JEFF PRESTRIDGE: I worry Chancellor’s coming for the triple lock

Labour’s Rachel Reeves will go down in history as one of the country’s most ruinous Chancellors.

Since taking up her appointment in July 2024, she has overseen the economy’s near destruction by taxing consumers and businesses to the hilt to fund an ever-expanding welfare state.

Higher taxes have come at us from all angles, be they bigger employer National Insurance bills or increased taxes on capital gains (made on second home sales and share disposals) and dividends.

Frozen tax allowances have perpetuated this financial pain, resulting in larger income tax bills – both for those happy to graft for their living and for people who have retired after grafting all their working lives.

So far, this Chancellor has treated pensioners contemptibly by heaping extra income tax on their shoulders – while simultaneously taking away their winter fuel payments at a time when energy costs have remained doggedly high.

As I will explain later, more contempt could be coming the way of pensioners very soon.

Occasionally, I reflect upon Reeves’ capabilities – usually when out running – and nearly always a picture of an Amazon giant leech forms in my mind.

Why? Well, this beast reminds me of what Reeves is doing to our household income – and to the revenues of UK companies large and small. She is sucking the proverbial blood out of us all.

It’s a point backed by the International Monetary Fund (IMF) which last week forecast that Reeves will push the UK’s tax burden to a peacetime high of 42.1 per cent of GDP (gross domestic product) by the beginning of the next decade.

In pounds and pence, it equates to an extra £130 billion of taxes per year since Labour took power – £4,500 more per household.

The UK’s version of the Amazon giant leech is bringing this country to its knees.

Scarily, far worse is coming down the line. We already know that next year will see increased tax rates on savings income, inheritance tax imposed on unused pension funds – and a continuation of the deep freezing of income tax allowances.

Then, in 2028, a mansion tax on £2 million-plus homes will come in, landing homeowners with annual bills of between £2,500 and £7,500.

But that’s just the hors d’oeuvre. Reeves, it seems, has some inedible main courses up her sleeve – and she will blame the Middle East conflict and Donald Trump when inflicting them upon us.

She laid the seeds for this in comments she made last week at the IMF meeting in Washington when she blamed the US President for all the UK’s economic ills. Not once has she admitted that it is her out-of-control welfare spending that will necessitate the raking in of yet more tax revenues.

Instead, she is blaming the (likely) collateral damage from the conflict: higher interest rates, increased government borrowing costs, surging inflation – and the acute need to raise defence spending (despite being told last July what needed to be done following publication of a strategic defence review authored by former Labour MP Lord Robertson).

So, it is likely the Autumn Budget will include higher taxes on inherited wealth (through restricting gift allowances) and further tax hikes on capital gains and dividends.

And don’t rule out cuts to tax relief on pension contributions (Reeves’ Treasury team is full of diehard socialists gagging to take an axe to higher and additional rate relief).

There is also mounting evidence that the scrapping of the triple lock governing the annual increase applied to the state pension (new and old version) could be on the agenda. I said as much in this column two weeks ago, but a mix of Labour MPs and grandees are now airing the idea.

Last week, Harriet Harman, former Labour deputy leader, said it was time for the lock to be unlocked with any resulting savings diverted to boost defence spending. Harman’s idea appears impractical (and very socialist) with only the ‘very well-off’ losing the triple lock. But similar ‘targeting’ was applied with the recent withdrawal of the winter fuel payment, so it can’t be ruled out.

In my opinion, a more likely approach is for the Chancellor to suspend the lock in the Autumn Budget, blaming Trump and the fallout from the blockade of the Strait of Hormuz for the move.

She will justify it on the grounds of protecting the nation’s finances. There will be no mention of the exploding welfare bill. This will then be followed by its axing.

Remembering investment pioneer Mark Mobius

Although emerging markets investment guru Mark Mobius had a huge ego (many of us do) and a love for the finer things in life, investors have a lot to thank him for.

Mark, who has just died at age 89, was an investment pioneer.

In the late 1980s, he was instrumental in putting emerging markets on the radar of retail investors with the launch of investment trust Templeton Emerging Markets (TEMIT).

The trust, valued at £2.6 billion, is still going strong as is Mobius Investment Trust (MMIT) which he founded seven-and-a-half years ago. Both have decent performance records.

Carlos von Hardenberg, who runs MMIT and also worked with Mobius on TEMIT, says Mark had ‘a profound interest in developing countries and played an important role in the establishment of stock markets in these countries’.

He adds: ‘Mark also had a deep belief in improving corporate governance and pushed for companies to become more transparent.’

A force for investment good.

Two final investment thoughts   

First, a big thumbs up to global fund Blue Whale which tomorrow will rebate a slice of its annual management charge back to investors.

It won’t be a cash handout. Instead, the money will go back into the fund, effectively increasing its value and the holdings of investors.

It’s an investor-friendly move which, in my opinion, other funds should follow.

Second, I urge all shareholders in Edinburgh Worldwide to cast their vote ahead of the trust’s forthcoming Annual General Meeting (AGM) a week on Thursday – April 30.

Only a resounding vote for the reappointment of the existing directors will save the trust from losing its incumbent managers Baillie Gifford – and from falling into the hands of activist investor Saba Capital whose only interest is its own (amassing funds under its wing).

Investors with shares held through platforms must act this week. Voting deadlines are Friday for Fidelity and Monday week for Hargreaves Lansdown, Interactive Investor and AJ Bell. VOTE.

Don’t bank on Barclays return 

I laughed out loud when I heard that Barclays was planning to bring back bank managers and open new branches.

After all, this is the bank that led the way on branch closures 26 years ago when it shut 172 on a single day, leaving more than 60 towns and villages bank-less.

For those with long memories, it was me who broke the story after being tipped off by community bank campaigner Derek French.

In fact, I was shortlisted for a prestigious press award as a result but didn’t win it. Coincidentally, Barclays was the award’s sponsor.

The bank’s propensity to axe branches has never eased. According to the latest data from consumer group Which?, Barclays has shut more branches (in excess of 800) over the past eight years than any other bank brand.

Today, Barclays is represented in little more than 200 locations countrywide. Embarrassing for a bank that once claimed it was a big bank for a big world.

Maybe Barclays will open some branches in the coming months but I doubt it will prompt a deluge.

In Wokingham, Berkshire, where I live, the bank shut its branch nearly three years ago – and its empty shell scars the high street to this day.

Given the town’s prosperity, it would be a perfect branch for Barclays to re-open.

I await the proverbial phoenix rising from the ashes – but I’m not banking on it. I’ll stick with my building societies, Newbury and Nationwide, where service is personal and delivered with a smile.