Let’s have a budget for prosperity

We need to move on from  austerity.  The Treasury needs to write back some of the tax revenue it will collect over the next couple of years, that it took out of the forecasts in the Autumn Statement. It was too gloomy then. It needs to spend enough on social care, schools and the NHS to provide a good service. It can make spending reductions elsewhere, starting with the EU contributions and other items I have highlighted on this website.

It also needs to unleash more infrastructure investment. Much of this in energy, broadband and some in transport can be privately financed. The government may need to assist with loan guarantees, permissions, licences and co investment.  It needs to do more to promote enterprise through tax cuts. It has a programme to raise the 20% and 40% tax thresholds for Income Tax. It would also be wise to cut Stamp Duty rates to help homebuyers. It could offer entrepreneurs and small businesses additional tax relief.

Mr Trump’s plans to increase infrastructure spending, cut personal and company income tax rates, and relax banking controls to allow bit more lending all make sense. The UK is already well ahead of the US in lowering corporation tax rates for large companies, but needs to sharpen its competitiveness for start ups and smaller companies.  We should tax work, effort and enterprise less, as we want more of it.

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88 Comments

  1. Leslie Singleton
    Posted March 5, 2017 at 5:46 am | Permalink

    Dear John–I for one am not interested in hearing about investment in “infrastructure”–a word with a sort of pseudo halo or nimbus above its head. An investment is good or bad dependent solely on whether it is good or bad not because it is meaningless socialistic “infrastructure”. Remember you were once the Standard Bearer of the Right.

    • Leslie Singleton
      Posted March 5, 2017 at 5:51 am | Permalink

      Postscript–Heaven preserve us from infrastructure’s being given (a la foreign aid) a target each year

      • Leslie Singleton
        Posted March 5, 2017 at 2:26 pm | Permalink

        PPS–The very word “investment” is sufficiently devoid of meaning on its own these days, largely just meaning any spending on “worthy” causes

      • Lifelogic
        Posted March 5, 2017 at 7:10 pm | Permalink

        Indeed.

        Things like HS2, Hinkley C, Swansea Lagoons, offshore (and on shore) windfarms and solar PV ….. are not infrastructure they are just pissing tax payers money down the drain. The last thing we want is even more of them.

    • Ed Mahony
      Posted March 6, 2017 at 9:03 am | Permalink

      There is good and bad investment. Private enterprise flourishes more with good investment (over bad investment or no investment). Investment involving long-term strategic-thinking (involving an element of creative thinking / subjectivity / risk but also thorough research and analysis).

  2. Peter Wood
    Posted March 5, 2017 at 6:58 am | Permalink

    Good morning,

    The UK government spending as a proportion of national GDP is @ 44%.

    Just fiddling around the edges is not going to resolve this problem. A new Conservative government should be elected to effect a fundamental change in the nation’s economic landscape, to release and reward the creative capacity of science and industry. Only then will we be able to create the wealth to afford the armed forces and social services being asked for.

    • Lifelogic
      Posted March 5, 2017 at 1:36 pm | Permalink

      44% and for what? Virtually nothing of any real quality or value. The figure should be 20-25%, it would then be 25% of a far larger UK GDP.

      The government is, as always, the problem.

      • Ed Mahony
        Posted March 6, 2017 at 12:54 am | Permalink

        @Lifelogic.

        Whether you’re right or wrong, doesn’t matter. What matters is what voting public think. Vast majority disagree with you. Fact. If Tories followed 25%, it would be Corbyn – Labour straight back into power.
        Labour can’t win it. Only Tories can only lose it (like we did in 1997).

        (Yes – of course – to bringing down the 44% but first we have to transform the economy to win voters’ confidence + support).

        Regards

        • Lifelogic
          Posted March 7, 2017 at 3:03 pm | Permalink

          The public will follow what works in the end. Far less red tape, lower simpler taxes and smaller government always works.

          The idea that elections are won form the centre ground may be true for Labour but not for the Conservatives. Thatcher won three really four (with major as her man until they realises what a dip stick he was). Lefties like Heath, Major & Cameron have all been disasters electorally.

          Head the right way, the economy will grow and the hearts and minds of the voters will follow.

          • Ed Mahony
            Posted March 7, 2017 at 4:25 pm | Permalink

            Mrs Thatcher won because she was a strong politician but also because the country was in a mess when she came to power. Mrs Thatcher was more centre right than people think and at her best when centre right.

            Mrs Thatcher was a Conservative Christian who believed in hard work, family values and a strong net for the vulnerable. She was at heart – a soft capitalist, not a raw capitalist.

            Raw capitalism was at variance with her Methodist up-bringing. Again, she was a Conservative Christian. She put her faith ultimately in God NOT her own strength. May she rest in peace.

          • Ed Mahony
            Posted March 7, 2017 at 4:37 pm | Permalink

            Lastly, raw capitalism (as opposed to soft capitalism) doesn’t work.

            It’s not just bad for the individual (from a psychological/emotional POV) but ultimately bad for society. Here’s why.

            Raw capitalism is based on greed (not work ethic and dilgence). Greed destabilises society (in so many ways), costing it more, indirectly, in the long-run.

            Also, raw capitalism’s instinct is to focus on one’s own interests than others. A government must spend money on soft investment in order to sow the seeds of private enterprise. Raw capitalists are happy to benefit from such soft investment but you can’t rely purely on raw capitalism to do all this investment for you (yes, they’ll invest but in their own company where they can see more clearly returns for their own company as opposed to benefitting other companies).

