We knew Reeves would be a disaster after she made the politically inept decision to rob 10million pensioners of their Winter Fuel Payment. She thought it made her look tough but instead she just looked out of touch.
Reeves, in collusion with PM Keir Starmer, then made another awful decision: to talk down the UK economy and warn of Budget tax hikes.
This terrified the life out of businesses, which stopped investing, and consumers, who stopped spending. The result: instead of growing in September, the economy shrank 0.1%.
Labour’s Budget in October was even more brutal than expected, with £40billion of tax hikes and an extra £30billion worth of government borrowing.
There’s so much to criticise but I’ll focus on the misfiring decision that will see Angela Rayner hopping around.
Reeves loaded £25billion of extra national insurance (NI) charges onto employers, while increasing the national living wage by an inflation-busting 6.7%.
Everybody from the Bank of England to the Confederation of British Industry has been warning that this will squeeze business profits, drive up inflation and knock growth.
Starmer and Reeves had only one suggestion for boosting growth. They pledged to “to get Britain building again”, by constructing 1.5million homes during its five-year term in power.
Rayner was charged with delivering that, in her role as Secretary of State for Housing, Communities and Local Government. And Reeves has just wrecked any chance of success.
The chancellor’s Budget NI raid and minimum wage hike will drive construction companies out of business because they can’t afford to meet the added cost of employing the workers they need to build those homes.
They’re already falling like dominoes.
More than 4,200 contractors have gone bust so far this year, according to property development body the Considerate Constructors Scheme (CCS).
Construction company ISG, which held government contracts worth billions of pounds, is just the latest to go phut. There will be many more once that NI raid bites next April.
CCS executive chairman Amit Oberoi has said the industry is angry at the Budget NI hikes as this “makes it harder for smaller firms to hire staff, offer pay rises and create jobs”.
Developer’s are on a “knife edge”, he told the Daily Telegraph. “We won’t see the depths of this until probably the middle of next year.
This won’t just stop private housing developments. It will also scupper the social housing boom that Raynor is desperate to engineer to boost her credentials with the party faithful.
Is there nothing Reeves hasn’t wrecked since her appointment?
Labour’s plan to build 1.5million homes was always pie in the sky.
Back on July 22, four months ago, I wrote that Starmer didn’t stand a chance of hitting that fanciful target.
Finally, on November 20, planning minister Matthew Pennycook admitted this would be “more difficult” than Labour thought in opposition.
Heaven help us. What exactly was Labour thinking in opposition? Whatever it is, it’s collapsed at its first collision with reality.
There’s already a huge shortage of workers in the construction industry.
Now Reeves has made employing them even more expensive. So many companies simply won’t. House completions will fall as a result. Rayner will fail.
This is partly Rayner’s fault, too.
Her flagship workers’ rights reform will cost businesses far more than the £5billion ministers originally claimed, leading to wage cuts, job losses and even failed companies.
That won’t do anything for Labour’s house building plans either. So Rayner has shot herself in the foot, too. It would be funny if it wasn’t such a disaster.
