The Guardian has reported:
Rachel Reeves is considering raising capital gains tax as high as 39% in the budget, the Guardian can reveal, amid a scramble to raise funds for crumbling public services.
Treasury modelling being reviewed by the chancellor and seen by this newspaper shows officials are testing a range of 33% to 39% for capital gains tax (CGT).
This will please just about no one. Most people in the country want rates equalised and will be angry that a bias to the rich might be retained. The one per cent of the population who pay capital gains tax will claim this is enough to make them leave the country, even though about 0.1 per cent of them will actually do so. And, this will raise only a little over half the potential gain from aligning this tax with income tax - or maybe £8 billion or so. That's not enough to make the difference Reeves requires, so it cannot be all that's on her agenda.
But what else might be done? Who knows. The same report notes:
“Some very big tax decisions are being left until very late in the day,” one senior source claimed. Another said the Treasury's tax-raising plans were in “complete disarray”.
But with plans for other wealth taxes in tatters, Whitehall officials and ministers are concerned that time is running out to find ways to raise money.
Why note that? Because, yet again, it shows that Labour made absolutely no preparations for actually being in office. As managers, they are utterly incompetent.
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The lack of concrete plans to tackle public services was evident before the election and the decision to adopt the Tories fiscal rules just put the cap on it. My only thought that goes anywhere near explaining this is that they courted money to win the election which is now constraining their options.
When it becomes an exercise in revenue raising you will be bombarded with “evidence” that one particular rate is better than another etc.
No, it has to be an issue of “fairness” – then the rate to use is obvious and all discussion/gossip ceases.
I would add that in Norway they did a similar thing….. and charged an exit CGT (on market value payable with a delay) as people left the country. There was an article in the FT a couple of days ago.
The trap that is the FPTP system ensures that all you have to do is wait your turn and talk utter crap until it comes.
PR – and making politicians work together is the only answer.
I admire your optimism 🙂
Do you have an example where this PR utopia exists? Other countries, even those with PR, don’t appear to be doing any better
So you would rather not have democracy than have it?
Why?
The fundamental premise that each of our votes should count towards what we each believe in should surely be a foundation stone of any democracy. Any examples that you have of PR failure I’m sure that we would all welcome for scrutiny.
PR is, in my view, preferable to FPTP as it generates a greater sense of fairness even if the outcome in terms of effective government is not always achieved. The factors of this are various and have little to do with PR itself. Here are 2 of them:
1. Many self-interested politicians try to subvert the collegiate nature of a PR based system. The answer is not to reduce our expectations to the LCD but aspire to a better political discourse.
2. The centralised nature of our political system renders lower tiers of government powerless to make meaningful local decision making so with all the power at Westminster and the only input being a vote every 5 years it is understandable that just changing to PR would not significantly alter outcomes even if it felt fairer.
In other words, PR is not a stand alone panacea but should be part of a wider policy of devolving decision-making to local government that has access to funding to implement local policy.
I attended a rare meeting about politics in my local town a number of years ago.
I advocated for PR then, and then a Dutchman who was now living locally told me what that might mean.
It might mean overtly fascist parties being voted in as well and having to work with them in some way even though you might not like them.
But at least he said, when you work with them, you know where they are and what they are up to and you may even arrive at some sort of political solution that leaves everyone feeling they have had their concerns considered and maybe with got something out of it.
Tell me Kezia and Matt – is everybody getting something right now out of our politics?
PR is a necessary but not sufficient condition to bring us nearer to something more like democracy – rule by the “demos”, people.
We also need politicians who have such qualities as political intelligence, social intelligence, economic intelligence, integrity, honesty, a spirit of public service, a willingness to cooperate and where necessary compromise with other points of view (and so on) and will put the best interests of all citizens at the forefront of their decisions, especially those least advantaged (ie Rawls Difference Principle).
Maybe that’s too much to ask, so I’d settle for honesty, integrity, a willingness to learn and putting every decision to the test of the Difference Principle.
“….. even those with PR, don’t appear to be doing any better”.
The words “any better” are doing a great deal of work here, buttressed by “don’t appear”, which conveniently provides a home-free escape card. I do not wish to put you to any inconvenience, but perhaps you could provide some actual evidential substance to accompany the flaccid justification you have so far offered us.