            And raw capitalism (when they turn too raw capitalist) just loses the Tories elections.

            So economically soft capitalism works best.

            Saying that, you can be a soft capitalist and a hard Conservative (like me) against gay marriage, abortion, euthanasia, and so on, and YES to family families and so on.

            Raw or hard capitalism does NOT work in the long-run. Happy to debate that.

  3. Mark B
    Posted March 5, 2017 at 7:21 am | Permalink

    Good morning.

    . . . . starting with the EU contributions and other items I have highlighted on this website.

    You can’t ! Much like I cannot refuse to pay my commitments to local and national government.

    If the Chancellor is to cut taxes in the places you mention, he must either raise them elsewhere or borrow and / or print more money.

    The economy has already been massively inflated. We cannot keep doing this ! It is time the government started to reduce spending and fund the tax reductions this way.

    We are heading for another sharp correction and, if the BREXIT negotiations go badly we could be looking at a change in fortunes for the Labour and Liberal Parties. And whilst I do not like the Conservative Party in its current ‘Soft-Socialist’ form it still remains the lesser, albeit slightly, of the two evils.

  4. Dave Andrews
    Posted March 5, 2017 at 7:41 am | Permalink

    I agree taxing work less, but with a continuing deficit and monstrous national debt we also need to balance the budget. So how about we reduce employer NI before corporation tax? Why do we tax employment so heavily when we need to encourage it?
    The cost of healthcare and social care is spiralling. Government needs to back off responsibility in these areas to manage costs. Healthcare costs could be alleviated by facilitating company healthcare plans with tax incentives because they relieve costs on the NHS (provided all staff are included, not just management). Take social care out of local control and integrate it with the NHS, so it stops being solely a burden on the homeowner and the NHS is enabled to deal with bed-blocking.
    When it comes to reducing costs, let’s scrap Trident, the only purpose of which is to murder the innocent populations of major cities.
    To balance the budget, an income tax rise should be considered. This can be offset by a reduction in employee NI to encourage work and maybe make the state pension tax-free to help those on a low income.

  5. Lifelogic
    Posted March 5, 2017 at 8:39 am | Permalink

    Indeed we do, but the signs are not good. His Autumn Statement was just more of the same Osborne insanities and tax increases.

    We need real competition in the state virtual monopoly areas of education and heath (this with a voucher system and real choice for consumers). Turnover taxes are hugely damaging and turnover taxes at up to 15% are completely absurd. The “renewable” energy subsidies should all go with the climate alarmism religion too. The money down the drain vanity projects HS2, Hinkley C, Lagoons etc. should all go. The sugar tax is patently absurd. The legal attacks on the GIG economy and being self employed are absurdly damaging. We need cheap reliable energy and real freedom to choose. Central wage controls are an absurdity too. Osborne’s tax attacks on private pensions and landlords/tenants are an outrage.

    Taxes at (up to) the absurd rates below are all mad and counterproductive, even to tax revenues.

    Income tax 45%, Stamp Duty 15%, NI 13.8% employer + 12%, IPT 12%, Capital Gains at 28% without even indexation and in the end Inheritance tax at 40% above just £325K. They are even still ratting on Osborne £1 million threshold promise of about eight years back.

    I will be amazed if Hammond comes up with the goods. May and Hammond are clearly just more tax borrow and piss down the drain, interventionist, government know best Libdims at heart. Can they really change their spot now and cut the bloated state sector? I rather doubt it.

    T May even wants workers legally forced onto company boards, gender pay “gap” reporting (their is non dear) and wants all the EU employment “protections” then even “to build on them”.

    The real protection for employees is lots of alternative available jobs but May and Hammond are killing jobs, growth and even tax revenues. The just do not seem to understand business or economics. How can you get to their age without working it out?

    • Lifelogic
      Posted March 5, 2017 at 8:46 am | Permalink

      Plus VAT at 20% too.

  6. Roy Grainger
    Posted March 5, 2017 at 8:39 am | Permalink

    Reducing stamp duty will not help house buyers at all, it will simply increase house prices by the same amount.

    • behindthefrogs
      Posted March 5, 2017 at 2:46 pm | Permalink

      What is needed is an adjustment of council tax payments.
      Two new bands at the top.
      Fixed rate reductions for single occupancy based on the current band c rate.
      Higher rates on properties empty for more than a year.

      We also need business rates based partly on the size of the building to make the out of town supermarkets pay their share.

      • libertarian
        Posted March 6, 2017 at 9:32 am | Permalink

        behindthefrogs

        “We also need business rates based partly on the size of the building to make the out of town supermarkets pay their share”

        NO WE DON’T !!!

        I have a very large building which I operate as a community centre. Its income is peanuts, as we are larger than the Tesco next door we already pay more business rates . Just gone up to £25k per annum with a BID levy of 3% on top of that. Size of building and rentable value have nothing to do with use , effectiveness or profitability of the building

        Business rates need to be scrapped and totally rethought

      • Narrow shoulders
        Posted March 6, 2017 at 1:30 pm | Permalink

        Two new bands that are very high and higher for unoccupied properties.

        Holiday lets should not count as unoccupied as it brings funds into the area.

