Politics
Brooklyn Peltz Beckham’s Father-In-Law Reacts To Family Drama
Brooklyn Peltz Beckham’s father-in-law has spoken out about the public drama his family has found themselves at the centre of in recent weeks.
For the last few months, speculation has been mounting that Brooklyn is no longer on speaking terms with his parents, Sir David and Victoria Beckham, finally breaking his silence in a series of now-infamous Instagram posts last month.
In these posts, the Beckhams’ eldest son accused his parents of “performative” and “controlling” behaviour throughout his life, while also claiming they have “endlessly” tried to “ruin” his relationship with his wife, Nicola Peltz Beckham, to whom he’s been married since 2022.
On Tuesday, Nicola’s father, the billionaire Nelson Peltz, appeared at a WSJ Invest Live event, where People reported that he was asked “negotiating high-stakes situations, particularly playing out in public view” in light of the drama surrounding his daughter and her husband.
“Has my family been in the press lately? I haven’t noticed that at all,” the 83-year-old quipped.
“My advice is to stay the hell out of the press. How much good did that do?” the entrepreneur and investor continued. “My daughter and the Beckhams are a whole other story. That’s not for coverage here today.
“But I’ll tell you my daughter’s great, my son-in-law, Brooklyn, is great, and I look forward to them having a long, happy marriage together.”

Gregory Pace/Shutterstock
Since Brooklyn’s posts, his famous parents have remained tight-lipped on the much-publicised family fall-out, and their representatives have not responded to HuffPost UK’s requests for comment.
However, during an interview in the immediate aftermath, Sir David did make some well-timed comments about the “mistakes” that can be made on social media, particularly by younger people.
“Children are allowed to make mistakes. That’s how they learn,” he said. “That’s what I try to teach my kids. But you know, you have to sometimes let them make those mistakes as well.”
Politics
The House Article | To truly enhance our democracy, we must reform the electoral system

4 min read
I am pleased the government has recognised the need for electoral reform by removing first-past-the-post in mayoral elections. We should expect the same strong representative standards for our MPs.
The Labour government has brought forward the Representation of the People Bill to the House of Commons. In doing so, it will add itself to a proud lineage of predecessors who have passed Representation of the People Acts that have extended the franchise, building our political system into the democracy we know today.
This new Bill is a welcome stride forward in enhancing our democracy, including more of our own citizens through automated voter registration and shutting out malign foreign actors. But to truly live up to this legacy, secure our democracy and tackle political inequality at the ballot box, the government must be bolder. To become a modern representative democracy, Westminster needs proportional representation (PR).
As I argued in the House of Commons in January last year, PR is a necessary reform to ensure that our increasingly multi-party politics translates into a representative parliament. Fragmentation has only accelerated since the last general election, with five parties now receiving more than 10 per cent of the projected national vote share – more than ever before. It’s no longer inconceivable for a historic landslide to be won with barely over a quarter of the vote. We must recognise that it is unfair to voters and wrong for any party to have total control over the levers of power of the British state for a five-year term when three in four voters have explicitly voted against them.
As PoliticsHome reported, over 50 constitutional experts have sounded the alarm that first-past-the-post (FPTP) risks “random and arbitrary” results. Among them is Sir Vernon Bogdanor, who has branded Westminster’s voting system “a serious threat to the quality of British democracy”. Meanwhile, the Institute for Government has said that the Gorton and Denton byelection shows that FPTP “is creaking at the seams”. I am pleased the government has already recognised the need for electoral reform by removing FPTP in mayoral elections. We should expect the same strong representative standards for our MPs.
Electoral reform need not threaten the vital constituency link. As an MP, I know this is key to grounding my work as a representative in and of my community. A mixed-member proportional system, as used in the modern parliaments of Germany or New Zealand, and throughout the UK in Scotland, London, and, until recently, Wales, delivers both local and national representation. It’s also worth noting that internationally, the only countries with high and rising public satisfaction with democracy all use PR. Meanwhile, in the UK, public trust is at rock bottom, with NatCen research last year showing that just 12 per cent of people trusted governments to put the interests of the nation above those of their own party.
