The winners and losers of Labour's first year in power

Telegraph

a day ago

It is one year since Labour's 'loveless landslide' and already millions of individuals, and the economy, are suffering.
Last summer, Rachel Reeves ominously declared the Tories had left Britain with a £22bn 'black hole' in the public finances.
It was a sobering shift in tone from the Chancellor who had spent the months prior promising no tax rises for 'working people'.
And it left her walking a careful tightrope of raising money without breaking the party's central pledge: to leave alone income tax, VAT and National Insurance paid by workers.
In doing so, she clumsily launched tax raids on pensioners, home buyers, business owners and farmers instead.
Here, Telegraph Money speaks to the winners and losers after a year of Labour.
Losers
Pensioners
Ten months on from Ms Reeves's maiden Budget, Peter Ferguson has still not forgiven her for ripping up his carefully-laid financial planning.
The Chancellor used the Budget to bring pensions into the scope of inheritance tax, upending millions of calibrated retirement plans.
Mr Ferguson, 68, from Edinburgh, had hoped to pass on most of his £800,000 pot to his children. He believes the changes amount to 'state theft'.
'The Tories told people to make far greater provision for themselves because the state can no longer be relied on to provide for everyone, and I agree with that,' he says.
'But now there is no incentive to save to provide for your family – I would be better off going to restaurants, drinking nice wine and going on holidays.'
He adds: 'If I have paid tax throughout my life, as I have to by law, then inheritance tax and stealing from pension funds is just reprehensible. I am determined not to let this government have a penny more than I have already.'
He intends to take the tax-free lump sum of £200,000 and spend the rest on 'assets that will hopefully accrue value', like paintings.
Farmers
Farms were previously exempt from inheritance tax under agricultural property relief. However, changes brought in by the Government mean that, from April 2026, the relief will only apply to the first £1m of combined agricultural and business property. After that, the relief drops to 50pc.
David Barton's Gloucestershire farm will now attract an inheritance tax bill of £800,000 when it is passed on to his son, Ben, 34.
The 57-year-old says: 'I am disappointed because we engaged with Labour politicians before the election. All the noises were very promising, and things were okay until the Budget. That was a massive blow to the industry. It has completely knocked the stuffing out of us.'
At a union meeting last year, Mr Barton raised his concerns directly with Steve Reed, the Environment Secretary.
'My question to him was, 'Can you tell me when I am going to die? Because I don't know when I am going to die, and if I get it wrong, the business is gone.'
'There are many better ways that you could raise this revenue from the farming industry than the way you are doing it. You can't help but wonder if this is just genuinely trying to raise revenue, or is there something a little bit vindictive about this?'
Labour also slashed sustainable farming incentives – grants for farmers who adopted sustainable practices to protect the environment.
'It's really destabilised everything,' he adds. 'There's been a massive drive towards environmental improvement, and I think as farmers we have done a tremendous job. But the funding that supports that is absolutely required. It's an all-time low for morale within the farming community.'
Property buyers
Labour's young voter base had hoped the party might offer them help on to the property ladder. But instead, the Chancellor ignored them, neglecting to extend a stamp duty discount which sent the tax rate soaring.
It means first-time buyer, Emily Fishburn, 29, now faces paying an extra £1,000 on her new home in Nuneaton.
She says: 'We put an offer in before the threshold changed, which is so frustrating, because now we have that as an additional cost we weren't anticipating.
'I thought it was going to get better for first-time buyers under Labour, but it's got a lot harder.
'We've been saving for a house for five years – we'd rather spend that money on extra things for the house, like a sofa, things for the kitchen. We'll have to make do with sitting on the floor for a while.'
Landlords
Britain's property investors have been attacked by politicians of all stripes ever since the Tories began whittling away their tax breaks. Unsurprisingly, landlords' fortunes have not improved much under Labour.
It is pressing ahead with plans to force landlords to meet energy efficiency standards by the end of the decade. Many are expected to spend tens of thousands insulating properties, or sell up and exit the market. And landlords have been left despairing over the Renters' Rights Bill.
The legislation will end 'no fault' evictions, give tenants longer notice periods and restrict rent increases. The Bill will not apply in Scotland, where rent controls and eviction restrictions have already been put in place by the Scottish National Party.
Derek Tyson, 54, is a buy-to-let landlord with dozens of properties across Lothian, Fife and Angus – a portfolio built up gradually over 30 years.
He says: 'Labour is a total mess. Landlords have been kicked in the guts for years, and they've done nothing to ease the burden.'
The Government is also ramping up its 'Making Tax Digital' project, requiring around 900,000 landlords and freelancers earning over £20,000 to report their taxes quarterly, rather than every year, from April 2026.
Mr Tyson sees it as yet another regulatory hoop for landlords like him to jump through.
'It's just going to put up costs. If I can't recoup it in rents, I'll get out of the market. You can't keep getting more money from landlords without affecting tenants,' he says.
'You can't keep taking money from people – it doesn't grow the economy. But this is what Labour does.'
Mr Tyson believes the Government should focus on building more homes, rather than punishing landlords.
'If there's less stock, rents go up. It's GCSE economics. I don't understand why Rachel Reeves and these guys don't get it.'
Second home owners
Since April 1, local authorities have been able to use additional powers to charge double council tax on second homes.
While it was a Tory policy, Labour rubbed salt in the wound by increasing the stamp duty surcharge for second home buyers from 3pc to 5pc.
Peter Drown, 75, has been renting a flat near St Paul's in London for the past six months. He lives in Truro, Cornwall, with his wife, but spends every other week working in the office in the City as an accountant.
