Category Archives: rachel reeves

Exclusive: Voters’ Trust In Labour To Run The Economy Plummets Amid Budget Backlash

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Labour’s lead over the Tories on which party is best placed to run the economy has plummeted since the election, HuffPost UK can reveal.

Polling by Savanta shows that just 38% of the public now back Labour over the Conservatives, down from 50% in July.

At the same time, the proportion of the public who prefer the Tories has gone up from 28% to 33%.

That means Labour’s lead has fallen from 22 points to five points in just four months.

The poll also found that Labour’s lead over the Tories on dealing with the cost of living has gone from 28 points to nine points over the same period, while the party’s lead on taxation has fallen from 16 points to just two points.

The findings are another blow for chancellor Rachel Reeves, who has come under fire over a series of controversial decisions she has taken since the election.

They include taking the winter fuel payment off 10 million pensioners, imposing inheritance tax on farms worth more than £1 million and hiking the rate of National Insurance paid by employers.

Reeves’ own personal approval ratings have also fallen from plus seven at the end of July to minus 18, the Savanta poll found.

Chris Hopkins, the pollsters’ political research director, said Labour’s advantage on the economy had “all but faded away since the election”.

“The Conservatives haven’t made up that much ground on the economy, taxation and cost of living, but many voters no longer think that Labour are the most trusted on these issues,” he said.

“Reeves would no doubt argue that she is being forced to take difficult decisions because of the inheritance left to her by her Conservative predecessors. While the public do have sympathy for that point of view, I think it’s fair to say they were expecting more from Labour.”

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Top Stores Tell Rachel Reeves Her Budget Will Cause ‘Inevitable’ Job Losses And Higher Prices

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Some of Britain’s biggest businesses have warned Rachel Reeves that her Budget will lead to “inevitable” job losses and higher prices in the shops.

More than 70 retailers, including Greggs, Amazon UK, Tesco and Sainsbury’s, condemned the “sheer costs” associated with the chancellor’s decision to hike employers’ National Insurance.

It is estimated the move, which will see the NI rate increase and bring down the threshold at which it must be paid, will raise an extra £25,7 billion for the Treasury.

Reeves said it was necessary to help fill a £22 billion black hole in the public finances left by the previous Tory government.

But in a letter to the chancellor, organised by the British Retail Consortium, the firms said: “We appreciate government’s focus on improving the fiscal situation and investing in public services; we also recognise the role businesses have in supporting this.

“But, the sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable, and higher prices a certainty.”

Other major companies who put their names to the letter included Aldi, Boots, Lidl, JD Sports, Primark and Morrisons.

A Treasury spokesperson said: “With our public services crumbling and an inherited £22bn fiscal black hole from the previous government, we had to make difficult choices to fix the foundations of the country and restore desperately needed economic stability to allow businesses to thrive.

“By doing this, more than half of employers will either see a cut or no change in their National Insurance bills, there will be £22.6bn more for the NHS and workers’ payslips will be protected from higher tax.

“This government is committed to delivering economic growth by boosting investment and rebuilding Britain.”

The business backlash comes as farmers prepare to protest in Westminster at changes to inheritance tax which they say will cost them millions of pounds and put many out of business.

However, the chancellor has insisted there will be no U-turn on the policy, telling them: “The reforms to agricultural property relief ensure that wealthier estates and the most valuable farms pay their fair share to invest in our schools and health services that farmers and families in rural communities rely on.”

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Rachel Reeves Tells Farmers There Will Be No U-Turn On Inheritance Tax Changes

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Rachel Reeves has warned farmers preparing to take part in a mass anti-government protest that there will be no U-turn on controversial changes to inheritance tax rules.

The chancellor announced in last month’s Budget that farms worth more than £1 million which are handed down to a family member after the owner dies will be subject to 20% inheritance tax rather than zero, as is the case at present.

Farmers say that will put many of them out of business, and will make their feelings known at a lobby of MPs in Westminster on Tuesday, which has been organised by the National Farmers’ Union.

Thousands more are expected to join a separate rally in Whitehall.

