The Conservative secret tax plan

There is a well buried secret in the Conservative Manifesto. It says the government will raise the Income Tax threshold to £12,500 by 2020, and will increase the threshold before you pay 40% higher rate tax to £50,000 by 2020.

I don’t understand why we do not hear more about this. The Manifesto explains why it wants to bring tax down. It sets out a vision of a “Strong economy built on sound public finances, low taxes, better regulation and free trade deals with markets around the world”. This vision is exactly the one most of you write in to demand, apart from the few who write in every day to condemn whatever I have said.

As we saw yesterday, setting a lower tax rate can bring in more revenue. It certainly has with Corporation Tax. Cutting the top rate of Income Tax from 50% to 45% increased the money taken from the better off. Mr Brown when Labour’s Chancellor always thought you got most from the rich at 40% and who is to say he was wrong.

The government would be well advised to review the more discretionary taxes with a view to setting rates that bring in more revenue. Taxes on capital are regularly avoided by most people because they are transaction related. Many people refuse to sell their shares or their property because to do so would incur a tax charge.

We have seen how many fewer transactions there are in the property market after Mr Osborne’s big increase in Stamp duties. It is true revenue from SDLT edged up £0.7bn in the first year after the hikes, but it is also true that transaction volume plunged. A lower rate would be very likely to bring in more revenue, and would do less damage. Currently many people are stuck in property too big or too small for their up to date requirements, but do not wish to incur the high charge of moving.

Capital Gains Tax revenue is stuck around £9bn, a small sum given the large accumulated wealth of the country as a whole in shares and property. Asset markets have gone up a lot in recent years so there are plenty of gains to be taken. The truth is many portfolio investors tell their managers not to take gains above the tax free allowance. Many people who own a second home will not sell it when they cease to use it much, as they have no wish to share 28% of their gains with the Treasury. They hold on thinking the family might want it, visiting it when it is no longer what they really want to do. It would be better if they did sell and the home was used by someone who needs it.

Published and promoted by Fraser Mc Farland on behalf of John Redwood, both at 30 Roe Street Wokingham RG40 1XU

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62 Comments

  1. Lifelogic
    Posted June 4, 2017 at 5:23 am | Permalink

    What matters is overall government spending (which is mainly wasted) relative to GDP. This needs cutting significantly. It can only be done by cutting out all the endless government waste, lowering and simplifying taxes, attracting and retaining the wealthy, cutting red tape, encouraging investment and going for cheap reliable energy.

    Grow the tax base, encourage people not to use the NHS or state schools, encourage those who can to provide for themselves. Low simpler taxes give more revenue not less. Some damn vision is needed from these daft Red Tories.

    • James P
      Posted June 5, 2017 at 9:11 am | Permalink

      couldn’t agree more

  2. Lifelogic
    Posted June 4, 2017 at 5:40 am | Permalink

    I log on to my betting site to place largish bet on a Tory Majority at 1:4 (as it was yesterday) only to find it is now 1:10 – I have missed my chance. Still Corbyn would have cost me millions in devalued properties, a collapsing economy, redundancy payments, higher interest rates, the garden tax. more corporation tax (no actually less as the business would be far less profitable) and all the other insanities. Perhaps I should be grateful to Corbyn and Sturgeon for being so unelectable to the English and Welsh.

    The appalling thought of Corbyn, Mc Donnell, Abbott, Sturgeon taking over has won it for May. This despite her daft attempts to throw the election. Now we need the sensible JR wing to explain some real economics, engineering, business and science to her. To kill her mad soft socialist agenda, kill the prices and income policy, kill her absurd Stamp Duty rates, her workers on boards, her gender pay drivel ….. and get her to follow Trump on cheap reliably energy too.

    A bigger tax base is what we need not higher tax rates and endless government waste dear. We do not want Ted Heath in drag, we want someone with vision who is even better than Lady Thatcher was as cutting taxes, at growing the economy, at running a tight efficient ship and restoring UK democracy.

