How Would Britain Look With Reeves As Chancellor?

In a confident speech, the shadow chancellor Rachel Reeves told the Labour conference that, “when we next meet, I intend to address this hall as Britain’s first female Chancellor of the Exchequer”.

- SEAN O' GRADY

Since her appointment by Keir Starmer in May 2021, she has become the de facto deputy leader of the party and enjoys Starmer’s confidence like no other of his senior colleagues. The feeling is mutual. Unlike so many of her recent predecessors, she has been creative in her role, which is especially difficult at a time when the public finances are so tight and economic growth so sluggish.

The time has come to wonder what a Reeves chancellorship would look like...

What’s going to be in her first Budget?

Unusually, for all the claims of Labour’s vagueness, we’ve actually got a fairly shrewd idea about what she’s set out because she’s either told us or dropped some hefty hints. The first budget is always crucial for an incoming administration, as a road map, a statement of intent, and an exercise in getting the trickier stuff done early. Reeves would, for example, immediately charge public schools VAT and business rates, and pump the money into state schools.

She would also tax buy-to-let landlords and people who receive substantial income from stocks and shares. She doesn’t appear as keen these days on hiking capital gains tax, and she’s ruled out a wealth tax. Some middle-class tax breaks might get trimmed, such as tax relief on private pensions. It’s also unclear whether she’d retain the multi-year freeze on personal tax thresholds introduced by Rishi Sunak – the largest stealth tax of all. But non-dom tax status would definitely go (and in truth, so might some of those globally footloose individuals, to more fiscally friendly locales).

So the fairly prosperous would pay more tax under Reeves and Starmer; the super-rich would avoid their predations, as ever; and the less well-off would be relatively untouched.