Rachel reeves

Friday

Tim Shipman

Pain is inevitable for Rachel Reeves

A year ago, the Chancellor called her £38 billion tax rise a ‘one-and-done’ move. Now she looks set to rinse and repeat, with reports that a 2p increase in income tax is on the table. According to The Times, she has informed the Office for Budget Responsibility that a rise in personal taxation is one of the ‘major measures’ she will announce. This is the strongest signal yet that she will break Labour’s manifesto pledge not to increase income tax rates. What does this mean for the Chancellor, and taxpayers? Elsewhere, David Lammy suffered a disastrous Deputy Prime Minister’s Questions after dodging questions on whether there had been another prisoner

Thursday

Martin Vander Weyer

Income tax must rise ­– but Rachel Reeves must go

Call me hard-hearted, but I doubt even a magic mushroom-induced tantric visualisation of a harmonious universe could transport me into a state of sympathy for Rachel Reeves. Her content-free but don’t-blame-me speech on Tuesday morning did nothing to make me feel more benign. Yes, it’s not entirely her fault that a Labour cabinet can’t deliver welfare cuts, that defence spending must rise and that the UK has a chronic productivity deficit; and yes, the Tories left a mess behind. But in every other respect she’s in a trap of her own making, in which the only Budget move that might restrain out-of-control public borrowing, namely raising income tax, is also

The Spectator

Letters: Venezuela’s middle-class exodus

Minimum requirement Sir: Some of Charles Moore’s observations about the minimum wage are pertinent (Notes, 1 November). However, what many also lose sight of (most of all our Chancellor) is that by government raising the minimum wage, those employees who were just above it usually seek pay rises to stay ahead of it, or employers risk losing those staff. This can then have a ripple effect through the whole organisation. It is another reason the Chancellor’s last Budget had such a profound impact on companies and, in turn, the economy at a delicate time. With employers’ NI rises as well, company cost bases have risen significantly, stifling investment, growth and

Charles Moore Charles Moore

The rudeness of Reform

Critics see Rachel Reeves as betraying her election manifesto tax promises; but she may well be trying ‘The Lady’s Not for Turning’ gambit. Her speech from Downing Street delivered before the markets opened on Tuesday, resembled – in content, if not in style – Margaret Thatcher’s 1980 party conference speech. In both cases, the incoming government had failed to get public spending and borrowing under control. (Indeed, government borrowing costs then were 6 per cent of GDP, compared with a mere 5.1 per cent today.) Also in both cases, the government sought simultaneously to go against earlier promises not to raise taxes, yet to do so in the name of

Wednesday

Michael Gove

Rachel Reeves’s Budget ‘bollocks’ & Britain’s everyday crime crisis

48 min listen

To submit your urgent questions to Michael and Maddie, go to: spectator.co.uk/quiteright This week on Quite right!: Rachel Reeves goes on the offensive – and the defensive. After her surprise Downing Street address, Michael and Maddie pick over the many kites that have been flying in advance of the Budget at the end of the month. Was she softening the public up for tax rises, or trying to save her own job? Michael explains why Reeves is wrong to say that Labour’s inheritance is the reason for our current economic misfortune and says that it is ‘absolute bollocks’ that Brexit is to blame. Next, a chilling weekend of violence sparks

Tuesday

Michael Simmons

Is Brexit to blame for Britain’s economic doom loop?

22 min listen

Rachel Reeves is preparing for her first major Budget – but is Brexit really to blame for Britain’s black hole? Host Michael Simmons speaks to independent economist Julian Jessop about the OBR’s productivity downgrade, Labour’s tax plans, and whether Reeves is right to point the finger at Brexit.