    • Lifelogic
      Posted March 5, 2017 at 6:20 pm | Permalink

      Reducing it will help people move home (perhaps to take up a different job) without it costing them many thousands of pounds. Turnover taxes are profoundly misguided. At 15% on houses they are bonkers. You should tax profits if anything. There is little point in buying a house with high SDLT unless you are sure you need it for circa eight years minimum. It is hugely against home ownership.

      SDLT also does push up house prices too. It is a cost of development. It also restricts mobility and makes some developments not worth doing and so restricts supply. Osborne was bonkers bringing it in, but them nearly everything he did was bonkers.

      • Lifelogic
        Posted March 5, 2017 at 7:13 pm | Permalink

        Google why turnover taxes are damaging – it is very obvious if you think about it.

        Essentially it stops and deters people from doing very sensible things.

        • rose
          Posted March 5, 2017 at 9:07 pm | Permalink

          Like paying tax on insurance premiums which Ken Clarke brought in and this chancellor has built on.

          • Lifelogic
            Posted March 7, 2017 at 3:07 pm | Permalink

            Indeed. So for medical cover you pay for the state cover, then the income tax and NI on the money to pay for private cover then 12% IPT tax on the BUPA etc. premium.

            It is any wonder we have the dire virtual monopoly that is the NHS!

  7. Lifelogic
    Posted March 5, 2017 at 8:46 am | Permalink

    I suppose T May did read Geography and P Hammond PPE, perhaps this explains their total lack of understanding of business, economics or what works economically?

  8. formula57
    Posted March 5, 2017 at 8:51 am | Permalink

    Unshackled from the dead hand of Liberal Democrat coalition partners and soon that of the Evil Empire, the Chancellor has an opportunity to grasp, not least in demonstrating to Remoaners that Britain is open for business and set to thrive.

    • Lifelogic
      Posted March 5, 2017 at 12:20 pm | Permalink

      Well we shall see. Hammond and May seems to be big government, high tax, greencrap, interventionist Libdims in all but name so far. Let us hope he adults his position hugely in the budget. The IHT ratter Osborne’s tax borrow and piss down the drain agenda was a huge disaster.

      • mickc
        Posted March 5, 2017 at 8:52 pm | Permalink

        I entirely agree with your comment.

        My expectations of Hammond are high tax, moral lectures and little else.

    • Tad Davison
      Posted March 5, 2017 at 12:33 pm | Permalink

      I’d go along with that, and the creation of a vibrant, flourishing economy is the ONLY way to go in the first instance, for without it, the rest doesn’t make economic sense. But the twin problems of massive personal and sovereign debts should not be overlooked completely and paid off at the earliest opportunity.

      Maybe I’m not privy to insider information, and the whole lot is just going to be written off, which might ultimately be the only way to eradicate it all such is the magnitude.

      Personally, although it is said the debts are manageable, I’d rather not be at the mercy of others in whom I have absolutely no faith and trust whatsoever. People who would create debt slaves of all of us, and thereby dictate what our foreign and domestic policies should be. And we had a taste of that when the Labour government of the 1970s had to go cap-in-hand to the IMF.

      Tad Davison

      Cambridge

  9. Richard1
    Posted March 5, 2017 at 9:00 am | Permalink

    I think the first question is when is the general election? If it’s in May, as would surely be a good idea given the state of Labour, the budget better be steady as she goes with a bit more money to social care and the NHS, warm words, virtue signalling, nothing to frighten the horses etc. But if Mrs May really wants to press on all the way to 2020, the budget needs to be radical. After all there isn’t going to be a better time for radical measures than now if we have 3 more years of this Parliament left. In such a case obvious radical measures would include huge tax simplification and cutting rates. Stamp duty should clearly be either abolished or put back where it was, the Osborne increases have reduced yield! Likewise the 45p rate. Obvious areas for saving include EU contributions, green crap, overseas aid and HS2.

  10. Caterpillar
    Posted March 5, 2017 at 9:17 am | Permalink

    I appreciate I am repeating some of my previous comments, but I think more fundamental changes are still required:

    On money: a) some social credit, b) community banks, c) regulation of big banks’ credit creation
    On tax: a) net cashflow for companies (to encourage investment) b) expenditure not income tax for individuals (to encourage a consumption to investment shift)
    On global politics: keep the pressure on Germany and China w.r.t. artificially high trade surpluses.

    I agree stamp duty needs to be looked at. Accommodation needs to be frictionless for workers to move, property speculators could be ‘hit’ at 3rd not 2nd property.

  11. Cheshire Girl
    Posted March 5, 2017 at 9:18 am | Permalink

    The Chancellor has said again that the UK must ‘live within its means’.

    It seems they have made a good start, it has been announced they are to give £20 million for a memorial in Normandy to the D Day veterans. It may seem harsh, but I feel that this money could be better spent on veterans who may be in need of Social Care in the UK.

    Just saying…..

    • behindthefrogs
      Posted March 5, 2017 at 2:48 pm | Permalink

      Agreed

    • sm
      Posted March 5, 2017 at 4:32 pm | Permalink

      I must agree with you – with all due respect to those heroes, their best memorial is surely to maintain our democracies in Europe, not squander £millions on gestures.

    • Lifelogic
      Posted March 5, 2017 at 7:17 pm | Permalink

      It is not the UK that needs to it live within its means it is the Government. Philip Hammond is in charge of the government’s budget. The silly man should not say such daft thing things, he should just control all the endless government waste.

