Chancellor’s days at No 11 look numbered, but there’s time to do more damage before she goes.
Chancellor Rachel Reeves must come up with another bad idea, what does she do this? (Image: Getty)
There’s a reason why Chancellor Rachel Reeves is the least popular politician in the UK today.
The YouGov political favourability survey gives her the lowest score of all the major politicians, with a disastrous net rating of -51. That’s even worse than PM Sir Keir Starmer, who’s at -48. It’s what you get for pretending you won’t increase taxes on working people before an election, then hitting them with more than £70billion in your first two Budgets. Reeves stripped away the winter fuel payment, and went after farmers, small businesses, pensions, savings, inheritances and jobs. She flattened the UK economy, even before the Iran war.
Her days now look numbered as Starmer prepares to chuck her under a bus to save himself. But she still has time for a few parting shots. This week we’ve been treated to yet another zany episode of ‘Reeves gets it wrong’, as the Treasury floats the idea of forcing private landlords to freeze rents for a year. There is a genuine problem with soaring rents right now, especially in London. Younger tenants are paying through the nose, destroying hopes of saving for a deposit. Naturally, Reeves has struck upon the wrong solution.
One reason that rents are rising is that the UK population has rocketed, creating a massive housing shortage. Keir Starmer’s housebuilding pledge bombed. And Angela Rayner‘s Renters’ Rights Act, which comes into force on Friday, will make things worse by driving out landlords.
The Renters’ Rights Act aims to protect tenants by making it harder for landlords to boot them out. Obviously, there are dodgy landlords out there, but there are dodgy tenants too, and now landlords fear being stuck with them. Many buy-to-let landlords are now selling up, typically after throwing out their existing tenants to make way for the sale. That’s a disaster for renters, and it cuts choice and pushes up rents for everyone else.
Now Reeves wants to do her bit to kill the market, by threatening rent controls. The Treasury has floated the idea of forcing private landlords to freeze rents for a year, to help tenants survive the cost of living crisis.
Rent controls may sound attractive, but they’ve leave a trail of disaster everywhere they’re tried. They deter investment, reduce supply and leave tenants worse off. As Assar Lindbeck, the Swedish economist, points out, the policy is a disaster. He said: “Rent control appears to be the most efficient technique presently known to destroy a city – except for bombing”.
Reeves has already dropped one huge bomb on our struggling high streets, as higher business rates wreck shops, pubs, restaurants, cafes and hotels. She’s also raided farms, carpet-bombed businesses and strafed terrified taxpayers, unleashing total warfare on the productive part of our economy. Now she risks blitzing the rental market too.
Brighter Labour minds can see the danger. Labour housing minister Matthew Pennycook has previously warned rent controls could hit tenants as well as landlords.
So why is Reeves doing such a daft thing? In a word: Politics. Labour is terrified about losing support to Zack Polanski’s Green Party, which is pushing for rent controls. London mayor Sadiq Khan wants powers to cap rents. Greater Manchester mayor Andy Burnham is also calling for tougher intervention. The madness is spreading. Reeves couldn’t resist.
She’s denying everything now but if she had any sense, this would never have crossed her mind in the first place. As Kemi Badenoch suggested at yesterday’s PMQs, Starmer should give Reeves an easier job. It would work wonders for her popularity rating too.