Labour’s pledge to restore winter fuel payments and review the two-child benefit cap could lead to another £10bn to £30bn of tax rises, experts fear. Stephen Millard, acting director of the National Institute of Economic and Social Research (NIESR), said: “It is pretty much inevitable now that [the Chancellor] will have to raise one of those big taxes.” Britain’s tax burden is already at a 75-year high, after the Chancellor raised taxes by a record £40bn last autumn. Richard Tice, deputy leader of Reform UK, commented: “Labour has lost control of the economy, mainly due to [Rachel] Reeves’s wild public sector pay rises. More taxes will ruin what’s left of the economy and more entrepreneurs are leaving her car crash by the week.” Meanwhile, the Office for Budget Responsibility is expected to revise down what is widely thought to be an overly-optimistic prediction of longer-term productivity, leaving the Chancellor even less fiscal room. Finally, the FT points out that a rise in UK 10-year gilt yields has led investors to predict more fiscal tightening in the autumn as borrowing costs rise.

Nigel Farage, leader of Reform UK, is set to propose tax breaks for married couples to address the UK’s declining birth rates, which he describes as an “existential crisis.” In his upcoming speech, he will advocate for an overhaul of the tax system to incentivise marriage and support families in having more children. He plans to scrap the two-child benefit cap and introduce a transferable marriage tax allowance, allowing one spouse to earn £25,000 tax-free. Farage argues that boosting birth rates will create a larger domestic workforce, reducing reliance on foreign labour. He said: “We need to encourage people to have families and ensure they feel financially able to have them.” However, the Conservative Party has dismissed his proposals as “fantasy economics,” with shadow chancellor Mel Stride claiming the policy would cost £50bn.

Victoria Atkins says in the Express that Labour’s next U-turn should be to scrap its planned inheritance tax raid on family farms and small rural businesses, which she argues is threatening the viability of rural businesses. “The human cost of this policy is also becoming tragically clear as farmers ask whether their families can afford for them to live beyond the tax change.” Atkins argues that Labour MPs representing rural areas “must stand up for their constituents” because the “threat of electoral defeat or rebellion seem to be the only things that change this Prime Minister’s mind.”

Fiona Cameron critiques the Employment Rights Bill, introduced on 10 October 2024, for its “one-size-fits-all” approach that overlooks the unique needs of various sectors, particularly those reliant on seasonal staff. The Bill aims to modernise employment rights but may inadvertently threaten job opportunities in agriculture, tourism, and hospitality. Key changes include new regulations on zero-hours contracts, requiring employers to guarantee hours based on a worker’s regular schedule. While this aims to provide stability, it could lead to increased costs for employers and discourage the use of flexible contracts. Cameron warns that without tailored protections, the future of seasonal jobs in Scotland may be at risk, stating: “The adoption of a ‘one-size-fits-all’ approach… could threaten the future viability of seasonal jobs.”

Graduate job openings have fallen by over 20% as Rachel Reeves’s tax policies lead businesses to reduce hiring for entry-level positions. According to Adzuna, listings for graduate roles dropped by 22.8% in the year to April, with a monthly decline of 7.6% in April alone. The increase in employers’ National Insurance and a lowered payment threshold have contributed to this downturn. The National Living Wage rose by 6.7% to £12.21 per hour, yet many graduate roles now offer salaries close to the minimum wage. Andrew Hunter, co-founder of Adzuna, remarked: “After signs of recovery in March, April brought a reminder that this remains a delicate job market.” The overall job market is also struggling, with vacancies down to 761,000, marking the worst conditions since January 2017, excluding the pandemic.

The retail sector is experiencing a significant decline in job vacancies, with a 39% drop in April compared to the previous year, following the employers’ National Insurance hike imposed by Labour. Andrew Hunter, co-founder of Adzuna, remarked: “After signs of recovery in March, April brought a reminder that this remains a delicate job market.” The Chancellor’s recent policies, including an inflation-adjusted minimum wage increase, have further strained hiring prospects. Retailers are also bracing for Labour’s proposed employment law changes, which could escalate costs and discourage recruitment. The overall UK job vacancies saw a slight increase of 1%, but the retail sector’s challenges are evident, with only 10% of retailers planning to hire in the next three months, marking a record low since 2014.

Chancellor Rachel Reeves is set to unveil a £113bn capital investment plan at the spending review coming up in June, aimed at revitalising homes, transport, and energy sectors. The investment is positioned as a response to rising public discontent and aims to stimulate growth and job creation. The spending review will also address significant commitments on child poverty and infrastructure projects, including the East West Rail and Sizewell C nuclear power station. Labour MPs are pressing for a clearer economic narrative, especially following recent cuts and pressures from within the party.

Fraud in Britain is escalating, with outdated policing methods failing to address the issue. Lutz Schüler, CEO of Virgin Media O2, stated that fraud has become “a crime without consequence,” highlighting the need for a significant overhaul in policing. The Police Foundation’s report revealed that fraud accounts for 40% of all reported crimes, yet many officers lack the necessary skills and resources to combat it. The report advocates for the establishment of a national Crime Prevention Agency to tackle fraud and cybercrime, alongside a national strategy to develop skilled investigators. With 70% of fraud originating from abroad, the report’s author, Michael Skidmore, stressed the inadequacy of the current policing structure. Schüler warned: “Britain is losing the battle against fraud,” as cases surged by 33% last year, reaching 4.1m. He urged the Government to prioritise fraud prevention, stating that victims are often left unsupported.

According to the EY-Parthenon CEO Outlook survey, over 80% of UK chief executives have altered their investment strategies due to tariff uncertainties, with 49% delaying plans and 25% halting investments. The survey highlighted that 43% of respondents identified geopolitical and trade uncertainty as the main risk to growth targets.