  12. stred
    Posted March 5, 2017 at 9:22 am | Permalink

    I see the BBC has 3 anti-Trump anti-Brexit journalists as the review panel on Marr this morning. They don’t even pretend to be unbiased these days. Earlie was a trailer for their anti-diesel car campaign next week. Here they are peddling the totally unproved idea that PM2.5s are causing dementia. No mention of the fact that dementia is much more common in old women than old men or no link with professional drivers, who are more exposed. Or that PM 2.5s have been reducing and that cars and vans under 10 years old have filters. Or taht up to now the increased lifespan has been blamed, as it is a disease of old age and women live longer. Fake Science for the BBC as well as fake news.

  13. a-tracy
    Posted March 5, 2017 at 9:34 am | Permalink

    When you dropped corporation tax for big business how much less tax did the U.K. Take?

    • libertarian
      Posted March 6, 2017 at 9:42 am | Permalink

      a-tracy

      Er they didn’t the UK took more , here is a quote on the subject from HMRC

      Total net CT receipts in 2015-16 were £44.4 billion. This is an increase of 3 per cent from £43.0 billion in 2014-15 (see Section 4, Table 11.1A), which sees CT receipts at a highest level since 2007-08.

      I would provide a link but I then get fed up waiting for my post to be published so you’ll have to Google it

  14. Denis Cooper
    Posted March 5, 2017 at 9:57 am | Permalink

    Off-topic, why have successive UK governments let the SNP get away with this lie?

    http://home.bt.com/news/uk-news/no-reason-independent-scotland-would-fail-to-join-eu-11364146785265

    “SNP MSP Stuart McMillan said: “This is an important intervention, which makes clear that, as an existing member of the EU, Scotland would be in a completely different situation from other countries seeking membership.

    “There is no ‘queue’ to join the EU. There is a process, and a country must be in line with the requirements of membership – which Scotland, as a full part of the EU up until this point, already is.”

    Well, that’s apart from a few small details such as not being an independent sovereign state legally capable of becoming a contracting party to the EU treaties, and with its own national central bank and its own national currency which it can later abandon in favour of the euro, as it would be required to do under those treaties.

    • Mark B
      Posted March 6, 2017 at 8:50 am | Permalink

      The Scots know that life outside the UK will not be as good. So they need the plebs to believe that Scotland sucking on the teit of the EU (Germany) will be as good. They are of course being less than honest and the poor people of Scotland will suffer for their folly.

  15. LordBlagger
    Posted March 5, 2017 at 9:57 am | Permalink

    We need to move on from austerity.

    ==============

    There’s a 12.5 trillion pound debt to pay.

    • Ed Mahony
      Posted March 5, 2017 at 7:32 pm | Permalink

      Successful companies hate debt.
      I agree though about supporting entrepreneurs.
      Also, need to be careful about banks. Played important role in recession. Plus there’s a brain drain of talent to the City when we need more going into high tech, and creating the British Apples and Googles of the future.

      • libertarian
        Posted March 6, 2017 at 9:44 am | Permalink

        Ed M

        “Successful companies hate debt”

        ha ha ha ha ha …. you are so funny. If you’ve left school I’d love to know what you do for a job

        • Ed Mahony
          Posted March 6, 2017 at 12:01 pm | Permalink

          ‘I meant companies hate being in debt, not getting into debt to borrow’ – for investment.

          Oh, whatever ..

  16. Denis Cooper
    Posted March 5, 2017 at 10:03 am | Permalink

    I’m glad Hammond is apparently preparing to allow some financial leeway in case there are temporary obstacles to our withdrawal from the EU. Of course if necessary he could always ask the Bank of England to indirectly lend him additional money.

    • Peter Martin
      Posted March 5, 2017 at 8:18 pm | Permalink

      “Of course if necessary he could always ask the Bank of England to indirectly lend him additional money.”

      I’m surprised you’re suggesting something like this! It is frowned upon in mainstream economics as “money printing”. All money is of course printed or created in a computer so there’s really nothing wrong with this providing that inflation is kept under control.

      If Govt needs money it can either create bonds and swap them for cash or create cash directly via the BoE. The two different methods aren’t that much different. Both involve the creation of what are essentially Govt IOUs but they do have different effects on longer term interest rates.

  17. Bert Young
    Posted March 5, 2017 at 10:04 am | Permalink

    John’s post this morning is more than ample evidence that he should be the Chancellor . All the priorities John outlines are exactly what is needed to provide stimulus and confidence ; we need a big boost at the moment as a riposte to the “moaners” and a “thumbs up” to the Brexiters .

    The leaks from Hammond so far are bland ; he knows full well that revenues would increase if taxes were reduced giving areas like the NHS and infrastructure spending the extras they require . It would also help if the Barnet formula was also reviewed and amended ; a strong signal has to be sent to Scotland to remind them who is providing the benefits they enjoy .

    • acorn
      Posted March 5, 2017 at 5:48 pm | Permalink

      So, what would a budget for prosperity look like, I haven’t got a clue. Also, I haven’t got a clue what “spending within our means” means, to a government that issues its own currency!

      Have a look at http://budgetresponsibility.org.uk/download/commentary-public-sector-finances-january-2017/ These will be the numbers the Chancellor will be using. Particularly part 18 for Denis C.