Celebrities including TV presenter and farmer Jeremy Clarkson – who told The Times in 2021 that avoiding inheritance tax was “critical” in his decision to buy land – are expected to join the rally.

But in a joint-statement with rural affairs secretary Steve Reed ahead of the demos, Reeves said: “With public services crumbling and a £22 billion fiscal hole that this government inherited, we have taken difficult decisions.

“The reforms to agricultural property relief ensure that wealthier estates and the most valuable farms pay their fair share to invest in our schools and health services that farmers and families in rural communities rely on.”

The pair said farmers were “the backbone of Britain”, and said the government is investing £5 billion into farming over the next two years.

But NFU president Tom Bradshaw said: “There’s a complete disillusionment and distrust, and feeling of betrayal, that [the government] doesn’t understand food production or even want to understand food production.

“Farmers are cross, they’re worried, they feel they’ve nothing to lose, I don’t know where this ends. I don’t believe the government have any choice but to rethink this policy.”

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‘Why Would Anyone Believe A Word You Say?’ Sky News Presenter Roasts Chancellor Over Tax Rises

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Rachel Reeves has been skewered by a Sky News presenter for massively hiking taxes just months after saying she had “no plans” to do so.

Trevor Phillips asked the chancellor why “a reasonable person would believe a single word you say” in future.

Reeves was shown a video of her from June 11, three weeks before the general election, where she said: “I don’t need to become chancellor to know what a mess the government have made of public finances, of public services and the fact that the tax burden is at its highest level in 70 years.

“We don’t need higher taxes, what we need is growth and I don’t want to, and I have no plan to increase any taxes beyond what we have already set out.”

But last Wednesday, she announced £40 billion worth of tax rises, partly to fill the £22bn “black hole” Labour says it was left by the last Tory government.

Phillips told her: “You specifically said you already knew everything you needed to know, yet on Wednesday you raised taxes by £40 billion.

“Why would a reasonable person believe a single word that you say in the next 15 minutes and that you’ll stick to it?”

Reeves replied: “I was wrong on June 11. I didn’t know everything, because when I arrived at the Treasury on July 5, I was taken into a room by the senior officials and they set out the huge black hole in the public finances, beyond which anybody knew about at the time of the general election.

“The previous government hid it from the country, hid it from parliament and indeed they hid it from the official independent forecaster, the Office for Budget Responsibility.

“And so when I went into that Budget last week I had to put our public finances back onto a firm trajectory because we saw in the previous parliament what happens when government loses control of the public finances, and the first commitment we made in our manifesto was to bring stability back to the economy.”

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Elon Musk Has Reignited His Feud With Keir Starmer And This Time It’s Over The Budget

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Elon Musk has reignited his feud with Keir Starmer by becoming an unlikely champion of Britain’s farmers.

The X owner has taken issue with changes to inheritance tax rules set out in the Budget last Wednesday by Rachel Reeves.

Under the new measures, farms worth more than £1 million will become liable for the tax for the first time when their owner dies.

Responding to a post on X criticising the new policy, Musk wrote: “We should leave the farmers alone. We farmers immense gratitude for making the food on our tables!”

In the summer, the prime minister slapped down the billionaire tech boss for claiming “civil war is inevitable” in the UK in the wake of the far-right riots which have taken place across the country in the past week.

The PM’s official spokesman said: “There’s no justification for comments like that and what we’ve seen in this country is organised illegal thuggery which has no place on our streets or online.”

But responding to a video posted on X by Starmer in which he said the government “will not tolerate attacks on mosques or on Muslim communities”, Musk replied: “Shouldn’t you be concerned about attacks on all communities?”

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How Worried Should We Be About The Way The Markets Are Reacting To The Budget?

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The cost of government borrowing has gone up and the value of the pound has fallen as the money markets react to the Budget delivered by Rachel Reeves on Wednesday.

That has sparked some fears that the UK is heading for a Liz Truss-style economic meltdown triggered by the chancellor’s decision to massively increase taxes and government borrowing.

On Thursday afternoon, bond yields – effectively the interest rate the government pays on its debt – hit 4.568%, the highest it has been since August last year.

