Reeves speech lays bare Labour's 'monstrous' tax lies

0:02The Telegraph

0:10Monstrous lies. Sunday Telegraph editor Alastair Heath gives us his verdict on the Chancellor's pre-budget speech. Which all but confirms that she does plan to break a key manifesto pledge and put up taxes on working people. Our political editor Ben Riley-Smith was in the room for Rachel Reeves' speech. And I was in the room for Kemi Badenoch, but once again the Tory leader appeared to miss an open goal when it comes to The Telegraph's BBC scoop. Welcome to The Daily Tea with me, Tim Stanley. And me, Camilla Tominy.

0:50Ben Raleigh-Smith is in The Daily Tea studio, bright-eyed and bushy-tailed after an early start. Did we know this Rachel Reeves speech was happening this morning at 8am or whenever it was? We did know it was that early because we were trying to work out if it was going to be before the markets opened. because that would have been super alarm bells. But I think strictly the markets had opened. But yeah, we got a glimpse that it was coming actually last week when there was this diary of Rachel Rees' schedule that she was holding at the Photographer's Quartet and she was practising a speech for Tuesday.

1:19It's not often chancellors practice regular week-in, week-out speeches. But last night they confirmed it and they got everybody wondering what on earth was coming. They keep saying, we won't talk about the budget, we don't talk about the budget. And then they give a speech about the budget. And OK, they didn't say precisely what was in it. But can you explain to us the rationale ahead of a budget of giving a speech about the budget, which you don't talk about what's in the budget? Yeah, I'm not sure I've been to a press conference quite like that, where they are talking with all of the media and the nation's attention on them about something that's coming.

1:47They're giving no details about what was to come. I think it's pretty clear what they were trying to do. The Treasury has decided they want out very publicly and very loudly the idea that they are going to break their manifesto to raise tax. Now, there's a slither of a possibility that they're doing that to allow expectations to rise so much that actually on budget they say, aha, we haven't actually done that. It feels to me much more likely they've taken the decision. But to increase the fiscal headroom and make you less sensitive to economic moves or policy U-turns, that they are going to substantially raise tax.

2:20It looks like income tax is the most likely one to put the public finances on a secure footing. So why would you come out and indicate that now three weeks before? They want that idea to oxygenate for the public and also the markets and also businesses to think, OK, this is what is probably coming. And it takes the sting out the announcement on budget day if that's what they do. She didn't specifically say she was breaking the Labour manifesto, which I see you have a copy of, Ben, in front of you. I do, tattered, suitably tattered. I love that. Look how well worn it is as we have checked whether they have honoured their commitments.

2:54And it's such a depressing document. A very sober Keir Starmer and faded grey, not smiling. Yeah, we're all calling for change now, mate. But it looks like he's asking, do you have any change? Yes. Increasingly, they are. He's lost his job in a stockbroker's. I'll tell you what. He's living on the street and he's going, got no change, mate. And sleeves rolled up. She's wanting us to find some change down the back of the sofa. Now, she didn't expressly say, Ben, I'm going to break the manifesto and call for income tax rises. This is how she put it into typically robotic politico speak. As I take my decisions on both tax and spend, I will do what is necessary to protect families from high inflation and interest rates, to protect our public services from a return to austerity, and to ensure that the economy that we hand down to future generations is secure with debt under control.

3:48If we are to build the future of Britain together, we will all have to contribute to that effort. Each of us must do our bit for the security of our country and the brightness of its future. And then once she had delivered all this, you got to ask a question. Let's have a listen to that. Ben Riley-Smith from the Daily Telegraph. Thank you, Chancellor. It's pretty clear you're keeping open the possibility of breaking your manifesto. is you say you want to do what's right but not what's popular. If you look at history... Well, I'd like to do both, but... But I will do what is right. Well, often governments that have broken manifestos have been turfed out.

4:26Are you willing to lose the next election if it puts the public finances right? We've got to do the right things. You know, the problem of the last 14 years is that political expediency always came above the national interest. And that is why we are in the mess that we are in today. You know, there's no reason why borrowing costs in Britain should be higher than every other G7 economy. Why are borrowing costs so higher than in Italy or in France? The reason they are is because the damage done by that mini-budget, it might have been three years ago, but we're still paying the price of that. But also the price of keep racking up the national debt, 94 % of GDP,£2.6 trillion.

