These things did not happen in the Budget:
- Green investment or anything to tackle the effect of climate change
- A new economic settlement for the devolved administrations and regions of England
- Anything to save local authorities from bankruptcy
- Anything to save universities from insolvency
- Anything serious on social care
- Anything meaningful to end the delay in the delivery of justice in the UK
- Anything to redirect savings to social purpose
- Anything to end the massive subsidy of wealth in the UK via the tax system, and most especially via pension tax relief
- Anything to make sure higher-paid employees pay their fair national insurance contributions
- Measures to increase the rate of tax on investment income to compensate for the lack of national insurance on them
- Anything to fund Companies House to run a real company regulation system in this country to really beat fraud and tax abuse
- Moves to take HM Revenue & Customs back into local communities
- Moves to reduce inheritance tax on smaller estates whilst seriously increasing it on larger ones so that this tax might really be progressive
- The equalisation of capital gains tax rates with income tax
- Real spending increases sufficient to make public services work - when even the NHS increase was only an effective inflation rate increase
- Anything significant on child poverty
I am sure there is more. But you get my drift by now.
This was a massive opportunity missed.
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So I’m no economist, and after the Liz Truss debacle I’m willing to take it on trust that as well as persuading voters to vote for them, despite a right wing media bias, Labour also have to keep “the markets” happy. But as you say, it baffles me that the upper limit on NI wasn’t raised, that a plan for updating council tax banding wasn’t offered and there are a number of other “minor” tinkerings (standardising employed and self employed tax and NI). But most disappointing is the lack of a sense of direction. Anything to show a willingness to address growing wealth inequality. Anything (even announcing a Royal Commission) on social care would have been a step of sorts. I do hope Starmer doesn’t think competence is enough. I think he’ll find that’s discounted, the least we can expect from a government incompetence.
This is the sort of time in its life when you hope that a new government might introduce something new, innovative or necessary, not necessarily through the budget
A Social Housebuilding programme
Investment in NHS & School buildings to address the backlog of maintenance and make them fit for the 21st Century
Some sort of an integrated ‘crime’ plan aimed at reducing offending and dealing with offenders more effectively
Improvements to bus services
Improvement to the condition of our housing stock
A major energy conservation plan
etc etc
Funnily enough even Mr Blair managed a few in his time
But no nothing
As I foretold – there is no story
Except that using the false criteria she uses, the books will balance
How the gov would/did respons to your wish list:
No Green investment (must keep the fossil mafia in business)
Devolved administrations and regions of England (let’s keep em poor & dependent!)
Local authorities & bankruptcy (keep em poor & dependent/pour encourager les autres)
Universities & insolvency (too many of em)
Social care (look after yer self)
Delivery of justice in the UK (for the rich – not the poor)
Savings to social purpose (communism must be stopped)
Subsidy of wealth in the UK via the tax system, (the rich are always with us)
Higher-paid employees pay their fair national insurance contributions (but that’s us & our sponsors – can’t have that!!
Increase the rate of tax on investment income (can’t have that funders won’t like it)
Take HM Revenue & Customs back into local communities (why bother?)
Reduce inheritance tax on smaller estates & increase on larger (our sponsors don’t like that)
The equalisation of capital gains tax rates with income tax (noooooo……)
Real spending increases to make public services work (but why would we do that – we don’t like public services – private is always better)
Anything significant on child poverty (focuses minds – don’t have kids if you can’t afford em)
It could have been much worse for the wealthy. The changes to CGT were modest and the new higher rates are still much lower than income tax. The switch to income tax for carried interest will have a built-in discount so the effective rate is lower than usual – around 32% not 45%. There are some tweaks to the non-dom changes. SDLT will reach 19% for some (buying a second multimillion home, cry me a river). The caps on 100% APR and BPR (on top of the nil rate, so effectively c.£1.5m) will hit some heavily but the retention of a 50% relief is better than nothing. And the big hit falls on employers which will put downwards pressure on wages and deter employment.
That said, I’ve already heard that a substantial number of people with overseas roots who have been living in the UK for a long time but were waiting to decide whether to stay in the UK or to leave, and many are now taking immediate steps and implement their plans to leave. Taking their families and staff and spending and taxable remittances with them. The numbers leaving will be much higher than predicted. But perhaps that does not matter if this is about fairness and not revenue.
