Scorched earth Chancellor – Rachel Reeves to ruin UK for Tories or Farage | Personal Finance | Finance
Few believe Rachel Reeves will still be in office at the next election. He definitely won’t be in power AFTER he gets the say of the voters. So is Keir Starmer. Labor will be swept away by the tidal wave of public anger over economic mismanagement. Even senior Labor MPs are appalled by their incompetence.
Dame Meg Hillier, chair of the House of Commons Treasury select committee, criticized the recent Budget chaos, saying it was “like throwing a few hand grenades onto the field”. In practice, as Friday’s data confirms, Reeves has done much worse than that.
Incredibly, the UK economy shrank by 0.1% in October; This follows a similar decline in September and zero growth in August.
As the budget approached, consumers stopped spending, the housing market stalled, and employers halted hiring for fear of the impending carnage.
They were right to be afraid. Reeves hit us with another £26bn tax increase on top of last year’s £40bn; will spend this money solely on public sector wages and welfare.
The economy is “booming”. Inflation is higher than it should be, unemployment is climbing, and borrowing costs are much higher than in other major economies. The pound may be set for a “crunchy” decline.
It’s clear that Reeves isn’t cut out for the job. He cannot even perform simple daily tasks such as telling the truth.
But something bad is also happening. He is playing a ruthless political game using the UK economy as bait.
Reeves thinks the Conservative Party mistreated him and wants to make them pay for it. Or Nigel Farage. Either will work.
His budget was derided as “spend first, tax later”, and rightly so. Reeves is front-loading spending by extending the freeze on fuel duty and household energy support and removing the two-child benefit cap from next April.
It also postpones the tax increases that would pay for it. The £2m “mansion tax” will not come into effect until 2028. Pension sacrifice reforms would save £4.5bn a year, but not until 2029.
The extended freeze on income tax thresholds will not take effect until 2028/29.
Reeves also claims it will cut Civil Service running costs by 15%, but only by “the end of Parliament”. It is targeting a budget surplus, but not until 2030/31. Did you notice anything suspicious about all these dates?
The next general election must be held no later than August 15, 2029, and could take place well before that date. Most of the tax increases and spending cuts won’t happen until then.
Reeves enjoys spending money today, but the pain of restoring fiscal responsibility will fall to those who follow his destructive reign.
So what is he doing? In my view this is a brutal revenge attack on whoever wins, be it Nigel Farage’s Reform UK, the Conservatives or a coalition of the two.
Their first order of business will be to cut spending, at which point the left will shout “austerity”. Reversing Reeves’ tax increases won’t be easy, thanks to his extravagance.
Labor is making sure there is no money left, just as Gordon Brown’s government famously did.
This is a cruel, cowardly and vengeful approach that burns everything behind and leaves nothing for the next government. Once again, the British people will foot the bill.