Thursday

Tim Shipman

Reeves’s fiscal play-off

In a week where political attention was on espionage and anti-Semitism, the cri de coeur from one Treasury official was notable. Recalling how Budgets were made during the years of Gordon Brown, before the 2010 coalition created the Office for Budget Responsibility (OBR), the number-cruncher complained: ‘All they had to do was fiddle their own figures. That was a dream compared with this.’ Earlier this month, Rachel Reeves received the OBR’s first estimate of the state of the public finances, showing the depth of the ‘black hole’. She will shortly get another OBR report on how falling productivity is damaging growth. For every 0.1 per cent productivity growth is downgraded,

Thursday

Martin Vander Weyer

The AI crash is coming

Who knows what Rachel Reeves reads in bed. Perhaps she dips into her own debut book, The Women Who Made Modern Economics (2023), and dreams of those carefree pre-government days when serious people, Mark Carney for one, thought she might make a decent Chancellor. But if she’s also burning midnight oil over drafts of her Autumn Statement, I hope her boxes are packed with granular data on the state of the UK job market. September normally sees a recruitment surge, but not this year. A summary of recent stats in IFA Magazine shows vacancies down by 119,000 from a year ago and entry-level graduate jobs down by as much as

Thursday

The Spectator

Rachel Reeves’s self-defeating attack on British racing

Few British traditions can claim as long a history as racing. The first races thought to have taken place in these islands were organised by Roman soldiers encamped in Yorkshire, pitting English horses against Arabian. By the 900s, King Athelstan was placing an export ban on English horses due to their superiority over their continental equivalents. The first recorded race meeting took place under Henry II in Smithfield as part of the annual Bartholomew Fair. Nearly 1,000 years later, racing remains the nation’s second most popular spectator sport. Five million people attend more than 1,400 meets throughout the year. The industry is estimated to be worth more than £4 billion,

Thursday

Martin Vander Weyer

This is the least business-savvy government in half a century

In this season of scant corporate news – a Ryanair rant against the French here, a new BP oilfield there – it’s hard to know what business leaders are thinking about the cold months to come. Until, that is, you read a survey conducted last month for the Institute of Directors. Given that I’m writing from France this month, I’d call it an absolute croissant-dropper. The nub is that 639 UK businesses, large and small, report ‘optimism in prospects for the UK economy’ at -72, lower even than their darkest pandemic sentiment at -69 in April 2020. Export hopes and investment intentions are down, wage expectations are sharply up and,

The Spectator

Britain is broke – and we all need to face it

Sometimes when I go to bed, I think that if I were a young man I would emigrate,’ said James Callaghan, the then foreign secretary, in 1974. He was referring to that decade’s chronic economic dysfunction, with its double-digit inflation, growing unemployment and stuttering growth. Two years later, as prime minister, he would have to go cap in hand to request a bailout from the International Monetary Fund. Two years after that came the Winter of Discontent. Today’s economic picture may not be quite so bleak. Even so, the young see only intractable stagnation, cost-of-living pressures and visible decline. A recent poll suggested that more than a quarter of 18-

Thursday

Dot Wordsworth

Are Reeves and Starmer really in ‘lockstep’?

‘She and I work together, we think together,’ said Sir Keir Starmer of Rachel Reeves, the Chancellor of the Exchequer. ‘In the past, there have been examples – I won’t give any specific – of chancellors and prime ministers who weren’t in lockstep. We’re in lockstep.’ ‘Sounds like you and me,’ said my husband sarcastically. But I was wondering whether the Prime Minister was aware of the connotations of his claim about being in lockstep. The Merriam-Webster dictionary gives the meaning ‘in perfect or rigid, often mindless, conformity’. An image might be the scene in Fritz Lang’s film Metropolis (1927), where the overalled workers change shift, their heads bowed, their

The Spectator

Portrait of the week: Rachel Reeves cries, Rishi Sunak joins Goldman Sachs and a six-month bin strike

Home Rachel Reeves, the Chancellor of the Exchequer, had given a theme to the week by sitting weeping behind Sir Keir Starmer during Prime Minister’s Questions. She later said: ‘It was a personal issue.’ Sir Keir said: ‘She will be Chancellor for a very long time to come.’ No. 10 said she and the Prime Minister were ‘in lockstep’. The government found itself short of the £5 billion it had meant to save in the welfare bill, thwarted by its own MPs. The Office for Budget Responsibility said that, with rising debt, ‘The UK’s fiscal position is increasingly vulnerable’. Asked whether she would rule out tax rises in the autumn, the

Saturday

Tim Shipman

Labour’s first year (in review) with Tim Shipman & Quentin Letts

22 min listen

Cast your mind back a year. Labour had just won a storming majority, promising ‘change’ to a stale Tory party that was struggling to govern. But have things got any better? In the magazine this week, Tim Shipman writes the cover piece to mark the occasion of Labour’s first year in government. He takes readers through three chapters: from Sue Gray (freebies scandal and winter fuel cut) to Morgan McSweeney (a degree of professionalisation and dealing with the Donald) to the point at which ‘things fall apart’ (assisted dying, the welfare vote and Reeves’s tears). On the podcast, Tim is joined by The Spectator’s James Heale as well as sketchwriter

