What shows Angela Rayner's leaked memo about Labor's plans?

A Leck of Angela Rayner's memos to Rachel Reeves shows that the deputy prime minister would prefer a tax on the (relatively) rich as cuts in public services. Not exactly a shock and hardly a surprise for the Chancellor, but an interesting insight into the dynamics of the government and this year's public expenditure check and the autumn budget.

Just like the Prime Minister, the leak comes a partially U-turn for the middle test of the pensioner winter fuel payment of the winter.

What does it want?

It wants a little more social justice in financial policy. Especially last year, the Chancellor asked her to collect 3-4 billion GBP of various tax increases instead of hacking, for example, claims of disabilities.

Your ideas consisted of increasing corporate tax on the banks; Freeze the threshold of 45 percent for the tax rate; Eliminate the remaining (£ 500) tax -free allowance for dividend income; And limit the amount that people can insert into their pension funds before they are taxed.

What did you get?

Nothing. Some of the Rayner suggestions would have been more difficulty than the income they achieved in political terms – and would have followed perverse. For example, limiting the lifespan for pensions would probably mean, for example, more paid GPS that retire early and increase the waiting times for operations. The self -employed would also be disproportionately exceeded by a further tax on their dividend income. The freezing of threshold values ​​would further add the existing distortions in the tax system.

In addition to all of this, Reeves is determined that you and your party will lose the image “taxes and expenses” and that the total tax burden in post -war highs is intensively aware of (even if personal taxation in Great Britain is still comparatively easy).

What about the turning angle of winter fuel assignment?

Rayner undoubtedly resisted the cuts, but she went to the cuts, but she went along with collective responsibility and in the crisis atmosphere of the immediate time after the election. So the U -turn will be very welcome for you, but it reveals the deep unrest about politics within the Labor Party. The recent results of the local election, the loss of the recruitment and poor survey points of the runcorn have forced the hands of the Prime Minister and his Chancellor. The changes to the winter fuel allowance were a constant complaint on the doorstep and the most unpopular of all things that the government has come since its power.

In the context of public finances, it also collected a tiny amount of money. The danger now is that Keir Starrer has increased expectations too high and less than a complete reversal increases only a further disappointment.

What will be in the expenditure assessment?

Well, we will find out on June 11th. The increase in inflation is not helpful because they exert pressure on the department budgets and reduce the likelihood of more interest reductions (and thus the interest calculation for public debt). The Trump tariff despite the latest deal also contributes to printing, but the latest GDP growth was better than expected. However, it would always be tight, since it must also take higher defense spending and the fiscal rules are still restrictive.

As a multi-year review and with little space for maneuvers, it will be very susceptible to unexpected shocks and political prints, especially with pay prices for the public sector and the expected “efficiency savings”. Assumptions about AI and productivity gains can be over -optimistic. In truth, it will not be so different from the situation that prevailed during the Sunak government – including strikes.

And the budget?

It would be a surprise if the taxes would not rise a little, and the Chancellor will find it difficult to fulfill their rules for borrowing and debt. But the markets have shown that they will no longer make them loose. She could try to find some additional means by changing the way the bank of England pays the commercial banks because it runs monetary policy, but the bank does not like the idea, and it cannot wash with investors either.

Some of the pensioners will pay more easily this winter, and the good news for Rayner is that they are making good progress in building the 1.5 million houses that are promised for this parliament, but the general air of acquisition will linger for a few years.