Just raise tax
This is the deeply frustrating position in which Reeves and her department find themselves. Young people are dropping out of the labour market in unprecedented numbers, which our economy cannot support, and the bill for disability and incapacity benefits will rise to £100bn a year, which the government cannot afford. Our debts are almost the same size as our entire economy, and our borrowing costs are the highest since 2008. And yet, in the Treasury's view, some of Labour's own MPs are unwilling to accept fiscal reality. Backbenchers who argued against the 'tractor tax' on family farms also signed the amendment against the welfare bill, rejecting both the government's plans to raise more money and its plans to spend less money.
Reeves is beginning the process of writing the next Budget, which she will announce in October. Before the economic modelling and the departmental bargaining begins, the Chancellor and her advisers will meet at the long, cabinet-style table in her office on Horse Guards Road and talk about first principles. A year in and the government has run out of money. Yet more tweaks will not suffice.
Everyone around that table understands that taxes will almost certainly have to rise in the autumn. They will also have to confront the fact that they made a terrible mistake. By promising not to raise any of the three biggest revenue-raising taxes (income tax, National Insurance and VAT, which account for 63 per cent of all government income) they effectively agreed to maintain Britain's long-term political and economic malaise. The question that now hangs over this government is which would be worse: breaking that promise, or breaking Britain's already dented economy – before handing it over to Nigel Farage.
How did the intelligent, politically savvy people running Labour's election campaign agree to make such a catastrophic mistake?
Imagine yourself in their place. Imagine how humiliating it would have been if Labour hadn't won the election. After 14 years of Conservative rule – the gutting of public services, the shambolic exit from Europe, the conga-line of backstabbing and pocket-stuffing – imagine if they had still lost. Imagine losing to a group of people so utterly devoid of responsibility that upon learning the date of the election, they scuttled to the bookies to do some illicit gambling.
This was the possibility that terrified Labour's strategists and advisers. A career-defining win was within reach; but so was the chance to miss the greatest open goal in modern British politics. This was not a risk they were willing to take. And so the 'Ming vase' strategy was born. The public and the bond markets were to be reassured: here was a party of managers, securonomists, cautious practitioners of grey-suited fiscal rectitude.
Subscribe to The New Statesman today from only £8.99 per month Subscribe
At the heart of this strategy was an act of cowardice: the tax lock, a pledge not to raise any of the big three taxes on 'working people'. This promise allowed Labour to insure itself against the relatively small risk of humiliation at the election, but guaranteed that it would be humiliated in its first year in power. The government has been forced into two painful and politically damaging U-turns on spending cuts: first, on winter fuel payments, and, more recently, on disability benefits. At the same time, it is trying to hide the inevitability of higher taxes in stealth taxes and tweaks to an already overcomplicated and dysfunctional system. This wider strategy has run out of road.
Many of those closest to Starmer and Reeves believe tax is at the core of the enragement of ordinary voters. As they see it, middle-income workers have seen their living standards squeezed for close to two decades, as their pay has failed to keep up with inflation and taxes have slowly risen to pay for the old, young, sick and unemployed. In this telling, the middle earner has become the cart-horse of Britain, paying out ever greater sums in tax to live in a country in which the schools are falling down and a GP appointment is harder to come by than a Glastonbury ticket. One influential Starmer aide likes to deploy the metaphor of a ceiling slowly moving downwards (think Indiana Jones), crushing the great middle classes underneath. The government's job, in this aide's view, is to lift the ceiling off the shoulders of middle earners so that by the time of the next election they feel life is at last getting better again.
There is some truth in this account, but it is far from a complete picture. The 'tax burden' on the whole economy is high, but taxes on many 'working people' are at a multi-decade low. Economists measure the 'tax wedge' – the percentage of labour costs that become taxes of any sort – and for an average single worker in the UK, this is among the lowest in the developed world: below the US, Japan, Ireland and Canada. The uncomfortable truth is that our tax system is narrowly focused on workers with good jobs (60 per cent of income tax is paid by the top 10 per cent of earners) while others (landlords and pensioners) get a much easier ride.
