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New Statesman
an hour ago
- Politics
- New Statesman
The Tories must do more than apologise for Liz Truss
Photograph by Henry Nicholls - Pool/Getty Images. Better late than never, and better something than nothing. The Conservative Party should have distanced itself from Liz Truss at the first opportunity – emphatically, unequivocally and ruthlessly. On the steps of Downing Street on 25 October 2022, as his first act as Prime Minister, Rishi Sunak should have condemned the mini-Budget, apologised to the nation and made it clear that Truss would never be a Conservative parliamentary candidate again. It would have been a justified response to the chaos of the preceding few weeks and a signal that the party had changed. It did not happen. Sunak acknowledged that 'mistakes were made' but left it at that. He was too cautious about splitting his party. The membership had voted for Truss (he should have announced his intention to remove their rights to elect the leader, too) and a large minority of the parliamentary party had backed her. It would have been a bold gamble, and the case for such a move becomes more persuasive when one knows for certain of the electoral obliteration that lies ahead. Maybe we should not be too harsh on the last Conservative prime minister but we do now know how the infamous mini-Budget was brought up at every opportunity in last year's general election, and is continually referenced by Keir Starmer and Rachel Reeves. This is not just out of habit but will be a consequence of extensive polling research. The public remain furious at the chaos and uncertainty that was unleashed. Mortgage-holders, in particular, will not be quick to forgive. The Tories can survive many accusations, and still win elections. But they cannot win while being perceived as economically reckless. Not only is it a political vulnerability, but the Truss experience prevents them from delivering effective criticism of their opponents. At a time when Nigel Farage is advocating turning on the spending taps while also implementing massive tax cuts, the Conservatives are right to say he is being fiscally irresponsible. But when they say he is 'Liz Truss on steroids', it sounds amiss coming from Truss's party (especially when the line is delivered by those who served her loyally). And if the fears that the bond market vigilantes will turn against the UK come to pass, the Tory attack on Labour will also lack real punch. These factors resulted in the most substantial criticism of the mini-Budget from the Conservative frontbench. Shadow chancellor Mel Stride acknowledged that it had damaged the Tories' economic credibility, and that the party should show contrition. Stride – a reassuring figure who was critical of the mini-Budget at the time – was right to do so, but even then there was too much equivocation. Despite the advance briefing, there was no explicit apology. The language was characteristically measured and thoughtful, but what was needed was something a little more eye-catching and memorable. Subscribe to The New Statesman today from only £8.99 per month Subscribe Better still, the sentiments should have been expressed by the party leader, not the shadow chancellor. But when Kemi Badenoch was asked subsequently about the mini-Budget, she equivocated. She started to make the argument that the problem was the higher spending on energy support announced on 8 September, not the unfunded tax cuts set out on 23 September (she should check the dates of the market turmoil) and stated that she 'did not want to be commenting on previous prime ministers'. The strategy of distancing the Tory Party from Truss had been watered down after just a day. It is not good enough. Having left any serious criticisms for too long (31 months too long), this is no time for half measures. If the Conservatives want the right to be heard again by those voters who prioritise economic stability, they need to do this properly. Emphatically, unequivocally and ruthlessly. That means not just taking on Truss, but the thinking behind the mini-Budget. Contrary to the arguments made by the Trussites, tax cuts generally do not pay for themselves. Fiscal responsibility should come before tax cuts. Independent institutions such as the Bank of England and the Office for Budget Responsibility are not to blame for our economic difficulties. The events of autumn 2022 were not the result of a conspiracy but incompetence. The leadership of the Conservative Party should be making and winning those arguments now. This means that it will be impossible to offer unfunded tax cuts at the next general election as part of a retail offer, but that is the price that must be paid to recover economic credibility. While they are at it, there are other aspects of the party's recent history that should be addressed. The