𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Millions of taxpayers will be dreading Labour’s third Budget, after Rachel Reeves’s first two growth-crushing assaults on the UK economy. The best thing John Healey could do today is reverse pretty much everything she did. Sadly, that’s not going to happen. Yet a pre-Budget leak suggests our new Chancellor is about to do something sensible. And it will be great news for savers but a slap in the face for Reeves.

Reeves wanted people to put more money into Stocks and Shares ISAs, rather than Cash ISAs, to give their savings a better chance of growing over the long term. Shares typically outperform cash over the long term, but are highly volatile along the way. It was a noble idea in theory, a disaster in practice. Now Healey is about to kill off her plan.

The overall annual ISA allowance would have remained £20,000, but under-65s would have been restricted to putting just £12,000 into cash. That would have created a two-tier system based on age, penalising younger savers who wanted the security of cash.

That is a lot of extra red tape to achieve an uncertain result. Confused savers might have given up on ISAs altogether, rather than invested more in shares.

The policy also threatened banks and building societies, which rely on Cash ISA deposits to fund mortgage lending. Healey appears to have recognised this fiddling was wasting everybody’s time.

Reeves’s planned inheritance tax changes for unused pension funds are also a right mess, as they will force grieving families having to track down old retirement pots and pay tax on them within six months of death. Industry experts say it’s unworkable.

But at least one unnecessary layer of red tape looks set to disappear today. Even before it even begins. Now, if Healey could apply the same principle to the rest of Reeves’s reforms, we might actually have a Budget to welcome. I’m not holding my breath.