The basic rate of income tax has not risen – not once, not by a penny – for more than 50 years. During that time the average life expectancy of people in the UK has increased by almost ten years, and as a result, our spending on healthcare and pensions as a share of GDP has doubled. We now face a plethora of other steeply rising costs: from managing climate change (£14bn to build a new nuclear power station in Suffolk) to defence (more than £70bn a year by 2027) and even the asylum system, where accommodation alone is expected to cost £15bn over a decade. We remain frighteningly over-exposed to sudden changes in the cost of energy – a source of constant panic in the Treasury. Our creaking transport network, crumbling schools and overwhelmed NHS need rebuilding and maintaining. But for five decades, as successive governments have tried to keep the cost of the state off the balance sheet, costs such as tuition fees (a graduate tax by another name) have contributed to this sense of being squeezed, and so the idea of raising the basic rate has remained taboo.
The truth is that middle earners are not being taxed enough for the kind of state we want. Taxes need to rise. Our crisis of delusion about the tax system has put public finances on an unsustainable path. The longer we refuse to face up to this reality, the more painful the situation will become. Every targeted tweak creates a new interest group with which the public can sympathise, while the central problem at the heart of the British state persists. Failure to address this may cost Labour the next election, leaving a Reform-led coalition to impose its priorities. The country would continue to have a depleted and failing public realm and a monstrous pile of debt, neither of which is likely to be fixed by a second attempt at Trussonomics. The choice before us is becoming ever more obvious: between permanent political crisis and what would be, for any other European country, a normal level of tax.
The last election was notable for the amount of time the Conservatives spent lying about tax. In September 2023, Rishi Sunak claimed, bizarrely, that he had 'scrapped' a proposed tax on meat. He didn't say which arm of the international vegan conspiracy had plotted to impose a meat tax on Britain's long-suffering beef consumers, but two weeks later his energy secretary, Claire Coutinho, claimed it was a Labour policy. She provided no evidence for this. The following year, as the election approached, the Conservatives paid for hundreds of attack adverts and campaign leaflets that claimed Labour planned to roll out the London Ultra Low Emissions Zone charge for polluting vehicles across the country. This, too, was untrue.
In May 2024, Jeremy Hunt published a document – 'Labour's tax rises' – which presented the claim that Labour was planning to hike taxes by more than £2,000 as an official costing, 'conducted by HM Treasury'. The figures were disowned by the civil service. The government statistics regulator rebuked Sunak for his use of the figure, but it continued to be promoted online by the Conservative Party press office, which had mendaciously rebranded on X as 'Tax Check UK'.
The Conservatives could make such claims because they knew that Labour, in power, would have to raise Britain's taxes. Hunt and Sunak had already condemned the British public to higher taxes, for years after the election, by freezing the thresholds at which different levels of income tax became payable, causing millions of people to be pulled into higher tax brackets ('fiscal drag').
Labour could have seized the moment of electoral victory to make it clear that the tax system, as currently arranged, was not working. Instead, Reeves and Starmer persisted in the same subterfuge as their predecessors. Having limited their options with a commitment not to increase any of the three main taxes, they talked up the value of relatively minor adjustments – VAT on private schools, changes to the non-dom regime – while getting the real money from stealth taxes such as fiscal drag and higher employers' National Insurance (a tax that is, according to the Office for Budget Responsibility, mostly passed on to employees, and therefore very much a tax on 'working people').
On either side of the centre, populists offer what sound like simple solutions: the left claims that a simple wealth tax, which has failed in every other country in which it's been tried, could raise £20bn a year. On the right, Reform claims tens of billions in tax cuts would be achievable without either the obliteration of public services or a mass sell-off of government bonds. The public is wise to the reality of stealth taxes, which are reviled in focus groups across the country. People feel the tax system is a con. And they're right. Worse still: it is a con that is actively making us poorer.