Conservatives were deeply damaged by the partygate scandal and the impression that the rules that applied to everyone else did not apply to them. According to a parliamentary committee on which there was a Tory majority, Boris Johnson misled the House of Commons about this matter and a 90-day suspension from the Commons would have been recommended had he not resigned as an MP. If the Tories want a reputation for economic competence and integrity (and that should not be too much to ask), they should make it clear that both Johnson's and Truss's days as Conservative parliamentary candidates are over. When distancing themselves from those aspects of their past that alienate the voters they need, what is required from the Tories are confident strides, not small, tentative steps. They have at least made a start, but it would be a grave mistake to think that the job is done. Related
Daily Mail
29-05-2025
- Business
- Daily Mail
What's YOUR inflation rate? How renting, having children and being a high earner can drive it up
Renters are facing higher inflation than those who have a mortgage, according to new data from the Office for National Statistics. It revealed that households in private rented properties had the highest annual inflation rate of 3.6 per cent in March, reflecting rising private rental costs. A big contributor has been the fact that UK monthly private rents increased by 7.7 per cent in the 12 months to March, according to the ONS, but this fell to 7.4 per cent in April. Private renters were followed by renters in social housing, who had a 3 per cent inflation rate. In contrast, mortgage-free homeowners experienced the lowest annual inflation rate of all housing types, at 1.8 per cent in the year to March. Households with mortgages had the next-lowest at 2.8 per cent. Riz Malik, director at wealth management firm R3 Wealth, said: 'Once tenant costs increase they rarely decrease, particularly with many landlords raising rents due to the 2022 mortgage rate hikes following the infamous mini-Budget. 'This gap continues to grow, and while some may manage to get onto the property ladder, many will remain part of generation rent. 'This situation is especially challenging for those in the south east or working in major cities.' Richer households see higher inflation Overall household costs, as measured by the Household Costs Index, rose by 2.6 per cent in the year to March. This is a fall from 2.9 per cent in the year to December 2024. However, inflation is slightly higher for those who earn more. It rises to 2.7 per cent for high-income households and falls to 2.5 per cent for low-income households. Inflation has dropped substantially for higher earners, though, coming in at 4.7 per cent a year earlier. Another interesting disparity picked up in the data was that non-retired households are experiencing a higher annual rate of inflation at 2.8 per cent in March than retired households at just 2.1 per cent. Sarah Coles, head of personal finance at Hargreaves Lansdown, said: 'The inflation rate slowed for retirees, and is now just 2.1 per cent - down from 3.1 per cent a year earlier. 'The change is thanks to lower bills, which tend to make up a larger proportion of the spending of this group so the cuts to the energy price cap have a disproportionately positive impact. 'Unfortunately, it means pensioners will have borne much of the brunt of Awful April, so early 2025 will only have been a brief respite from rising prices.' Retired people also aren't paying fast-rising costs associated with commuting, such as train season tickets. It is also costing more for those raising children. The annual inflation rate for households with children was 2.8 per cent in March. However, for households without children, it was 2.6 per cent. These inflation rates are likely to have risen since the data was gathered in March. Overall CPI inflation rose to 3.5 per cent in April, up from 2.6 per cent in March, driven by a huge hike in household bills. In addition, energy, water and council tax bills were hiked for many last month in what has been dubbed 'Awful April'. Coles added: 'Inflation eased in early 2025, but it still put a real squeeze on lower earners and renters. 