Answering your questions

On Trump vs Musk, Labour's challenges, Reform's prospects, schools and immigration policy, Ukraine, Israel and much more

Thanks for our largest ever haul of readers’ questions over the past week. We’ve done our best to anwer as many as possible but have had to cut some to stop this post being literally the length of a short book. Apologies if we haven’t answered yours this time.

Sam answers on subjects including:

• What taxes are going to go up in the Autumn

• Why Labour is struggling in government and Starmer’s future

• Reform’s ceiling, potential mergers, safeguards against Farage and whether they need to be seen to fail in government before we can move on

• Corbyn setting up a new party

• Who’s going to win between Trump and Musk

• Stopping Trump and the midterms

• Dominic Cummings’ claims about the “deep state”

• The “black swan” risks we’re not paying enough attention to

• Why the right are more confident in arguing for their policy goals

• David Gauke’s sentencing review and AI’s impact on the workforce and public services

• Progress being made on the challenges highlighted in my book

• Orban’s future

• Why small boats are such a wicked problem

• Lots of education policy including the impact of US policy for UK higher education; priorities for education spending; Michaela school; and special needs reforms.

Lawrence answers on subjects including:

• Where the war in Ukraine is heading

• What we’ve learnt about the future of war from Ukraine

• Polling in Russia, and elections in Ukraine

• Israel and Netanyahu’s endgame (or lack of one) and what could be done to force a ceasefire

• Trump and alliances - particularly the future of NATO and European cooperation

• Implications of a Chinese manufactured plane downing a French one in the Kashmir conflict

• Defence procurement

• And whether Starmer will be judged more kindly on foreign policy than domestic.

And we both answer on:

• How we avoid despair when writing about what we cover.

---

Questions to Sam

John Offord asks: How likely is it that the Chancellor will have to raise taxes in the Autumn and what are they most likely to be? And Kieran asks whether ‘the government have a plausible path to improving public services whilst sticking to their current fiscal and tax promises’?

As regular readers will know I’ve always thought taxes would have to go up this autumn. Not because I want them to but because we have low growth, high borrowing, and higher demand for public services. Something has to give.

Unfortunately, it looks increasingly as if tax rises will be mostly spent on staying within the fiscal rules, given the likelihood the OBR downgrades the Chancellor’s headroom this autumn. So we may see worsening services anyway.

If further strikes can be avoided we should see some improvements in NHS outcomes as the pandemic effects fade. I’m not convinced, though, they will be substantive enough to be widely noticed. NHS waiting lists have starting falling, but only marginally (down around 1.5% this year so far). I’ll write more about it when the NHS “10 year plan” emerges.

Elsewhere I don’t see much reason for hope. Funding settlements for local government, policing, and education look like they’re going to be very tough. Social care has been long-grassed (again).

As for what taxes are going to go up it depends on how much is needed. They will start will revenue raisers that don’t break election promises. So I would imagine all thresholds will be frozen until 2030 which will raise a few billion. There is talk of a gambling levy that could raise £3 billion. They could have a look at higher-rate pension relief, but I’m not sure they’ll want to go there.

In other related questions Tom Hill suggested charging pensioners national insurance – but that would only raise around £1 billion because not many work (though that will increase over time). Robin asked about higher property taxes – I think you could probably get away with a little more proportionality in council tax, but significant property taxes beyond that would cause absolute uproar politically. Tom asked about taxing international companies – which is notoriously difficult. There are proposals included in the OECD global tax deal to allow countries to charge multinationals based on where customers are located. But this has not yet been agreed, and it’s not looking likely any time soon. We do have a digital services tax of 2% which raises around £500 million a year but it’s a bone of contention with the US.

So there are no easily available large pots that avoid breaking Labour’s tax pledges. VAT, income tax or employee NICs are the only ones that will raise significant amounts.

JPodmore asks: ‘What's the media diet like of people working in number 10? Why is stuff that seems so obvious to people in the wider centre-left policy world either missed or deliberately ignored?’ And relatedly an anonymous subscriber asked: “Are Starmer/Reeves really as lacking foundational principles, strategic vision, basic competence, as they seem? Have they already written their own political obituary as the disappointments who opened the door to Reform and once-in-a-generation chaos?”