Foundational reform of our democracy can under no circumstances be done on a whim. Electoral reform must be carried out not because it may benefit any particular party or ideology, but because it puts power back into the hands of the British people. Support for change is strong among Labour MPs – I note with interest excellent interventions from my colleagues Tim Roca, Beccy Cooper, Jenny Riddell-Carptenter, Sean Woodcock and Jo Platt in recent weeks, and many speeches in favour at the Representation of the People Bill’s Second Reading. This is a chance for the government to listen and lead. The cost of inaction could not be higher – chaos for our democracy means chaos for our politics and all those who depend on it.
I was not elected by my constituents to idly stand by and defend a broken political system and failed status quo. Fifty-three per cent of the public want to change our voting system. Electoral reform would go a long way to restore faith in politics. I am proud to be an MP representing a Labour government that is taking the next steps forward to build the modern, secure and representative democracy every elected representative should demand.
I urge the government to go further. It’s time for a national commission on electoral reform.
Luke Akehurst is Labour MP for North Durham
Politics
Keir Starmer Avoids Mandelson Questions During PMQs
Keir Starmer repeatedly dodged questions about the Peter Mandelson scandal during a bizarre PMQs performance.
The PM refused to say whether he had personally spoken to the disgraced former peer before making him the UK’s ambassador to Washington – even though No.10 has previously admitted he did not.
Mandelson was sacked by Starmer after just six months in the job after the full extent of his links to convicted paedophile Jeffrey Epstein were revealed.
At prime minister’s questions, Tory leader Kemi Badenoch asked Starmer several times to confirm that he handed Mandelson the plum diplomatic role without speaking to him first.
But the PM chose instead to talk about Badenoch’s shifting position on Iran and Tory frontbencher Nick Timothy’s “appalling” tweet about Muslim group prayer in Trafalgar Square.
The Tory leader said: “Did the prime minister personally speak to Peter Mandelson about his relationship with the convicted paedophile Jeffrey Epstein before appointing him as our ambassador to Washington?”
The prime minister replied: “Let me start where I must. This was my mistake in making the appointment, and I’ve apologised to the victims of Epstein, I do so again.
“The matter of process was looked at by the independent adviser on ministerial standards. It’s clear the appointment process wasn’t strong enough, and that’s why I’ve already strengthened it.
“But it was my mistake, and I’ve apologised for it. She should follow suit and apologise for her gross error of judgment in calling for the UK to join the war in Iran without thinking through the consequences.”
When Badenoch asked him again, the PM replied: “She appointed the shadow justice secretary. He said last night that Muslims praying in public, including the mayor of London, practising his faith are not welcome.
“He described it as an act of domination. Straight from the Islamist playbook. If he was in my team, he’d be gone. It’s utterly appalling. She should denounce his comments and she should sack him.”
The Tory leader then tried a third time to get a straight answer out of the PM.
She said: “I know he doesn’t want to talk about the documents he tried to bury last week, he’s going to try and talk about anything else, but he’s not going to get away with it. I asked him a question, he did not answer.
“He knew that Mandelson stayed in Epstein’s house after Epstein had been convicted for child prostitution. He knew that. So I will ask him again, did he speak to Peter Mandelson about this before the appointment? Yes or no?”
But Starmer told her: “The independent adviser has looked at it, and he said, quote ‘the relevant process for a political appointee was followed’.
“Now, obviously this is a question of my judgment, but what about her judgment? She wanted to rush into a war with Iran without thinking it through.”
Politics
Line Of Duty Season 7 Cast To Include Gavin & Stacey Star
Line Of Duty bosses have announced more information about the new and returning cast members appearing in the BBC police drama’s long-awaited seventh season.
