The sheer brass neck of Rachel Reeves never ceases to amaze.
The Chancellor’s speech last night to the City at the Mansion House was another example of her astonishing capacity for self-delusion and what can only be described as dissembling.
Using the first person with her usual tone-deaf arrogance, Reeves boasted about how the choices ‘I have made’ since taking office mean the economy is stronger, the fastest growing in the G7, with interest rates down, investment up, productivity up and wages up.
And that ‘Britain has beaten the odds and beaten the forecasts time and time again’.
Her policies, she had the gall to say, had helped in ‘fixing the foundations, restoring economic stability, and proving our capacity to deliver radical change’.
Blinkered: In her speech to the City at the Mansion House Rachel Reeves, pictured, boasted about how the choices 'I have made' had resulted in a stronger economy
Really? Pull the other one. Was this some last-ditch audition perhaps to persuade Andy Burnham to keep her on as Second Lord of the Treasury? Or had she woken up in another country? Poland maybe.
Because if it were the case that she and Keir Starmer had fixed the foundations, then it’s unlikely that the PM would have been kicked out and about to be replaced by Burnham.
Rather than the glowing economy she describes, the UK is suffering higher unemployment while half the population is on some sort of benefit, gilt yields are soaring, the national debt is ballooning, welfare spending is rocketing and the annual interest payments on that debt exceed what we spend on defence and education.
Put more bluntly, the Reeves/Starmer team bodged up.
More pertinently, confidence is at rock-bottom with households and businesses drawing in their horns ahead of the tax tsunami that is expected to wash over us in Burnham’s first autumn Budget.
The kite-flying about various tax increases – the latest kite being flown is for a tax raid of £38bn – is feeding that uncertainty.
And this uncertainty is hitting the real economy. One big land developer tells me he has pulled the sale of a prime housing development because there is zero interest from housebuilders to buy the site.
Yet it’s a prime site, one which would be considered bread and butter in normal times.
What an irony that a government which promised to build thousands more houses has been thwarted in its own promise because housebuilders are so nervous of another massive tax-raiding Budget.
If the leaks are to be believed, it’s a Budget that will squeeze the middle classes even more, by freezing tax thresholds, walloping ISAs and any other savings, hiking capital gains and putting inheritance tax into pensions.
Even Burnham knows that a punitive wealth tax would drive more of our wealthiest overseas.
The top 1 per cent already pay nearly a third of all income tax. So far, Burnham has had an easy ride down from the North.
But now come the bumps. The Bank of England governor, Andrew Bailey, is already warning him that the ‘big issue’ is growth, a problem which has haunted successive governments for nearly two decades.
There are rumblings too from long-term bond investors. One of the country’s biggest gilt investors, Rathbones, is pulling out of maturities. These are those very investors whom Burnham said we should not be ‘in hock to’.
Add to this uncertainty the Middle East conflict. With the price of oil and commodities on the rise again, the next move in interest rates and inflation will be up.
Yet Burnham has an opportunity to avoid catastrophe. Ironically, he would do well to learn from the chaos of the Liz Truss reign.
She was in too much of a hurry, and didn’t take enough care to keep potential enemies or the markets on side.
Burnham doesn’t need to be in a rush: if he avoids tinkering with the Budget but promises bold reform to welfare – such as grown-up schemes to help people back to work – the new PM has the chance to win over the gilt market. And maybe voters too. He needs to show he is more than Starmer with mascara.
The Financial Conduct Authority’s stance on the scandalous attempt by US firm Litani to buy out Aviva’s private investors at a bargain price is pathetic.
The FCA has only said that investors should carefully consider their options. This is not good enough.
It is time the City’s watchdog showed it really does have teeth hiding behind its rather meek growl. This scam needs to be stopped.
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