Lying about the tax system is easy because it is a precarious assemblage of misdirection and untruth. We are told that there is a special tax to pay for pensions, but there isn't: the National Insurance Fund is not an insurance scheme or a pension pot. Today's pensions are paid by today's workers. The Office for Budget Responsibility is instructed every year to pretend that fuel duty will rise; it has been frozen at every Budget for 15 years. Council tax rises inexorably but the bins are collected ever less frequently, the potholes bloom, and somehow the council has still run out of money – because 'council tax' is no longer a tax to pay for the council, but a de facto tax to pay for social care.
The system cloaks its dysfunction in its bizarre complexity. One economist described Britain to me as having 'the most complex tax system in the world'. Simply reading the yearly handbook to the tax system – which runs to more than 23,000 pages – would be a full-time job that would take three or four months.
The VAT code is a catalogue of absurdities. An ice-cream cone, on its own, is classed as a biscuit and is therefore zero-rated for VAT, unless it is covered in chocolate, in which case it stops being a biscuit for tax purposes, or until such time as a scoop of ice cream is placed into it, at which point it becomes a taxable dessert (unless it is a chocolate-lined waffle basket of a size that would make it – to quote the tax code – 'quite difficult, although not impossible, to hold one in the hand and eat it'). His Majesty's Revenue and Customs will seek to collect tax on the sale of a fur coat (but not a fur hat) assuming the fur is from an animal other than a rabbit or a sheep (separate rules also exist for products made from the fur of gazelles, chamois and dogs, depending on whether the beasts' hides have been 'tanned or dressed'). A coat made from a goat is zero-rated, but wait: was the goat Mongolian, Tibetan or Yemeni? If so, the tax must be paid. The funding of our public services genuinely varies with the filling of ice-cream cones and the nationality of goats.
This teetering edifice of workarounds and compromises has created a system of distorted priorities. Council tax aggressively redistributes wealth from the poor to the rich. It is a significant cost to people on low incomes – in the past two decades, thousands of prison sentences have been handed out to people who haven't been able to pay it – and a trivial expense to the rich. The property values on which it is based are three decades out of date (they were last updated in 1992), so it is an arbitrary measure. And more than half of it is spent on services – social care – that it does not make sense for councils to provide. National Insurance is also regressive, in that it has an upper earnings limit, so again it is much more expensive to people on lower incomes. Capital gains tax is very high for genuine investors (people who patiently build up value in an investment over time and then crystallise the gains in one year) and very low for those who use it cynically (by taking income as capital gains purely to exploit the lower headline rate).
Walk down almost any high street in Britain and ask: why does this place feel poorer and more desolate than streets in ostensibly less prosperous countries? Many of the answers can be found in the tax system. About one shop in every seven will be vacant, and almost one in ten will be a charity shop, thanks largely to business rates, which are charged on valuations that are four years out of date (and which are therefore much higher than they should be) but which are not charged on charity shops or empty premises. In the surviving restaurants, you may find that most of the people coming through the door are delivery riders, who are – despite the brands emblazoned on their bags – technically self-employed (meaning the delivery company doesn't have to pay employers' National Insurance contributions on their work).
Meanwhile, large numbers of people don't pay as much as they should, or at all. HMRC estimates the 'tax gap' (the difference between all the tax for which people and businesses were liable, and the amount of tax actually collected) was £46.8bn in 2023-24. Another awkward fact: £2bn of this is estimated to be wealthy individuals, but £28bn of it is from small businesses. The idea of big companies paying more tax does very well in focus groups – one source told me this was the main reason corporation tax was raised in 2021 by Rishi Sunak – but it has a significant impact on economic growth.
The best tax to raise, purely in terms of economic impact, is the most direct and unavoidable: income tax. Research by the National Institute of Economic and Social Research shows that income tax is the least distorting measure, with the lowest impact on economic growth. But for all Labour's insistence on growth as their main objective, the main tax hike in the last Budget was a £24bn rise in employers' National Insurance. Workers will pay almost all (£19.5bn) of this, through lower wages, while the wider economy is already impacted by reduced hiring. No doubt it seemed a palatable way to raise money, but we should also ask: how many people were fooled? Given Labour's standing in the polls the answer appears to be: not many.