5:04If we had lower debt and we had lower debt servicing costs, we wouldn't be having to make the choices that we have to make today. and I'm determined to put our country on a more sustainable footing. Public finances that are under control, public services that are properly funded, and yes, with a focus on fairness and on growth, because in the end, growth is the best way out of the challenges that we face. I set all that out, but if you're asking me what comes first, the national interest or political expediency, it's the national interest every single time with me, and that's the same for Keir Starmer too.

5:41This is the righteousness of Rachel Reeves. I mean, I love this idea that she doesn't mind being unpopular. You've never been popular. You have always... Also, it's a fair price to pay if you do the right thing. Yes. She's doing the wrong thing and she's unpopular. No, but I think someone who's constantly doing the wrong thing while pretending it's the right thing has a unique kind of self-denial. I'm also going to go there and say she looked dreadful. This is taking a toll on her physically. Yes. We had the crying in the comments, which we can't get out of our mind. Whenever we see her now, I was listening to it in the car on the way in, driving the kids in.

6:20She sounded shaky and uncertain of herself. In the flesh, she just, she doesn't look comfortable in the room. She can't nail her look. I'm sorry, I'm going to have to go there. She started with the Lego Bob. She's now gone for something that's more relaxed and freewheeling. but I'm afraid it looks like she's been dragged through a hedge. You've gone there. You are such a little B-I-T-C-H. I'm sorry. I'm sorry. But if this is all about reassuring people, sending out a Chancellor who looks like she hasn't slept for weeks and someone has hurriedly put her together for a press conference, it's not good.

6:57We shouldn't really go down that road, but maybe Ben, who is looking very anxious at what we are saying about how she looks... Somebody's got to deal with the Treasurer and the Chancellor regularly. I'm going to tip it around. To be fair, sort of woman to woman, And I mean, I do think presentation matters. We're going to get on to Kemi Baden-Walky. We're actually looking quite confident this morning, even though no one's going to be listening or care what she said. But we'll get on to that in just a minute. Ben, just in terms of her aura, things haven't been right with the Chancellor since Teargate.

7:24They just haven't. Well, that was a terrible moment for any politician to lose control of your emotions like that on the front bench. We still don't really know why it is. We were told that maybe in something personal, but there's never been any kind of big explanation. I guess stepping back, this is a massive political moment for this government. It is very rare that a government explicitly breaks their manifesto and gets re-elected. So that's kind of why I asked that question about popularity. She brought in this phrase, it's more important to do the right thing than be popular. I mean, the gamble at the core of this, if the Treasury do indeed break the manifesto, is that they're willing to take the political pain now and hope that putting the finances on a more stable footing over the next two or three years buys you more leave room, eases up the economy, means you're less sensitive to the markets and in three or four years' time you might be able to cut taxes and win back people's trust.

8:16How often does that work? Public trust in politics is so low right now. It's a huge gamble. Yeah, if I rob you now, it might not be a popular thing, but it's the right thing to do. I don't think that works. But to what extent are we being set up for it not being as bad as we all thought. Is this actually part of an operation to make us to gird ourselves for a dreadful budget and then actually the tax rises are not that terrible? They're not 2p, they're 1p. It's certainly going to raise tax a lot. Yes. It's certain they're looking at the manifesto. Every budget I've ever covered, the Treasury placed this, oh, it's really bad, it's really bad, it's really bad.

8:54Oh, actually, it's not as bad as I thought. But even if you accept that, it does seem genuinely possible that they're going to have to go down this manifestory. They might do something quite clever, like we'll freeze the thresholds, and strictly that is a rate change and we'll get money. And we'll take 2p off national insurance and put 2p on income tax, which means workers don't pay more, but people who only pay income tax and not NI, like pensioners and landlords, get stung. So they might try and be clever, clever. And we shouldn't totally rule out that possibility, because from a comms perspective, that makes sense.

9:23But when you look at the numbers and when you look at the tone, the most interesting bit, I thought, at the press conference was she is saying the use of the word all. All of us now need to play our part. For months, it's been those with the broadest shoulders who need to play their part. No, now it's everyone. It's everyone. Now, on to Kemi, who was at the Royal Institute of Engineers. OK. I'm not sure if she's mentioned it. Is she? I don't know if you knew that. Do you happen to know the profession of the Prime Minister's father? Anyone? If only there were a Royal Institute of Toolmakers, he'd be there with a union jack every day.