Thursday

Oscar Edmondson

NHS reforms: Labour puts on a brave face

14 min listen

Today Wes Streeting – with the help of Keir Starmer and Rachel Reeves – announced his 10 year plan for curing the NHS. It’s all about creating a ‘Neighbourhood Health Service’, but what does actually mean in practice?  Much of the plan was leaked in advance: first, focusing on preventing disease before it becomes too late; second, improving community healthcare services to help reduce pressure on hospitals; and third, embracing the tech revolution to bring the NHS into the ‘digital age’. One of the glaring omissions is a chapter on how this will all be delivered. Perhaps the most notable part of today’s launch was the decision to include Rachel

Matthew Parris Matthew Parris

How Labour governments always end

Couldn’t we just skip to the end? I’m old enough to have seen this so often: must I sit through each dreary succeeding scene again? Parties in government are animals: they have natures; their natures do not change; they are incapable of being different animals; and what follows, follows. A Labour government finally runs out of money and enters a period of slow-motion disintegration, ending in a chaos of finger-pointing and blame-shifting, still whimpering about social justice as the bailiffs move in. Already the suspense has gone. There will be many twists and turns, probably over years rather than months, before this government pulls apart at the seams; but, honestly,

Saturday

Michael Simmons

Why is Britain’s economy so unhealthy?

20 min listen

The Spectator’s economics editor Michael Simmons is joined by the outgoing boss of the Institute for Fiscal Studies Paul Johnson and the CEO of the Resolution Foundation Ruth Curtice to understand why Britain’s economy is in such a bad place. Given it feels like we are often in a doom loop of discussion about tax rises, does this point to a structural problem with the British economy? And why are the public’s expectations so out of line with the state’s capabilities? Michael, Paul and Ruth talk about whether it’s fair for Labour to claim they’ve been ending austerity, the extent to which the effects of the covid-19 pandemic are still

Thursday

Claire Ainsley

Is Rachel Reeves’s headroom shrinking?

13 min listen

There were clear winners and losers in Rachel Reeves’s spending review yesterday but some of her announcements around capital spending and investment saw her dubbed the ‘Klarna Chancellor’ by LBC’s Nick Ferrari for her ‘buy now, pay later’ approach. Clearly trying to shake off the accusations of being ‘austerity-lite’, Labour point to longer term decisions made yesterday, such as over energy policy and infrastructure. But will voters see much benefit in the short-term? And, with the news today that Britain’s GDP shrank by 0.3% in April, will the decisions Rachel Reeves have to make only get harder before the October budget? Lucy Dunn speaks to Michael Simmons and Claire Ainsley,

James Heale James Heale

Rachel Reeves, the Iron Chancer

Gordon Brown may not be every teenager’s political pin-up. But as an Oxford student, Rachel Reeves proudly kept a framed photo of him in her bedroom. It was Brown who introduced the first multi-year spending review in 1998: the kind of big political set-piece speech which he relished. Reeves’s speech on Wednesday showed the level of constraints facing the Treasury this decade vs the 1990s. Chess, not poker, is the Chancellor’s chosen game of recreation. As a player and a politician, she prides herself on making decisions guided by skill, care and thought. Yet this week she staked her government’s future on a series of political bets. Her tax rises

Tuesday

Michael Simmons

Labour goes nuclear while Reform turns to coal

17 min listen

Rachel Reeves has pledged a ‘new era of nuclear power’ as the government confirms a £14.2 billion investment in the Sizewell C nuclear plant in Suffolk. This comes on the eve of Labour’s spending review, with the government expected to highlight spending pledges designed to give a positive impression of Labour’s handling of the economy. However, as Michael Simmons tells James Heale and Lucy Dunn, there are signs that the government’s National Insurance hike is starting to bite. Plus – Nigel Farage has made two announcements in as many days. This morning, he unveiled Reform’s new chairman, former MEP Dr David Bull, taking over from the recently returned Zia Yusuf.