The world has changed.
Does Rachel Reeves need to get back to the Despatch Box in the House of Commons and announce a change to her fiscal rules and a new Budget for the UK?
Should Rachel Reeves go back to the House of Commons as soon as possible with a new Budget?
- Yes (83%, 421 Votes)
- Don't care as it won't change anything (14%, 72 Votes)
- No (2%, 8 Votes)
- Don't know (1%, 5 Votes)
Total Voters: 506
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I wrote to my Junior Minister to make that point this weekend. It made me feel better.
🙂
Reeves cannot levy austerity at a time of increased costs and turmoil in the markets, she has to soften the blow.
However, I think that she will nothing or very little.
The problem is that she would deliver a budget which would make things a lot worse rather than better as she lacks the ability to do otherwise!
BTW Do you think ISAs should be abolished or limited to those on lower incomes or a maximum allowance over a lifetime?
I assume at the moment that if you had high earnings and put £20k in over say a 30 year period you could hold £600k without paying tax – great if you have high earnings but not much use to anyone else, as a bit of revenue would be lost.
I think £100,000 maximum is fine.
I say so in the TWR as I recall.
I have to admit to owning a large ISA, mostly through rising share prices. I agree with Richard this is unfair, but taxing it would have many of the same issues as a wealth tax. It would be easy to limit the amount going into an ISA, but it would be tricky to tax nominal value, since share prices vary wildly. (We can’t rely on Trump crashing the stock market every April). Would it work to treat money withdrawn from a large ISA as capital gains?
PS Why is Richard the only person who talks sense on a wealthtax?
I would restrict the amount going in.
Nothing else is realistic.
I don’t agree @Michael G.
If there were a £100k ISA limit all that would be required would be for the ISA holder to nominate an account for increases on the ISA, above £100k, to be deposited. Stocks and shares ISA (not a sensible ISA anyway because stocks and shares are largely a Ponzi scheme as Richard has said)? No problem – just sell off stocks using some arbitrary rule or a holder preference. It can easily be done.
As an example consider Premium Bonds. There is a £50k limit. If you have less than £50k holdings you can add prizes to your holding. If you have more it has to be paid to another account.
So, no, I don’t think an ISA limit has the same problems as a wealth tax.
That is far too complicated to police.
Tax systems have to be pragmatic. They are never ideal. Take the 80%, always.
That £20k saved each year (I should be so lucky) comes by and large from income that has already been taxed, perhaps at 45 (or 47% with NICs). It is not like pensions saving which by and large are saved without tax on the way in, grow without tax, and are only taxed on payments out.
What remains untaxed are the income and gains on investments held within the ISA. The £600k plus any accumulated gains will be subject to inheritance tax on death, but can be left IHT free to a spouse and the sum kept within an ISA envelope.
Rachel Reeves will continue to make “tough decisions” because she thinks spreadsheets are more important than people. She thinks she can chant the right incantation with the right magic formula, and by some strange alchemy the “growth” that has eluded us for more than a decade will suddenly return. It is all a confidence trick, and the confidence she is cultivating is that of the Bank of England and the wider City of London.
I’d argue something like the TWR as a manual for “Guerilla taxfare” is the way to go. Dozens (even hundreds) of small, barely noticeable (to ordinary people) tweaks to existing taxes and allowances, gradually chipping away at wealthy people’s assets from all directions, rather than one easy to criticise headline grabbing ‘wealth tax”. Richard has done a great job writing the manual. My worry is that the Labour government lacks the imagination and agility to fight for working people using unconventional, covert tactics needed.
Thanks
Ace idea. I notice Andrew in the previous comment said:
“Rachel Reeves will continue to make “tough decisions” because she thinks spreadsheets are more important than people” – well she could take the spreadsheet approach to loads and loads of small changes (10? 20? per month) that as noted are sufficiently minor to attract zero MSM attention. Could be a lot of fun.
Worth noting that the old exchange controls (I think they were called “the dollar premium” or some such) were abolished by Thatcher via an “order in council”. Why not do that in other low profile areas. Buying a yacht that is 40 foot? you need an environmental permit – needs to be renewed each year @ a cost of ?? £3000. 60 foot? thats £8000. Oh it’s a motor yacht oh OK – that’s £10,000 then. Change MoT costs, car has a 300hp engine? sorry sir that will be £1000, 600hp? £5000. etc . All none linear. Private schools: environment inspection per month £10,000. etc etc. Oh your house has a swimming pool that is more than (e.g. 60 m2) that needs a yearly safety inspection: £20,000. Pass it all over to local gov and tell ’em they can keep the revenue.
Your fees might in some cases be high but I like your drift.
@Mike Parr
If an Act of Parliament has, say, a scale of rates for benefit payments, or for tax thresholds such as the personal allowance that has been frozen, or National Insurance Contributions, the rates are changed by using Statutory Instruments, with a delay of just 40 (House) Sitting Days in most cases.
There is a piece in the House of Commons Library on SIs:
https://commonslibrary.parliament.uk/research-briefings/SN06509
I think primary legislation is required for many tax allowances and NI changes, but they are very short, quick and unopposed bills.
I agree SIs also have a role though.
I voted “no”. We don’t need a budget just a change of policy.
But how would we know without a budget?
the cuts we saw recently weren’t a “budget”…. but they still happened.
The problem with a “budget” is that it requires a lot of work by HMT, OBR etc. – that takes time taht we don’t have. Just announce a fundamental policy shift NOW…. details to follow.
That I accept
Reeves needs to change more than her self imposed fiscal rules, she needs to change her rejection of Keynes. Anything we can do, we can afford. Raising aggregate demand is the means to improving the economy, not supply. And public provision will be better than private.
Agreed
surely:
“Is Rachel Reeves functionally able to deliver a new Budget?” ……….that can address the needs of the UK.
Nope, not in a month of Sundays. (Reeves “hey luv, have yer seen me economics books from Oxford… I need some ideas”…
You might just as well expect a chimp to type out:
To be or not to be that is the question – whether tis nobler in the mind etc etc.
One question worth asking is how badly will LINO lose by 2029 & what comes next?
I note that the UK MSM plays a very similar role to that of the same in the USM(ango).
I voted “don’t care” on the basis that even if Reeves did this (which she or, more likely, her successor will have to do at some point) it would just be a tinkering and not address the fundamental problems. A budget that introduced real change? I’d vote for that.
Me, too.
Reeves needs to change more than her self imposed fiscal rules, she needs to change her rejection of Keynes. Anything we can do, we can afford.
Much as I like the sentiment. There’s so much we actually can’t do. We would just bring in imports of goods or expensive services.
Lots of skills and capabilities have been lost and even if we wanted to get them back we would struggle. Examples are numerous but ship building, steel making, coal mining, merchant navy, just to name old things but potentially
still important. I’m sure the same is true of newer skills like making semi conductor components, hard discs or the ubiquitous sim card. So much has been lost that a huge national educational and training effort is needed for us to try to capitalise on Keynes famous saying.
This I can’t see Labour or indeed Tories doing. They are wedded to neoliberalism and free trade. The market will provide. Until it doesn’t of course…
The most we can expect is that they will fight to retain the status quo.
What that definition of insanity when you keep doing ….
We don’t need to eliminate trade
We need to break our dependency on the USA