9:54Indeed so. To be fair to Kemi, she actually poked fun at herself by saying, look, I'm here because I have mentioned on occasion that I'm an engineer. Well, it's good to know why she was there. Well, it was good to know. Now, let's just accentuate the positives here. She had a couple of good lines on Rachel Reeves. Let's hear the first one where she reacted to the Chancellor's speech. The Chancellor's speech was one long waffle bomb. A laundry list, a laundry list of excuses. She blamed absolutely everybody else for her own choices, her own decisions, her own failures. She claims she will focus on the priorities of the British public.

10:31Whose priority is it to pay more tax? And then she actually tackled head-on Reeves' blame game. You know, Reeves is saying it's the Tories' fault, it's Liz Truss' fault, it's austerity's fault and all the rest of it. And I thought, oh, this is quite bold. She's just going to grasp that nettle and this is what she said. We had a global pandemic. We had a war in Europe that jacked up energy prices. What's her excuse? What's her excuse? They haven't had anything like that happen, and yet we are seeing all of the metrics go the wrong way. Of course, we didn't want to put up taxes, but where did people think the money was coming from where we were paying people to stay at home?

11:08Where did it come from? Every action has a consequence. We went into that election not knowing that there was going to be a pandemic, but we dealt with it as best as we can. I'm not here to say everything was perfect, but there is no other party that is talking about fiscal responsibility except us. No other party is going to deliver a stronger economy and stronger borders. We have come up with a plan. Let's get the welfare bill down. Let's get people into work. Every person off welfare, every person off welfare going into work is a double whammy. We're not paying for them to be on benefits and they're going to be contributing taxes.

11:41That is the one thing that can be done and Labour has no plan for it. Anything else that they're talking about is just making excuses. But the trouble is, chaps, at the end of it all, I was wondering what the point was. She didn't announce anything new. It was basically a restatement of everything that she'd said at conference. She reiterated business tax rates to go to zero in the high street and for pubs. She reiterated their desire to cut spending by 47 billion. And I was sitting there going, well, there's nothing new in this. and then she was asked in the Q &A about our colleague Gordon Rainer's brilliant BBC scoop and there's more on that by the way today because we're moving from them Doctor and Trump footage to the mistakes they've made in their Gaza coverage and do check that out on the website and so she was asked actually by GB News what's your reaction to this amazing telegraph expose of a lack of impartiality at the heart of the national broadcaster and she said she wasn't across that story Extraordinary.

12:43And I just thought, can you just please, please, please just make sure you're briefed in the morning? Or don't be so anal about it. I don't know the precise ins and outs of this, so I don't want to pass comment. So I spoke to some aides. Welcome to politics. I know. I spoke to some aides afterwards and they're like, well, we want to make this about the speech and we don't want to make it about the BBC. I sort of thought to myself, today's news agenda is never going to be about this speech, especially if she hasn't said anything. Today's news agenda is about two things. It's about Rachel Reeves' broken promises and it's about the BBC's lack of impartiality.

13:18Those are the two stories of the day. Jump on one of them. You can jump on Reeves, but everyone's going to say, well, you started it. But you can jump on the BBC. You could show some courage. You should show some mettle. You should actually align yourself with your electorate. The Telegraph readers who are saying, Tim Davies' head must roll, the director general, and you could just call for him to resign. You could do that with no consequence for you at all. She can't. They're so cautious still. I would imagine by the time this goes out, probably Farage will call for Davy to go. Yeah, he would.

13:52He wouldn't hold back. And imagine him not commenting on something because he's not on top of all of the detail. Oh, my God. So we have another situation where the Tories, you know, are being offered a penalty in front of an open goal and have, you know, booted it over the crossbar. Can I give a slightly more generous interpretation of what they were trying to do? Even if they failed. I think in all the conversations we had at conferences, it's pretty clear if you're in that Tory bunkhouse somehow trying to plot what is the path back, it's to be seen as the economically credible party, the one that will control spending, the one that will try and create space for tax rises.

14:29It's got all of the problems because they got the baggage of what they did, especially in the last five years of the Tory government. They didn't stick to that. But they can't go super hard on immigration because Farage is always going to be in a tougher place on that. If the economy wobbles and people are really concerned about their money, they might look at them and think, why not reform are really tough on the borders? Do I know my pension is going to be paid with Farage? Who's his chancellor going to be? So they're trying to kind of own that fiscal credibility space. So I think they were trying to insert themselves into the budget narrative by saying, look, we would actually crack down on spending.