Martin Compston, Vicky McClure and Adrian Dunbar will all be reprising their roles in the new run of episodes, which are due to air next year, with Bafta winner Robert Carlyle announcing last month that he’s also set to play a new character.
On Wednesday morning, more casting information was revealed, and there’ll be some familiar faces returning alongside some new additions.

Picture Perfect/Shutterstock
These newbies will include Tom Weston-Jones, who has previously appeared in Sanditon, Warrior and Copper, as well as Laura Aikman, perhaps best known to Gavin & Stacey fans as Smithy’s girlfriend Sonia in the two most recent stand-alone specials.
In a press release, Tom’s character is described as the leader of Tactical Operations Unit 7 (TO-7), a “charismatic officer who has won plaudits for a string of takedowns of organised crime”, who is “accused of abusing his position of trust to act as a sexual predator”, while Laura will play a new police officer, Paula Beckman.

David Fisher/Shutterstock
Also joining the cast are David Calder, Levi Brown and Amy Leigh Hickman, while Mark Bonnar, Owen Teale, Perry Fitzpatrick and Christina Chong are all set to return.
Further new cast members include Steven Elder, Dominic Mafham , Sarah Andre White, Aimee Powell and Naomi Yang.
Showrunner Jed Mercurio enthused: “I’m honoured to be working with our brilliant new cast members, and I know the audience will be thrilled to see some much-loved old faces returning from previous seasons.”
As well as writing all six episodes of Line Of Duty’s next iteration, Jed will also direct the second half of the season.
Meanwhile, The Sun recently reported that season seven would once again focus on the mysterious “H”, after many viewers were unimpressed with how things played out in the most recent finale.
Politics
Starmer Calls On Badenoch To Fire MP Over Prayer Attack
Keir Starmer called for Kemi Badenoch to sack one of her Tory frontbenchers during an irate prime minister’s questions.
The prime minister suggested the Conservative leader drops shadow justice secretary Nick Timothy after he attacked a large Muslim prayer ceremony which took place in central London on Tuesday.
Starmer squeezed the jibe in after Badenoch made several digs about the prime minister’s judgement in appointing Peter Mandelson to be the UK’s ambassador to Washington – despite his links to convicted paedophile Jeffrey Epstein.
Rather than responding directly, the PM read out Timothy’s explosive tweet from Tuesday night, where he called a group prayer event “a declaration of domination”.
Starmer told the Commons: “He [Timothy] said last night that Muslims praying in public, including the mayor of London, practising his faith, are not welcome.
“He described it as ‘an act of domination, straight from the Islamist playbook’.
“If he were in my team, he’d be gone.
“It’s utterly appalling. She should denounce his comments and she should sack him.”
Badenoch replied by criticising the justice secretary David Lammy for his attempts to abolish jury trials.
“My shadow justice secretary is defending British values. I know who I would rather have sitting on the front bench next to me and it is not him,” the Tory leader said, pointing at Lammy.
The PM replied: “Even Tommy Robinson – I can hardly believe I am saying this – has said today that if the shadow justice secretary had made these hateful comments two years ago, the Conservative Party would have kicked him out.
“Tommy Robinson isn’t some sort of moral signpost. He was pointing out how much their party has changed. They’re more inclined to his views. And he’s right about that.
“The fact that he’s sitting there on her front bench shows she’s too weak and has absolutely no judgement.”
Robinson, formerly known as Stephen Yaxley-Lennon, is a far-right agitator.
The PM added that he thought those religious gatherings showed “the great strength of our diverse city and country”.
“The only conclusion is the Tory party has a problem with Muslims,” Starmer said, again lashing out at Timothy for spreading “poison and division”.
The PM’s attack comes after Labour’s deputy leader Lucy Powell also condemned Timothy’s post on X as an “extreme reaction”.