      Part 18 explains that BoE can’t create new fiscal assets into the economy. The Treasury, the currency issuer, has to finance the purchase of corporate bonds (PSND government deficit, goes up).

      QE operations, are where the BoE swaps government bonds back into the original government spending (“reserves”) that bought them in the first instance. If the BoE has to pay a premium over the face value of the bond, the Treasury has to finance the difference (PSND goes up).

      There is some talk of a £60 billion Brexit “War Chest”. I will be fascinated to see how the Treasury does a “Funding for Lending” type scam on that one.

  18. Lifelogic
    Posted March 5, 2017 at 10:05 am | Permalink

    New ‘T-levels’ – sounds like another silly distraction gimmick rather like pointlessly reversing the order of the grades of A levels.

    Though I am all in favour of better technical training.

  19. agricola
    Posted March 5, 2017 at 10:14 am | Permalink

    If the government believes that correcting the deficiencies in UK spending are a priority, then the Chancellor can move things in the right direction without altering total spending. On the debit side we have a lack of social care, post operative and in old age. The appalling state of our roads. A police force that fails in it’s duty to the public. Do not tell me that crime is falling, remember there are lies, damned lies and statistics. An inability to deal with domestic and industrial waste through an incoherent approach to the problem. The depleted nature of our armed services.

    So how do we make inroads to all the above. I contend that 10 billion of the 12 billion Overseas Aid budget should be used to alleviate the above on an annual basis. Recipients of OA would be better off as nations if they could trade freely with the UK and benefit us by reducing our food costs.

    Of the 20 or so billion we pay to the EU , various recipients in the UK get back about 10 billion. While most of these payments should continue, those that buy political influence for the EU should divert to better uses. I have in mind the payola to the BBC for instance. This is a correction that could occur on triggering Article 50. Sadly the HS2 vanity project has tipped beyond the point of no return. All that fails to return from the EU, about 10 billion, could be planned into the UK economy in two years time.

    The re-balancing of tax in the UK should be geared to encouraging new businesses, the technical training of the workforce, and improving investment returns. Further reductions in corporation Tax should encourage investment from overseas. Ending the iniquitous Inheritance Tax and any further thought on raiding personal wealth to fund terminal care should be dropped. If the only means of avoiding such tax is to be feckless throughout life it is a negative message. It is a vote loser.

  20. oldtimer
    Posted March 5, 2017 at 10:15 am | Permalink

    The effect of taxation and regulation on economic activity is its tendency to create friction, inefficiency and lower growth. Measures which reduce such friction and improve efficiency are needed.

    I thought that the Chancellor made sensible as well as measured comments in his interview with Andrew Marr this morning.

  21. Jack
    Posted March 5, 2017 at 10:34 am | Permalink

    The Chancellor is saying “no spending spree”. This will come back to bite him, and the Brexiteers too, if it’s true.

    Government spending = the non-government sector’s income. I thought JR wanted rising incomes? If govt spending is restricted and taxes not reduced, then the only two avenues of money creation, and therefore income growth, are from spending via the foreign sector (exports) or commercial bank lending.

    Both of which are sub-optimal compared with a fiscal adjustment and don’t look like they will boost demand enough for full employment and 10% annual real GDP per capita growth, which would be possible with a significantly larger fiscal deficit.

    So, I’m hoping for massive payroll tax cuts and huge extra spending to get the deficit up significantly. But I will almost certainly be disappointed, and the UK will continue to slug along and be overtaken by other economies around the world, and disillusionment grows further among the population.

    The budget deficit is far too small.

    • Jack
      Posted March 5, 2017 at 10:37 am | Permalink

      correction: should have said “the only two other avenues of aggregate demand growth” rather than “money creation”, since foreign sector demand isn’t money creation, although for commercial banks it’s correct (loans create deposits)

  22. alan jutson
    Posted March 5, 2017 at 10:48 am | Permalink

    The problem with all that you suggest John is that there has been no austerity in Government spending, as you keep on telling us government spending has increased each and every year.

    Osbourne killed off the high end of the house market with punitive rates, so people now do not move, they extend instead, and whilst that may bring in some VAT (if builders are registered) the bigger market has stalled.

    We are now due an absolutely massive increase in Probate rates in April, not much we can do about that (other than redistribute it before we die) as its taken from the dead persons estate, so they cannot complain.

    Inheritance tax has now been made unfair on those who rent, with Osbourne’s stupid house allowance.

    If only we had a government which had a clear and fair vision of the future, then perhaps we could all plan our finances, savings, investments, and spending, sensibly.

    The problem is the Government is spending too much on many things it should not even be involved in.

    • alan jutson
      Posted March 5, 2017 at 12:32 pm | Permalink

      According top Press reports a discussion has been held on perhaps introducing a new but added Death Tax to the mix, as well as keeping IHT.

      Yet more tax, yet more spending taken from those who wish to pass a little down to their family members.

      John Majors “a cascade of wealth trickling down through the generations” statement seems like light years ago.

      Such is the confusion of government aims, using such a complicated tax system.

      No wonder so many people seek professional advice to try to minimise their tax obligations in a legal manner.

    • Mark B
      Posted March 6, 2017 at 9:29 am | Permalink

      Alan

      Taxing us in order to bribe us with our own money. Or, to fund their corporate shills.