That is significant because the more money the government has to pay servicing debt, the less there is available to spend on public services.

Sky News economics editor Ed Conway said voters should be “certainly a bit worried” by what is happening on the money markets.

Posting on X, he said: “There has been a marked rise in UK bond yields following the Budget which is greater than what we’re seeing in other markets.”

But he added: “Perhaps the most important thing to say is: this is NOTHING like the reaction we saw following the Truss mini Budget.

“Even so, there has definitely been SOME reaction. The pound weakened a bit and gilt yields rose. This despite the fact that most of this Budget was pre-briefed long in advance. Investors are actively re-pricing UK debt. And that matters.

“The issue at present isn’t the one Liz Truss had to grapple with – a near financial crisis – but something else. The cost of debt servicing is going up. And if debt interest costs goes up it has a direct bearing on the government’s fiscal plans.”

At the same time, the value of the pound against the dollar has also fallen – further evoking memories of the financial crisis which followed Truss’ disastrous mini-Budget two years ago.

Kathleen Brooks, an analyst at trading firm XTB, said the the Budget “has not been well received” by the markets.

Kyle Chapman, an analyst at trading firm Ballinger Group, said the fall in the pound and rise in gilt yields indicated that the market had decided Labour had “overextended” with its borrowing and spending plans.

However, other analysts insisted the current situation was completely different to when Kwasi Kwarteng, Truss’ chancellor, announced £45bn of unfunded tax cuts.

“Investors feared a new Liz Truss moment, but in the end the announcements do not suggest an uncontrolled surge in debt,” Edmond de Rothschild Asset Management portfolio manager, Nabil Milali, said.

Laith Khalaf, head of investment analysis at AJ Bell, said: “Of course, markets are especially sensitive to the effect chancellors can have on interest rates ever since Kwasi Kwarteng took to the despatch box, and with the ten-year gilt yield now climbing to levels seen in the wake of mini-Budget, it’s fair to ask whether Rachel Reeves’ maiden Budget could cause similar problems.

“The answer is probably, and hopefully, not.”

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Budget Analysis: Voters Could End Up Paying The Price For Rachel Reeves’ Big Gamble

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Rachel Reeves is not, by nature, much of a gambler.

She has managed to become the UK’s first ever female chancellor through a combination of political ability, sound economic judgement and caution.

But in the Budget, she decided to bet everything on the government being able to grow the economy – and the “working people” Labour have sought to protect could end up paying the price.

Reeves stunned the Commons by announcing that she was hiking taxes by £40 billion – an astronomical sum even bigger than what had been predicted and which will take the tax burden to the highest level on record.

Capital gains tax, inheritance tax and – most significantly – employers’ National Insurance are all going up as the chancellor seeks to clear up the financial mess she says the last Tory government left behind.

Tens of billions of pounds will also be borrowed as the government turns on the spending taps.

Much of the cash will be spent on improving the NHS and schools, moves which are likely to be popular with most voters.

But look at the small print and it’s clear to see why economic experts – and plenty of Labour MPs – are nervous.

Economic growth – the government’s number one mission, don’t forget – over the next five years is set to be lower than previously forecast by the Office for Budget Responsibility.

Inflation and interest rates are also set to rise, according to the OBR, further damaging household incomes.

Treasury sources acknowledge this is a sub-optimal situation, but are pleading for patience from voters.

One said: “Do we want those growth forecasts to be higher? Yes. But we’re not going to be able to turn around 14 years in one Budget. This is our first Budget in our first term.

“What the chancellor has set out is an honest Budget in response to the scale of the challenge we face.

“We’ve had to take difficult decisions on tax in order to bring back stability to the economy.

“We’re not immune to the consequences of our decisions, but the consequences of not acting would have been to lose control of economic stability.”

But there was an ominous warning from the highly-respected Institute for Fiscal Studies, whose director Paul Johnson said: “Somebody will pay for the higher taxes – largely working people.”

With the Labour government’s popularity already cratering barely three months after the election, a major financial hit to those who helped put them in office is the last thing Reeves and Keir Starmer need.

The chancellor desperately needs her big Budget gamble to pay off.

