Goldman Sachs Boss Just Torched Rachel Reeves (And He's Not Wrong)

By HOAR Team 23 July, 2025 5 mins read 368 Views

Listen, I've been covering financial policy for eight years now, and I've never seen a Chancellor get called out this brutally by a major banking CEO.

David Solomon from Goldman Sachs basically told Rachel Reeves she's turning London into a financial ghost town. His exact words? London's status as a finance capital is now "fragile." Ouch.

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When Banking Royalty Throws Shade

Solomon didn't mince words during his Sky News interview yesterday. The guy who runs one of the world's biggest investment banks essentially said Britain is hemorrhaging wealth and talent because of Reeves' tax obsession.

"Policy matters, incentives matter," he said. Translation: you're screwing this up, Chancellor.

He actually praised some of Labour's growth rhetoric (diplomatic much?) but then delivered the killer blow: "But if you don't set a policy that keeps talent here, that encourages capital formation here, I think over time you risk that." Without better treatment from the Treasury, London's financial sector would just... "fray."

That's corporate speak for "we're outta here."

The Numbers Don't Lie (Unfortunately)

Here's where it gets embarrassing for Reeves. Remember when she hiked capital gains tax rates last Budget? Lower rate jumped from 10% to 18%. Higher rate went from 20% to 24%.

The result? Between January and July this year, capital gains tax only brought in £11.8 billion. Same period in 2024? £13.5 billion.

That's £1.7 billion less. From a tax increase. Let that sink in.

Even worse - the government's own economic watchdog predicted higher receipts, but they fell short by around £200 million. I mean, come on.

Why This Matters More Than You Think

Shaun Moore from Quilter investment firm put it perfectly: "The government's decision to slash capital gains tax allowances and hike rates has backfired."

People aren't stupid. When you jack up taxes, they change their behavior. They move money offshore. They relocate. They find workarounds.

Moore continued: "While taxing teh wealthiest may sound politically appealing, the CGT experience shows that people will change behaviour or adjust their financial plans to mitigate the tax bills."

It's basic economics, really.

What Happens Next?

Word is that Labour's plotting even more tax raids for the Autumn budget. Apparently backbench MPs are pressuring Reeves to keep the welfare spending tap flowing, which means... yep, more taxes.

Solomon's warning should be a wake-up call. London didn't become a global financial center by accident - it happened because we created an environment where talent and capital wanted to be here.

Now? We're actively pushing both away.

The Chancellor better hope she's got a plan B, because this approach clearly isn't working. And when Goldman Sachs starts making public warnings about your economic policy, maybe it's time to listen.

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