The Government is locked in a doom loop and destroying its own credibility.
Within hours of apologising to Wes Streeting for the briefing against him, Sir Keir Starmer announced he had been “assured” the said briefing never came from No 10. In the process he took a leaf out of the Trumpian fake news playbook, implying that some of the most senior journalists in Westminster must be liars.
Today, having spent weeks “rolling the pitch” for increases in income tax – in the national interest albeit breaking a solemn election manifesto promise – Rachel Reeves has slyly called off the game, according to the data she is legally obliged to give the OBR in preparation for her Budget on Wednesday week.
Instead of having the confidence to impose what Paul Johnson, former head of the IFS – think-tank of the year – calls the “simplest” and “progressive” way to start filling the black hole, the Chancellor will opt for another “smorgasbord” of targeted tax raids.
Forget strategic planning. Reeves and her Treasury team have been scanning the economic dashboard from day-to-day, pouncing on any upward blip in statistics, while ignoring the big picture flashing red.
Yes, tax receipts and wage increases have been slightly better than expected recently. So technically the amount she will say she needs to make up could be as “low” as £20bn rather than £30bn, plus an increased £15bn of headroom.
Never mind that the OBR has also been revising down its productivity forecasts and that growth in the economy was negative in September.
Never mind that this kind of piecemeal calculation led to last year’s tax-raising Budget. And Reeves’s promise, about to be broken, that tax-raising would not have to be done again this side of the next election.
Never mind that the immediate response of the gilt markets to the Chancellor’s latest swerve was to lose trust that she would do what they see as the right thing in the end. Reversing a gentle decline in recent weeks, the Government’s cost of borrowing spiked and the pound went down – immediately upsetting the very optimistic calculations on which Reeves is relying.
Reportedly Starmer and Reeves decided not break their manifesto pledge on income tax rises because they feared “a backlash from voters and Labour MPs”. The same reason they abandoned their previous attempts to marginally reduce the ballooning benefits bill. Truly they live up to former chancellor Lord Lamont’s celebrated jibe of “in office but not in power”.
Their calculation appears to be that there will be an electoral dividend if they still claim credit for their election promise even though the tax take is bound to go up. A fond hope. It seems likely that income tax thresholds will be frozen or even lowered as wages go up. This means that all earners will be paying more tax. A raid is also expected on those foregoing salary to build up pension pots.
The toxic tax “smorgasbord” will mean more pain for specific interest groups which can be caught – such as family farms last time – while, reportedly backing off from the high earning accountants and lawyers in LLP partnerships, because they are too nimble to be plucked successfully by the Treasury’s bean-counters.
By placing greater burdens on some of the broader, if not broadest shoulders, Reeves and Starmer hope to appease their much championed “working people”.
Rachel Reeves has looked like the political living dead ever since the tearful episode in the Commons in July. She either sits gloomily in shot on the front bench behind Starmer or pops up for morale-boosting appearances which lack all conviction. Her fallen stock is evident in that she is not even mentioned in the long list of potential candidates to replace Starmer, which even stretches to Louise Haigh and Ed Miliband.
Your next read
square DR PUNAM KRISHANMy son is hitting puberty, I’m in perimenopause – and my husband wants to move out
square HAMISH MCRAE Newsletter (£)The Waspi compensation row shows the retirement dream is a myth
square HAMISH MCRAEA good retirement is working past 80 and no cruises – no, really
square ISABEL HARDMANKeir Starmer embodies everything wrong with the Labour Party
With this latest fumble, she has lost her strongest card: respect from the wider economic community for being prepared to put the national interest first. The slew of contradictory signals from the top of government now indicate a clumsy amateur hour.
Reeves’s shadow Mel Stride can now accuse her of “kite flying” and “creating uncertainty” with justification. He has licence to tell the Labour Chancellor to “stop playing games” in the very week that his leader Kemi Badenoch is embarking on the difficult task of trying to re-establish the Conservatives as the party to be trusted on the economy.
Along with Morgan McSweeney, the man in the bull’s-eye of the Starmer government’s other major cock-up this week, Reeves may be too close for this Prime Minister to survive without her. But everything we have seen from his past treatment of close allies is that Sir Keir will dump her if he thinks he needs to. Nobody is likely to stand in his way.
Adam Boulton presents Sunday Morning on Times Radio; he was formerly editor-at-large of Sky News.
Hence then, the article about rachel reeves is now doomed was published today ( ) and is available on inews ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( Rachel Reeves is now doomed )
Also on site :
- Iran’s new security boss Mohammad Zolghadr: Why his appointment matters
- Target’s Set of 2 Comfy Patio Chairs From a ‘Brady Bunch’ Star’s Brand Will Instantly Elevate Your Outdoor Space
- Kim Jong Un uses Iran war to justify North Korea’s decision to keep its nuclear weapons