  23. DaveM
    Posted March 5, 2017 at 10:52 am | Permalink

    Mr R,

    Is there any chance you could publish some details on how the strategy is shaping up in terms of fishing and farming post A-50? I hear lots about tariffs and customs unions and the NHS, and lots about what Brexit will mean for people who play with pretend money on computers, but not a lot about what things will look like for tens of thousands of people when we have control of our territorial waters and our own agricultural policy. After all, a large number of the people who voted for Brexit – i.e., who helped your side win – are involved with those industries and are awaiting direction so they can look to the future. And in my opinion our MPs should prioritise those folks’ futures over and above those of the EU immigrants upon whom all the focus is now sitting.

    Thanks.

  24. ian
    Posted March 5, 2017 at 12:34 pm | Permalink

    Don’t worry, if cooper tops out hear with other commodities like oil, with gold, silver leading the way down you won’t have to think about infrastructure because that’s red alert for the whole market going down, once it starts they won’t stop it, even with all the tools in their box at the treasury, it will take a long time because they will be doing they can to save the elite with establishment with the reputation of the con party.

  25. Prigger
    Posted March 5, 2017 at 12:39 pm | Permalink

    Upping State Pension=Good
    Upping Personal Allowances producing an after-tax net gain in Personal Pension = Good

    Then there is upping of Council Tax=Bad

  26. fedupsoutherner
    Posted March 5, 2017 at 12:45 pm | Permalink

    Its ok investing in infrastructure and energy but only if the energy being supplied is of some use and not so expensive it drives other businesses to the wall. That is what is happening now with all the nonsense regarding wind, solar, biomass and wave/lagoon crap. The sooner May and Hammond get their brains around the fact that renewables have been the biggest waste of our money the better. We need a drive for cleaner fossil fuels and get fracking underway instead of just talking a good act. I heard yesterday that in Forres, Scotland they are planning a further 62 turbines at a height of over 500ft to be erected close to 4 other wind farms where the grid cannot take the power generated now. etc ed

    • fedupsoutherner
      Posted March 5, 2017 at 8:40 pm | Permalink

      John, is there a reason my comment is still awaiting moderation?

  27. behindthefrogs
    Posted March 5, 2017 at 1:39 pm | Permalink

    It makes more sense to raise national insurance thresholds than income tax bands. Why should people on minimum wage pay national insurance? Why reduce corporation tax rather than raise company national insurance bands.

    • Jack
      Posted March 5, 2017 at 8:13 pm | Permalink

      Exactly, if the Conservatives want to brand themselves as the “true” worker’s party, huge payroll tax cuts are in order.

      That will be a bottom-up way to boost GDP, and would actually result in the size of the state falling as a % of GDP (since GDP will boom). Though this is assuming that no austerity measures to “offset” the payroll tax cuts take place. Tax cuts that are “paid for” aren’t tax cuts. They’re nothing, at least for macroeconomic growth.

    • libertarian
      Posted March 6, 2017 at 12:38 pm | Permalink

      Er because then companies would employ less people and have less money to invest in growing a business.

      Why should companies pay Employers national insurance, plus workplace pensions, plus give maternity leave, plus give paternity leave, plus allow flexible working as required by law and then get a kicking for offering part time and zero hour work ?

      As NI is not a hypothecated tax it should be scrapped all together and rolled into one income tax ( by the way this is also a really simple solution to the issue that HMRC have with self employed people gaming the system) . Of course politicians and public sector hate simplicity because then you can see what they’re up to.

  28. Denis Cooper
    Posted March 5, 2017 at 2:01 pm | Permalink

    Off-topic, I hope that the report from the Commons Exiting the EU Committee on the rights of EU citizens in the UK will not be seen as setting any kind of precedent for our general approach to the EU withdrawal negotiations.

    Otherwise we will see the same cycle repeated for other issues:

    1. UK government proposes a reasonable reciprocal arrangement;
    2. Leaders in the EU decide to act tough and reject that proposal;
    3. MPs press the government to capitulate with a unilateral concession.

    If Theresa May had acted unilaterally last July that would have been a different matter, but having tried to get a reciprocal deal but been rebuffed by the other side it would inevitably be taken as a sign of weakness if she gave in now, and MPs should not ask her to do so.

  29. hefner
    Posted March 5, 2017 at 2:12 pm | Permalink

    How exactly do you want to “relax banking controls”? We saw in 2007-2008 what it could lead to. You need give more details.

  30. lojolondon
    Posted March 5, 2017 at 2:22 pm | Permalink

    Absolutely correct, John. The first place that a proper Conservative would start is abolishing the dishonest and frankly wrong IR35 tax and re-naming and merging National Insurance as ‘Tax’. And cancel the £6Billion TV tax that we waste on the Biased BBC.

    • Mark B
      Posted March 6, 2017 at 9:36 am | Permalink

      All of which I agree with.

    • libertarian
      Posted March 6, 2017 at 12:44 pm | Permalink

      lojolondon

      Absolutely correct

      The current “crackdown” on the self employed by HMRC is outrageous . They state you are not self employed if someone can tell you what to do, they then tell me I have a duty to tell everyone entering my workplace the H&S requirements, which means that as far as HMRC rules are concerned everyone, the postman, the repairman, the paperboy are all my employees. Its crazy .

