Rachel Reeves last night made what is surely her final Mansion House speech to the business bigwigs, obscure liverymen and bankers of the City of London. It was an address to perhaps the only people who feel any fondness for this Chancellor.
Reeves’s legacy – beyond being the least popular chancellor ever, according to polling – is unemployment and business destruction. Her £25 billion raid on national insurance, coupled with hikes to the minimum wage, has, without any doubt, led to the rising unemployment we have seen in the past few years. Small, medium and large business owners spent her entire chancellorship complaining – justifiably – about how punitive and preventative the tax system had become for them.
But, curiously, there was always a warmer reception for her in the Square Mile. As I wrote on the cover of the magazine early this year, Reeves and the City had entered into what one ex-HM Treasury source called a ‘Faustian pact’. So long as she protected the banks from windfall taxes, watered down levies on their highest earners and shielded them from reforms to consumer protections, banks would furnish her with the investment announcements, new headquarters and public endorsements – or at least public silence – she needed to maintain an appearance of economic credibility. It was a toast to big business paid for by family firms.
