slovenia, countries once considered far from rich but which are now increasingly prosperous. Efforts to reform the British economy have struggled even as Italy has had more success. Labour's attempts to trim welfare spending and encourage more claimants back to work resulted in a backbench rebellion and a humiliating U-turn. The Chancellor is expected to refocus her efforts on boosting productivity growth ahead of her Budget in the autumn, as she seeks ways to fill a hole of as much as £50bn in the public finances. By contrast economists have hailed Italian prime minister Giorgia Meloni's reforms. Holger Schmieding, chief economist at Berenberg Bank, said Italy had 'outperformed' expectations. 'Italy has cut welfare entitlements under Meloni, so that people have more incentive to work instead of resting idle,' he said, adding that judicial reforms have also made progress. Extra subsidies for home renovations also provided a remarkable boost to Italy's economy, as has EU spending under an economic recovery fund known as the Next Generation programme. The scale of the shift in relative prosperity is significant, both as a sign of Britain's decline and Italy's revival. Andrew Kenningham, from Capital Economics, said it could be comparable with 'Il sorpasso' – the overtaking – of the late 1980s when Italy's economy became bigger than Britain's. That was taken as a sign Italy had finally shrugged off its reputation for stagnation – though it regained that status in the years following the eurozone's sovereign debt crisis. Once again Italy has pushed past Britain, though the UK's GDP remains larger overall. 'It tells us that Italian and British citizens are equally well off in terms of what they can purchase. Average living standards are in principle the same, or in Italy very slightly higher now,' Mr Kenningham said. Italians also have a higher life expectancy than Britons. The country has become increasingly attractive to wealthy households from Britain as investors, entrepreneurs and non-doms seek shelter from rising taxes in the UK and instability elsewhere. 'Of all major countries in Europe, politically Italy is by far the most stable. This is unusual – it is not the history of Italy – but compared to politics in the UK, France, Spain and Germany, Italy looks good,' Mr Schmieding said. 'It has a stable, steady government which is not doing as much as it should, but is not doing anything seriously wrong, which is something you cannot say about many other countries.' Yet for its success, Italy's economy still has its problems. Paolo Grignani, from Oxford Economics, warned that the cash dished out with the renovation 'superbonus' – which gives homeowners tax credits for renovating their houses – 'led to a fiscal imbalance that will take years for the Italian government to rectify,' while construction has slowed since the scheme ended. At the same time, Italian wages are not yet back above pre-Covid levels after adjusting for inflation, he said, unlike those in the UK. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Sign in to access your portfolio
Bloomberg
5 hours ago
- Bloomberg
Visiting London? You Should Pay a Tourist Tax
Taxes have always been as inevitable as death. In Rachel Reeves' Britain, it's looking like tax increases are now as unavoidable as the grim reaper. The chancellor must find billions of pounds to fill a black hole in the public finances before the autumn budget. So far, she has proven unable to cut public spending thanks to a series of rebellions by Labour MPs. And Keir Starmer's 'defining mission' of making the sums add up by turbocharging growth has also been stymied, partly by Reeves' move to hike national insurance for employers in her last budget. GDP figures out Thursday are expected to show an anemic 0.1% increase for the second quarter of 2025. That leaves taxes and, having ruled out increasing the burden on 'working people,' Reeves and her team are spending the summer eying other sources of cash. One idea being pushed by some in Westminster is a tourist tax. It's worth taking seriously, both for the potential to raise some much-needed revenue and as a driver of growth.
Yahoo
11 hours ago
- Yahoo
BBC apologises to Robert Jenrick over Radio 4 broadcast
The BBC has apologised to Robert Jenrick after a refugee charity boss suggested the shadow justice secretary is xenophobic during Radio 4's Today programme. Mr Jenrick has accused the broadcaster of smearing "millions of worried citizens as 'xenophobic' for their completely understandable fears". While appearing on the radio on Wednesday, Krish Kandiah, a director of Sanctuary Foundation, claimed Mr Jenrick had increased "fear of the stranger" among people. Mr Kandiah added: "The technical name for this is xenophobia. "All phobias are by definition irrational. Nevertheless, they have a huge impact. Over the past year, xenophobia has fuelled angry protests outside hotels housing asylum seekers, deepening divisions in our communities." READ MORE: HMRC warning to all UK households as crackdown begins READ MORE: Winning Lotto numbers tonight: Full National Lottery results on Wednesday, August 13 In a letter to the Conservative MP, the broadcaster's head of editorial standards Roger Mahony said the comments "went beyond" what is expected of its Thought For The Day segment. Mr Mahony said: "I have concluded that, while its reflection on fear in society from a faith perspective is broadly in line with expectations of Thought For The Day, some of the language it used went beyond that. "I have asked for the two references to xenophobia to be edited from the programme on BBC Sounds. Please accept my apology for their original inclusion." The content has since been removed from the programme on BBC Sounds. Mr Jenrick said: "Illegal migration is obviously fuelling crime and the public are right to be concerned about it. "It's extremely disappointing the BBC thought it was acceptable to smear millions of worried citizens as 'xenophobic' for their completely understandable fears about undocumented men entering illegally." A series of protests have been held outside the Bell Hotel in Epping, Essex, over recent weeks after an asylum seeker was accused of attempting to kiss a 14-year-old girl. Hadush Gerberslasie Kebatu, 38, denies the charges of sexual assault and is due to stand trial this month. In a statement, the BBC said: "During this episode of Thought For The Day, criticism was made of recent comments by shadow secretary of state for justice Robert Jenrick, about hotels housing asylum seekers. "While the programme's reflection on fear in society from a faith perspective was broadly in line with expectations of Thought For The Day, some of the language used went beyond that and we apologise for its inclusion. "It has been removed from the version on BBC Sounds."