'Unfortunately, life is only going to get tougher, as shortly after these figures were calculated, Awful April hit hard. Those same groups are likely to face the biggest challenges in the months to come.' Why is inflation different for everyone? The consumer prices index measures the average change in prices of roughly 730 core goods and services over time. This includes everything from transport to food and services. Every month, a team of roughly 300 analysts visit 20,000 shops in 141 different locations recording around 180,000 prices in the process. The truth is, there's no such thing as a single rate of inflation. Everyone will have their own because people buy different goods and services from an array of shops and sellers. It means certain individuals will have noticed the rising cost of living far more than others over the past 12 months. The changing price of dog food, for example, is not going to be relevant to someone who does not have a canine companion. Instead, Britain's national statisticians aim to create a representative basket of goods broadly reflective of the nation's shopping habits. This basket, which is used to calculate what we know as 'the rate of inflation', or the consumer prices index, is updated once a year to reflect changing tastes. For example, at the start of 2024, 16 items were added to the consumer prices index and 15 items were removed. Additions to the basket for 2024 included air fryers, vinyl records, gluten-free rice cakes and spray oil. Removals from the basket included hand sanitiser, sofa beds, rotisserie cooked hot whole chicken and bakeware. Best mortgage rates and how to find them Mortgage rates have risen substantially over recent years, meaning that those remortgaging or buying a home face higher costs. That makes it even more important to search out the best possible rate for you and get good mortgage advice, whether you are a first-time buyer, home owner or buy-to-let landlord. > Mortgage rates calculator > Find the right mortgage for you To help our readers find the best mortgage, This is Money has partnered with the UK's leading fee-free broker L&C. This is Money and L&C's mortgage calculator can let you compare deals to see which ones suit your home's value and level of deposit. You can compare fixed rate lengths, from two-year fixes, to five-year fixes and ten-year fixes. If you're ready to find your next mortgage, why not use This is Money and L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you.
New Statesman
06-05-2025
- Politics
- New Statesman
Starmer can turn Reform's rise to his advantage
Photo by. Last week's election results have proven to be far more consequential than normal. Much of the focus (including mine) has been on the dismal results for the Tories but there is no doubt that Labour has cause for alarm too. Its decline in support was much more substantial than Labour a year after 1997 or the Conservatives a year after 2010, when our vote remained flat (helped to a large extent by a collapse in support for our coalition partners, the Liberal Democrats). Cutting winter fuel payments and disability benefits, and increasing employers' National Insurance Contributions were all, apparently, issues on the doorstep. No doubt that is all true, although to some extent this simply reveals that governing at a time of low economic growth and strained public finances is difficult. Tough choices have to be made. But this is an environment in which there are advantages to having clean hands. Reform benefited from having no record in government; the Liberal Democrats' record has now been forgotten or forgiven. The increasing inclination of voters to shop around, having repeated bouts of buyers' remorse, has contributed towards a move away from incumbents (current or recent) and the rise of multi-party politics. But, paradoxically, the changing alignment of British politics may yet work in favour of the incumbent party. The lesson from last year's general election is that, in a first-past-the-post, multi-party system, tactical voting becomes crucial. The reason that Labour ended up with a landslide victory, while the Conservatives were reduced to a rump, was the efficiency of the anti-Tory vote. Large numbers of voters worked out who was best placed to defeat the local Conservative candidate and voted for them. The election was essentially a referendum on the Tories' record in office, a referendum it emphatically lost. The next election was always likely to be more complicated with Labour as the incumbents and events such as partygate and the mini-Budget more distant. A risk for Labour, and a hope for the Conservatives, was that anti-Tory tactical voting would unwind. Even without gaining any extra support, the Tories might win additional seats as non-Conservatives simply vote for their preferred candidates. What complicates matters is the rise of Reform. The party clearly has substantial and well-motivated support, but it is also a very polarising force. Much of the public may well be motivated to vote for whoever is best placed to keep it out (47 per cent of Britons have an unfavourable view of Farage compared to 29 per cent with a favourable one). Subscribe to The New Statesman today from only £8.99 per month Subscribe Most obviously, many Lib Dem or Green sympathetic voters are likely to be open to voting tactically to defeat Farage's candidates. It does not end there. On the day of the Runcorn & Helsby by-election, a senior Labour figure told me that there was anecdotal evidence of moderate Conservatives