Crypto News: Whack-a-tax

Hi there, welcome to The Readout. Until the general election on July 4, The Readout will be co-written by Allegra Stratton and Ailbhe Rea alongside other colleagues from the newsroom, giving you extra perspective and analysis as the campaigns unfurl. Hope you enjoy it.

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The Labour party would far rather we were beginning the Readout today with what Allegra has written about below: tax and spend plans — actual policy questions both parties want to discuss. But to the growing frustration of Labour figures, they are now 48 hours into a news cycle dominated by a dispute entirely of their own making.

The party's deputy leader Angela Rayner has now weighed into that row, to say that Diane Abbott should be allowed to stand again for Labour if she wants to. It's the first sign of a split at the top of the party over how the issue has been handled. (I have a full write-up of how we got here if you need a reminder.)

You might not care terribly much about Labour infighting, dear reader, and it might not move the polls. But let me tell you why it matters. Rayner's intervention is just one glimpse of the discontent within Labour bubbling under the surface. It highlights a rift both on the left of the party and at senior levels — and, crucially, in the grassroots.

However much they deny it, Starmer and the team around him are focused on purging anyone from the faction they dislike, with a view to maximising the loyalty of backbenchers under a future Labour government. In the meantime, they forget the ordinary party members that are the backbone of a successful campaign.

Labour groups — including Fabian women — are full of people saying they'll refuse to campaign for the party in the light of these decisions. I have spoken to Labour staff today — none of whom are toward the left of the party -- who have privately decided this is it for them. They can't campaign after what they see as disrespect for a veteran MP and trailblazer for black women in the UK. MPs and candidates are now worried that, despite their massive poll lead, they won't be able to turn out the volunteers they need in some constituencies.

One well-placed figure — who typically has a finger on the pulse — now sees a 60/40 chance that the Labour leadership will now back down and allow Abbott to run.

A decision is due on Tuesday from Labour's ruling National Executive Committee on whether Abbott can stand again. But letting this row rumble on until then poisons the atmosphere and distracts from the campaign.

Normally in elections we talk about tax bombshells – but what we are watching right now as this election enters its second week is fiscal whack-a-mole … or perhaps, "whack a tax."

The Conservatives are pushing Labour to rule out, or rule in, individual changes to taxes. Labour's current north star is to demonstrate fiscal restraint. But the more they rule out taxes, the more the Conservatives think they bind their hands for government — or jeopardize their path to power by not ruling something out. That's why Keir Starmer on Monday appeared to be havering about the idea of a VAT increase, but by Wednesday, had ruled it out.

Today, Bloomberg's Alex Wickham believes this strategy emphasizing tax has backfired on the Tories. In the morning, Chancellor of the Exchequer Jeremy Hunt committed to keep income tax thresholds frozen until 2028 if the Tories got back in power. Alex casts this as effectively confirming workers will face three years of stealth income tax rises should the Tories win. The move, he writes, risks "undermining the core message in the Tory election campaign that is built around tax cuts. The problem for Hunt is that the Tories like to paint themselves as the party of low taxation, regardless of the fact that the UK's tax burden has soared on his watch."

The Tories counter that Labour is committed to freezing thresholds too. Even so, this game of whack-a-tax gives an unreal tone to this election – coming as it does after a Parliament that saw a pandemic and a war, which lifted public spending to historic heights. After all, polling suggests voters think taxes will go up whichever party wins on July 4.

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Portrait of Charlie Mullins in his apartment in London Photographer: Felicity McCabe for Bloomberg Markets

Charlie Mullins' father worked in a toy-car factory. His mother cleaned homes. Today, Mullins has a £10 million London penthouse with a view of the Thames. "Tom Jones lives there, if you can believe it," he says, pointing to the flat above him, where the Welsh singer is a neighbor.

Mullins can credit his dazzling rise to the unlikely intersection of high finance and blue-collar labor. Over four decades he built a successful plumbing business that eventually employed his children and grandchildren. At the end of 2021, he sold his company, Pimlico Plumbers, to Wall Street giant KKR & Co. for £140 million ($178 million). KKR and other private equity firms are looking to snap up thousands of family-owned outfits in the US and Europe that ply the home-services trades—plumbing, electrical, air conditioning and heating, landscaping and pest control.

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Allegra Stratton worked for Prime Minister Rishi Sunak when he was chancellor and runs an environmental consultancy, Zeroism.

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