Rumours abound as to how Reeves will find the roughly £6bn the two U-turns have cost, relative to her previous plans. Wealthy investors worry she may implement an 'exit tax' to prevent the highly paid from eloping to Milan or Dubai. But this would be more tinkering, and it would not address the elephant in the room.
Britain's public debt is 96.4 per cent of GDP. Our government is spending almost twice as much on debt interest as it spends on schools. The UK has very limited fiscal space and economic growth has slowed to a crawl. This is not a situation that small tweaks to the system are likely to solve. The truth is staring us in the face: the tax system needs to be overhauled. And the overall tax take has to increase. Reeves is well aware of the need for both.
First, the simplifying. Start with National Insurance: get rid of it. This 8 per cent tax on work could be replaced by an additional 5 per cent on income tax. This would be a tax cut for workers. Wealthy pensioners and landlords would be furious at having to pay more, but they should pay more. Economic growth does not proceed from making it more lucrative to work less. Politically, this has the benefit of having been a Tory idea (proposed by Jeremy Hunt, although he failed to say how he would pay for it).
Rather than raising employers' National Insurance as Reeves has done, many suggest getting rid of that, too, because it is a tax on having employees, and therefore effectively a subsidy for companies that use gig workers and zero-hours contracts. To change course would require another rise in income tax, but the long-term result would be higher wages.
Next, taxes on property: get rid of stamp duty, which gives the government an incentive to inflate the housing market and makes it too expensive to move, preventing older people from downsizing and younger people from taking up new jobs in other cities. The same goes for council tax and business rates. All three should be replaced by a land value tax, which would be fairer, less vulnerable to avoidance and less damaging to the economy. As in Germany, this should allow for more taxes to be raised, and spent, at a local level, rather than centralising almost all spending power in the Treasury.
Finally, eliminate the loopholes and cliff edges that make the system inefficient, such as the VAT threshold, which causes many small businesses to deliberately remain small in order to avoid becoming taxable.
Of course, as Reeves is tired of explaining, it is easy for journalists and think tanks to present such plans; getting it past the party and the public is very different. Achieving even part of such a programme would involve a huge political fight for a government that already seems exhausted by the skirmishes of its first year in power. But it is going to have a huge fight anyway against a party that won't accept cuts, opposition parties that offer easy (and improbable) answers, and the uncaring, invincible bond market. You can try to make compromises that will allow you to muddle through, until you face disaster at the next election. Or you can try to make history.
That's the thing about history: it keeps happening, and it makes your choices for you. Starmer's other promise – 'a politics that treads a little lighter on all of our lives' – was even more naive than his assurances on tax. No politician can offer to stem the tide of history. Brenda from Bristol can avoid the news, but it will not stop happening while our species is around. The solution to Britain's political and economic problems is not found in a bit less politics. Nor is that what a restive public wants.
Back in the Treasury, the Chancellor is considering the moral principles under which the system by which Britain pays for its state could be remade. Reeves is known to be frustrated by the fact that one pound in every ten of British public spending goes to the holders of UK government bonds – including hedge funds and overseas investors – rather than on public services. She sees a progressive case for reducing the deficit, just as she has seen the need to pour tens of billions into the health service in an attempt to fix the labour market, and to rewrite the fiscal rules to invest hundreds of billions in infrastructure. She is frustrated and embattled, facing a summer of rebellion and calls for her to be replaced before the biggest test of her career in this autumn's Budget. Now is the time to be bold.
Reeves and the Treasury are keenly aware that to reform the tax system would require a battle that would make the fights they've had seem trivial. For the moment, they are having a series of ill-defined squabbles instead. But this is the fight they need to have.
