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Telegraph
02-07-2025
- Business
- Telegraph
Starmer's Britain is just one blunder away from an IMF bailout
A tearful, broken Chancellor; a selfish, buck-passing Prime Minister who cannot even pluck up the courage to sack her; fanatical MPs determined to veto even the most modest of spending cuts: welcome to Labour Britain, a failing, unserious, ungovernable country. Sir Keir Starmer is our Potemkin PM, a widely despised figurehead. Rachel Reeves remains, for now, our Chancellor in name only, her raison d'etre obliterated, her final mission to serve as Starmer's human shield. Morgan McSweeney, Starmer's chief of staff, is finished. The real power lies with an economically illiterate, fiscally irresponsible mob on the Labour backbenches, and their Cabinet allies, Angela Rayner and Ed Miliband. The Parliamentary party is now little more than a mismatched coalition at war with itself; factionalism rules, guaranteeing stasis and drift. It has taken just a year for this farce of a Government to run out of other people's money, as all Left-wing administrations eventually do, yet it is now unclear who has the authority to grasp a situation that threatens to spiral out of control. Britain in 2025 feels ominously like a gigantic ponzi scheme on the brink of exposure, taking down everything and everybody with it: no wonder many young, ambitious people are dashing for the exits while they still can. Starmer will eventually sack Reeves, or she will quit in disgust, but whoever replaces her will either be a creature of the party's tax-loving, anti-capitalist, spendthrift Left, or suffer her sorry fate. Her successor won't be allowed to make any cuts, just hike taxes on the rich and successful, further crippling the economy. The next Chancellor will be under immense pressure to loosen the fiscal rules, and borrow with even more abandon. Labour's experiment with technocratic social-democracy lasted exactly one year: whatever comes next will be much more explicitly socialist and destructive. Yet this is not merely the latest instalment in a Parliamentary theatre of the absurd, or even the human tragedy of a hubristic, over-promoted politician stabbed in the back by her party and cut adrift by her honourless leader. This is real life, and the situation is grave. Britain is nearing a point of maximal danger. The budget deficit is too high, and gilt yields have been rising. The economy is barely growing. Tax increases aren't yielding much. This is the moment when political crises typically metastasise into financial meltdowns, when the markets begin to treat us like a failed state, sell the currency and push up interest rates. Britain is one political blunder away from a run on the pound, an emergency Budget and a bailout by the IMF. It was striking how sterling slumped when it looked as if Reeves was about to be axed during PMQs: the markets don't love her, but they are terrified that her successor could be even worse. The tragedy of Reeves is that she has no friends, no defenders, but she actually understands the need to speak the language of business and to give the impression that she is trying to balance the books. I will never forgive her for slapping VAT on school fees, for lying about the Tory black hole, for attacking farmers so pitilessly, for wasting billions on useless pay rises for the public sector, for breaking her manifesto promise on National Insurance, for destroying the economy. But in a desperate world of least-awful options, she was nevertheless the last bulwark against neo-Corbynite madness. She was right to seek to cut welfare spending. The obscene increase in the number of people receiving the mobility section of enhanced personal independence payments (PIPs) is laid bare in a TaxPayers' Alliance analysis of the official statistics. The numbers exploded from 734,136 in January 2019 to 1,754,739 in April 2025, a 139 per cent increase driven by widespread, officially sanctioned abuse of our welfare state. The number of recipients claiming because of autism surged from 26,256 to 114,211, for anxiety and depression from 23,647 to 110,075; for ADHD from 4,233 to 37,339. Successful claims for acne, obesity, drug and alcohol misuse and even writers' cramp all jumped. Some thirteen people receive enhanced PIPs for 'factitious disorders' with deliberately falsified symptoms, including munchausen syndrome. The Left have no interest in tackling this. They are much more interested in what they see as the obvious solution: higher taxes. When not toasting Reeves's imminent political demise, they have been excitedly sharing 'Just raise tax', the cover article in the New Statesman magazine, in their WhatsApp groups. The piece argues that Starmer's 'tax lock' – a pledge not to raise National Insurance, income tax and VAT – was an 'act of cowardice'. The magazine's thesis is that Britain's 'malaise' is caused by a state that is too small. It posits that 'middle earners are not being taxed enough for the kind of state we want'. It argues that 'the basic rate of income tax has not risen – not once, not by a penny – for more than 50 years'. It wants to replace employee National Insurance with a 5p hike in income tax designed to hammer savers and pensioners. It calls for a 'land value tax'. Some of the suggestions to simplify tax on labour income make sense, but the Left will ignore those and simply see a new opportunity: massive rises in income tax at every level, and the confiscation of as much 'unearned' wealth (to use the despicable Marxist term) as possible. They have spent years dreaming of a crippling wealth tax on property, targeting especially Tories in London or the Home Counties; with the Starmer-Reeves project in tatters, now is their opportunity. Owners of large gardens would be ruined, pensioners would have to sell, the rich would flee and the housing market would crash. If homeowners were levied even one per cent of the value of their home, they would need to pay £5,000 a year for a modest flat in London, and £10,000, £15,000 or much more for a house. Starmer has behaved disgracefully, and failed to stand up for Reeves. If she really believes in fiscal probity, and realises that full-on socialism isn't the answer, she should stop covering for a Prime Minister who doesn't deserve it. She should resign, and let somebody else clean up his mess.