voting tactically to keep out Reform. Evidently, it was not enough, but it should alert Labour to the potential to win over support from unexpected sources. Tactical voting is essentially a negative instrument. It is used by voters seeking to prevent a candidate being elected, rather than a positive expression of support for another candidate. If an election becomes a referendum on a particular party, and overall opinion is negative towards that party, increased tactical voting can have a devastating impact, as 2024 shows us. This is not to be complacent – Reform will be able to squeeze some of the Conservative vote, especially in the 88 seats where it sits second to Labour – but the strong negative view much of the country has of Reform can be exploited. This does require Labour to think hard about how to do so. It will mean nullifying Farage's appeal on some cultural issues by closing down vulnerabilities. Parts of the liberal left are too quick to dismiss this part of the strategy but it is true to say that Labour needs to avoid giving the impression that Farage was right all along. At the same time, on its chosen issues, Labour must demonstrate greater willingness to take Reform on. Farage, for example, used highly incendiary language immediately after the Southport murders last year, language which may well have contributed to the subsequent unrest. Ministers could have been more willing and forceful in condemning this. Europe is a sensitive issue, but Labour should lean into it by arguing that Farage would reverse the work done to repair our trading relationship with our biggest market. The Reform leader's relationship with Donald Trump is also a vulnerability, albeit one that is difficult to readily exploit when the government is seeking a constructive relationship with the US. Nonetheless, Starmer can find proxies who can make sure that Farage's friendship with the unpopular US president is kept in the public eye. By 2029, it should be all too apparent from the American example that right-wing populism cannot solve society's problems. Then there will be the opportunities that accrue as a consequence of Reform being in power at a local authority level. Labour should be meticulous in pulling together examples of incompetence and ensuring that they are disseminated. In other words, Starmer should be prepared to take on Reform aggressively, even if it risks antagonising some Labour voters who have a soft spot for Farage. Last year, the overwhelmingly anti-Tory mood, plus tactical voting, was a formula for Labour success. Next time the formula might still involve tactical voting, but with a focus on keeping out Reform instead. A general election which is a referendum on Reform, rather than the record of the incumbent government, is one Labour should be able to win. Related
Daily Mail
24-04-2025
- Business
- Daily Mail
Why wasn't my pension lifestyled? I lost £8,500 in stock market downturn: CRANE ON THE CASE
I have a personal pension which I opened in the 1980s with Wesleyan Financial Services. In recent years, I received letters and emails suggesting my pension would be 'lifestyled' into a lower-risk fund five years ahead of my claim date, which was set to be when I turned 65 in March 2020. This did not happen and instead, my money remained in a fund rated moderate-high risk/high reward until March 2020. At this point, I realised what had happened and asked for the switch to be made manually. The same month, I asked for my pension date to be moved forward five years to March 2025. Shortly after, the stock market plummeted due to the pandemic and I am now entering retirement with a shortfall in my fund. Had my pension been moved into a lower-risk fund in 2015, as Wesleyan said it would be in its letters, I believe I would not have lost as much money. In the event, it fell by approximately £8,500. Is there anything I can do? I.M, Exeter Helen Crane of This is Money replies: We initially spoke late last year, but I thought your story was worth sharing now, as those approaching retirement may once again be concerned about stock market turbulence caused by Donald Trump's tariffs and what that means for their retirement funds. Losses during the pandemic were much steeper, however. In March 2020, your pension was worth about £50,500, but by April 2021 this had fallen by more than 20 per cent to about £39,000. At the end of 2024, it had recovered somewhat, rising to £42,000. Like a number of pension savers, you were unfortunate to also be affected by the stock market fall of 2022, which happened after the mini-Budget. You expected to be shielded against these losses to a degree, thanks to a common feature of pensions known as lifestyling. This is where savers' money is moved into lower-risk investments as they approach retirement. The idea is that, while the gains they make won't be as large as previous years, the