[See also: Why George Osborne still runs Britain]
Related
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Spectator
an hour ago
- Spectator
Tim Davie shouldn't quit over Glastonbury
There probably never has been a time when a governing party much liked its MPs. If you are on a mission, as governments imagine they are, you are always impatient when your own side raises objections. But it is only recently that governments have seemed positively affronted by the idea that their MPs should have a say. This was encapsulated by Sir Keir Starmer when he dismissed Labour's backbench revolt over welfare cuts as 'noises off'. Off what, exactly? Legislators have the sole right to legislate and that includes the right to refuse legislation. Those, like Rachael Maskell, who parade their consciences may be tiresome, but there is no way of governing this country except through parliament (though people like Lord Hermer are striving mightily to alter this). Prime ministers are oddly blind to the ultimate consequence, which is that their MPs get rid of them. Sir Keir's blindness led to his capitulation on Monday night, turning his gigantic majority into his potentially fatal problem. It is always confusing for the BBC to decide what to ban, cut or edit. In 1972, in the wake of Bloody Sunday, it banned Paul McCartney's rather tame song 'Give Ireland back to the Irish' ('Great Britain, you are tremendous/And nobody knows like me/ But really, what are you doin'/ In the land across the sea?') but allowed John Lennon's 'Sunday Bloody Sunday' which attacked 'You Anglo pigs and Scotties/ Sent to colonise the North', complained about 'the concentration camps' (unspecified) in Northern Ireland and regretted that although 'the cries of 13 martyrs filled the free Derry air', 'not a soldier boy was bleeding/ When they nailed the coffin lids'. If you do not have your own moral compass, you will be guided only by levels of public outrage and will find these hard to predict. In the case of Bob Vylan, the story is about management of coverage, not endorsement, of dreadful views. It does not exhibit the monstrous anti-Israel bias daily apparent in BBC documentaries, news reports, BBC Verify, BBC Arabic, Jeremy Bowen etc. It is more a lack of due diligence. I doubt the resignation of Tim Davie would produce visible improvement. He is actually the first D-G even to admit and pursue the anti-Semitism problem. More shocking is the way the Glastonbury crowd (and therefore, unthinkingly, the BBC) rolls with this type of thing. If – unimaginable, I know – an extreme-right popstar had appeared and announced that he hated 'Zionists' and that Israeli soldiers should die, he would have been howled down. But the left has so normalised Islamist extremism that the overwhelmingly white, middle-class establishment audience has no sense of its weirdness. In a passage not widely reported, Bob Vylan announced to the Glastoholics, 'We are not pacifist punks here. We are the violent punks.' Some of them cheered. Was that a tattoo of a guillotine that I saw on his right arm? Does Glastonbury have to suffer the fate of the Manchester Arena before they understand? Ex-prime ministers are sparing in their public interventions. So far as I can see, Rishi Sunak had made only one Commons speech (as opposed to asking questions) since leaving office – on Rachel Reeves's first Budget. Last week, however, he made his second, in Westminster Hall. It began: 'I last spoke on this subject in this very place back in 2016. A lot has changed in the last nine years – notably, ten chief secretaries to the Treasury, seven chancellors and, indeed, five prime ministers – but one thing that has not changed is my view on grouse shooting.' From that good start, Mr Sunak went on to argue that the sport 'is a part of our local social fabric, and… one of the world's great conservation success stories'. He criticised the tendency of 'some conservationists… to act as though farmers and gamekeepers are somehow trespassing on Britain's landscape, but without their hands repairing our dry-stone walls or their dairy cows keeping the fields lush, the rural beauty of our countryside would soon fade. Heather moorland… is rarer than rainforest, and 75 per cent of it is found right here in Britain. It is a national treasure.' The fanatic Chris Packham, who was attending the debate, was seen to hold his head in his hands as he listened. I hope this oration marks the start of Mr Sunak's comeback. Charm is easy to recognise but notoriously hard to describe. Sandy Gall, who has just died aged 97, had it. When he and the tipsy Reggie Bosanquet co-presented ITN News in the 1970s, charm was visible nightly on the nation's screens. It had something to do with being at ease, a lack of self-importance and the sense that the pair were often repressing laughter. Sandy retained these qualities in many dangerous situations covering wars for more than half a century, and into old age. In 2010, when he was 82, we accompanied him to Afghanistan. It was supposed to be a holiday, plus a visit to the charity which he had established to give prosthetic limbs to children injured by the war when he first covered Afghanistan, hidden in Russian-occupied territory, in the 1980s. Sandy's two rules for later journeys there were that he should never have security – it just makes one a target, he said – and that he should always carry a bottle of whisky, which was illegal. It being high summer, he had advised us not to bring waterproofs, but when we flew in a light aircraft to see Bamiyan and the mountainside which held the colossal Buddhas smashed in their niches by the Taliban, we found the place flooded. The airport was on a plateau. Our hotel was visible below, surrounded by water. Undismayed, Sandy ordered ten donkeys to carry us through the inundation and breakfast to eat until these could be found. By the time we had finished the breakfast, the waters had sufficiently receded for the donkeys to be laid off. He was a dear man, neither broken by the horrors of war, nor puffed up by his courage in the face of them – a true reporter.