It’s odd that when it comes to the wealthy we are desperate to keep migrants here
When it comes to refugees we are desperate to keep them out
All in the words used. Just another example. Farm subsidies should actually be called benefits and pensions benefits should be called entitlements.
Agreed
Andrew, they may well leave, but they can’t take their Sterling with them – or rather they can only spend their Sterling in the UK, or find someone to swap with for another currency.
They also can’t take their immovable property, and if they take their fancy cars, they might find them tedious to drive on other roads due to the steering wheel being on the wrong side.
Bsaically them leaving just offers opportunities for others to step in.
Richard, by and large these people are not too bothered about any sterling denominated assets or UK property or assets. That is a small and rather unimportant part of their overall estate. It is very much more about not paying UK inheritance tax on the very significant value of their non-UK assets.
It is going to be very interesting to see how this turns out.
Other things we did not hear:
* reform to council tax, still based on 1991 values
* proper reform to business rates, just some short term tinkering
* addressing the tax difference between employment and self-emolument – the increase of employer NIC widens the gap
Council tax reform: I’d like a property tax with two main purposes. Firstly to discourage leaving properties unoccupied and secondly to dampen the rampant house price inflation we’ve endured over the last several decades.
Perhaps an annual property tax based on the last sold price (some number <1%). Local authorities could decide what multiplier to use. I don't suppose this would cover all LA expenditure, particularly in the more economically deprived parts of the country, so some additional redistributive measures would also be needed.
Of course this would leave the aristocracy in an anomalous position so there'd need to be periodic revaluations. Imagine the howls from Highclere and Harewood.
Reeves did announce investment in carbon capture and storage and also green hydrogen. This has been lost amonngst far bigger sums of money. It would appear that significant funding will go to GB Energy. It is, in my view, just a nod in the direction of climate change and totally inadequate.
It is also interesting to note a piece on green hydrogen from 3 days ago.
https://oilprice.com/Alternative-Energy/Fuel-Cells/Hydrogen-Stocks-Crash-as-Hype-Faces-Reality-Check.html
The summary at the beginning starts
The initial excitement surrounding low-carbon hydrogen has faded due to high project costs, regulatory uncertainty, and weak demand.
Only a small percentage of hydrogen projects in North America and Europe have reached final investment decisions.
Major energy companies like Shell and Equinor have paused green hydrogen plans in Europe, citing poor project economics and unclear regulatory frameworks.
And the final paragraphs read
The Spanish firms halting projects are the latest European firms to pause or ditch green hydrogen plans due to either policy or demand concerns.
Most recently, Shell and Equinor have ditched plans for low-hydrogen production and transportation in north Europe due to a lack of demand.
Investors are not rushing to invest in backing green hydrogen projects, either, due to poor economics and potential returns.
“Green hydrogen is still not investable. It’s rubbish in terms of investment,” Mark Lacey, head of thematic equities at UK asset manager Schroders, told the Financial Times.
By Tsvetana Paraskova for Oilprice.com
So it seems that there are significant problems that many who are working on the have yet to solve. Her announcement seems to me to perhaps be ill-informed. I also have personal doubts about Carbon Capture and Storage as being a worthwhile technology. See https://www.climatecouncil.org.au/resources/what-is-carbon-capture-and-storage/
This states
Key points:
Carbon capture and storage (otherwise known as CCS) is a licence to ramp up emissions.
CCS will never be a ‘zero-emissions’ solution.
CCS is eye-wateringly expensive.
Chevron’s Gorgon Gas Plant in WA, which is the biggest attempt at a CCS project in the world, is a big, expensive failure.
And ends with
CCS IS NOT A VIABLE CLIMATE SOLUTION
CCS has not been trialled and tested – anywhere in the world – at the scale required to tackle the climate crisis. When attached to fossil fuel developments – like coal, oil and gas – CCS is not a climate solution, as digging up and burning fossil fuels only adds to the problem. Global temperatures will not stop increasing until after emissions reach net zero. To achieve that we must stop digging up and burning fossil fuels. CCS is extremely expensive and cannot deliver zero emissions. The only solution is to stop burning coal, oil and gas.
