Rachel Reeves will deliver her maiden Budget under the new-ish Labour government this afternoon and becomes the first female chancellor in 800 years to do so.
She faces the tricky task of stimulating investment and growth without relying on unfunded promises, while raising taxes without letting the burden fall much further on ‘working people’.
Many of the forthcoming policies will come as no surprise, having been floated to the media in advance – presumably so as to avoid upending markets à la Liz Truss.
So without further ado, here’s all we can expect from Reeves’ first time in charge of the little red box.
How did she get there?
Rachel Reeves was born in 1979 and grew up in south east London, a stone’s throw from Keir Starmer. Her CV is not dissimilar to predecessor Rishi Sunak, either: Oxford PPE, a master’s in something economics-y, plus a stint in the private sector before entering Parliament.
However, while Sunak was busy prepping slide decks at Goldman Sachs, Reeves was working at the Bank of England – presumably learning to navigate those top-secret gold vaults that may prove rather useful to her over the next four years.
It’s worth noting, too, that the seeds of Reeves’ Budget were in fact sown long ago. Many of today’s policies take their root in a 2018 pamphlet, titled The Everyday Economy, in which she wrote:
“Taxing the savings and investment income of higher rate taxpayers can be increased. Capital gains tax could be reformed, halving the annual allowance, having it paid at income tax rates and improving tax compliance.”
She also advocated for a ‘long overdue’ reform of 1991 council tax bands and its replacement with a property tax for homeowners – so perhaps we’ll see a curveball announcement here, though nothing has been forecast.
What’s her voting record like?
How did Reeves vote in opposition? Well, a glance at TheyWorkForYou will tell you a bit about how she reacts when someone else is managing the coffers.
She voted against both the March 2015 and 2016 Budgets, which contained plans to spend £76bn and £56bn more than they expected to take in.
And Reeves also ‘almost always’ voted against reducing corporation and capital gains tax; while over on the infrastructure side, she backed HS2 and other high-speed rail projects. Make of that what you will.
Who might she upset?
Well, everyone really. If she goes after higher-net-worths via taxes on share ownership and tightening of ‘non-dom’ restrictions, these individuals are liable to move abroad. If she goes after businesses through national insurance hikes, retaining workers becomes more expensive and may lead to job losses across the country.
According to the IFS, almost two-thirds of government tax revenue comes from just three sources: income tax, NICs, and VAT.
Corporation and capital taxes combined make up just 15 per cent of the total, so it seems she’s decided to ramp up one of the big three contributors rather than meddle with several smaller levies (and, in doing so, renege on one of their headline manifesto pledges).