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Labour’s Tax Rises Will ‘Largely’ Fall On Working People, Leading Economists Say

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Working people will end up paying for Rachel Reeves’ huge tax hike, according to a leading think tank.

The chancellor unveiled a plan to raise a record-breaking £40bn in her Budget today, but maintained that she had stuck to her promise not to bring back austerity.

Labour also claims to have honoured their manifesto pledge not to increase taxes for “working people”.

Although that exact definition is still not clear, the government said they would not put up the income tax, VAT or National Insurance that they pay.

However, Reeves did raise the NI rate paid by for employers to 15% from April next year.

According to the Office for Budget Responsibility, three-quarters of the impact of that will be felt by employees through lower wage rises.

Institute for Fiscal Studies (IFS) director Paul Johnson said: “Somebody will pay for the higher taxes – largely working people.”

Johnson also issued a warning about the way the chancellor had “front-loaded” the government’s spending plans over the next five years.

“A government splashing the cash in the short term and promising to be more austere in future? Stop me if you think you’ve heard this one before,” he said.

He added: “The challenge will be to make sure the money is spent well enough to make those costs worth bearing.”

Accountancy outsourcing specialists Advancetrack said the increase to employers’ NICs is a “big blow to UK businesses of all sizes who are already grappling with a range of escalating costs”.

Meanwhile, accountancy firm Menzies LLP warned that this Budget was focused on “quick fixes rather than meaningful reform”.

European Movement UK CEO and former Lib Dem minister, Sir Nick Harvey, suggested there was something missing from the Budget: Brexit.

“The chancellor can tinker around the edges, but addressing the economic damage done by Brexit must become a priority,” he said.

Social mobility charity Sutton Trust thought it was educational support that was lacking from the Budget, saying: “The government has clearly identified the need to increase the national minimum wage due to cost of living pressures, so why does student maintenance remain inadequate?”

Meanwhile, Generation Rent’s chief executive Ben Twomey said: “The lack of clear support for the half of renters who don’t have savings and are really struggling is a big concern.”

Resolution Foundation’s interim chief executive Mike Brewer said the Budget engages with the country’s economic challenges – but it’s only the “first step of what will be needed”.

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How Brits Are ‘Bracing Themselves’ For The Budget As Rachel Reeves Looks To Raise £40 Billion

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It is not an overstatement to say that this week’s Budget is likely to be the most consequential event of this parliament.

Every decision the government makes between now and the next general election, for good or ill, will be influenced in some way by what Rachel Reeves announces at lunchtime on Wednesday. No pressure then, chancellor.

This is what we know so far. The Budget – called ‘Fixing The Foundations To Deliver Change’ – seeks to raise £40 billion, the vast majority of it through tax rises plus some spending cuts, including £3 billion from the welfare bill.

With Labour having promised not to increase taxes on “working people” before the election, income tax, VAT and the employees’ rate of National Insurance are all off-limits.

That means Reeves has her eyes on inheritance tax, capital gains tax, pension allowances and – most controversially – the employers’ rate of NI to help her balance the books.

A Treasury source told HuffPost UK: “We are dealing with the £22 billion hole in the public finances left by the Tories, and it’s worth stressing that is this year, next year, the year after that and the year after that. It’s a huge problem and we’ve got to address it.

“What we are doing is resetting the public finances and putting them on a firmer footing.

“We’re also acutely aware that we were elected on a platform of change. People voted to change things and for things to get a little bit better. So there will be more money for the NHS to cut waiting lists and more money for long-term investments like building schools, roads and other infrastructure.”

To that end, the chancellor announced on Thursday that she is changing the way the government measures debt, thereby allowing her to borrow an extra £50bn while still sticking to her pledge to bring overall debt down.

That money will be ploughed into public services which, Reeves claims, the Tories were planning to starve of the funds they need.

However, a poll carried out by Savanta and seen by HuffPost UK will make for worrying reading for the chancellor as she puts the finishing touches to her Budget speech in No.11 this weekend.

It shows that 48% of voters believe she should prioritise cutting taxes, compared to 43% who would rather see more money for public services.

