Reeves comes off worse in encounter with reality
Having been so happy in the cloud cuckoo land of her spring statement, where all was fine and dandy in the UK economy, it would have been kinder to leave her there. Instead, Labour HQ sent her out on the media round.
By the end, you almost felt sorry for her. All that hubristic crowing at the last Budget about being the first-ever female Chancellor of the Exchequer (while crippling entire industries at the flick of a pen). Now she stood in the sad reality of her position; broke, wet and disliked.
Though Reeves was late for her interview with GB News, her appearance is perhaps a sign that knickers are becoming even more twisted in No 10 about the upcoming Runcorn and Helsby by-election.
Like other government ministers, Playmobil Chancellor has sometimes dodged interviews with the channel. So for her first foray into the lions' den, Labour HQ had plonked her in front of a building site. Behind her, throughout the interview, a truck could be heard, reversing very slowly. The metaphor gods were feeling especially uncharitable today.
Downing the pound and passing the buck
'Why do you blame everyone else but refuse to take responsibility yourself?' asked one of the GB News hosts. The Chancellor ignored this question completely and instead answered the one she'd wanted to hear, which was about how awful Liz Truss was.
Her ride on Sky News proved a little easier. At one point she was allowed to launch into an extended monologue on the importance of her ever-changing rules to the nation's fiscal strength. She might as well have said that she was relying on a programme of mass leprechaun capture, torture and gold pot discovery to turbocharge economic growth.
Perhaps the most agonising of the Chancellor's televised clashes with the hard forces of reality occurred on ITV's Good Morning Britain, where Richard Madeley had to lay down the absolute basic rules not just of politics but of existence to Reeves. He explained that accepting free concert tickets worth thousands of pounds looks bad when you're cutting welfare spending at the same time.
The Chancellor blinked a lot before launching into her all too familiar brand of verbal flailing. 'I'm not able like I was in the past just to buy tickets for a concert,' she spluttered. Now on the grounds of pure competence, this felt believable enough. Some of those booking websites are very complicated. Yet as an excuse, it doesn't really wash.
Co-host Kate Garraway stuck the knife in next; of course, she said, Reeves needed security, of course she was entitled to a private life, she was even allowed to have fun. At this point, Reeves stared back blankly, not even a twitch of recognition on her face as to what that might be happening.
Surely, however, continued Garraway, this didn't mean you had to take freebies? Reeves promised not to take any free tickets again; unless, of course, it was related to her job. So, the campaign starts here, let's crowdfund a ticket for the Chancellor's travel back to the real world.
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Telegraph
an hour ago
- Telegraph
If Reeves isn't stopped, every inch of Britain will be the property of the state
The pitch rolling has started. The propagandists have been unleashed. We are being softened-up for the ultimate betrayal, the most obscene of broken promises, the grossest attack on private wealth in living memory. If you are a homeowner, I have grim news: Rachel Reeves has just declared war on you. You could pay even more tax, so much so that in some cases you may be forced to sell your house to pay the bill – and then to hand over yet more cash just to be allowed to say goodbye to your beloved family home. Reeves is considering several options, all abhorrent: an annual proportional wealth tax on the value of homes, large enough to replace stamp duty, council tax and more; the imposition of capital gains tax (CGT) on primary residences for the first time ever, albeit just on more expensive ones at first; an 'exit tax' as an alternative to CGT, payable on sale; and a revaluation of council tax, with even higher bands, including a mansion tax. Britain is in the midst of an epic struggle between tax-eaters and net taxpayers, between those seeking to squeeze ever more out of the private sector to keep our bankrupt welfare state going a little longer, and those desperately seeking to preserve their wealth at a time of weak GDP, stagnant real wages and rocketing costs. We have almost reached the economy's maximal taxable capacity, at least with the tools at HMRC's disposal. The bond vigilantes are circling, and Reeves has taken the UK to the brink of fiscal meltdown. Her party won't allow her to cut spending, so she is turning to the last untapped El Dorado, the final pot of cash ripe for raiding: our homes, worth trillions of pounds in total. If she goes down, she wants it to be in a blaze of Left-wing glory, taking out the forces of conservatism's last bastion and scoring the greatest victory for socialism since the glory days of Hugh Dalton and Sir Stafford Cripps. Primary residences have long been the great tax taboo, the last line of defence against predatory politicians: no government has been able to directly tax their gains in value or to impose an annual levy (a property wealth tax) over and above council tax. Slapping CGT on primary residences or an annual property wealth tax based on the value of one's home isn't some minor technocratic tweak to the tax system to make it slightly more 'efficient' or 'fair': it's an attempt at dynamiting the foundations of our society, to drastically curtail the power of the petite bourgeoisie, and to enshrine the political class's supremacy. Unlike with ISAs or pensions, whose tax-beneficial status are understood to survive at the Chancellor's discretion, primary residences are an Englishman's tax-free castles, for which we assume we have a natural right not to be taxed. This is one of the last in-built libertarian assumptions in British society, and the reason why Reeves's proposed tax 'reforms' are so pernicious. Tim Leunig, who advised Rishi Sunak and whose Left-wing ideas are also proving attractive to Reeves, is advocating for a 0.44 per cent levy on homes worth up to £500,000 to replace council tax. He simultaneously wants stamp duty to be replaced by a 0.54 per cent annual tax on homes above £500,000, with an extra 0.28 per cent supplement on values over £1m. These would be revenue-neutral, which wouldn't be good enough for Reeves: she wants to raise billions more. The rates would need to be even higher. I loathe council tax and stamp duty, but this idiot savant scheme would create Britain's first annual wealth tax, levied on a stock of illiquid assets, and would prove even worse. Property rights would be abrogated, and homeowners downgraded into leaseholders, paying the state-cum-landlord a fee for the right to keep living in our homes. The ancient tradition of the yeoman freeholder would be extinguished. Many homeowners would end up paying £7,000, £15,000 or more