Labour's defences are looking very leaky, says ALEX BRUMMER

Labour's defences are looking very leaky, says ALEX BRUMMER By Alex Brummer for the Daily Mail Updated: 08:21, 1 October 2024 e-mail View comments When Lord (Mervyn) King made a weekend appearance on the Radio 4's Today show to talk about his new role as President of the MCC, he was ambushed with questions on the economy. The ex-governor was critical of former colleagues at the Bank of England for failing to spot the cost-of-living car crash until too late and overdoing the money printing. There also were barbs for Chancellor Rachel Reeves and Labour.

By ring fencing three big tax groups – income tax, national insurance and VAT – from increases in the election campaign, the Government effectively forced itself down a blind alley on fiscal policy. One of those policies, closing loopholes on non-domiciled taxpayer levies, is heading for a U-turn, as the nation's wealthy overseas residents, big spenders and investors in the UK head to Milan and Dubai. Meanwhile, the private equity barons fearing the loss of their special tax status – known as carried interest – are moving in the same direction.



Detracting: Lord Mervyn King was critical of Reeves and Starmer after the Government effectively forced itself down a blind alley on fiscal policy The promised end to investment allowances for already over-taxed North Sea oil explorers and extractors is causing jobs havoc and for all the hype, Great British Energy isn't going to compensate. Just to add to the missteps, the clumsy way in which the winter fuel allowance was killed looks likely to yield far less income for the Exchequer than originally envisaged, as pension credits are cranked up and pensioners missing out on other means-tested benefits claim entitlements. The vanishing streams of income and savings have left the Chancellor scratching around to close the alleged (but not certified by the Office for Budget Responsibility) £22billion shortfall in resources, around half of which has been created by public sector pay deals without productivity strings.

So how to find the missing billions and to invest in public services as promised? King suggested it was a mistake for Reeves to have endorsed the Tory cut in employee national insurance. Instead, among the latest leaks in Whitehall, is a proposal for increasing national insurance on employers – a payroll tax on jobs. RELATED ARTICLES Previous 1 Next ALEX BRUMMER: Rachel Reeves to junk former Chancellor's.

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.. Share this article Share That too isn't terribly bright at a moment when green transition in steel and energy is gobbling up jobs and artificial intelligence, another threat to work, is coming down the pike.

Labour has made much of fiscal integrity and the failure of Liz Truss's unfunded tax cuts. It too, however, risks fiscal stability if it seeks to change the way the government balance sheet is measured by formally introducing the concept of Public Sector Net Wealth. This broadens the size of the economy by including assets such as public buildings and playing fields.

That is a sleight of hand which carries market risks. The defences erected by Keir Starmer and Reeves in the run up to the election are proving very leaky. Sour grapes There is nothing gracious about News Corporation's response to the stout rejection of Aussie offshoot Rea's £6.

2billion takeover effort for Rightmove. Four offers have been rejected by Andrew Fisher and the Rightmove board, showing the kind of stellar resistance to predators not often enough seen in Britain's boardrooms. Rightmove profitably has exploited the online residential real estate space and, with sensible investment, could extend its reach in the UK and overseas.

Robert Thomson, the chief executive of News Corp, which owns 61 per cent of Rea, chose to throw his toys out of the pram after the rejection. He praised his boss Lachlan Murdoch for his 'savvy' investment in Rea and for the company's 'financial discipline'. He went on to sardonically charge the British firm with failing to make the 'right move'.

Pitiful. Sporting life Mike Ashley is not a person to be trifled with. The failure of Mulberry to consult the company's 37 per cent shareholder on a proposed £11million fund raising by the luxury leather goods group aroused Ashley's competitive spirit.

He tabled an £83billion bid for the whole caboodble. The Sports Direct founder doesn't want to see Mulberry, a supplier to his House of Fraser department store chain, tumble into administration. Ashley and son-in-law Michael Murray have become lenders of last resort to the High Street, fashion brands and online swooping in on struggling enterprises.

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