risk of losing money is also lower. It is intended to avoid big drops just before they need to access their money. You were sent a letter five years out from your initial retirement date, which explained why you might wish to consider moving your pension into lower-risk funds. This also included a generic 'information sheet' about lifestyling, which wasn't tailored to your pension specifically. This said that 'Lifestyling starts five years before your benefit date, unless you tell us you don't want to include it' - so you thought this would happen. I contacted Wesleyan to ask why it did not. It told me that as the pension was taken out in the 1980s, when lifestyling was uncommon, the plan did not have this built in to it. Lifestyling only became popular in the 2000s, as customers with more modern 'unitised' funds approached retirement. This is where a savers' money is used to buy 'units' in a fund, and receives the same amount of 'units' back at the end - hopefully having grown in value through investments. Before that, many policies paid out a defined sum or benefit when they matured, regardless of how the investments performed. As your plan predated this change, Wesleyan confirmed that lifestyling would not happen unless you gave the instruction. The company claims that it confirmed to you that lifestyling was not part of your policy in 2019, though you did not share that letter with me. It previously investigated a complaint from you, which was not upheld. Wesleyan also told me that the Financial Ombudsman Service investigated your complaint and agreed with Wesleyan's finding that it was not accountable for any financial loss. A spokesperson for the Wesleyan Group said: 'We were sorry to hear of I.M's complaint in 2022. 'We fully investigated it at that time, as did the independent Financial Ombudsman, and both agreed that Wesleyan was not to be held accountable.' I do agree with you that some of the information you were sent by Wesleyan could have been clearer, in particular the fact that it sent you a generic 'information sheet' on lifestyling which didn't reflect your situation. However, you may be interested to learn that some people who did have their pension lifestyled in the last few years ended up losing a lot of money from their pot, too. That is because lower-risk pension funds are often heavily invested in government bonds or gilts, which tumbled in value after the 2022 mini-Budget - something that not many people expected. Of course, it is impossible to know now whether you would have ended up better or worse off. See this column former pensions minister Steve Webb wrote for us at the time. The global trade war launched by US president Donald Trump has sparked a bond sell-off in recent weeks. If the chaos continues or worsens, older workers may once again discover they are sitting on big pension fund losses right on the brink of retirement, which they might be forced to delay as a result. Finally, I don't know what your plans are for the pension, but if you left it invested, as opposed to buying an annuity for example, the investments would have the chance to increase again. Some experts would suggest avoiding lifestyling if you intended to stay invested for the long term, as this could result in higher returns - though there is always risk. I am not a pensions expert so it is worth taking proper advice, but this is something to consider. Clarks turned away my £75 voucher Last Christmas, my son bought me a £75 voucher for Clarks shoe shop. When I tried to spend it in my local store recently, I was told the card had not been validated and was therefore unusable. It was hard to get hold of the customer service department, so I lodged a complaint online. I've recently been told by Clarks that the card has been reloaded - but only with a balance of £26. E.A, Hampshire Helen Crane replies: Clarks is a staple of the British high street, so it is unfortunate to hear that the firm put its foot in it when it came to sorting out your gift voucher. You told me the assistant in the Andover store spent 40 minutes on the phone trying to get it sorted, but in the end said you needed to call customer services yourself. After trying and failing to get through on the phone for 90 minutes, you put in a complaint via the website, providing the receipts for the gift cards from your son. As your reward for all that effort, you got back only a fraction of the full balance. You told me: 'The effort and hours spent trying to get this sorted was disgusting. The company have and are making this as difficult as possible for people, perhaps hoping people give up!' I attempted to contact the shoe retailer myself for several months, but unfortunately never received a reply. However, one of our complaints must have eventually been heard, as you recently contacted me to say the remaining £49 had been credited to your voucher.