      Politicians and the public sector hate the self employed with a vengeance

      IR35, CIS and the current sole trader rules all need revamping and we need to encourage self employment and micro businesses , this is where the future jobs will come from.

  31. turboterrier
    Posted March 5, 2017 at 2:29 pm | Permalink

    Lets have a budget that will claw back some of the billions that have been wasted on the religion of renewable energy and the saving of the world.

    Too many people lucky enough to be in a position to take more than full advantage of the situation bought about the weakness of sucessive governments in paying homage to a religion born out of computer controlled sciences have for years been ripping off of the UK population.

    A massive windfall tax on all asociated with the scam ring fenced for the NHS, Care policy or Homeless soldiers, who is really going to rise up against a tax that impacts on less than one percent of the population?

    We need policies to remove the something for nothing culture that seems to be applied by so many of the population, especially those fortunate enough to take advantage of weak political thinking.

  32. Ian Wragg
    Posted March 5, 2017 at 2:39 pm | Permalink

    Energy could be financed privately. Would you put your money is in reliable base load gas fired power stations when they can only run as standby for wind power. Unreliable wind getting £107 per mwh and gas £40 per mwh. I know I certainly wouldn’t.
    Why is the Brexit committee so interested in the plight of 3 million immigrants but not in our own people. The silly Hilary Benn is of course an arch remainer like the majority of the committee.

  33. Devolved Taxation
    Posted March 5, 2017 at 2:44 pm | Permalink

    We should be legally able to individually withdraw from paying precepts of Council Tax.

    It is one thing paying ones share of Firefighting or Waste Disposal. It is quite another lump of playdough paying for OTT installations priorly built on the basis of Daddy State footing the bill with an open cheque book, or nowadays a credit card with massive APR, enacted by Local Government because of political criteria and ideology. The Council Tax Payer should not have to foot the bill for persons who voted the wrong way in the past. Perhaps a Magistrates’ order should be made to inspect the voting pattern of each voter with a view to Labour and Liberal voters paying the precept and the rest of us getting a well-due reduction. The problem remains with Surrey or is it Suffolk. Anyway, the one which cannot add up and do its guzzinters properly and wanted a Referendum on putting C.Tax bills up.

  34. The Prangwizard
    Posted March 5, 2017 at 4:05 pm | Permalink

    We have had an announcement recently on industrial strategy, much about R&D, not much about encouraging the making of widgets; more, better and bigger widgets than those we now import, by home owned businesses with the latest and most efficient machinery.

    We’ve had a debate about productivity, it being stated that we are down the league because we have more people in work than those who outperform us. Better have lots of people in work, many imported on low wages it seems who can serve coffee, than support and enable our own industries to start making things again in the most efficient way. We have given up making so many things that others now do that our leaders ought to be ashamed.

    Sadly, too many people in government and the civil service, and those in their comfortable country houses having retired from The City, and those who should know better, don’t wish to be associated with any business where they might get their hands dirty.

    Snobbishness lives on.

    Let’s hope we can see some change, but we do need some people with oil under their fingernails in government. I await developments with interest.
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    Is captcha really essential?

  35. Antisthenes
    Posted March 5, 2017 at 4:20 pm | Permalink

    Reaching the right tax and social and infrastructure spending levels will never be achieved whilst the state is the major decision maker, provider and funder. The state is inefficient at planning simply because it relies on one best guess not accurate information. Two it has insufficient incentive to be competent in the way it spends or provides. Decisions are often made based on political imperatives and not on economic realities to curry favour with a certain constituency group or satisfy a particular ideology. The state has to pander to social justice objectives which impinges on the ability to create the wealth needed to create a surplus to lavish on them. The result is not to create universal social justice but just to change the group that it benefits the most and impoverish the means to create universal social justice.

    All human progress and life improvements have come from interaction and exchange in a market environment. Diminish that for the sake of socialist doctrines is to pave the way for a society that increasingly becomes corrupt, indolent, unjust and so eventually dysfunctional as the free market and democratic principles that had hitherto supported it crumble away.

    The state should renounce responsibility for finding most of the solutions to the problems of the never ending need to retain and improve security and prosperity. It should only facilitate the people to do that for themselves as history tells us that people are very good at doing so and the state is very good only at undermining that endeavour. The people through private enterprise created insurance, financial institutions, industry, charitable organisations and much more that improved their lot. It is only when the state intervened did they stop being effective and the evolutionary dynamic stopped that they became unfit for purpose and either failed or only continued at heavy cost to the taxpayer.

  36. Narrow Shoulders
    Posted March 5, 2017 at 6:04 pm | Permalink

    A commission to investigate a better way to measure the economy’s health. GDP does not cut it anymore.

    A commission to reduce the tax code to below one hundred pages.

    Change corporation tax into a flat turnover tax (catching offshore multinationals) and abolish business rates at the same time.

    Guarantee EU subsidies (paid with our contributions) for this parliament and the next.

    Remove all in work top ups from EU workers – No tax credits, no housing benefit. If the wages do not pay sufficiently without top ups the job and this country is not for you. Corporations needing “talent” to serve coffee and wait tables can pay more or train UK staff.

    Any chance of getting my child benefit back? £50K is better than £40k in London but it really is not much.

  37. Anonymous
    Posted March 5, 2017 at 6:25 pm | Permalink

    We need to tackle seriously the welfare burden.