15:02unlike Labour, we would slash welfare, unlike Labour. But you're right, they seem to be tactically not managing to generate those headlines in a particular savvy way. So I could see what they were trying to do. I mean, Ben, also, you're right, they're trying to own the label of the fiscal conservatives, but they have said they will abolish stamp duty. They have said they'll get rid of rates on pubs, etc. I don't feel that has such credibility anymore because of those promises. OK, they want to cut welfare. OK, but even so, also reform have shot that fox by saying they won't do anything in government anymore.

15:40Do you think it's time for reform to have a shadow chancellor? I feel if they want to take this to the next level so that we can trust reform, we need to know, particularly as journalists, who we're speaking to. But then you're going to have a wrestling match between Tice and Yusuf behind the scenes. Do you think that would help reform if we had a name? Well, it depends who the name was and how credible they were. But certainly they've got this problem about economic credibility. And it's interesting, you know, Farage, for all his faults or things you can throw at them, he has a very perceptive ear to the public mood, but also the political narrative and where he needs to shore himself up.

16:15So he's seen that the Tories and Labour are coming out of conference saying we can smack reform in the economy. So he's ditched those tax cuts. I think they do. I mean, Farage has actually asked this directly in the press conference. And he said, look, we are not at the stage yet where we can do that. I understand what people are saying, but I need more time to work out our position. I mean, it's a danger if you hand it to Richard Tice or see Yusuf and they start saying things and it begins to crumble. Then it has the opposite effect. It's interesting what we're seeing with the reform councils.

16:43You know, they do have a hold on local government. And now their story is about half of those councils now whacking up tax. I mean, to be fair, both Tice and Yusuf have run successful businesses. I think Youssef has made much more money actually than Tice. We could compare the bank balances. Maybe we'll do that later. The trouble is that we've had chancellors in the past that have run successful businesses and been self-made millionaires. Jeremy Hunt obviously is now Shadow, but Mel Stride and others, and it doesn't necessarily help because then you really do blame them when they do really anti-business things like in the case of Hunt.

17:19Yes. They put corporation taxes up by 6%. I think this is really interesting. thing with reform in their cabinet, which is going to play out in the next couple of years, they've decided that they're going to appoint a lot of outsiders and say they're going to make them peers and that will be their cabinet. And it's that balance of whether people think that person's got no experience or it's a bit of a Donald Trump effect when I was in America. You know, America needs a CEO. Actually, when Farage frames it as I want someone who runs a business, I want someone who knows the industry, they don't have to be a political insider.

17:48That kind of instinctively feels like it shines with where the voters are. Which way that balance goes will be like fascinating in the next couple of years. You and I also know, from having covered the period in which David Cameron was Foreign Secretary, that that simply doesn't work. You can't have a Chancellor of the Exchequer in the House of Lords. Why? Because he cannot enter the Commons, sit on the benches and explain their policy or deliver a budget. Theoretically, all you can do is call them to the bar of the House so they can stand at the entrance and shout at members and be heard from there.

18:17That would be absurd in the case of... I don't think Chancellor, but could you have a Business Secretary who's a peer? Could you have a cultural secretary who's a bit? That's clearly what reform we're going to be proposing. There are some positions you can do that, but we have learned from experience with Cameron that is really unsatisfactory. And I think, I know where they're coming from. It sounds like a great idea, but it speaks to me about how this is not a parliamentary party. It doesn't have that institutional appreciation for how Westminster works. And it does matter. Ben Riley-Smith, thank you very much for joining us on The Daily Tea.

18:48Thank you for having me. Coming up next, a man never short of opinion, not least when it involves Rachel Reeves and the nation's finances. Alistair Heath, columnist and editor of the Sunday Telegraph, will join us.

19:09We're now joined by Alistair Heath, the editor of the Sunday Telegraph and our top columnist and our boss. So thank you and we think you're great. In your column last week... You just get that when those first, what do we call it, when we have our review, we may butter this man up. Yeah, exactly. You've all had time for the occasion and everything. Actually, isn't that funny? I've dressed up. I've polished my shoes too. In your column last week, Alistair, when this potential 2P income tax rise was first being pitch rolled, you wrote, This government, the smuggest, most insolent, most supercilious in living memory, keeps lying to you.