Telegraph
16-04-2025
- Business
- Telegraph
Gold isn't the safe haven asset you think it is
Last week, a man made £100,000 in just a few days by investing in gold. Today, the aureate metal has set yet another record high price, trading at more than $3,300 (£2,488) for a single ounce. Pop the words 'gold' and 'safe haven' into your favourite search engine and you'll be greeted with a wealth of articles confirming that indeed, yes, bullion beats all as the ultimate bolthole. As with everything in investing, beware anyone who knows anything for certain. The ructions in global trade caused by US President Donald Trump's universal tariffs have sent gold on a glittering run of late, with the commodity up 5pc since 'Liberation Day', and 26pc higher year to date. Not influenced by a single factor, the rise in its price is owed to myriad concerns best lumped together under the word 'uncertainty'. Here enters common knowledge: in uncertain times, gold will typically outperform. While true, we often overlook the qualifier in this phrase, finding it difficult to deal with precisely when it would serve us best. The inconvenient truth is simple and worrying – there is no such thing as a safe haven asset. There are assets that are typically inversely correlated, things that have historically gone up when other things go down, but past performance is no guarantee of future results. Now more than ever, we have plenty of uncomfortable evidence shaking the foundations of what we think we know. In 2022, in the wake of the infamous mini-Budget, one typical safe haven asset broke from tradition so aggressively that the Bank of England had to step in to reassure markets. As a result of the liability driven investment (LDI) crisis, nobody will look at UK gilts the same way again. Now, the safest of safe havens has broken from tradition, and US Treasuries, the most certain of financial assets, are uncertain. Prices have fallen and yields have spiked – this is not what they should do in response to collapsing markets. Treasury basis trades, off-the-run trades and swap spread trades have had the blame laid at their feet, with phenomenally leveraged hedge funds forced into unwinding these trades. But at the real heart of this, much like the LDI crisis, is a fundamental unease with a government, which in turn damages faith in traditional havens. When the world fundamentally changes, it is perhaps unsurprising that historical truths change with them – I've written more on what this might mean in a recent Investor Newsletter, the archives of which can be accessed when you subscribe. But even in history, these truths are more flexible than we might wish to admit. We all know a bear market lasts for a few months, maybe more than a year, and then we're back on track. According to research from Goldman Sachs, that's been true since the post-war era. With one exception in 2000, we've not had a bear market that lasted more than 21 months – the average is just 13 months. Run the clock back before 1945, and the average bear market exceeds the longest we've suffered since, coming in at 36 months. Spare a thought for those in the mid-19th century, who endured an 82-month mauling. With the end of the post-war era, we might want to brush up on other precedents. Sure, other bits and pieces of financial wizardry may have broken of late, but gold is tangible, it can't be manipulated by markets and must rise in times of uncertainty, right? Taking the example of our well-timed investor, had he invested just five days earlier, rather than making around £100,000 in a week, he'd have lost that same amount in four days. That's thanks to the unwinding of some financial wizardry, as large investors flooded the market with gold in order to meet margin calls held elsewhere, sinking the price by 5pc and commissioning a wealth of notes asking, 'What just happened?'. There is also a lot of head-scratching over the amount of bullion being imported into New York at the moment. While gold has since recovered these losses and has returned to its upward trajectory, this hiccup proves that even this safe haven can leak in a storm. A 2023 outlook from the World Gold Council asserted, 'gold does well in recessions'. Read beyond the headline, and that tricky word 'typically' rears its head. Delivering positive returns in five out of the last seven recessions is surely impressive, but had you flooded your capital into gold during each, it would have let you down almost a third of the time. Even over the long term, gold isn't as safe as it's sold to be. Let's say you'd bought gold at the height of worry during the 1980 recession – at less than $700/oz, you'd be laughing today. But that depends on how long you could hold your nerve. It would take almost three decades for that gold investment to make a profit, staying under that peak through each successive recession, bear market and bout of global uncertainty until 2007 came along. That's Black Monday, the first and second Gulf wars, the dotcom boom and bust, and the recession of the early 1990s, to name just a few events, not sparking enough love for gold to offer you anything but a loss. Now and forever, the investor's best weapon against uncertainty is diversification. There is no silver bullet or golden egg – the most effective solution is to make sure those eggs aren't in one basket. Gold is typically a hedge against uncertainty, but remember, this time can always be different.
