There is almost no detail on Labour’s upcoming spending U-turns. Chaotic briefing sessions after the winter fuel U-turn at PMQs and yesterday’s two-child benefit cap signalling have left hacks exasperated. The costs will make Treasury officials and taxpayers more so…
Analysis commissioned by the Institute of Economic Affairs and given to Guido shows Reeves is facing the possibility of a reverse black hole larger than her original ‘£22 billion’ gap. Experts currently speculate that raising the pension credit threshold, currently at £11,800 a year, would be Labour’s most likely path to extending winter fuel.
A standalone abolition of the two-child benefit cap is also estimated to cost a total of £10.2 billion to the taxpayer in the 2025-29 period. A third of the cost of the Chagos surrender…
Downing Street has additionally signalled that it is examining ways of reducing the £3.4 billion PIP benefit cuts by lengthening a “transitional period” or otherwise watering them down. In that case Reeves is looking at a new reverse black hole worth up to circa £35 billion…
The Chancellor gave herself £9.9 billion of ‘fiscal headroom’ at the budget – most of which is already being obliterated by steadily rising borrowing costs. As Guido reported Downing Street’s succession of panicked U-turns has aggravated Reeves. If those fiscal rules change – which Downing Street did not categorically rule out yesterday – Labour’s promise of economic credibility will be entirely shot…
Speaking to Sky News off the back of Rachel Reeves’ Air Passenger Duty hike, Ryanair chief executive Michael O’Leary said:
“Labour is dependent on those Red Wall seats, and yet every move she makes poisons economic growth and damages the UK’s recovery… it’s the Chancellor who stumbles from policy misstep to policy misstep… I think her policy decisions are incredibly stupid.”