19:47I'm sorry to use such hard language, but it is the most precise way to describe Labour's gaslighting of the great British public. Do you think that lie has now been exposed with this press conference? Yes, exposed again, I think. One of the big problems is this is a government that thinks it can promise things in its manifesto or in newspaper interviews or in TV interviews and so on and then simply renege on them in an incredibly arrogant, haughty way and just basically do the opposite. So, you know, it was very, very clear in the manifesto it wasn't going to put up national insurance. And, of course, it put up national insurance three months after that.

20:28Reeves said in the manifesto, Reeves and Starmer said, they put up tax by about£8.5 billion. That's it. In the first budget, they put up taxes by£40 billion, five times more than they promised, and we're about to see the same thing again in this budget. Another massive, massive lie. Lie, I'm afraid to say, is the only word to describe this kind of behaviour, right? This is not just a tweak. This is not just that circumstances have changed. Circumstances haven't really changed. That's simply not true. What's happened is that this government's come into power, massively increased public spending, refused to cut spending, tried a little bit but then gave up, and is now just putting up taxes again and again using levers that it explicitly ruled out.

21:10So the next big one, of course, is income tax. That was another one of those that the Labour Manifesto ruled out. We know everyone's now expecting a 2p or 1p or 3p or whatever is going to end up being increased in income tax. You know, will it just be the basic rate? Probably. But you never know. It could be could be more than that. And then, of course, there's another set of taxes that the chancellor explicitly ruled out, albeit in a newspaper interview with Sunday Telegraph about two years ago, which was any form of wealth or mansion tax. She explicitly ruled it out. We asked very carefully because this is a subject I've been interested in for a long time because I've always thought that the left eventually wants to come for people's wealth and for people's houses.

21:52So they were very clear and they said, we're not going to do this. And of course, now there's talk of massive increases in council tax, perhaps, or some other form of confiscation of property wealth. So this is a government that made explicit promises that it would, well, it wouldn't be a Blairite government, but it would be a sort of technocratic, centrist government. And it's now preparing another massive onslaught in taxes. This is going to end up being a government that raises more tax than any other government probably since, I don't know, Attlee or something. Yes. Yeah. One thing you said there I want to pick up on because I think it's so important.

22:27It will be framed in the next few weeks as the chancellor has no choice but to raise taxes. And that implies two false things. One, that she inherited an economy and a fiscal situation which she had no control over. And that's why she's having to raise taxes. The second is that there's no alternative. So on the first point, as you say, actually, she inherited a difficult situation, but she did increase taxes and she did massively increase spending. So we are partly where we are because of decisions she has made. And on the second point, there is no alternative. There is an alternative to tax increases, isn't there?

23:01Yes, well, of course, you can cut spending. But I think going back to the first of your points, the Conservative Party made a massive effort to try and regain control of the fiscal situation in its last year in office. I personally disagree with some of the way this happened, i.e. too many tax increases, not enough spending cuts, but nonetheless they came up with a long-term budget that was quite harsh, especially after the election. But nevertheless, you had these quite harsh public finance settlements that the Labour Party immediately, immediately tore up. That is a key point. Handing massive pay increases to the public sector and promising all sorts of other money to every part of their coalition.

23:41So Labour caused this problem. It is not true that Rachel Reeve suddenly came to office and suddenly discovered this massive black hole. And now suddenly, oh, there was something called COVID, did you know? And something else called Brexit. And let's just blame everybody and everything. No, this government has failed. This government claimed to be a technocratic government of grown up sensibles, people who could run the economy and the public finances better than the useless Tories, right? Labour said they were more moral, more competent, better people. They would be able to bend the civil service to their will.

24:14The blob would suddenly kick into action and actually do what they were told for once. And everything would be OK. There'd be all this deregulation and house-building boom and all that kind of stuff to grow the economy. Nothing has happened. Instead, we've had a traditional socialist government that is spending, spending, spending, taxing, taxing, taxing, and also regulating everything to death with huge increases in regulation and everything from rental contracts to the labour market. You're saying the word gaslighting. Have we entered this sort of post-truth period? And maybe it happened when everyone tried to convince us that women could have penises, that politicians now can stand up and tell bare-faced lies and expect the electorate to believe them.

