Labor’s defenses look very leaky, says ALEX BRUMMER

When Lord (Mervyn) King appeared on Radio 4’s Today program at the weekend to discuss his new role as president of the MCC, he was bombarded with questions about the economy.

The ex-governor criticized former colleagues at the Bank of England for not recognizing the expensive car accident until too late and for overdoing the printing of money.

There were also contradictions against Chancellor Rachel Reeves and Labour. By insulating three major tax groups – income tax, social security and VAT – from increases during the election campaign, the government effectively pushed itself into a fiscal policy deadlock.

One such measure, closing tax loopholes for non-resident taxpayers, is facing a U-turn as the country’s wealthy foreign residents, major donors and investors in the UK travel to Milan and Dubai.

Meanwhile, the private equity barons are moving in the same direction out of fear of losing their special tax status – the so-called carried interest.

The promised end to investment subsidies for already over-taxed North Sea oil explorers and producers is devastating jobs and, despite all the hype, Great British Energy will not deliver.

To compound the missteps, the clumsy way in which the winter fuel allowance was scrapped is likely to leave the Treasury with far less revenue than originally intended as pension credits are topped up and pensioners who miss out on other means-tested benefits claim benefits.

Dwindling income and savings flows have left the Chancellor having to work hard to plug the alleged (but not confirmed by the Office for Budget Responsibility) £22bn shortfall in resources, around half of which comes from pay deals in the country public sector without any ties to productivity.

So how do we find the missing billions and invest in public services as promised? King said it was a mistake for Reeves to have supported the Tories’ cuts to workers’ national insurance.

Recent leaks in Whitehall include a proposal to instead increase employers’ national insurance – a payroll tax on jobs.

That’s not particularly rosy at a time when the green transition in the steel and energy sectors is devouring jobs and artificial intelligence, another threat to work, is at stake.

Labor has placed great emphasis on financial integrity and the failure of Liz Truss’ unfunded tax cuts. However, it too threatens financial stability by attempting to change the way government balance sheets are measured by formally introducing the concept of public sector net assets.

This expands the size of the economy by including assets such as public buildings and playing fields. This is a sleight of hand that carries market risks.

The defenses put up by Keir Starmer and Reeves in the run-up to the election are proving very leaky.

Sour grapes

News Corporation’s response to Australian arm Rea’s resounding rejection of Rightmove’s £6.2bn takeover attempt has been less than gracious.

Four offers were rejected by Andrew Fisher and the Rightmove board, showing the outstanding anti-predator resistance not seen often enough in Britain’s boardrooms.

Rightmove has capitalized on the online housing market and with sensible investment could expand its reach in the UK and abroad.

Robert Thomson, the chief executive of News Corp, which owns 61 percent of Rea, decided to throw his toys out of the stroller after the rejection.

He praised his boss Lachlan Murdoch for his “smart” investment in Rea and for the company’s “financial discipline”. He then maliciously accused the British company of failing to take the “right step”. Pathetic.

Sporty life

Mike Ashley is not to be trifled with. Mulberry’s failure to consult the company’s 37 percent shareholder on a planned £11 million fundraising by the luxury leather goods group ignited Ashley’s competitive spirit.

He made an £83bn offer for the entire business. The founder of Sports Direct doesn’t want Mulberry, a supplier to his department store chain House of Fraser, to fall into insolvency.

Ashley and son-in-law Michael Murray have become lenders of last resort for high street, fashion brands and online businesses swooping in on struggling businesses. Discipline, who needs it?

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