A hundred long days and short nights (I don’t sleep well) have passed since Labor came to power with an overwhelming majority. And while I rarely rant—friends tell me I internalize too much—this administration worries me like no other in my 30-plus years of reporting on money matters. It scares me to death.
Everything Sir Keir Starmer’s tribe have done since July 5 has left me extremely unimpressed.
Whether it’s pandering to public sector unions on wages and pensions, pursuing a fiery (and expensive) green energy agenda, tying companies in knots and costs over better rights for workers , or forcing landlords to give up the game over improved tenants’ rights Labor is piling up problems – big problems – for the economy.
Unions, buoyed by what Labor has already given them in terms of generous pay rises, will continue to demand inflation-busting pay rises.
The zealous pursuit of a green energy agenda will drive up bills – and leave the country vulnerable to periodic power outages as demand for electricity soars to accommodate the shift away from gas, overwhelming the National Grid.
The Institute for Fiscal Studies warned that Chancellor Rachel Reeves may have to find £25 billion in tax increases to meet her government spending obligations and avoid cuts.
The new Employment Rights Bill – the brainchild of serial raver and Deputy Prime Minister Angela Rayner – will drive up costs for many businesses. Some small businesses will certainly respond by reducing their workforce.
Rayner’s Renters’ Rights Bill will also put even more private landlords out of business because the financial figures will no longer make sense. Put all these negatives in a giant pot and you have a recipe for economic disaster, not the new economic dawn that Starmer believes will soon be on the horizon. The economy will come to a standstill.
A few days ago, the Institute for Fiscal Studies warned that Chancellor Rachel Reeves may have to find £25 billion in tax increases to meet her government spending obligations and avoid cuts. That’s a lot of tax increases.
The financial markets, which eventually ended Liz Truss’s brief spell as Prime Minister because they failed to approve her unfunded tax cuts, are increasingly nervous about Labour.
Government bond yields are rising slowly, which could indicate higher mortgage costs. The only positive is that the UK stock market hasn’t panicked yet, but don’t rule that out.
The specific tax increases that will hit our personal wealth will be set out in the Chancellor’s Budget on October 30.
As a result of the commitments in the Labor manifesto, we already know that income tax rates will not increase (good), nor will the VAT rate (better).
Also, National Insurance Contribution (NIC) rates for employees will not be increased (triple good).
But with Labor already backing away from taxing non-doms and private equity investors to the hilt (for fear of losing the wealth creation they generate), it’s a certainty that it will be Middle Englanders (readers of The Mail on Sunday and the Ny Breaking) which will absorb most of the tax burden.
So brace yourself for higher taxes on capital gains (from investments, second homes and rental portfolios) and a more draconian inheritance tax regime (with stricter rules for tax-free gifts to loved ones).
And of course our pensions are not spared. While employers may take the biggest hit when they have to pay NICs for the first time on the additional payments they make to employees’ pension funds, it is likely that our right to tax-free cash will be severely curtailed.
Currently, most savers have tax-free access to 25 percent of their pension pot once they reach the age of 55. But the pound amount is limited to £268,275. The Chancellor could well reduce this to £100.00 in her quest for additional tax revenue.
It’s not a pretty picture (sorry if I ruined your Sunday) and I’m sure some of you won’t share my pessimism.
But 100 days of this Labor government is 100 days too many. We’re in for five years of financial pain. It’s time to batten down the hatches and put as much money into tax-exempt vehicles like individual savings accounts (ISAs) and pensions (despite the expected restriction on tax-free cash) as you can.
Shame on the cold shoulder for fuel payment protesters
It was encouraging to attend a demonstration outside Parliament six days ago against Labour’s decision to trial the winter fuel payment.
Although the event was hijacked by trade union Unite with its phalanx of red balloons, banners and a booming megaphone, 350 members of the National Pensioners Convention took action, with many lobbying MPs in the House of Commons.
While I do not agree with the NPC and Unite position that the cuts to the Winter Fuel Payment (worth up to £300) should be reversed, it is clear to all Bar Government Ministers that the way they have been implemented is unfair.
The reason for this is that too many retirees living in poverty will lose benefits because the eligibility criteria for continued payment is too onerous. Only those who receive a pension credit – and some other benefits – will still receive the payment.
A banner at the demonstration in London outside Parliament against Labour’s decision to trial the winter fuel payment
As a report from charity Age UK confirms, four in five pensioners living below – or just above – the poverty line will now lose benefits.
The charity’s Caroline Abrahams says that ‘unless ministers change course quickly, millions of older people on low and modest incomes could face disaster as the weather turns colder’.
Against the backdrop of repeated chants – ‘Keir Starmer, don’t be cruel… give us back our winter fuel’ – I interviewed pensioners at the meeting, including Sharon and John Baker from Woking in Surrey.
Although they can afford to lose their payment, they waved the flag for relatives who are in a much worse financial situation and will be denied the money.
Former electrical engineer John, 74, said: ‘Labour has bullied pensioners when surely there are other areas of government spending that are more worthy of cuts.’ So true.
Meg McDonald, a feisty 81-year-old former teacher from west London, has also lost her fuel payment. She carried a “Cold Homes Kill Us” banner and said she would “struggle” to keep her basement warm in the coming months. How sad.
It is now clear that Labor will not look at how to implement the abolition of the payments in a more sensitive way.
The result is a hateful attack on some of the country’s most vulnerable pensioners that will make little more than a dent in overall government spending. Embarrassing.
Some building associations take wokeism to the extreme. The latest is Nottingham, who have decided to drop Robin Hood – the legendary Sherwood Forest hero – from the logo.
Nottingham, which has more than 30 branches, says the makeover is ‘a reflection of society as it is today’. It adds: ‘For us, that means standing up for inclusivity and celebrating financial diversity.’
Oh honey. Nottingham Building Society (as it will now be known) certainly has much more important things it could do with its members’ money. To start with, raising the savings interest rate would be sufficient.
If you are a member of Nottingham (sorry, Nottingham Building Society) and have a view of the the eradication of Robin Hood by society, send an email: jeff.prestridge@mailonsunday.co.uk.
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