25:00I make the following points. We have a Chancellor who is preaching fiscal discipline when she has overseen a£20 billion bump in borrowing and the debt having actually increased under Labour by£186 billion. Point one. We then have a Chancellor who is blaming, as you say, Alistair, anyone and everything. It's Brexit's fault. It's Donald Trump's tariffs. It's the Tories recently. It's Liz Truss. George Osborne's austerity plan has been blamed for today's fiscal situation, which will strike most people as completely incredible. It's just a ridiculous claim that we are now talking about austerity causing things 15 whatever years on.

25:46And then the central premise at the heart of all this is this lie that working people can be defined only by those who earn under£46 ,000. This was the sort of the truth of this lie was exposed when the budget came out. And as you say, everyone said, well, no, if you're increasing employers' national insurance, then it's an indirect tax on workers. Working people are surely people who just work. They could be on£4 ,000. They could be on£46 ,000. They could be on£466 ,000. It doesn't matter. This whole chicanery, this political manoeuvring to try and get false premises across the line is just a total sham.

26:33Or am I over-exaggerating? No, I agree. I mean, you're right, but I see this as the death throes of an old political order, not of a new order where people can just get away with lying. I don't think people can get away with lying, and I think that is the reason why both the Conservative Party, which sadly didn't always tell the truth either, and the Labour Party are now in a terrible, terrible position in the polls. And our public conversation has yet to adapt to the massive collapse in both those two parties' poll ratings, right? I mean, the most recent YouGov poll puts Labour at about 20%, towards the 16%, 17%.

27:08That means a combined share of those two parties is barely above a third of the electorate. Why? Because these are parties that promised things they couldn't deliver. You know, a combination of let's spend, spend, spend, but let's not tax more. You know, and obviously I'm not making the case for higher taxes here. I'm saying we can't live beyond our means forever. That is where we're going here. We are a country that's now living beyond its means. We're an increasingly poor country. we have impoverished ourselves through 15, 20, 25 years of stupid economic and political decisions and we're now paying the price.

27:42And both parties have refused to accept that and both parties are now in tatters. Although reform have had to renege on their contract with the people last year. I mean, a listener called Mike, thank you very much for our exchange, sort of said to me, well, you hauled Richard Tice over the coals. You said that he's broken his contract. They never signed the contract with the people because they didn't get elected to power. And you should only judge parties on their manifestos if they're actually forced to deliver them because they're voted in. And I said, no, hang on a minute. What happened yesterday was that reform met reality.

28:17Reform had come out with a load of uncosted spending pledges combined with a vague promise that they were going to make the money back by cutting government waste, doing something with the Bank of England based on a 5 % interest rate that won't apply by the time the next election comes around. But anyway, and then yesterday we had Tice telling me, OK, yeah, commitments have become aspirations. So they're all at it, Alistair. Are you more favourable towards Farage? Because at least he's been honest and said, well, we were going to pledge to cut taxes, but now we've realised we're going to have an almighty trust situation on our hands.

28:51So I've now had to back off from everything I vowed last summer. Well, look, yes. I mean, ultimately, I think he had to do what he did. and I'm happy that he's done what he's done, which is basically to accept reality, as you've just said, Camino. Of course, the original plans didn't add up. On the other hand, you know, they won a few seats in the last election. They're now a serious player. They're now ahead in the polls. There's been a transformation. It's still the same party, but the world has completely changed. That party's biggest challenge now is to tell the people, show to the people, show to middle England that they are a serious party, they won't implode and trigger a financial crisis the day they come into office.

29:31So I think what Farage did this week made a lot of sense, but it's just step one. He actually now needs to give us the details of all these sorts of plans. He mentions maybe looking at public sector pensions, for example, which I think would be an excellent idea. These sorts of policies. Yes, reform had policies that were uncosted going into the last election. That's unfortunate. However, I'd much rather that they accept that now and come up with much better policies, which means that the public discourse and the current debate can actually be all about reality. So basically, I'm happy with what Farage has done.

30:04I think he had to do that to become a serious party. That doesn't absolve Rachel Reeves of anything because she was ahead in the polls. They were a serious party. Everybody knew they were going to win the election. They won the election, and then they proceeded to immediately refuse to actually do what they promised. I think Labour adds an added dimension to this, which makes them so awful, which is they're holier than thou about it. A bit like the way in which they attack Boris of a party gate. And then we've had one scandal after another on the economy. This morning, Rachel Reeves and all her briefers are saying we're all in it together or we've all got to contribute as if this is like a wartime situation.