The Herald Scotland
an hour ago
- The Herald Scotland
Tougher rules needed for utility firms digging up roads, MPs say
Transport Committee chairwoman Ruth Cadbury said a pattern of repeated works can feel like a 'recurring nightmare' for road users. The Transport Committee set out a series of recommendations to reduce disruption from streetworks (Martin Keene/PA) Under current rules, utility firms are responsible for the quality of the road surfaces they have reinstated for two years after works have completed, or three years in the case of deeper excavations. The committee called for that period to be extended to five years so council tax payers do not have to pick up the bill for repairing potholes caused by shoddy remediation work. Other recommendations from the committee included: – Tighter use of immediate permits enabling companies to dig up roads with little or no notice given to the local authority. – A new streetworks commissioner, similar to the Scottish roadworks tsar, to monitor performance and resolve disputes. – The wider use of lane rental schemes, charging firms up to £2,500 a day to incentivise quicker completion of works. – Better co-operation so utility firms and housing developers can work on the same bit of road at the same time rather than have repeated closures. Labour MP Ms Cadbury acknowledged that ageing infrastructure under the roads needed to be maintained and upgraded and extra cables and pipes were required for new homes. 'But as every road user knows, street works can feel like a recurring nightmare,' she said. The committee's recommendations would make a huge difference if they were implemented, she said. 'Upping the quality of reinstatement works will help stem the never-ending plague of potholes on local roads. 'Lane rental schemes should provide a financial incentive to complete works on time. 'And longer-term planning and earlier notification should help councils prevent the infuriating occurrence of multiple roads being closed in one locality, or the same road being dug up multiple times in one year.' A Department for Transport spokesman said: 'We wholeheartedly agree that streetworks are far too disruptive for drivers and that is why we have taken action to prevent the impact on drivers. 'We've cracked down on streetwork companies overrunning or leaving roads poorly repaired by ramping up fines and giving local authorities new powers to coordinate roadworks more efficiently and will put measures in place so 50% of surplus lane rental funds must be invested into highway maintenance. 'We are determined to end the pothole plague, which is why we are already investing £1.6 billion this year to help local authorities resurface local roads and fix the equivalent of up to seven million extra potholes this year.'
