𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Prime minister Keir Starmer looks set to be swept away in a furious Labour revolt. Chancellor Rachel Reeves is likely to fall with him. Few, if any, Express readers will mourn them. Together, Starmer and Reeves have blitzed Britons with a barrage of tax hikes, hitting our pensions, investments, savings and inheritances, driving buy-to-let landlords out of the market, and burying small businesses.

In doing so, they’ve crushed economic growth and driven up unemployment. Thanks to the Iran war, worse is to come, with energy prices, inflation and interest rates set to climb, putting still more pressure on our pockets. It’s a terrible legacy, yet one Starmer and Reeves somehow defend by claiming they’ve “restored stability”. As last week’s election drubbing showed, the country begs to differ. Even Labour has had enough. The party is tearing itself apart as they decide how to get rid of Starmer and who should replace him.

Three candidates are in the frame: Andy Burnham, Angela Rayner and Wes Streeting. The first two would drag the UK even further to the left, while Streeting may offer some respite – if the Labour Party lets him. There is also a wildcard – Ed Miliband, another far-Left candidate adored by many Labour members. As we’ve seen, the party’s default position is the same as always: tax, borrow, spend and repeat. The only question is over how brutal they will get, and how much the bond ­market will allow.

Under Starmer and Reeves, UK borrowing costs are soaring as bond investors demand higher interest rates for the risk of lending to us. The sight of Andy Burnham or Angela Rayner in No 10 could trigger an open bond market revolt. Cutting taxes and spending, and boosting growth, might fix that. But would any of these figures do that? Unlikely. So what might they do – and what does that mean for your money?

Andy Burnham: Higher borrowing, more spending

The mayor of Manchester, Andy Burnham, has a problem. He is not an MP and needs to find a winnable Labour seat to stand for Prime Minister. Quickly. It may be better for ­taxpayers if he doesn’t. Burnham has an economic philosophy called “Manchesterism”, and the state is at the heart of it. So we can expect the ­traditional tax-and-spend Labour approach, only more so. This may mean still further tax hikes for higher earners. Burnham has previously proposed restoring a 50p top rate of income tax on earnings over £125,140, in a further attack on aspiration. He has also flirted with mansion taxes, wealth taxes and council tax reform, arguing that owners of expensive homes should pay more.

This could be bad news for pensioners, as would another raid on inheritances. That’s something else he has previously floated. Burnham has also pushed for a higher mandatory National Living Wage, even though Rachel Reeves has already delivered two inflation-busting hikes, effectively pricing younger workers out of the jobs market. Basically, Burnham could end up doubling down on Reeves’s worst excesses. Other policies might include suspending the Right to Buy scheme, introducing a £2 national cap on bus fares, and pushing for nationalisation.

Pensioners relying on public services might welcome higher spending on the NHS and council services. Burnham is also sympathetic to workers and trade unions, which could mean stronger wage growth in the public sector. Taxpayers will foot the bill. Last year, Burnham notoriously said that Britain needs to “get beyond this thing of being in hock to the bond market”. The only way to do that is to stop ­borrowing so much money from them – and Burnham won’t want to do that. Instead, he’s likely to leave Britain even more in hock to the bond market. Because he doesn’t borrow it and spend more, what’s the point of him?

Angela Rayner: Workers first, higher taxes on wealth

Former deputy PM Angela Rayner is also lining up a hard-left programme of tax and spending, possibly as part of a joint ticket with Burnham. A former trade union rep, Rayner presents herself as the champion of working people. Her instincts are redistributionist. That means stronger unions, tougher employment laws, wealth taxes and more pressure on businesses.

Rayner’s controversial Employment Rights Bill has already made employers nervous about hiring new staff, by giving workers full rights from day one. It’s one of the reasons unemployment is expected to rise by 163,000 this year, according to the ITEM (Independent Treasury Economic Model) Club. Rayner is likely to double down rather than backtrack, making jobs even harder to find.

On tax, we already have a pretty good idea of what Rayner would like to do, as she set out much of it in a leaked memo to Rachel Reeves in May last year. Her ideas included extending the income tax threshold freeze, something Reeves has since done – as well as new property taxes and a sharper squeeze on investors. This could include scrapping the £500 dividend allowance altogether and cutting inheritance tax relief on small company shares listed on the AIM index. Under Rayner, capital gains, inheritance and pension taxes could all come under attack. The bond market would be in turmoil if she took power. And the idea that the anti-business union firebrand known as “Red Ange” will generate the economic growth we desperately need is for the birds.

Wes Streeting: The most market-friendly option

Wes Streeting is the candidate that taxpayers and financial markets fear least. And the one that left-wing Labour MPs and activists are desperate to stop. The Health Secretary is firmly on Labour’s modernising wing and has repeatedly stressed the need for reform alongside spending. He’s said the unsayable by questioning the NHS, saying it cannot simply demand more money every winter and must deliver better value for taxpayers in return.

Streeting has also defended using the ­private sector to cut waiting lists. In return, he’s regularly accused of wanting to privatise the NHS. Working people, savers and pensioners might breathe a sigh of relief if he is elected leader. So would the bond market. Streeting tends to sound more fiscally cautious than Burnham or Rayner and is less likely to frighten markets with any big spending promises.

He has supported strict fiscal rules, balancing day-to-day spending with tax revenues, but has also suggested hiking capital gains tax bands to align them with income tax. That’s another move that would hit businesses and aspiration, and is likely to cost the Treasury as much as it raises. Streeting could come after inheritances, too. He has previously suggested replacing inheritance tax with a “lifetime gifts tax”.

So even though he’s on the right of the party, as PM he could still end up presiding over yet another controversial Labour Budget. His supporters say he is realistic and economically credible. Which is why he probably won’t win. It’s just not very Labour.

Ed Miliband: The wildest card

Energy Secretary Ed Miliband has been Labour leader before, with disastrous results as he led the party to defeat in the 2015 ­general election. He says he doesn’t want another shot, but it could happen – especially if Burnham fails to get into Parliament, or Rayner is brought down by the HMRC investigation into her stamp duty tax swerve. There’s one thing in Miliband’s favour: this time, the voting ­public doesn’t get a say. Pensioners, savers, energy bill payers and motorists might consider the prospect of PM Ed Miliband with deep alarm. So will the bond market.

By contrast, Labour members adore his uncompromising left-wing instincts and green crusading zeal. Miliband is already driving Labour’s net zero agenda at full speed, despite mounting concerns over the cost, while blocking North Sea drilling in the middle of an energy crisis. He has backed bans on new petrol and diesel cars, tougher energy efficiency rules and vast state-backed investment in green energy projects. Supporters say this would create jobs and cut energy bills in the long run. It’s likely to pile huge costs on to households first.

Higher green levies, expensive home upgrades and soaring public borrowing could all follow under a Miliband leadership. Expect further windfall tax raids on banks and oil companies, and more nervousness on the bond market. For anybody worried about inflation, borrowing and rising household costs, Miliband looks the riskiest of the lot and, as we’ve seen, whenever his fantasy politics crash into reality, which is most of the time, he just ploughs on. Even if Miliband doesn’t become PM, there is another threat. Under Burnham or Rayner, there is a fair chance he’d be made Chancellor. At that point, taxpayers might experience the most unlikely emotion of all: nostalgia for Rachel Reeves.