She said: “What an extreme reaction from a member of the Shadow Cabinet. Across the country today Muslims, Christians, those of faith & of none, have worked, learned, shared & broken fast together. That is real Britain, not the desperate hatred being whipped up here by a leading Tory.”
Politics
Israel ministers daughter posted she wouldn’t choose suicide
As Skwawkbox reported on Tuesday 17 March 2026, Israeli government minister’s daughter Shoshana Strook has been found dead in suspicious circumstances. She had just appointed lawyers to pursue justice for the crimes against her. Strook had spent months speaking publicly about allegations of physical and sexual abuse. In several social media posts she outlined how her mother, father, and brother had abused her since childhood. Authorities in Israel have claimed to be investigating the circumstances of her death.
However, Strook’s own words before she died are extremely worrying, to say the least. But the evidence may have already started to be erased.
“If they tell you I committed suicide – don’t believe it”
Strook had accused her mother, far-right settlements minister Orit Strook, along with her father and one of her brothers, of raping her for years during her childhood and filming it. In December 2025, Shoshana Strook warned her Facebook followers that she was in danger of murder to silence her. And she told them not to believe a word of it if she was found dead and it was called suicide, or an ‘accident’. A screenshot of the post, translated from Hebrew, is below in case the original is scrubbed:
Strook/Strock
That Facebook post still – at the time of writing – exists. However, Shoshana’s name on that page is “Strock”, rather than “Strook”. However, the two are interchangeable in Hebrew, which does not use vowels in the same way as European languages – and “Strock” is even Orit’s name on her official Knesset profile.
Or it was, early on Tuesday evening. By the time of writing, that profile has been deleted or otherwise made inaccessible:
As such, so have any records of the same page on the Wayback Machine archive and archive.li.
But too late – Skwawkbox had already saved a screenshot of the Knesset page proof:
Strock has not, at the time of writing, announced her resignation from her ministerial post or her position as a member of the Knesset, so that potential excuse for deleting her page doesn’t apply. And the scrubbing of the Strook-Strock interchangeability hasn’t – at least yet – been thorough enough. Orit Strock is still demonstrably named in coverage of Shoshana’s ‘suicide’ (archive) by the Times of Israel:
She is also named as “Strock” by the Jewish News Syndicate, Haaretz, the Jerusalem Post and others. Shoshana Strock’s Facebook page is that of Shoshana Strook and vice versa, as also shown by the numerous videos she uploaded straight to it.
Israel has a paedophile problem
As Skwawkbox said in its first report of Shoshana Strock’s death, the issue of child rape among Zionists is not limited to Israelis or the Israeli extreme right. The Netanyahu regime is currently ignoring well over 2,000 extradition requests for alleged and convicted paedophiles who fled there from other countries. Others have been convicted in the US, while the Zionist UK Labour party right also has a long record of paedophiles and other sex offenders.
Israeli psychotherapist and trauma expert Dr Anat Gur, head of the Bar-Ilan University trauma therapy program, has said that she believes organised child rape in Israel is widespread:
Organized child rape is one of the most horrific things I’ve encountered. It’s likely much more widespread than we think. It’s happening in places we least expect.
Strook’s death mirrors the long list of suspicious deaths among victims and associates of serial child-rapist and Israeli spy Jeffrey Epstein. These deaths include that of Virginia Giuffre, Epstein’s most well-known victim – who was also found dead after saying she would not. Jean-Luc Brunel, the French ‘modelling agent’ accused of procuring underage girls for Epstein, was found dead of supposed suicide in a French prison in 2022.
If Shoshana Strock’s death is suspicious because of her recent comment that claims of her suicide would be false, then the disappearance of her mother’s official “Strock” page does nothing to dispel those suspicions.
Featured image via the Canary
Politics
Court protest in support of water bills boycotter
The founders of the Boycott Water Bills movement are holding a protest in Margate on Thursday 19 March. It comes ahead of long-time boycotter Julie Wassmer’s showdown with Southern Water.
