LONDON: Rachel Reeves has become the first female finance minister (Chancellor of the Exchequer) in the history of the United Kingdom and a lot rests on her to uphold the expectations from the elections.
Rejected by the electorate, the Conservative party falls to a record low in the UK general election of 2024. The Labour party promises of “Change”. However, what really changes is the key to the outcome of this landslide Labour verdict. Outside of power for the last 14 years, Sir Kier Starmer had successfully transformed his party to the centre, which had deviated in the past. His strategy has led him to No 10 and now the real uphill challenges begin. Promises of fixing the economy, improving living standards, revamping the public services, rejuvenating the National Health Service including the dental disaster and building an end to the housing crisis are all key milestones.
Rachel Reeves has become the first female finance minister (Chancellor of the Exchequer) in the history of the United Kingdom and a lot rests on her to uphold the expectations from the elections. There can be some quick fix to the national societal infrastructure and once the new government is fully in place they may make revelations that the financial gorge are spectacularly high. There is an enormous economic black hole in the nation’s finances, so a smart strategy may be to deliver remedies that do not cost an arm and leg to the exchequer.
According to the Labour Party’s manifesto, they will “immediately abolish Section 21 ‘no fault’ evictions, prevent private renters being exploited and discriminated against”. Section 21 allows a landlord to evict a tenant without providing a specific reason—hence being dubbed “no-fault” evictions. This will definitely bridge the current huge imbalances between landlord’s and renter’s rights. Also, help for first-time buyers with a mortgage guarantee scheme for people hoping to get on the property ladder with limited deposits can be quite attractive.
With no highly spectacular growth for the economy in sight to fill the deficit, capital gains tax and the introduction of some form of land tax can be considered. Without changing the lifetime allowance limit on pensions there could be changes in the pension’s tax annual relief. In a way then everybody gets the same tax relief as basic-rate taxpayers. Currently higher and top rate taxpayers get more from the state towards their pension. On the front of carers allowances as it stands if anyone goes over the limit slightly they lose the full benefit. It’s like a cliff edge and thousands of people are affected, a softer landing where compartmental claw back can yield great results.
Household energy bills are expected to skyrocket up to 10% in October. In its first budget in September, if the government can negotiate hard to lower the landing charges it can be seen as a pound-back-to-pocket gesture. Car and home insurance bills including the price of new cars have more than doubled in the last few years, so if the regulators can find a way to lower them down it can prove to be a game changer. They say stability is the new change so the next 100 days will be the real litmus test for the resurgent red.
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