As a result, he has been hit with a £4,246.90 council tax bill. In total, his bill for both properties is now £8,750 – now, he says he will give up his flat.
'I've been working in the City since 1969, and I've paid a lot of tax,' says Mr Drown. 'This is not a real second home, it is not a holiday home.'
He adds: 'If you lived in somewhere like Birmingham, where the council is bust, you could almost understand it. But the City of London has plenty of money. Why are they messing around with the likes of me?'
Business owners
One of Labour's most unpopular policies has been its increase to National Insurance contributions paid by businesses.
The rate they pay on an employee's salary rose from 13.8pc to 15pc, and the salary threshold at which point National Insurance kicks in also fell from £9,100 to £5,000 (though this was accompanied by a rise in the 'employment allowance', which helps the smallest employers offset the rising costs).
Hugh Vinney, 37, chief executive of online private school Minerva Virtual Academy, is bitterly disappointed. He became a first-time Labour voter last year, feeling disillusioned with a Conservative government that he says hadn't offered much to business owners like him.
'In the business world, there was a lot of hope, particularly on the small business side, because they were talking about 'growth, growth, growth,' so I was excited for Labour's agenda,' he says.
'Pre-election, they were talking to and consulting small businesses, but by the time of the Budget, they had completely forgotten about us.'
The National Insurance raid, as well as the increased minimum wage, has forced Mr Vinney to 'pull up the drawbridge in terms of hiring'.
He adds: 'It means you have to be much more careful about wage increases, which is not what you want to be doing in a growing business. National Insurance and minimum wage changes are preventing us from being able to reward people for hard work.'
Britain, Mr Vinney says, is 'a country where it is not a good place to be an entrepreneur', and that anyone wanting to start a business should do so elsewhere. 'Small businesses are an engine for growth. But we have been abandoned.'
Private school parents
Television presenter, Ana Boulter, 47, has two children at independent schools. She has been left feeling betrayed by Labour's decision to impose 20pc VAT on school fees.
Ms Boulter's daughter is autistic, and, like many parents, she worries local state schools do not have the resources or expertise to deal with her child's needs. She is now considering home schooling after her children's fees rose by 21pc in a year.
She also takes issue with the perception that parents choose to send their children to private schools simply to make them get ahead in life.
She says: 'The people who are really buying advantage are those who can afford to buy houses next to outstanding state schools. What parents in the independent sector are doing is buying an education that suits their children's needs which they believe the state can't provide.
'The way ministers have spoken about private education, do they not think about how this affects the children? They are actively pushing a group of people out and saying, 'You don't matter, you don't count, you are not important, you are insignificant'. You are a political smear on our outlook.'
Winners
Few would describe themselves as 'winners' from Ms Reeves and Sir Keir Starmer's tenure so far, but some groups have undeniably been given extra support.
Net zero supporters
Ed Miliband and his Department for Energy Security and Net Zero was a surprising winner of Ms Reeves's first spending review.
The Warm Homes Discount, which some speculated would be cut, was expanded. And the budget for the Boiler Upgrade Scheme, which doles out £7,500 grants to households who want to install a heat pump, was also raised by £1.8bn.
It comes too late for Tim Adams, 67, who has already made use of the Renewable Heat Incentive (RHI), a now-defunct scheme which paid early adopters for generating renewable energy over a seven-year period.
Mr Adams believes Labour's decision to continue funding grants specifically for heat pumps, rather than generalised payback schemes, is a shift in the right direction.
He says: 'The RHI was in some ways more generous, but now the £7,500 comes directly off the cost, and that will be preferable to those who can't pay the money up front.
'Solar panels and batteries stack up in a way that you should be able to do it on your own, and in the same way, electric car prices have come down to the point you'd have to question how much that still needs to be subsidised.
' People are so negative about heat pumps – a lot of it through misunderstanding. They don't understand what the potential is, and I think that's a huge problem for the Government. The messaging just isn't cutting through.'
Public sector workers
One of Labour's first acts in Government was to hand public sector workers a pay rise – to the tune of £6.9bn.
The decision to capitulate to pay review bodies briefly quelled frequent strikes by teachers and doctors. However, unions have warned that further industrial action is likely unless the Government agrees to an above-inflation pay rise in 2026.
Dr Erin Gourley, a psychiatric registrar, welcomed her 5.4pc pay award this year.
The 33-year-old mother-of-two says: 'Wes Streeting [the Health Secretary] is saying lots of positive things, and that's a lot better than what we were getting under the last government.'
However, she still feels worse off than before the election.
'I would say finances have progressively become more stretched over the year, and we are having to be a bit more cautious with our spending,' she says.
'One of the things that can make it worse is that I do a lot of out-of-hours work, a lot of evenings, nights and weekends, and my childcare needs are more than most jobs. Balancing that is particularly difficult.'
The British Medical Association estimates resident doctor pay remains 21pc lower today in real terms than it was in 2008. Doctors in Dr Gourley's pay grade earn around £61,825 a year, according to the BMA.
Dr Gourley, who lives in Coventry, believes Labour must reverse this decline. 'In terms of where I was in 2015 when I started working, I don't think the pay has increased commensurately with the skills I've taken on as I've become more senior,' she says.
A 6pc pay rise was awarded to junior doctors, 3.6pc for other NHS staff, 3.25pc for members of the Armed Forces, and 4pc for teachers and prison officers.
Senior civil servants will also receive a 3.25pc pay rise, while school staff such as teaching assistants, caterers and caretakers will receive 3.2pc.
The Government was approached for comment.