Kent-based author and environmental campaigner Wassmer faces imminent court action for her four year payment boycott of Southern Water bills. She has maintained this in protest at the company’s unacceptable sewage pollution record.
Wassmer, a co-founder of award-winning campaign group Boycott Water Bills, said:
Southern Water is a criminal company – a serious serial offender regarding sewage pollution and I aim to highlight how UK water companies are evading responsibility for poor service via a selective use of the Water Industry Act 1991.
Fellow Boycott Water Bills co-founder Katy Colley says the website has seen a flood of new sign-ups following the screening of the Channel 4 drama Dirty Business.
The three-part series exposes the collusion between water companies and regulators at the heart of the current sewage crisis.
Colley, from Hastings, said:
Every day people from all over the country are getting in touch to say they will join the boycott.
We should be pursing the criminal polluters who poison our waters with impunity instead of weaponising the law against a few brave individuals in the interests of big business.
Wassmer will be joined by Kent and Sussex boycotters and Green councillors, as well as local clean water campaign groups.
Mark Hood, Green group leader on Kent county council, said:
We fully support Julie Wassmer who has bravely stood up to the water companies whose monopoly has been a disaster for Kent and our environment and who have consistently put profit before tackling pollution.
Nonpayment isn’t a course of action which people take lightly but when Julie became aware of Southern Water’s record of sewage pollution to the beaches and seas she loves, she decided that she had no other choice.
The water industry needs to be returned to public ownership so that every penny of profit can be used to improve infrastructure instead of paying shareholders.
Featured image via the Canary
Politics
Greg James: 9 Highlights From His Longest Ride Comic Relief Cycling Challenge
Every year, Comic Relief sees different celebrities taking on a variety of grueling challenges in the name of fundraising – and Greg James’ latest is an especially mammoth one.
The Radio 1 host is currently in the middle of an eight-day cycling challenge that will take him 1,000km from Weymouth to Edinburgh, eight years on from his last physical endurance test.
Over the last week, Greg has received a wave of support from the British public as he slogs his way through the task – particularly as he announced he’d still be going ahead with it in light of the news that his father had suffered a stroke.
As you’d expect from any long-running stunt involving Greg, there’ve been plenty of memorable moments so far, and here are just some of the highlights…
1. Prince William surprises Greg James for a spot of tandem bike riding
On his fifth day of cycling, Greg was taken completely off guard when he was led down an alternative route, where Prince William was waiting for him.
“There are lots of things you don’t expect in life. You definitely don’t expect to see Prince William at a truck stop,” the presenter told the BBC.
“And I then went, ’OK, I’m trying to get my head into gear of like, oh, I need to talk to [a member of] the Royal Family now after being on a bike for the last three hours.”
Greg continued: “He was sat behind my bum on the bike. I said, ‘I’m sorry, how the mighty fall. I’m sorry that you’re sitting behind this now. I’m really sorry that this is what you have to deal with’
“But I was amazed that he even wanted to ride.”
He later admitted: “People are asking me, ‘what was it like to be on the bike with Prince William?’ I don’t know yet, because I haven’t had the chance to process it. I’m numb – I don’t know what’s going on!”
2. Prince William also had a pretty savage ‘unpopular opinion’ for Greg James as they rode together
Regular Radio 1 listeners will know that on the breakfast show, Greg invites callers to share their “unpopular opinions” with him, which he and his guests will then debate.
Prince William’s? “Sara Cox’s challenge was harder.”
3. Greg James’ emotional support from his mum has been a highlight for many of those following his challenge
When he’s not behind the handlebars, Greg has been updating his mum on his progress over the phone, which has made for both touching and hilarious viewing.
She also turned up to surprise him at the day two finish line, where the two shared a hug.
4. Day six of the challenge began with a poignant moment in honour of Greg James’ dad on Wednesday
Before setting off, Greg requested that Radio 1 played Coldplay’s Paradise, which he said was his dad’s favourite song.