a year. At best, there would be no money left for holidays or school fees; at worst, total tax bills would exceed 100 per cent of annual incomes. Pensioners and the cash-poor would be forced to sell. Many would pray their house didn't increase in value, and halt repairs and enhancements. Some would tear down garages or annexes to reduce their annual tax, or allow homes and gardens to fall into disrepair to influence assessors. Entrepreneurs, rich investors and the last non-doms would flee the UK. We should scrap stamp duty, but by cutting spending, not by introducing this repulsive new form of larceny. Imposing CGT on primary residences would be almost as toxic. Like every new tax, invariably pitched to us as limited in scale and scope, it would soon be extended, in this case to ever more homes. The rates would soon be equalised to that on income. Eventually, it would become impossible to make any gains from property at all. Tax used to be only payable on real capital gains, not on inflationary increases. Labour largely ended that key protection; the Tories scrapped the last safeguards. Inflation, now at 3.8 per cent, is once again a silent thief, delivering what Milton Friedman described as 'taxation without legislation' on a grand scale. Under Reeves's plans, homeowners would pay tax on phantom inflationary gains and in many cases lose money in real terms. This would be especially true in London, where real, as opposed to nominal, property prices are often lower than they were a few years ago. It would be barely concealed theft. Buying a house would become a high-risk gamble. Homeowners who haven't kept every receipt would face tax bills for their recently completed new kitchens. More generally, there would be far fewer future home improvements and extensions as the post-tax payback would be lower. Nobody who didn't have to sell their home would do so, especially with the prospect of a Reform government reversing the raid. The housing market would implode. This war on homeowners is a bridge too far, a leap into proto-Marxist hell. Reeves is seeking to pauperise the middle classes. Taxpayers must make their fury known, write to their MPs and take to social media. This is the final battle, the fight to end all political fights: the Chancellor must be persuaded to change her mind, or else there will be no hope left for this country.
The Guardian
2 hours ago
- The Guardian
How Labour can build a stronger British economy
If Rachel Reeves is serious about ensuring that Labour's second year in power is all about a stronger economy that rewards working people across the country (In our first year Labour fixed the foundations – now we must build a stronger economy for a renewed Britain, 13 August), she needs to rethink what your editorial called the UK's 'broken growth model' (6 August). The growth that Britain needs is an increase in economic activity that improves social and environmental infrastructure nationwide. This involves a huge increase in secure, well-paid jobs to rebuild a more resilient future economy. The last thing that is required is Reeves's obsession with more deregulation of the City and pressuring savers into investing in the stock market. What is needed instead is a massive increase in a socially and green-oriented bond market that will provide secure returns for savers. This will require intense pressure to be put on Reeves to shift her emphasis away from global financiers to recognising UK savers as saviours. She should make clear that in return for the tax breaks that those investing in Isas and pensions receive, a considerable percentage of such savings would be invested in green and social infrastructure projects. This would help tackle the climate crisis and rebuild our economy as well as the crumbling cohesion of our society. Colin HinesConvener, Green New Deal Group Rachel Reeves wants to solve Britain's productivity problem by kickstarting economic growth. Four decades ago, Britain decided to become a consumer economy when others chose to be investment economies. The mistake in tackling the fallout of the global financial crisis after 2008 was to slash capital spending at a time when money was cheap. The chaotic governments of Boris Johnson and Liz Truss created damaging uncertainty for investors. The world has become more uncertain, but political decisions also mean growth each year was on average twice as strong in the 16 years before the financial crisis than in the 16 years since, taxation as a proportion of GDP has reached historic highs and productivity is painfully weak. The chancellor needs to be bold and ambitious for Britain's economy. We must exploit the opportunities of the digital revolution, advance our skills base, join up government so that departments are all focused on growth and become a true investment economy at Stephen BarberUniversity of East London Rachel Reeves claims to have fixed the country's financial foundations in Labour's first year in office, but I am certain that the 4.5 million children still living in poverty, an increase of 100,000 from the previous year, wouldn't agree. At the same time, UK billionaires' wealth increased by £35m a day to £182bn, with Britain having the highest proportion of billionaire wealth derived from monopolies and cronyism among G7 Michael SymondsEmeritus professor, University of Nottingham No, you haven't 'fixed the foundations', chancellor. Where are the Labour values in 'renewal is our mission and productivity is our challenge'? Not a word about redressing the wealth gap between the rich and the poor; not a word about ending the two-child benefit cap; not a word about restoring the level of overseas aid. Rachel Reeves's article could have been written by George Osborne – and I for one fear what else that might entail for our dilapidated public space. It isn't good enough just to be wealthy – it's what you do with it and how fairly you spread it that counts. That is supposed to be the Labour D BryantPenarth, Glamorgan I find it disappointing that Rachel Reeves refers only to 'working people'. This indicates that she is not considering other groups such as pensioners, or those who cannot work either through disability or because of a lack of suitable jobs for which they are qualified. She refuses to target the super-rich, preferring to hit easy targets by keeping the two-child benefit cap, not raising tax thresholds (pushing more people into paying tax and higher tax) and targeting cash Isa allowances. Some people have had bad experiences with stocks and shares and are reluctant to risk their savings again. She has not learned at least two things from history: first, trickle-down economics does not work, as wealth floods into foreign tax havens, not to the less well off. And second, removing restrictions on the financial sector leads to people and financial organisations being overstretched and a banking EvesMold, Flintshire Have an opinion on anything you've read in the Guardian today? Please email us your letter and it will be considered for publication in our letters section.