30:46Again, completely out of their hands. It's like a tsunami or something. And we all have to pitch in. Well, no one asked me. I already pay a reasonable amount in tax. The kind of people who are probably going to get clobbered at the next budget pay far more even than I do. So they're already contributing. The idea that they're not already contributing. They are already contributing. Business already contributes. Farmers have already been asked to contribute. Employers have been asked to contribute, right? But also, I wasn't in favour of the lockdown. I personally think the Ukrainian war should have been wound down sooner than it was.

31:18No one's asked me. I don't regard myself as personally responsible for any of the disastrous policy choices of the last 20 years. Well, nobody asked for mass migration over the course of the last 25 years. Nobody asked for mass migration. So why am I suddenly being told? Nobody voted for it. It wasn't in manifestos. My country having been run badly, not having voted, well, I've voted twice for a winning party, but not having voted for most of the parties that have run things, why am I suddenly being asked to pay for everything? You make many very, very good points here. One of these is immigration, right?

31:47Immigration is where all of this started, which was endless lies, basically, in manifestos from the Conservative Party when they promised to reduce immigration and increased it instead. This is kind of where it all started. And now we've ended up with taxation and public spending, where Labour's completely imploded, basically. Immense. The scale of the lie is gigantic. It's almost unfathomable, right? If you say you're going to put up taxes by£8 billion, if you say there's going to be no bad surprises, you're not going to put up income tax, You're not going to put up national insurance. By the way, they didn't say they're not going to put up employees' national insurance.

32:20They said they're not going to put up national insurance. So clearly that was a massive manifesto. And then you end up putting up taxes by, say,£80 billion over two years. This is a huge lie. And we're talking about a lie that did not happen because of an unforeseen catastrophe. There was no massive new pandemic. There was no massive new war, right? We already knew about the Ukraine war. And by the way, none of this extra public spending has anything to do with military spending because Starmer's commitment to increase defence as a share of GDP hasn't even started yet. And in any case, it's fully funded via reducing foreign aid.

32:53So, yes, this is a monstrous situation, I think. This is why I'm describing the Labour Party as insolent because they almost seem happy that they're doing this. They almost want us to... Of course, you must understand why we lied. It was a noble lie. It was to just help us win the election, us, the good people, so we could get rid of these horrible Conservatives. No, it was an untruth. And I can't see them being forgiven. They will not be forgiven for what they have done. They just won't be. I think there are also a bunch of Puritans who enjoy pain. I think the spirit of Stafford Crips runs through that party.

33:29They love a period of austerity. But also, by the way, I just don't think he's going to have them with the left. They've lost the right and they've lost the left. The left is flocking to the Green Party, who are total nutters. Full on proper socialists. Like the new guy in New York. Exactly, Mamdani. No, but also, Jess, I love the fact that Donald Trump just described him as, quotes, a communist lunatic. We would love to see that rhetoric around Polanski and Sultana and Corbyn because that's precisely what these people are. They're total economic calamitists. Yeah, but they hold up the fantasy that there is somewhere a tree that you can shake.

34:07At least the Greens are not saying everyone must pay. They're not going to squeeze all of us. By the way, there's denial about Millionaire's Exodus. There's denial. I mean, I went on this luxury cruise last week, OK, with a lot of our readers, but an older demographic. We attempted to go on sailing away from the UK. Well, a little bit. Never come back. I'll tell you what my overriding feeling was. You know, there's a certain generation that are all right, and it's my father's generation who's nearly 80. These are people who retired from teaching 20 years ago. And I thought, well, you know, and they're travelling a lot.

34:40They're going on several cruises a year. And I sort of thought to myself, in what world can my children envisage a retirement of 20 plus years where they are going on around the world cruises and really comfortable? What property will they own? How much money will they earn? You know, what can we pass down to them? Because everything is going to be taxed until the pips squeak. I mean, there is something quite frightening. And those young people will blame capitalism, but in fact Labour destroyed the private pensions market. Well, I hope they don't blame capitalism. There's no growth. There's no economic growth, right?