“I started to cry there, in a nice way,” he later shared. “I was doing up my little shoes and I got a message from my mum, who said: ‘I’ll tell dad later that you played it for him’.”
Shortly afterwards, Greg also received a message of support from Coldplay frontman Chris Martin, who joked: “I’m a bit confused. I’m with my BMX just outside Bristol. You said to meet me for a bike ride. I’ve been waiting here for about three weeks. Where are you? What do you want me to do?
“I want to help you on your bike ride. But I’m in my shorts, I’ve run out of sandwiches. I might get the train back to America. Wherever you are, I love you and I send you so much goodwill. You must be quick on your bike because I can’t seem to catch you.”
5. Reaching that £1 million mark was a real moment
With days still left on the challenge, Greg’s supporters have already donated more than £1 million to Comic Relief, as he learned during a break on his fifth day of cycling.
Making the news even more exciting, it was delivered by his cycling buddy Prince William.
The Hunter Foundation has also said they will match donations of up to a million pounds, meaning that Comic Relief will receive at least £2 million off the back of Greg’s efforts.
6. Crowds of supporters have gathered over the course of the route to encourage Greg James on his way
“It’s so cool that this stupid challenge has got people out and together and enjoying it and tracking it and all the rest of it,” Greg said on Tuesday. “And most importantly, raising loads of money. Every pedal feels worth it when I keep seeing that total go up.
“And I mean, I really don’t want to do much more, but actually, if it kept going up like this, I would just stay on this bike forever, because it’s an inconvenience for me, definitely, but the good is outweighing the bad, for sure.”
7. His welcome in York was particularly impressive
Not only did a local uni choir serenade him with a rewritten version of Chappell Roan’s Hot To Go!, he was also greeted by a mascot tribute to Long Boi, the (sadly, now-deceased) duck he’s been obsessed with for years.
8. The tear-jerking surprises just keep on coming
A very tired Greg was overjoyed to see his best mate during a rest stop on day five.
9. Oh, and if you’re wondering how Greg has been recuperating after a long day of cycling…
…Let’s just say ice baths, sports massages and weird inflatable leg sleeping aids have all been involved.
Politics
The Best Exercise For Sore Knees And Back
If you’re one of the many people experiencing lower back or knee pain, “Spanish” and “goblet” squats can help you build leg muscle without added stress.
But strengthening your hips can go a long way towards reducing your risk of further pain, too.
It can help to stabilise your spine and even reduce strain on your knees.
And according to a paper published in the Journal of Orthopaedic and Sports Physical Therapy, “clamshell” exercises are one of the best ways to strengthen the area and protect against future injury.
What are ‘clamshell’ exercises?
It involves lying on your side in the foetal position. Your knees should be bent at a 45-degree angle, and the sides of your feet should be touching.
Keep your knees stacked on top of each other, rather than rolling the top one over the bottom one. Rest your head on your lower arm.
From there, lift the knee that isn’t touching the ground into the air.
Keep your hips and core engaged and your spine straight.
Ben Shatto, a physical therapist, shared on his YouTube channel that “it needs to be a painfully slow exercise”.
He recommends lifting the knee for five seconds, holding it there for five further seconds, and then dropping the knee back for (you guessed it) five seconds.
Shatto recommended “at least 10 repetitions” on each side.
If you like, you can add a resistance band to the exercise by placing it around the front and back of your knees.
What are the benefits of ‘clamshell’ exercises?
It helps to strengthen the “deep rotators of the hip,” Shatto said.
Clamshell exercises mostly target the gluteus medius and gluteus minimus. These help to stabilise your body and maintain your posture.
The stronger these are, the more likely our knees are to remain aligned, taking extra pressure off existing sore knees and reducing the risk of harm in the future.
And speaking to Woman & Home, Paola Di Lanzo, a personal trainer, pilates instructor and founder of Paola’s Body Barre, said: “Clamshells support better pelvic alignment by activating deep glute muscles, which can alleviate tension in the lower back and hips.”