So these two items chosen seem, in my view, to be duds – a waste of money
See what I have just posted
CCS is a big expensive distraction. Energy companies want to be paid to carry on their extractive hydrocarbon burning business as usual. If CCS has a place, it would be mitigating carbon production in sectors such as chemical processes where it is almost unavoidable. That only that after the rest of the economy has moved to renewables for energy (but potentially also a place for nuclear). The economics are tending that way anyway.
As I understand it, hydrogen plus fuel cells may make some sense, for transport and as a storage medium. There are still some significant engineering challenges.
‘Some’ and ‘significant’ are doing a lot of work there, I think.
I’ll wade in on “Green hydrogen”. As per usual, analysts (& people that should no better) tend to have a narrow focus.
Renewables, still being built out at a rate of knots. EU targets for 2030 still look to be achievable (just). However, elec’ markets are becoming increasingly unstable – due to surplus elec not having a home. Two reasons for this (not having a home) – some generation cannot be constrained (e.g. nuclear or run-of-stream hydro = use it or lose it or CHP that delivers heat & elec for industry) and…….. there is a pathetic lack of elec storage. Some will say that batts & EVs will save the day. They will help, a bit. Example: at some point (2030 – 2035) Germany will meet its renewable ambitions for 2030. Modelling shows that for multi-day periods there will be daily surplus’ of 1 to 1.2TWh (terrawatt hours) of elec. Putting this into perspective: Germany now consumes perhaps 1.5TWh (UK roughly 1TWh). If there were circa 25million EVs on German roads – they would have a daily demand of 0.3TWh – bit of help – what do you do with the 0.7 – 1.?? TWh left over? (remember – these events will happen repeatedly on consecutive days). The only storage that scales is H2 from electrolysers.
The article takes a wholly market focus – fair enoug. But the problem countries face (de-carb energy/change the energy system) is………..an engineering problem. Markets do cost optimisation – that is all. They are functionally incapable of engineering a new low/zero carbon energy system.
The thing that I find most puzzling with all this is that so many ostensibly bright people – don’t get it.
Companies house used by Liverpool Labour for their own Benefits
run a real company regulation system in this country to really beat fraud and tax abuse.
All listed in Max Caller Report
To be a fly on the wall as this budget was discussed would have been be really something.
Again, I think that ‘trickle down’ rules but the NI contributions on employers…………….you don’t think the Treasury is trying to claw back its furlough cash from Covid to ‘balance the books’ or something stupid like that?
It makes no sense.
Some believe the treasury to be the adults in the room. Leave the economics to the treasury and not the politicians and everything will be ok. Well I disagree with this outlook. Economics tells me that the treasury is just as clueless as the politicians. The treasury know that their reputation has taken a battering ever since 2008. Their models didn’t work then and they don’t now. They are still in a phase of limiting the damage to their reputation. They do public relations management and not political economy.
The treasury are the last people to be trusted
The treasury thought that taking twice as long to build HS2 would save money. Bloody idiots.
If you half the work done per day, you cannot halve the work force and you certainly cannot half management staff. Extra cost due to inflation over a longer period and the rise in inflation has exacerbated this.
To put this in context Robert Stephenson took just over 5 years to build the London to Manchester railway using picks and shovels, I hope HS2 are suitably embarrassed.
I would have thought waiting 3 months since being elected and 14 years of opposition there would have been a story to tell, guess what, there was nothing.
Another thing that didn’t happen is any limit to ISA holdings and tax relief. 🙁
My thoughts too, a massive missed opportunity. The Budget started to unravel as soon as the Chancellor sat down.
Arrogant Rachel Reeves is economically illiterate.
– failure to address climate change
– winter fuel allowance reinstated
– wealth tax
– hike fuel duty
– revenue tax BIG Tech
– no tax liability when family farms pass down the generations
– carbon tax
– tax ultra-processed food
– protecting food security
– kill the BIDs
It was wrong to load £25 billion, more than half of the tax raised, on when tax. It should have been more fairly distributed.
£20 billion on carbon capture, should have been spent on protection of and enhancing carbon sinks, rewilding, regenerative agriculture.
https://keithpp.wordpress.com/2024/10/30/budget-2024/
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