Ross Clark

Just how much more desperate can Rachel Reeves get? Giving an even heftier clue to Radio 5 listeners on Monday that she is going to break Labour’s manifesto promise and raise income tax, the Chancellor explained that this is necessary in order to raise Britain’s lousy productivity record. Sticking to the manifesto commitments, Reeves said: Would require things like deep cuts to capital spending. The reason why our productivity and our growth has been so poor these last few years is because governments have always taken the easy option to cut investment in rail and road projects, in energy projects, in digital infrastructure. As a result, we’ve never managed to get our productivity back to where it was before the financial crisis.

Like the John Lewis Partnership he used to run, Sir Charlie Mayfield, who has just completed the government’s ‘Keep Britain Working’ review, comes across as terribly nice and civilised. It’s just a shame he can’t quite bring himself to put the boot in and deal properly with the problem of mass worklessness he correctly identifies. Had the job been given to a more ruthless business operator – perhaps someone from Amazon, Aldi or one of the other businesses which is steadily devouring John Lewis’s lunch – government might actually have a hope of a workable solution. Mayfield all but ignores the real problem: it has become far too easy to claim out-of-work benefits Mayfield is not wrong in his diagnosis.

So just what was the point in dragging political journalists out of bed to be addressed by Rachel Reeves in Downing Street this morning? We could – and should – have had the Budget by now. Instead, we got a half Budget speech – a desperate attempt to blame the Tories, a vague suggestion that taxes are going to go up (which we know anyway) without any details. We heard yet more about Liz Truss and Kwasi Kwarteng, despite the fact that they have been out of office for more than three years. Reeves herself has been in office approximately ten times as long as Truss and Kwarteng were. Reeves is fooling herself if she thinks that the public are going to swallow her excuses.

There can be no more Panglossian document than the UK international climate finance results published by the government last month. Apparently, since 2011 UK taxpayers have helped prevent 145 million tonnes of greenhouse gas emissions, given 33 million people improved resistance to climate change and saved 717,000 hectares of ecosystem. How proud we can all feel of ourselves. Except, that is, we are beginning to learn a bit more about how our money – £11.6 billion of it between 2021/22 and 2025/26 alone – is being spent. There is £52 million, for example, on a road driven through the rainforest in Guyana and millions for a rewilding scheme in Uganda which involved subsistence farmers being thrown off the land.

It seems pretty certain now that having flirted with just about every tax rise under the sun, Rachel Reeves is going to increase income tax in her Budget on 26 November. That much became clear when Keir Starmer declined to take Kemi Badenoch’s invitation to rule out a rise in income tax rates at Prime Minister’s Questions yesterday. Previously when asked the question, he had always suggested that the government would stick to its promise not to raise the main rates of income tax, National Insurance or VAT.     Reeves will no doubt blame Brexit (as she already has done), the Tories (ditto) and Donald Trump for her fiscal black hole which is now forcing her to break the manifesto promise.

We are still four weeks away from the Budget and already we have had virtually every tax rise floated before us by Treasury leaks. This is presumably in the hope of managing our expectations so that if we think the Budget is going to be really, really dreadful, we will be pathetically grateful to Reeves when it turns out merely to be fairly dreadful. Is the Chancellor really intending to impose an annual mansion tax of 0.1 per cent of the value of every home above £2 million? It plays to the Labour gallery alright; maybe the idea has even come from the undead at the heart of the cabinet: Ed Miliband, who came up with a similar idea in his previous life as Labour leader in 2015.    This mansion tax is a pretty poor idea.

Oh, the horrid injustice of it all! By the skin of their teeth, pensioners on the state pension and with no other income, are going to avoid paying income tax next year. With September’s inflation figures now in, it can be confirmed that, thanks to the Triple Lock, the state pension will be rising to £12,547 next April, bringing it perilously close to the personal tax allowance of £12,570. You can write down in your diary now the day next year when the state pension certainly will tip over into taxable territory. There will be howls of outrage from opposition parties and pressure groups representing pensioners during this week. Prepare yourself for images of frozen old people rubbing their hands together over a one-bar electric fire – if not a single candle.

It is day three of Labour’s latest strategy: to try to blame Nigel Farage for the forthcoming tax rises in the Budget. After Health Secretary Wes Streeting had a go on Monday, Rachel Reeves this morning has made a similar point. The reason she is looking to raise taxes in the Budget, the Chancellor says, is because of Brexit. ‘There is no doubting that the impact of Brexit is severe and long-lasting,’ she said. Next up, apparently, is Keir Starmer, who at one point is going to tell us that Farage is guilty of campaigning for Brexit and then walking away from its implementation. Given that he wasn’t, and never has been, prime minister or a member of the government, it is hard to see how Farage could have implemented Brexit, but never mind.

Wasn’t Labour supposed to be tackling the scourge of insecure employment, doing away with exploitative zero hours contracts and giving employees protection against unfair dismissal from the first day they start their jobs? How odd then that so far it seems to have achieved the exact opposite. The latest labour market figures released by the Office for National Statistics this morning shows that the number of payrolled employees between June and August was 115,000 lower than in the same period last year. Over the latest quarter the fall was 31,000. An apparent rise of 10,000 payrolled positions in August seems to have been reversed in the provisional figures for September.