Reeves’s web of lies can no longer conceal her dystopian plan for Britain

The game is up. Labour’s tax increases could be the largest on record, shattering their manifesto pledges

Source - Daily Telegraph -

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It is an extraordinary scandal, a breach of trust on a monumental scale. Sir Keir Starmer and Rachel Reeves are feeding us a fake narrative, a farrago of downright lies, exaggerations, obfuscations and Orwellian double-speak designed to gaslight us into accepting what could be the largest peacetime tax increase by a Chancellor in one Budget. 

The Government has barely spoken a single truth on economic or fiscal matters since gaining power, and is now threatening to breach the letter and the spirit of its manifesto. It keeps increasing the size of the “black hole” that is supposedly compelling this unprecedented assault on taxpayers: originally £22 billion, it is now being put at £40 billion, prompting talk of fiscal tightening of up to £50 billion. 

We could end up with a 2 per cent of GDP tax increase, combined with higher borrowing on the back of rigged fiscal rules to pay for greater “investment”. Yet unlike the fiscal squeeze George Osborne had to impose in 2010, Reeves’ enormous tax increases are voluntary. They are her choice. There is no urgent fiscal crisis. The public sphere doesn’t need to keep growing, and the private realm doesn’t have to go on shrinking. 

We could, if we wanted, make greater use of private health insurance and savings, and spend less on welfare. There is no “black hole” compelling tax increases; a tad more spending restraint would have been sufficient to deal with any in-year overspend during the Tories’ last months in office. Labour soon conflated this minor fiscal slippage with the ludicrously costly public sector pay rises it ordered as soon as it was elected. It chose to spend more, and now blames the Tories.

The very idea of a “black hole” has become tautological: it is now defined as whatever Reeves wants to spend extra and that she cannot borrow. She wants to rule out any real terms spending cuts. But simply “standing still” won’t do: she wants to substantially grow the public sector, while still meeting her fiscal rules, necessitating huge tax rises. She doesn’t have the courage to explain her true, proto-socialist agenda and is fabricating a non-existent fiscal crisis as cover. She claims to want to end “austerity”, redefined to refer exclusively to public-sector belt-tightening, but her plan to hammer taxpayers will lead to crippling private-sector austerity.

Labour is not “facing a difficult inheritance”, at least not in the sense Reeves means it. The Tories did not “crash the economy”, with the LDI and gilts market turmoil of October 2022 resolved in a matter of weeks without permanently impacting the economy. Inflation is down to 1.7 per cent. Interest rates are falling. Rishi Sunak showered the NHS with riches. The economy grew in 2023 and was expanding at the time of the election. The deficit had been slashed by Jeremy Hunt, though partly through future spending restraint. 

Yes, the Tories were useless, increasing public spending, taxation, regulation and energy costs, and failing to properly reform welfare, immigration or the health service. But this is equally Labour’s agenda, so it cannot complain. 

The Government sometimes has the chutzpah to claim to have been saddled with the “worst inheritance since World War II”, but that is only true when it comes to the tax burden, something that Labour is about to make even worse. The difference between the Tories, 2010-24 incarnation, and Starmer’s Labour is merely one of degree, with the new Government about to double down on the worst part of their predecessors’ legacy, with some added nasties. The Conservatives spoke Right but governed Left; some of them were at least ashamed of this. Labour don’t possess any such scruples. 

In its righteous arrogance, it is convinced it will prove to be better social-democrats than the Tories, that its housing targets will work more effectively, that its stewardship of the unreformed NHS will deliver a miracle, that the Blob will respond better to it. It downplayed its Left-wing ideology during the election, and has since embraced tokenistic spending cuts to appeal to centrists, announcing the removal of pensioners’ winter fuel allowance. 

Fundamentally, however, Labour is a party of unapologetic collectivists and class warriors. It hates private schools, investors and society’s most productive people. It speaks Left, and will govern Left. Its investment summit was a farce. As good believers in the Platonic Noble Lie, it seemingly feels comfortable telling porkies, believing them to be for the public’s own good. The manifesto stated that “Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT”. It did not specify “employee’s National Insurance”: Fair-minded people assumed this ruled out higher employers’ National Insurance, yet, in a clear betrayal, we are now told that this could be on the cards for October 30. 

It doesn’t matter if NI is collected directly from workers’ pay packets, or indirectly by requiring employers to hand over the cash: the economic impact, the incidence of the levy, is the same. It’s a tax on jobs, not on profits, borne by workers via lower wages and higher prices. 

Writing in 2021, when the Conservatives were pushing their own, equally inane version of Reeves’ policy, the Office for Budget Responsibility explained that, when it comes to employers’ NICs, “the tax is passed through entirely to lower real wages in the medium term, with 80 per cent of the increases passed through to workers via lower nominal wages and 20 per cent to consumers via higher prices.” It is a direct attack on “working people”. 

Reeves knows this: speaking after Sunak proposed his own NI rise on employers and employees, Reeves described it as a “jobs tax”, saying it will “make each new recruit more expensive”. Speaking to The Telegraph the following year, she said: “This evidence that employees will be hit twice shows just how poorly thought through their tax hike is… [it] will hit businesses and working people…” 

None of this matters. Labour is hellbent on tearing down the “rich”. Incredibly, many of its MPs believe Reeves to be too Right-wing. Britain’s slide into dystopia will accelerate, with only one certainty: these tax hikes, however vicious, won’t be the last, and neither will be the lies. It’s going to be a grim five years.