35:15And there's no way our societies can survive with very little economic growth. I should say there's very little economic growth. There's some economic growth, but there's far less economic growth per capita than there has basically been since the start of the Industrial Revolution, at least for an extended period of time, and at least not in wartime, right? This is a situation we've gone through for the last 15 years or so. And it's not surprising when you ally that with massive technological change and huge amounts of immigration that you're going to create all sorts of political issues. But I think one of the points Tim made was spot on.

35:45There's two forms of socialism. There's the form of socialism where everybody has to pay and pay and pay. That's France. If you're going to take public spending to even higher levels than we currently have in Britain, which is what Labour want to do, if you want to be like France, basically, everyone has to pay tax on everything all the time, including the poor, the middle, the top. Everyone. Everyone is squeezed. And then you've got this kind of utopian socialism, which is what resisted clinging to, which is this idea that the rich can suddenly bail out and let's double the top rate of council tax.

36:16You know, let's just do stuff like that. Let's just levy a tax on people fleeing the UK just for the fun of it. Okay, that will raise some money. That will destroy the economy and destroy entrepreneurship even more. And ultimately, it won't succeed because the only way you're going to do the kind of thing she wants is you're going to have to put the basic rate of income tax to 30p. You're going to have to put VAT to 25%. These are the sorts of things you're going to have to do over the next 10 years, unless there's a massive change in the direction of this country and a massive shift in our economic policy to boost growth.

36:47These are the two things you've got to do. Otherwise, we're living beyond our means. And the only way to keep the show on the road for just a few more years will be just massive tax increases every year. That's going to become the new normal. Massive tax increases on everybody, not just the rich, because there's not enough rich people and they're already paying so much. You have predicted an all-out political revolt in Middle England. Where do you think that revolt will take place? Does that mean reform or also the left-wing parties or the Lib Dems? Yes, well, I think a bit of everything. I think Middle England, I don't think, depends how you define Middle England, I think the people shifting to the Greens are basically the most left-wing 15, 20 % of the population.

37:29I mean, the past 25, 30 years, there's been growth in the modern far left in Britain, which is quite different to the old trade union socialists and so on. These are kind of urban professionals, that sort of stuff. Those people are shifting to the Greens. I think the old Middle England is shifting largely to reform now, but some of them are going to the Liberal Democrats. I mean, many Liberal Democrat voters are more right-wing than the Liberal Democratic Party. Agreed. And I think Lib Dems are going to pick up a lot of votes at the next general election just by stealth. There are going to be people in the blue wall that can't stomach reform, think the Tories are finished, know enough, thankfully, about the Greens and Sultana and Labour to avoid it and just cast a yellow vote because it's the easiest thing that they can think of doing.

38:09Again, it's disastrous because it then emboldens Davy and co to do bizarre left-wing axis of evil deals with Labour and the rest of it. By the way, there are some righties weirdly voting for the Greens who don't seem to understand it's a hotbed for Islamic extremism and communism. It's not an ecological party. Those people need to do some research because they are marking up the wrong tree. But I think this is why Farage did what he did this week. He needs to reassure what's left of the Conservative electorate and some of the Liberal Democrat electorate, that he would be a serious person at the helm of this country's economy, and that the economic policies you pursue will be pro-growth policies that change, that break with the status quo, but they don't bankrupt the country, and that they don't trigger a panic.

38:54That's what he did. So the more credibility he builds on the economy, the more he can prevent people from going to the Liberal Democrats. He can say to former Conservative voters, look, I'm not scary, actually, come to me. I think that's clearly the strategy he's trying to pursue. Alistair Heath, we need to let you go. Thank you very, very much indeed for joining us on The Daily Tea. Thank you.

39:18I love Alistair for his strident opinions, but it's making me quite worried ahead of November 26th. Yes, I was almost tempted to ask if he'd let us do this podcast from Dubai. That's a thought, isn't it? Or, hang on, maybe somewhere closer to home like Guernsey or the Isle of Man. Singapore. I think I prefer Singapore to Dubai. Having had Isabel Oakeshott on the show last week, I've had so many emails from people saying actually Dubai is horrible. Yes, but you and I podcasting from like Raffles Hotel. Yes. Peanut shells at our feet. Yes, there might be a time delay issue. No one can chew gum there.

39:52It's all very neat and tidy. I approve of that. It's a thought, isn't it? It's a thought. I think somewhere where they whip you for spitting is exactly my kind of town. Spoken like a good Catholic. We'll be back tomorrow, 5pm.

40:23Thank you.