Politics
Zelenskyy Warns He Has ‘A Very Bad Feeling’ About Iran War
Volodymyr Zelenskyy has warned he has a “very bad feeling” about the consequences of the conflict in Iran could have on Ukraine.
The Ukrainian president pointed out that the global focus has shifted from Vladimir Putin’s ongoing attacks to the US-Israel war against Iran, even though Ukraine continues to be targeted by their Russian opponents.
“I have a very bad feeling about the impact of this war on the situation in Ukraine,” Zelenskyy told the BBC’s Laura Kuenssberg.
“The focus of America is more on the Middle East than on Ukraine, unfortunately.
“That is why you see our diplomatic meetings, trilateral meetings, constantly being postponed. There is one reason – war in Iran.”
He added: “For [Vladimir] Putin, a long war in Iran is a plus. It means higher energy prices and depletion of US reserves. So we have a depletion of resources.”
He said 803 missiles were already used on the first day in the war – and America only produces around 800 missiles a year.
That trickles down to impact Ukraine’s supplies as Kyiv is reliant on weapons from America.
The Ukrainian premier said the US had previously proposed to hold the next round of talks in America, but Putin has opposed such negotiations.
“Ukraine will support any date and any place but definitely not in Russia,” he added.
Zelenskyy also touched on the fallout between Donald Trump and Keir Starmer over Iran, as the White House has raged over the UK’s reluctance to get involved with any offensive moves in the Middle East.
He said: “I can’t tell Trump what to do. Keir is a smart and very cool partner, absolutely.
“We know there are emotions in everyone in different ways. Keir, he’s in touch with president Trump. He can meet with him and reload that relationship with him again.
“It happens. I don’t see a great problem. To be honest, I don’t see a great challenge if your history is stronger than the emotions of two or three people.”
Just over a year ago, Zelenskyy had his own falling out with Trump, after the president accused him of not “having any cards” when it came to the Ukraine war.
The spectacular row saw Zelenskyy leave the Oval Office early during a formal visit.
The two leaders have since repaired their relationship, though Trump continues to falsely blame Ukraine for starting the war with Russia.
Politics
Ben Fletcher: The abolition of Stamp Duty is a great first step, but for further tax reform lets talk VAT
Ben Fletcher is the Conservative candidate to be mayor of Cheshire and Warrington. He was previously CEO of Boots Opticians and CFO of The Very Group.
The best Conservative governments have been those that grasped the difficult job of fundamental tax reform to ensure stable finances that allow the economy to flourish. In the 1840s the Peel government ushered in a generation of prosperity through the combination of income tax reform and free trade. Disraeli oversaw significant local taxation reform, and, of course, the Howe/Lawson reforms in the 1980s were crucial to changing the trajectory of Britain’s economic performance.
Kemi Badenoch has rightly said she wants us to create a high growth, low immigration economy. There is a big argument that we need to win before the next general election: to reduce tax rates, we must reform the system. High rates are a consequence of the design of the tax system, and just reducing rates will not cut it. Successive chancellors have, in pursuit of a budget day ‘rabbit out of the hat’, tinkered with the system, creating distortions and anomalies that stunt economic growth. This has created a distorted tax system. There has been little sense of what type of tax system we want, what behaviour do we want to reward, and how do we create the environment for faster economic growth.
Reforming the tax system is going to be controversial. Since 1997 the tax code (as measured by Tolleys) has grown nearly fourfold from 7,250 pages to c.24,000 The tax code is now so long, with so many exceptions, that there will, inevitably, be opposition to almost any major change because there are bound to be losers. The need for reform though is immense. We have a Council Tax system based on 1991 housing values, an Income tax system where the marginal rate of tax rises to 70 per cent at certain income levels, meanwhile tax lawyers debate whether product is a cake or biscuit.