I would insert a slight caveat when appraising PR models and politicians working together.
Here in the Netherlands, an extreme-right political nation, PR has reached its natural limits. The problem is at election time every party retreats to their “achterbaan” (power base) and they come up with a manifesto based on gaining 100% of the power.
The reality is after the election, the horse-trading that we call coalition discussions begins. Then most of their manifesto promises are thrown out of the window because their coalition partners draw red lines under eachother’s manifestos.
Net result is you lose your support base, who then cling to false hope created by new parties making more empty promises.
Wilders has been an absolute political failure and has dropped 80% of his manifesto pledges over the years, yet the feckwits keep voting for him.
I despair of the common or garden Dutch person. They’re fools.
I am not an expert on the Dutch PR system, but I understand it is a non-constituency, national Party List PR system. In my opinion Party Lists serve Parties, not electors. Party will ruin every system in the pursuit of power. They can’t help it. They live only for elections, and winning them. Everything else is incidental. Running a Government well is irrelevant (it doesn’t guarantee you win). The selection in PR HAS to be in the hands of the elector, not the Party.
There are also cultural complexities peculiar to Dutch politics that affect PR (an antii-constituency predilection, combined with the complex history of “pillarization”).
Sorry mr Warren.
In my humble opinion your analysis of the Dutch is based on research papers and not based on living here.
PR is – obviously – a far fairer electoral system.
The Dutch are just xenophobes who deserve what they vote for- which is the nation that gave safe haven to Wilhelm 1 and deported 95% of their semitic population in 1940-1944
As I said, I make no claim to expertise about the Dutch PR system; so yes, it is not based on direct experience, indeed I have only visited the country once. Nevertheless, I think you misunderstood my point. It was not a criticism of PR, which I advocate should apply throughout the UK, over the present disastrous FPTP system that is a prime cause of the political malaise currently overwhelming Britain. It is almost impossible to change anything politically substantive in Britain because of FPTP; over eighty years we have seen a relentless fall in general election turnout; fewer and fewer British people vote in general elections. The politicians pretend concern, but it suits the major Parties. Nothing changes. This actually increases the stranglehold of the two-party system (so claustrophobic it is effectively operating as a neoliberal Single Transferable Party). Now, general elections are won with static support for the winning Party (they convince nobody), and with as few as under 1-in-4 of the registered electorate actually voting for the winning Party, which with ludicrous over-achievement for nothing, can now give the winner 100/150 plus majorities in Parliament; delivered by an older and older cohort of supporters, with unchanging views, often unable or unwilling to understand the rapidly changing circumstances of today.
My argument is solely over the form of PR used. I do not approve of Party List systems. Party List systems allow a Party to control the selection (the Party List) the elector is obliged to follow. There are non Party List PR systems that allow the elector to control the selection of the preferred candidate. That is to me a necessary provision of a PR system that does not perpetuate the manipulation of politics by Party. In Scotland, at Holyrood the PR system chosen by the Westminster Parliament FPTP Party system to apply in Edinburgh was a Party List PR system. The reason? It served the Conservative and Labour Parties best (both committed to FPTP and an endless two-Party system in Westminster that excludes everyone else, virtually permanently from forming a Government), while pretending to bend to the modern requirement for PR with devolution. This means politicians who have power and influence within a Party, but have never, ever managed to be elected directly to a constituency seat (because most voters will not select them), still end up in Holyrood through the Party List system; and quite typically become the Holyrood Party leader. It is an appalling system, and a cynicsl, calculated insult to the electorate (and the electorate’s intelligence).
On Rawls Difference Principle, see ‘A Theory of Justice’, (1999) pp.65-68 for Rawls definition; but Rawls himself was driven to concede his definition had simply failed to incorporate those with disabilities; who were outside the scope of his definition. He adjusted the definition but the problem persists. The problem here, I suspect is a tendency of Utilitarianism of Rawls kind to fall back on a Benthamite (indeed inspired Hutchesonian) over simplification of complexity, in order to offer an ability to measure complex moral issues with challenging and unclear outcomes; i.e., an easily applicable universal utilitarianism, in a scientific world of measurement of just about everything, that rejected imprecision (not deliberately but too typically facilitating monetising the unmonetisable). It is in fact a technique to disarm difficult choices by reducing the moral actor to disinterested technician. Rawls starting point was clearly economic inequality of opportunity given disparities arising from differing relative socio-economic starting points. You need only reflect on Rawls use of graphs in figures 5-8, to see the reductionism of the moral problem, to a replicable economic measurement problem (it implies no moral choice is made by any actor: the detached calculation is done, the answer is read out). It is well intentioned, and very seductive (especially for politicians and civil servants ) but it seems to me its usability far outruns its accuracy; like so much in utilitarianism, it ends by begging the question.