Spectator
an hour ago
- Spectator
Farage is the pacesetter of British politics
For the past year, Nigel Farage has served as the great pace setter of British politics. Reform UK has shot to the top of the polls, as Labour and the Tories languish behind. On immigration, the economy and much else, it is his five-man band that sets the tune. It is the inverse of Norman Lamont's jibe about 'being in office but not in power'. From his new base on the 24th floor of Millbank Tower, Farage enjoys a commanding view of Westminster. The office, an explosion of teal decor, has a large press briefing room, which aides liken to the one in the White House. At a desk adorned with a porcelain Union Jack bulldog, Farage plots his next steps. He sees his role as 'a little bit more [like] the general – not in the front lines so much, but a little bit behind the lines, sort of trying to take some strategic oversight as to what the rest of the party's doing'. Election planning is to be handled by former Ukip leader Paul Nuttall, the party's new vice chairman. A six-week summer offensive will begin on 21 July. Such machinations matter because of their impact on the government. Keir Starmer says publicly that the next general election will be fought between his party and Reform. Under his chief of staff, Morgan McSweeney, Labour is trying to pitch itself to patriotic, immigration-sceptic 'hero voters'. Yet many on Starmer's benches want him to switch to a more soft-left approach. Farage, who has never met McSweeney, says that 'probably politically, what he's advocating is right – but the Labour party can't swallow it'. He cites a surge in support for the Greens, arguing that there is a 'drag to the left that is going on in British politics' which only pulls 'the kind of undecideds on the Labour benches in one direction'. Reform's success often confounds opponents who try to place the party on a traditional left-right axis. Yet some within Reform think of it more like a business, hungry for market share, wherever available. Rather than ponder deep philosophical questions, or muse about how to interpret its political heritage, Reform pivots from lifting the two-child benefit cap one month to introducing a 'Britannia card' for the super-rich the next. Farage himself prefers to talk in post-ideological terms: 'I would like to think that people would look at me and look at us and say we're realistic and pragmatic. I think the benefits stuff that we said surprised a few people, but, you know, we're not finished on that. There's a lot more to come out on that agenda over time.' The debate in April over nationalising steel exemplified this approach. While the shadow cabinet were split over questions about state interventionism, Reform simply pledged nationalisation. For long-established political parties, history can be a bulwark, but it also brings baggage. Like any general, Farage likes having a free hand to respond to events nimbly. Critics jibe that this leaves Reform rudderless, constantly scrambling to board the next bandwagon. Allies argue that, in a world where a social media post by Donald Trump can blow up the markets, there is much merit in this approach. For them, the fact that much of Reform HQ has little Westminster hinterland beyond Farage is not a weakness but a positive. The staff are 'quite normal people', says one aide. Talks around strategy often reference sport, not politics. Wrestling is a shared love in the office and WWE-style razzmatazz has become a hallmark of the party's election rallies. Next May's regional elections represent the ultimate Wrestlemania for Reform. If Reform wins 30 seats in the new 96-strong Senedd, will Plaid Cymru and Labour cut a deal to keep them out? Six new mayoralties are also up for grabs and Reform is after local celebrities in the mould of Hull boxer Luke Campbell to stand as candidates. 'Essex is a slam dunk,' says one insider. There have even been talks about the prospect of attracting DUP grandees ahead of the Northern Ireland elections in 2027. The two main parties, though, will not go down without a fight. Some within Labour are putting their faith in the New Media Unit. This 28-strong, £1.3 million innovation sits in the Cabinet Office. It aims to help McSweeney 'take back control' of communications by targeting government messages at millions of voters online. The insights gleaned here could prove crucial to Labour strategists, as they try to reach key voters ahead of the 2029 general election. Labour's backbencher revolt over welfare, meanwhile, gave the Tories some reason to cheer this week. Conservative MPs allowed themselves an 'evening of fun' with Gyles Brandreth on Tuesday at the Albert pub in Victoria. Rishi Sunak, now a humble backbencher, enlivened things by debating with the compere about which of the many recent Tory chancellors was truly the 'shortest-serving'. At CCHQ there were several encouraging signs too. First, Mark McInnes, the former boss of the Scottish Conservatives, was named as the new Tory chief executive. Then longtime donor Lord Bamford, whom some speculated was about to switch to backing Farage, gave Kemi Badenoch £150,000. Both men are indicative of the arms race in personnel on the right of British politics, as the Tories and Reform battle it out for talent and donations. At present, there are plenty in the world of media and politics happy to keep a foot in both parties' camps. As the wine flows this summer, there will be much talk about the future of the right. Many Tories hope that Farage has peaked too early. 'This parliament is a marathon not a sprint,' says one MP. 'There are still four years left to go.' Such comments will not bother Farage, of course. He and his team believe they are exactly where they need to be: leading the pack, on course for both office and power come 2029.
