How long until Labour tells us the national finances are terrible? Not long at all, according to Money Saving Expert Martin Lewis.

On ITV’s Good Morning Britain, he said Labour will likely make a statement soon about how the UK finances are in a worse state than feared.

Martin said: “What I expect is going to happen in the next couple of weeks, is Labour will get fully into Government and do some form of revelation, saying: ‘Wow, the finances are so much worse than we expected, there’s a big economic black hole, things are going to be very tough,’ and then do some expectation management.

“Of course, we all know that already.”

That means Keir Starmer and Rachel Reeves will go on the media – TV, radio, internet, newspapers – to say they’re slashing their manifesto promises to ribbons.

Mr Lewis said:

“The Government will be looking at things that do not cost the exchequer a lot of money to do.

“They’re going to need in the first 100 days to make a difference to the country, they’re going to want to show people that things have changed, that they mean action, they’re going to start to deliver. But they’re going to have to do it in a way that, where unless it was preannounced in the manifesto, it doesn’t cost.”

He pointed out that a promise not to raise taxes is practically worthless because the thresholds at which we start paying different rates of tax have been frozen until 2028.

This means that, as pay rises, more people will be dragged into paying higher taxes.

And the promise doesn’t apply to all taxes because the government could increase Capital Gains Tax – tax on assets sold/profits made.

Other cheap crowd-pleasers include a promise to reform planning rules to make it possible to build 1.5 million homes; and eliminating Section 21 “no fault” evictions.

He also suggested changes to pensions. But is This Writer missing something? If they change the annual allowance, limit tax relief, then won’t that mean the Treasury receiving less tax revenue? Unless there’s a reduction in spending, my understanding is that such a move may be inflationary.

Other options may be available – as long as they don’t involve the government actually spending any money.

Source: Martin Lewis explains what Labour win could mean for your personal finances

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