I am sure many utilitarians will understandably disagree.
It sounds as if this, and any other Budget plans are going to result in chaos and U-turns, a bit like the VAT on school fees, where the timing of the legislation means there is insufficient time for schools to set their official budgets because they can’t register for VAT with HMRC until the legislation is on the statute book, and HMRC isn’t geared up for processing the applications anyway.
Maybe these announcements aren’t “plans”, but just “Missions”. Then all that is needed is a speech. Sigh..
“As managers, they are utterly incompetent.”……..I thought managerialism was their strong point?……or er hang on a sec………..managerialism as in keeping assorted MPs/potential MPs in-line = “toe the line of be chucked out the party/be deselected”.
One can see how this approach would work well when trying to run a country. But that said: LINO: “if you disagree with us & demonstrate peacfully, we will lock you up” – I wonder when they will run out of jail space – still there are always army camps etc.
Meanwhile, moving to “bung country” – £22bn here, £XXbn there to LINO corporate sponsors. What could possibly go wrong?
PR is inherently fairer as is acknowledged even by supporters of FPTP. It should not be seen, however, as a stand-alone panacea as it comes more into its own as part of a radical decentralisation of power.
The failure – if that is the case – of PR based systems to produce effective government also has to be seen in the context of self interested politicians subverting the collegiate nature of PR based parliaments. The answer is not to accept the LCD but to aspire to best practice.
As much as I despise Labour under Starmer/Reeves and they have already made some terrible decisions as a result of adhering to the artificial Osborne fiscal rules, I wonder to what extent they were caught out by Sunak’s odd timing of the general election: they might reasonably have expected the tories to have held this years budget.
TBH I am more despondent now than when Johnson got elected.
Oh come on, they knew it was going to happen this year and had four year’s notice of that.
It is really difficult to understand what Labour think Government and ‘regulation’ work.
“Sir Keir Starmer will urge Britain’s economic regulators to prioritise their mandates to stimulate economic growth as part of a pitch next week aimed at wooing global investors…………Sir Keir is said by officials to be determined to deliver the message that regulators such as Ofwat, Ofgem, the Prudential Regulation Authority and the Competition and Markets Authority should be focused on the competitiveness of the UK economy.” (Mark Kleinman, Sky News).
The Government website says this on the Regulators Code: “Regulators within scope of the Regulators’ Code are diverse but they share a common primary purpose – to regulate for the protection of the vulnerable, the environment, social or other objective”.
I think we can all understand the desire to use regulation to protect consumers of regulated services from harm. The problem comes in a very British regulation collapsing qualification attached at the end: “other objective”. What this means is that it is easy for Labour to require Regulators help with British “competitiveness” (that is so vague you can write your own ticket), but the giveaway is helpfully made abundantly clear not to frighten the horses; to help “as part of a pitch next week aimed at wooing global investors”. So we can work out how Labour is going to govern. Tax the vulnerable and reduce regulation so global investors needn’t worry about Red Tape. Back to the Future. Sounds like a hardline Neoliberal Conservative Government, just like the last fourteen years, to me.
It may that we are wrong when we ascribe incompetence to the powerful. Perhaps we’d do better to see them as deliberately mismanaging our affairs. That would explain a lot.
A vote of no confidence and another General election is not far off People have had enough we have replaced one group of fools for another collection of clowns this Labour Government has spat in the face of the British people
I do not share your confidence
In the Saturday guardian there is a exclusive behind the scenes account of the first 100 days.
What comes across is Everyone in Labour relied on Starmer having a plan.
But he thinks that the economy is self correcting and just needs to have a balanced budget and it will give him the growth to pay for what he wants.
And that A focus on delivery will be enough .
Read and weep.