Rachel Reeves at the 2024 Budget:
“I have come to the conclusion that extending the threshold freeze would hurt working people and take more money out of their payslips. I am keeping every single promise on tax that I made in our manifesto, so there will be no extension of the freeze in income tax and national insurance thresholds beyond the decisions by the previous government.”
Rachel Reeves today at the Treasury Select Committee:
“the freeze on tax thresholds… we extended that for a further three years. It’s not a breach of the manifesto, but it is asking everybody to contribute more.”
Red-handed…
Reeves’ former colleagues still in banking will not be thanking her today. Bank shares fell overnight after an IPPR report calling for a fresh tax on the interest banks get from the Bank of England coincided with an FT story on the sector expecting to be targeted by the Chancellor. Everyone is extremely jittery amid constant tax-hike briefings from the Treasury ahead of the Budget…
NatWest shares fell by 5.3%, Barclays 3.8%, and Lloyds Banking Group 5.2%. Lloyds has 2.2 million private shareholders including “most of our employees,” who number over 60,000. Reeves’ old bank has been part of Lloyds since 2009…
Reeves’ old HBOS colleagues who still work there and own shares in LBG will have seen the value of their shares take a hit thanks to the ideas of the so-called “economist” hitting the press early. Panicked pre-briefing to tank confidence prior to a tax-raising budget is certainly a strategy…
Reeves’ new address has changed from “HBOS Complaints team” to “11 Downing Street.” Former water cooler chums can direct their complaints there…
Torsten Bell is writing the budget now. Gulp…
The New Statesman reported last night that a shake-up in Reeves’ Treasury team has seen new MP and new minister Bell ending up taking on “additional responsibility for economic policy” in the run up to the budget. It’s the Bell Epoque…
Co-conspirators will remember some of Torsten’s bright ideas for economic policy. Many of them come from his landmark “Economy 2030” report for the Resolution Foundation. Guido has prowled the Bell archives from end to end – including from the book he released right before he became an MP – and presents a complete list of his proposals below:
Lots for the Treasury to chew on prior to the ‘Omnishambles Budget.’ Brace, brace…
Next week is ‘tax horror week’ as Reeves’ budget measures, including the hike in NICs, change in business rates and increase in minimum wage, come into effect. Businesses have been bracing for the raid by slashing jobs and shutting up shop in recent months…
New data from Retail Economics reveals that retailers across the UK face £5.56 billion in extra costs thanks to Reeves’ tax raid. Shops are expected to take a £1.76 billion hit to profits, while around £1.72 billion is likely to be passed on to consumers through higher prices and the rest covered by shops cutting costs. Leaving ‘working people’ to pick up the tab…
Retail Economics’ CEO Richard Lim, warns: “Retailers are staring down the barrel of a £5.6 billion wave of additional costs that will squeeze margins and threaten jobs across the industry. With operating costs rising sharply, many retailers have little choice but to absorb some of the financial pain while cautiously passing costs on to consumers already facing their own pressures.” Not exactly reassuring for inflation concerns. ‘Securonomics’ latest…
It’s more unhappy reading for the Treasury, as UK manufacturing PMI has hit a 14-month low of 46.9, a contraction for the fifth month in a row. According to S&P Global, the decrease in output and downturn in new orders has led to the steepest job losses since mid-2020. Rob Dobson of S&P Global laid the blame at Reeves’ door, saying:
“Weak demand, low client confidence and rising cost pressures are accelerating the downturns in output and new orders, while the Autumn Budget’s changes to the national minimum wage and employer NICs are driving up inflation fears and intensifying the downward trend in staff headcounts.”
The CBI now predicts four consecutive quarters of decline in the private sector, with consumer services facing the bleakest outlook – 55% expect a downturn, the worst reading in over two years. Meanwhile, more than a quarter of mid-sized business leaders are increasingly worried about rising employment costs. Party for ‘growth’ latest…
Bloomberg reports that the OBR forecast given to Reeves last week has the Chancellor facing a deficit thanks to upwards gilt market turmoil and downgraded growth since the budget. Spending cuts on the way on 26 March…
That will be news to no one who has been following economic indicators since October. City of London policy chairman Chris Hayward is giving a speech today warning of “worrying signs” in a City “allergic to risk” thanks to the fact “we have declined on criteria such as tax, regulation and skills.” That comes with a push to give “vital retail investors” incentives to use stocks and shares ISAs…
City figures have been lobbying Reeves for some time to remove tax advantages for cash ISA savers in a bid to rejig equity investment. The public might have a different view on whether a tax hike is the answer to economic malaise…
Lucy Powell on LBC, asked by Tom Swarbrick for her reaction to Labour MP Samantha Niblett’s call for a ‘summer of sex’ debate in Parliament: “I personally don’t own any sex toys, but each to their own… I’m not really sure that’s the right place for it, no.”