    The hidden agenda to Brexit is getting our own people working in coffee shops, on farms and in health care.

    Yet still we are reading daily about 70k a year benefit claimants – despite the benefit cap.

  38. Chris
    Posted March 5, 2017 at 6:33 pm | Permalink

    I think you are absolutely right about Trump’s policy. I remain concerned by Hammond’s approach. It will not bring the growth that is required. We cannot rely on consumer spending to ultimately boost the coffers. Many economists think that bubble will burst with very serious consequences.

    With regard to infrastructure projects, cancel HS2, and build Boris Island. In the meantime, another runway will have to be built also, but that would be only be a stopgap, as government well knows. The proposed extra runway at Heathrow has a “shelf life” of not many years, before ever more demand for air transport will render it inadequate to meet needs of industry and passengers.

  39. ian
    Posted March 5, 2017 at 6:46 pm | Permalink

    The big hit in this country is going to be the retail sector, as online shine through with discounts, store shutdowns in shopping malls coming with supermarket closing down stores as well with most small retails going under the steam roller, should be a nice one, all done by themselves, that is the B of E, treasury and government.

  40. ChrisS
    Posted March 5, 2017 at 6:49 pm | Permalink

    Many of us here have strong views on a certain little lady who has such strident views on Brexit, and in particular, Scotland being taken out of the so-called single market.

    Can I draw your attention to the excellent article in the Saturday Telegraph by Alistair Heath ?

    http://www.telegraph.co.uk/business/2017/03/04/scotlands-dire-economy-falling-behind-uk/

    Rarely have I seen such a devastating critique of Government Policy, in this case, it’s Sturgeon’s, not Mrs May’s policies that are under the spotlight.

    I’ve thought for a long time that she will lose a second referendum, if she is foolish enough to call one. This article rehearses all the economic arguments that would come to dominate the campaign without once descending into “Project Fear” territory.

    I cannot see how Sturgeon has any chance whatsoever of pulling it off and then going on to negotiate Scotland staying in the single market.

    Mrs May can pay little more than lip service to Scotland knowing full well that the options available to the SNP are truly unpalletable.

    • ChrisS
      Posted March 5, 2017 at 7:22 pm | Permalink

      Sorry for the appalling typo in the last line

      it should, of course, read “unpalatable”.

    • Mark B
      Posted March 6, 2017 at 9:50 am | Permalink

      The SNP could very well go the way of Labour if they are not careful. There is only so much milage in blaming ‘Westminster’, a euphemism for England, before it loses its effect.

    • Denis Cooper
      Posted March 6, 2017 at 10:47 am | Permalink

      Mrs May can simply decline to introduce a fresh Section 30 Order so that a second referendum can be held, and that is what she should do. That is unless any such Order states that a second referendum can be held but not before 2024, ten years after the first one; by which time she will have negotiated the whole UK out of the EU and there will have been enough time for the dust to settle, and for the Scots to assess the validity of the SNP’s current doom-laden predictions.

  41. Ed Mahony
    Posted March 5, 2017 at 7:35 pm | Permalink

    ‘Mr Trump’s plans’

    Need to be careful about Trump

    – if outsider can become President, Corbyn could become PM (please no)
    – if we associate too closely with Trump, Tories could lose support
    – bets on Trump is toast

  42. Duncan
    Posted March 5, 2017 at 8:21 pm | Permalink

    The last thing we should be doing is spending hard earned sterling on wasteful entities like the NHS. That’s a recipe for disaster. It needs reform NOT more spending.

    I do get the sense that politicians in govt. spend taxpayers money not because they have too but simply to minimise opposition ie buying the silence of a rebellious vested interest. That’s political spending for the benefit of politicians in securing their own political reputations.

    The taxpayer does not exist for the benefit of political expediency though at times you would conclude that we do

    Give us our money back!!

  43. Peter Martin
    Posted March 5, 2017 at 8:29 pm | Permalink

    Yes I hope Mr Hammond does go for a budget for prosperity. He simply has to remember that if he overdoes the spending and/or makes too many tax concessions he’ll end up with too much inflation. Conversely if he underdoes the spending and/or makes too few the economy will remain in the doldrums.

    Where the money is spent is also a consideration. It would be difficult to spend too much in the depressed regions and create inflation. But it would be easy to do that in London and the SE of England.

    Finally the govt’s deficit is simply everyone else’s surplus. What everyone else including our overseas trading partners choose to save rather than to spend. This won’t reduce as expected if spending is simply cut.

    Taxation revenue will decrease too. The deficit may even end up bigger than it was previously.

  44. Derek Henry
    Posted March 6, 2017 at 12:56 am | Permalink

    Ecellent John back on form I See.

    Now all you have to do is post this graph

    https://www.advisorperspectives.com/images/content_image/data/2b/2b5653b8085dc9b224b1a59bc304abbf.png

  45. libertarian
    Posted March 6, 2017 at 10:41 am | Permalink

    I said the only thing that could derail the current business and economic growth is if the Conservative Govt do something stupid…… Guess what they did !!!

    Business rates shock to small business growth prospects
    FSB has released the results of its business rates snap poll, adding to mounting pressure on the issue. It shows a significant proportion of small businesses across Britain are preparing to reduce investment and staff costs once business rates rise next month. The research finds more than a third (36%) of small firms expect to see their business rates increase from April 1.

    Politicians are the problem not the solution

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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