Every day, new data rolls in showing how she has made a hash of the economy since Keir Starmer appointed her chancellor in July. That’s on top of the damage inflicted on pensioners, of whom 750,000 will be left in the cold after she axed the winter fuel payment.
It’s going to be a cold winter for millions more after the incompetent Reeves turned the UK’s recovery into a looming recession, almost overnight.
Today, new analysis by CBI Economics shows that her vindictive decision to slap inheritance tax on family businesses will destroy 125,000 jobs.
It will also lead to the forced sale of family owned businesses – including one I spoke to that faces a £26million inheritance tax bill when the founder dies.
Reeves claims her priority is growth, but all she has done is sabotage it.
Why she – or number crunchers at the useless Treasury – thought it was a good idea to destroy family businesses is anybody’s guess.
I don’t think they did their sums.
Or if they did they got them plain wrong. Just like they underestimated the impact of making farmers pay inheritance tax. It will be five times worse than the Treasury reckons.
And it just gets worse. Today, Chris Williamson, chief business economist at S&P Global Intelligence confirmed that the economy is stagnating and was clear who is to blame.
He said: “Economic growth momentum has been lost since the robust expansion earlier in the year, as businesses and households respond negatively to the Labour government’s downbeat rhetoric and policies.”
Williamson said business confidence has sunk to a two-year low as companies work out how to afford the £25billion national insurance hike that Reeves thoughtlessly slapped on employers.
As soon as Starmer and Reeves opened their Pandora’s box of doom and gloom, the economy started to shrink rather than grow.
GDP fell by 0.1% in October and another 0.1% November.
Capital Economics now forecasts this will accelerate to 0.3% in December. If so, GDP will have shrunk by 0.5% over the final quarter of the year.
A recession happens when an economy shrinks for two consecutive quarters. At this rate we’ll be in one by March 31.
This is awful because it’s so unnecessary. Labour has put its bash-the-rich ideology over the good of the country.
It’s like having a bunch of student activists running the country.
Worse, Reeves’ tax raid won’t work on its own terms.
As the economy shrinks, tax receipts will fall rather than rise. CBI Economics reckons that tax revenues will fall by £2.6billion this Parliament thanks to the Budget.
Here’s how that happens.
If someone gets fired – and plenty will – they won’t pay income tax or national insurance until they get a new job.
If profits slump and businesses go bust – again, plenty will – they’ll pay less corporation tax and employer’s national insurance.
As people feel poorer – and millions will – they’ll spend less money so HMRC gets less VAT.
Plunging tax receipts will force Reeves to hike taxes still higher, triggering a vicious downwards spiral. I dread what news I’ll have to deliver in 2025. Again, I send my apologies. Although Reeves should be the one saying sorry.