Yahoo
29-05-2025
- Business
- Yahoo
Starmer's Britain is good at only one thing: driving out the wealthy and ambitious
It doesn't lead the world in developing new technologies such as Artificial Intelligence. It isn't breaking new ground in science, technology, or even in music, literature or fashion. Still, Sir Keir Starmer's Labour Britain is at least leading the world in one respect. It has become better than anywhere else at driving out the wealthy, the young, and the ambitious. There is just one catch. The Government doesn't appear to have any ideas on how to stem the exodus, nor how to replace all the tax revenues that will leave with them. The evidence that money and talent is fleeing Britain is becoming more alarming all the time. Guillaume Pousaz, Swiss-born billionaire founder of fintech giant Checkout, has become the latest to leave. We learned this week that he has shifted his tax residency from Britain to Monaco, following the decision by the Chancellor Rachel Reeve to abolish the non-dom rule that allowed wealthy foreigners to limit their tax bills in the UK. He joins the likes of the billionaire steel tycoon Lakshmi Mittal and the senior Goldman Sachs banker Richard Goode in getting out of the country. Over the last year, an estimated 10,000 millionaires have left the UK, according to Henley & Partners, second only to Russia, and the real total may be even higher. But it is not just a handful of the super-rich who are getting out. The young and ambitious are increasingly leaving for the Gulf States such as Dubai or Qatar, for Australia, where the youth mobility scheme allows them to live or work, or for the United States, if they can get a visa. Likewise, the 'Henrys', or 'High Earners, Not Yet Rich' are fleeing as well. It is not hard to understand why. The non-dom crackdown has created one of the most punitive tax regimes in the world for foreigners. They are now subject not just to our income taxes, but to inheritance tax at 40 per cent on their global assets, as well as capital gains tax if they sell their company. Many simply have to leave or face financial ruin. Likewise, frozen thresholds and tapered personal allowances now mean many successful self-employed or young professionals face marginal tax rates of 70 per cent or more on their earnings (and even more if they are crazy enough to live in Scotland). Perhaps worse of all, the dire state of the public finances means that everyone knows there is far worse to come over the next two or three years, with taxes rising relentlessly to pay for soaring welfare bills and public sector wages. The only rational decision is to get out while you still can. A desperate Labour Chancellor – perhaps an Angela Rayner-type – may even impose an exit tax, as other countries have tried to. It is catastrophic for any country to lose its wealthiest, most energetic, talented, ambitious, and hardest-working people. They drive investment, innovation, and entrepreneurship. More than any other group, they create the wealth that allows the country to flourish. But it is especially catastrophic for Britain. The reason is simple. Over the last thirty years, we have narrowed our tax base, so that the Government is very dependent on a small group of people. The top 1 per cent now pay 28 per cent of the total for income tax, and the top 10 per cent pay 60 per cent of the total. For capital gains tax, dividend taxes, and corporation tax the percentage will be even higher. As they leave, the revenue collected will collapse. Even worse, as the exodus gathers steam, the Government is doing precisely nothing to stop it. Any rational government, faced with losing 30 per cent of its tax revenue, would be frantically finding ways of persuading them to stay. Instead, Labour is complacently watching them leave, as if it makes no difference. It is going to prove a very expensive mistake – because the UK will find it very hard to get all those people back once they have left. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
