Is the Chancellor about to break Labour’s tax manifesto promise?

0:02Hi, I'm Charlie Duffield and welcome back to The Standard Podcast. If you're new here, hit follow and give us a rating. For all the latest news, head to standard.co.uk. Coming up later in the show. It's only just turned November, but can this year's flurry of Christmas adverts help get you in the festive spirit? Advertisements are this way that you can sort of read the temperature of a nation. Usually they're spread out a little bit more, but instead it seems like they've really dumped them. Kind of the moment that Halloween has come and gone, they're just all sort of out there. I think they are concerned.

0:46The High Street is also suffering at the moment. They want to make the absolute most of that time. But first. Today, Chancellor Rachel Reeves has been accused of delivering one long waffle bomb and a laundry list of excuses when laying the groundwork for possible tax rises in an unusual pre-budget speech at Downing Street this morning. She refused to rule out tax rises, saying she will make the necessary choices in her upcoming budget on 26th November, despite Labour's manifesto pledge not to increase income tax, national insurance or VAT. There were no specifics in her speech, but she is rumoured to be considering a proposal by the Resolution Foundation to raise income tax by two pence on the pound while cutting national insurance by the same amount.

1:42This would be a radical move, given that this country hasn't seen an increase in the basic rate of income tax since the 1970s. But the Chancellor said the world has thrown ever more challenges our way in the last 12 months and that her budget would be one of growth and fairness. If 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. 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.

2:38As we covered in last Wednesday's episode, the government's official forecaster, the OBR, is expected to downgrade its productivity forecasts, meaning the Chancellor could face a£20 billion gap in meeting her tax and spending rules. After years of so-called economic mismanagement, the budget will focus on getting inflation falling and creating the conditions for interest rate cuts. However, Daisy Cooper, Treasury spokesperson for the Liberal Democrats, said the speech was pointless, adding that this budget will be a bitter pill to swallow and the government seems to have run out of excuses. Likewise, Conservative Party leader Kemi Badenok said the Chancellor has blamed everybody else for her own choices, her own decisions, her own failures.

3:30and Reform UK's deputy leader Richard Tice said Rachel Reeves is going to hammer working people with even more tax rises. Joining us now is Stephanie Brobby, a former private wealth lawyer and founder and CEO of the Good Ancestor Movement. Stephanie, what's your response to Rachel Reeves' impromptu speech? Most people would agree that we're in really bad shape as a country that's meant to be the sixth richest country in the world. We've got nurses caring for sick patients in corridors by day, and then they're going to food banks at night. And then at the same time, you've got very, very wealthy people amassing a lot of property and investments and literally making money from housing scarcity and wage suppression and simply sitting on those assets and watching them go up in value.

4:23And in a lot of cases, they're paying the same, effective tax rate as a nurse, as we saw from Rishi Sunak's tax return a few years ago. So we need to start taxing wealth and not work. And Rachel Reeves' pre-budget announcement is, you know, somewhat frustrating. The only people that seem to be protected are the super rich. And Rachel Reeves has been very quiet about that particular demographic. You've said that this government could raise the revenue needed to cut waiting lists, fund schools and councils properly by taxing wealth more effectively, specifically by introducing an annual wealth tax of 2 % on individuals with wealth exceeding£10 million.

5:08Tell me more about that. The proposal that's on the table from a great deal of the people that I work with, I think it's three and four millionaires, according to fairly recent polling, shows that there is support for an annual wealth tax of 2 % on individuals with assets exceeding£10 million, which is quite generous when you think about the fact that the top richest 1 % households in the UK have£4 million. So we're not focusing on taxing wealth because there's often rhetoric around the idea of taxing wealth, but it's just the situation seems so untenable. Not only would they be breaking a manifesto pledge not to raise taxes.