However, more than half (55%) say it is more important for the government to invest in public services, with 32% saying it should be cut.

Meanwhile, just 20% of people believe the Budget will have a positive impact, with older people particularly gloomy about what it will mean for them – a result, most likely, of the row over the means testing of the winter fuel allowance.

A total of 80% of of over-55s think it will have a negative impact on their finances, compared to just 6% who believe it will be positive.

Those aged between 18 and 34 are more optimistic, however, with 40% thinking the Budget will be positive for them, with 28% taking the opposite view.

Even Labour supporters appear to be dreading Wednesday, with 41% of those who voted for the party in July believing it will be negative for them, compared to 33% who think it will be positive.

Emma Levin, associate director at Savanta, said: “Significant swathes of the electorate are bracing themselves for Labour’s first budget in 15 years.

“In particular older people appear nervous, amid rumours of many wealth taxes rises, compared to a relatively sanguine younger population.

“Concerningly for Rachel Reeves, even Labour voters think the Budget is going to have a negative impact on their lives. This may be exactly the mood music Labour HQ is going for ahead of a ‘painful budget’, but it’s clear the public want investment in public services as a priority.”

Nevertheless, allies of the chancellor remain confident that the measures announced in the Budget will eventually pay off both economically and politically.

One said: “It will be an honest Budget. Rachel will be very clear that we’re not going to be able to fix 14 years of failure in one Budget.

“This is a 10-year project. She’s having to make difficult decisions now to deliver long-term growth and prosperity.”

With the new Tory leader being announced just three days later, senior Labour figures also see the Budget as effectively the start of the next general election campaign.

“It will set out the clear divide for the whole parliament,” one Treasury source told HuffPost UK.

“Do we either do nothing, stick with the status quo, continue with more austerity, more cuts and more decline, or do we change and do things differently, asking those with the broadest shoulders to pay a bit more tax and start investing in long-term projects?

“This is where it will start to get difficult for the Tories.”

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Rachel Reeves Gives Herself Billions To Spend By Changing The Government’s Debt Rules

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Rachel Reeves has unveiled plans to spend billions of pounds on the UK’s infrastructure after changing the way the government measures debt.

In a major shift in policy ahead of next week’s Budget, the chancellor said the move would allow her to “begin to fix the NHS and start to rebuild our economy”.

She also confirmed that taxes will go up to fund the government’s day-to-day spending commitments – and that areas like the welfare budget will face cuts.

Labour’s election manifesto promised that debt would be falling as a share of the economy at the end of five years.

By changing the way that government debt is measured, Reeves hopes to release an extra £50 billion to spend on long-term projects.

The chancellor said: “My fiscal rules will do two things. The first and most important: my stability rule will mean that day-to-day spending will be matched by revenues.

“Given the state of the public finances and the need to invest in our public services, this rule will bite hardest.

“Alongside tough decisions on spending and welfare, that means taxes will need to rise to ensure this rule is met. I will always protect working people when I make these choices, while taking a balanced approach.”

She added: “My second fiscal rule, the investment rule, will get debt falling as a proportion of our economy.

“That will make space for increased investment in the fabric of our economy, and ensure we don’t see the falls in public sector investment that were planned under the last government.”

Reeves also told ITV News: “Our second rule, our investment rule, will change the way in which we measure government debt so we take into account our assets, not just the costs of investment.”

But Jeremy Hunt said civil servants had warned him against such a move when he was chancellor because of the risks it posed to economic stability.

He said: “The consistent advice I received from Treasury officials was always that increasing borrowing meant interest rates would be higher for longer – and punish families with mortgages.

“What’s even more remarkable is that the chancellor hasn’t seen fit to announce this major change to the fiscal rules to parliament. The markets are watching.”

A Labour spokesperson said: “Labour will not take any lectures from the Tories on how to run the economy. It was Liz Truss and the Conservatives that crashed the economy, which sent mortgages soaring and left the British people worse off.

“Jeremy Hunt and the Tories should be apologising to country for the economic mess they left – with a £22 billion blackhole in the public finances and public services on their knees.”

“Labour’s Budget will fix the foundations of our economy and deliver the change people voted for.”

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