The Guardian
2 hours ago
- The Guardian
Reeves leaves no stone unturned as she mulls reforms for property tax
Rachel Reeves is in favour of radical tax reform – or at least she was in 2018. 'We need a radical overhaul of the tax system because our current system of wealth taxation isn't working,' she argued in her pamphlet The Everyday Economy. Seven years later, in her second year as chancellor, Reeves appears to be returning to some of the themes in that pamphlet, especially as it relates to the UK's convoluted and unpopular system of taxing property. The Guardian revealed on Monday the chancellor was considering scrapping stamp duty (used in England and Northern Ireland) and replacing it with an annual levy based on the value of someone's home and the time they bought it. On Tuesday, the Times reported that Reeves was also considering imposing the UK-wide capital gains tax on higher-value primary properties, even though the prime minister, Keir Starmer, ruled out doing so before the election. All this is part of what officials say is a wider examination of the UK's property tax system, which experts argue could be simplified and improved while also raising money to help fill Reeves' £20bn fiscal black hole. 'Reeves is so desperate to find money she is flying every kite going [floating policy suggestions] to see which ones get knocked down,' said Tim Leunig, an economist whose work Treasury officials have been studying. 'But there are important reasons to change the way our property taxes work, especially if you want to raise serious money.' Politicians have long looked at inflated property prices in parts of the UK and wondered how to squeeze more money from them. Vince Cable, the Liberal Democrat former business secretary, proposed a mansion tax in 2009 that would have taxed properties worth more than £1m at 0.5%. The plan was dropped when his party entered government and faced opposition from their Conservative coalition partners. The idea was taken up by the then Labour leader Ed Miliband, who claimed in the 2015 election campaign that the policy would raise £1.2bn a year. Until recently, Treasury officials have scoffed at the idea of anything resembling a mansion tax, saying it would encourage wealthy people to move abroad. But they admit the UK's property taxation system is riddled with problems. An obvious one is stamp duty, which is a one-off lump sum charged to people when they buy a new property, set at different rates according to the value of the property up to a maximum of 12% for properties worth over £1.5m. The problem with such a charge is that it disincentivises property purchases, slowing the economy, and reducing the turnover of new properties. Leunig has suggested instead that property owners pay a smaller annual amount based on the purchase price of the home, payable in perpetuity. A rate of 0.54% with an additional supplement for properties worth more than £1m would raise the same amount as stamp duty does. A higher rate, or temptingly for the chancellor, a bigger supplement, could raise far more. Such a system would help those who move frequently, but penalise those who stay in their homes for a long time. Leunig argues this would incentivise people to move into smaller, cheaper properties towards the end of their lives, freeing up larger stock for younger families. Another problem which many have identified is with council tax, which is both unpopular and messy, with rates based on property valuations from 1991. Successive government have shied away from a full revaluation, which would create millions of losers, but Leunig has suggested levying a new charge only on properties worth less than £500,000 – with those over that threshold being covered by the replacement for stamp duty. While officials are looking into potential changes to council tax, this is likely only to come in if Labour wins a second term in office. Ministers are aware that polls suggest raising council tax would be one of the most controversial options they have. A third problem comes with capital gains tax, which is charged at a rate far below income tax. Officials are now looking at whether to levy CGT on primary properties for the first time, albeit only over a particular threshold. There are two problems with doing this, however. One is that Starmer explicitly promised not to before the election. And the other is that it would prove a major disincentive for people to move out of larger properties. 'No other countries does this without some form of exemption or rollover which allows sellers to pay it much later down the line,' said Ben Hopkinson, the head of housing at the Centre for Policy Studies. There is one further problem for the chancellor: British property is already more heavily taxed than that in most other countries. According to the OECD, the UK takes in more property tax as a share of its gross domestic product than any other developed economy. 'Property is inherently difficult to tax,' said Leunig. 'But we still manage to do so – at a rate three times higher than Germany.'