5:54But why is it that ordinary people are continually asked to cover the costs to meet the full responsibility of plugging the gaps where we have them? An annual wealth tax that I just outlined, that would raise up to 24 billion extra a year. And there's, you know, there's multiple other policies that could be tabled that would lead to more effective taxes on wealth so that we close that gap. So what other proposals are you referring to? Tax Justice UK has put out a number of different proposals. There's also the proposal to charge national insurance on investment income, which is said to raise about 10 billion a year.

6:37There's also equalising capital gains tax with income tax. So that basically would be operationalising the principle that income should be taxed at the same rate wherever it comes from, whether it's from wealth or whether it's from work. That would ensure that capital gains are tax-like wages because lots of people use that effectively as a loophole to disguise salary and remuneration to simply continue holding on to assets. That's meant to generate around$12 billion base cost uplift. There's a whole suite of policies that could be tabled for consideration to make sure that we level the playing field and make sure that we're starting to redesign our tax system because at the moment it just simply doesn't work for ordinary people.

7:25Keir Starmer previously said that tough but fair decisions are needed in order to kickstart economic renewal in Britain. What's your response to that? It may feel a tough pill to swallow to implement more effective taxes on wealth. But to my mind, there is a clear mandate for this. Three and four millionaires in the country are in favour of the proposed policy for an annual wealth tax. And there's growing public support across the political spectrum. It's about political choices, isn't it? She's the Chancellor of the Exchequer. She's got total agency. Any blockers are perception. It's so important for them to look at What is going on in the country, the absolute absurdity of some of the best and the brightest teachers and nurses having to go to food banks and kind of normalising the fact that work is no longer a route out of poverty, deciding to shield very wealthy people.

8:22For me, this is a matter of political choices and whether this government is prepared to take the bold steps towards redesigning our tax system through a number of different policies. Finally, what would your message to the Chancellor be? My message to the Chancellor would be taxing wealth more effectively has to be part of what needs to be done in order to save this economy. You know, the annual wealth tax that's proposed, the 2 % on assets over 10 million, that's only going to affect about 20 ,000 people, Whereas I think there are about 40 million income taxpayers. I work with a lot of wealthy people and I know for sure, you know, they like to diversify their assets.

9:04They'll be investing their assets in multiple different places and they will be making far more than 2 % every year on their wealth. Yeah, it's a no brainer for me. Let's go to a break. Coming up in part two. With Halloween over, bonfire night approaching and the night's getting darker. it only means one thing. Christmas is nearly here. We'll see you back here in just a moment. Welcome back. Last night, Oxford Street kicked off London's festive season by turning on its annual Christmas lights. Here's the moment the Devil Wears Prada star Vanessa Williams flipped the switch to light up the West End.

9:48Well, the fact that I'm in London now, sending my second Christmas holiday in this amazing city and being asked to turn on the lights is an honour. Five, four, three, two, one. Here we go. And with just 51 days until the big ho ho ho, Christmas adverts have also arrived on our screens. So the countdown is well and truly on. From Sainsbury's and Lidl to Aldi's annual Kevin the Carrot adventures, the gift of seasonal commercials keeps on giving. And a special mention this year to Boots' Christmas advert, which features Puss in Boots with a West Country accent. Puss! Where do you be? Puss! In Boots, of course.

10:35Snowy. Just the job right, Rapunz. Yes, eh, cinders? I nailed that. This year, the John Lewis Christmas ad sticks to its tried and tested method with an excellent music cover over a story about gifting. Labyrinth covers Alice in Limerick's 90s dance track, Where Love Lives, soundtracking a dad receiving a gift from his son.

11:04The tagline is, if you can't find the words, find the gift. To find out more, I spoke to The Standards' culture writer, India Block. India, you said that no other Christmas advert has moved you in the same way as this one from John Lewis has. What's the story? John Lewis always goes straight for the jugular when it comes to emotion. They've been doing this for almost two decades now. Surprisingly, this is the first time they've actually ever featured a father and son as a sort of central relationship. So it shows a dad receiving a present from his sort of surly teenage son who's not really joining in on Christmas.