As the famous New Zealand Finance Minister, Roger Douglas, showed and argued, reform succeeds when the changes are big enough to create winners who can champion reform alongside the short-term losers. To sustain a reforming agenda in a way that commands the confidence of markets, fends off the ‘losers’ from any reform, and creates a clear direction of travel, we need a set of principles that can be seen to be adhered to over a series of Budgets.
A good tax system has four elements: There are as few taxes as possible, the base for those taxes is as broad as possible, so that the rate can be as low and least distorted as possible, and there are as few exceptions as possible. Adherence to these principles across the tax system would create one that was simpler, which better rewarded hard work and risk taking, and which was much less onerous for the individual or organisation being taxed.
These can be applied to any tax, but it’s VAT that’s urgent. It has become so distorted that it is now killing critical sectors of the economy, most noticeably hospitality. In Cheshire this is particularly acute as hospitality is 10 per cent of our economy, employing 40,000 people. Reforming VAT would be the tax reform that potentially does most to stimulate economic growth.
The current VAT system breaks all four of the principles I described: it is levied on a narrow base meaning the rate is high, the number of exceptions is high, and it is distortive in key sectors. The threshold is set in such a way as businesses manage with the aim of avoiding it, causing growth to be capped.
VAT is levied on only c.40 per cent of consumption. There is no longer any rationale for why the base remains so narrow. Our consumption habits have changed hugely since the introduction of the tax in 1973. In particular, the percentage of household income spent on food has fallen by two thirds, and the exclusions for books and newspapers speaks to a pre-digital age. We’re having fewer children (another VAT exception) and real wages have risen faster than the cost of products.
This has distortive effects. In hospitality, most of their costs are zero rated for VAT meaning it cannot be reclaimed. The consequence for this is that 20 per cent of their income goes straight to HMRC, an unusually high amount. This puts sustained pressure on their cashflow such that when other costs are raised, they have very little left to manage with.
The narrow base causes the rate to be high. We have the highest rate in Western Europe which drives the second distortive effect: incessant lobbying for exceptions to the rate. Food in a pub? Taxed. Food at home? Not taxed. Plain biscuit? No VAT. Chocolate Biscuit? 20 per cent. Buying a pet? Taxed. A Rabbit, though? Not taxed. No wonder the lawyers are doing well.
The other aspect which narrows the base is the threshold for VAT registration, currently £90,000. Entirely unsurprisingly small businesses manage their revenue to the threshold to avoid the rate. The presence of this cliff edge (a lamentable feature of many taxes) means there are sudden movements in tax liabilities for small businesses which hamper growth as owners seek to minimise their cash outflow. We need businesses focused entirely on growing their income, not managing to an effective revenue cap.
The next Conservative government should go big. Taxing consumption is preferable to taxing income or risk taking. We need people to want to work, and found businesses risking their capital, and for that to be rewarding. What families spend their money on is their business.
Extended VAT to all consumption and radically reduce the rate. Extending the base should allow the rate to come in at c. 8 per cent and still raise the same revenue as today. In the same package of reform, we should cut the threshold from £90,000 to zero, so that every company pays VAT from day one. This removes the growth cap of the cliff-edge and because the rate has been cut makes it manageable for all companies. For new companies there should be a three-year transition where a VAT rebate is provided of 75 per cent in year one, 50 per cent in year two, and 25 per cent in year three to support cashflow in the critical early years.
Big changes always mean there are some losers, such as those businesses not currently paying VAT, and tax lawyers. Others, such as hospitality would have their growth prospects transformed. Our highly competitive retail industry would work hard to keep prices keen for the consumer.
Kemi Badenoch and Mel Stride have shown with their announcement on Stamp Duty that they are prepared to be radical about tax. This willingness to make bold choices will be essential in creating a growing economy.
Reforming VAT in a first Conservative budget would create the basis for accelerated economic growth and be consistent with the reforming approach shown by the best of our predecessors.
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