11:43He realises that it's a record and he plays it and it brings back all these memories of when he was out clubbing in the 90s. So it's Alison Limerick's 1990 song, Where Love Lives. And then it sort of transitions to this cover by Labyrinth because, again, John Lewis famously always has an artist cover, a sort of existing nostalgic song. And then he sort of sees his son and they embrace. And without words, they've sort of wished each other a Merry Christmas and affirmed their sort of loving relationship with each other. It's very touching and heartwarming. They've designed it really well and it did make me well up.

12:24But also a lot of the other Christmas adverts this year are quite depressing. So they didn't exactly have a very competitive field to play in. Tell me more about that. How does John Lewis's ad compare to others on our screens? So John Lewis is a department store. I think they have a little bit more leeway because their products are more diverse. And with this one, they've clearly gone for a more sort of disposable income available market. So the record with sort of Limerick on the A side and Labyrinth on the B side is being released in collaboration with Rough Trade. They've kind of gone with all of their quite expensive electronics and sound systems as their sort of what they're pushing.

13:06Whereas I think the supermarkets are struggling on both fronts. Their customers are really struggling. The cost of living crisis is still going on. I think there's this general fear that if you show a really sumptuous Christmas spread, you are going to alienate your audience because I think Christmas is going to be very hard for a lot of people this year. So understandably, they want to make it more low key in that sense. But then you have to go for the emotion. And that is actually quite a tricky thing to do. There's also another sort of thread to that, which is we're about to have some very strict new advertising rules come in.

13:45You won't be able to advertise food that is high in salt, fat or sugar before 9pm, so sort of pre-watershed. Those have now been pushed back to January, which has sort of left retailers in this limbo about what they're going to highlight. They are either, in the case of, say, Sainsbury's, which I know for sure, I think Morrison's probably maybe has also gone down this route. They are choosing to be sort of compliant ahead of the rules, just in case. M &S, I think, has really gone balls to the wall. Their chair, Archie Norman, was definitely taking a stand back in April, being like, you know, you're no longer going to be able to show a mince pie during the day.

14:25They've got Dawn French back and they're doing lots of really delicious looking canapes, little individual fish and chip portions and paella bites and Tom Kerridge's pate. So I think they're sort of going out with a bang, one last hurrah. Whether deliberately or not, this John Lewis advert also taps into the zeitgeist when it comes to tackling toxic masculinity. Would you agree? You know, father and son relationships have been in the news a lot. We had this sort of big conversation around adolescence and what it sort of means when you don't know what your children are up to and the terrible, tragic consequences of sort of toxic masculinity, online radicalization.

15:05We know there's a male loneliness crisis. The men aren't really sort of talking to each other or looking after each other emotionally. That falls on women to sort of address in lots of ways. But what's really refreshing about this is it's not like the mum or the sister being like, are you going to give dad your present? That's about a son who probably for the first time has a bit of money of his own and thinks of a thoughtful gift for his dad and leaves it there for him under the tree. And they have this moment of connection that's not being sort of shepherded by the women in their life. it is about two men connecting even if they're struggling to sort of talk about it they find music as this shared sort of thread and I think again there's a lot of this sort of generational divide youth culture has moved so far away from where sort of adults are now it used to be that you could usually pick up on like the lingo whereas we're getting a lot of this kind of like what does six seven mean oh my goodness what are the youths doing what are they up to we have no idea we're scared of them whereas this sort of really lowers the temperature and kind of basically it's like we're all humans these people raised you you know them probably better than anyone else you can probably pick up like what your dad's music taste is and buy him something special that relates to that it's really good to see not saying that it's a sort of deliberate comment on all of this because these creative teams start thinking about this sort of around now that's a real skill to have your finger on the pulse in that way.

16:41And that's The Standard. For all the latest news, head to standard.co.uk. If you'd like to get in touch, please do drop us a line at podcasts at standard.co.uk. We'll be back here tomorrow at 5pm. We'll see you then.