    • Lifelogic
      Posted June 4, 2017 at 6:01 am | Permalink

      Particulary this morning, after the appalling events at London Bridge and Borough Market last night, we need Theresa May to also adjust her stance on more state faith schools. We need fewer cleavages in society, not yet more please.

      Well done to the police for shooting the three terrorists so quickly and efficiently. Let us hope the government can also up their intelligence activities to prevent more of this warped, religious driven, insanity and murder. Let’s also hope we get some effective action, rather than the usual pathetic platitudes, from religious leaders and our politicians.

  3. Peter
    Posted June 4, 2017 at 5:53 am | Permalink

    An increase in inheritance tax thresholds is badly needed. At the moment governments are shamelessly stripping assets from the elderly.

    Future changes all have caveats. They only apply to married couples with children.

    • A.Sedgwick
      Posted June 4, 2017 at 7:56 am | Permalink

      The furore over social cap floor/cap was unnecessary. Upping the floor is a good idea and perhaps should be higher and as much as £250k, but with no cap and a totally unrestricted IHT allowance to £1m, sort of promised in 2007. Equally higher net worth should not be protected by trusts, farm ownership etc but be subject to a flat rate with no exceptions.

    • Ed Mahony
      Posted June 4, 2017 at 7:57 am | Permalink

      ‘At the moment governments are shamelessly stripping assets from the elderly’

      – as far as i understand it, it only strips them of their assets when they’re dead. So it doesn’t affect them, but their family.

      This country has a huge national debt. The young have huge financial pressures. And dementia is a massive burden on the country’s finances. The government has to do something radical at least until we return to more ‘normal’ economic times. What else do you suggest the government do?

      • mickc
        Posted June 4, 2017 at 10:53 am | Permalink

        Well, I would suggest that the government do not take so much money from people so that they can accumulate wealth to look after themselves in later life.

        Alternatively, of course, the government could not have accumulated such a large debt, not have saved the banks by fleecing the people, not spend money on useless weapons systems from the USA (Trident….), not support expensive wars to destabilise the Middle East….and if it is to print money, which it does, at least spend it on infrastructure of benefit to the country rather than just the City of London.

        Sorry, but the record of “your country needs you” is long worn out; the Tories, as ever, attack the middle class and cry “patriotism” whilst the “rich” do very well indeed.

        The political tide worldwide is anti the smug establishment (Brexit, Trump are examples of this change…). The times they are a’ changin’….and very much need to.

        May is very much not the change needed; neither is Corbyn but win or lose he may be the catalyst needed for the emergence of another Thatcher. And she most certainly was patriotic and understood that people want to “get on”….but then she wasn’t a Tory really.

        • Ed Mahony
          Posted June 4, 2017 at 12:32 pm | Permalink

          ‘Alternatively, of course, the government could not have accumulated such a large debt’

          – How we got here is important, from the POV of avoiding similar mistakes in the future. But surely the focus right now is how do we get out the situation we’re in? How do we pay off our national debt as soon as possible. Surely, that should be the main concern right now?
          Regards

          • mickc
            Posted June 4, 2017 at 9:30 pm | Permalink

            No, generating a strong growing economy is the priority.

      • Graham
        Posted June 4, 2017 at 10:54 am | Permalink

        Smart reply there Ed – top of the class stuff.

    • Baldwin
      Posted June 4, 2017 at 10:30 am | Permalink

      Agreed.

  4. Mark B
    Posted June 4, 2017 at 6:06 am | Permalink

    Good morning

    Who earns the money ?

    In a Command Economy like the former Soviet Union the state owned everything and managed everything. There was no need for save, invest or build something because the state would just take it.

    Slowly but surely we are moving in this direction. In order for the state to keep its promises it has to take from those that have in order to give those that have not. But sooner rather than later people begin to push back and they do it in a variety of ways.

    When it comes to big government, more is definitely less.

    • Hope
      Posted June 4, 2017 at 9:10 am | Permalink

      Not just those who do not, but all EU citizens who have an absolute right to the same irrespective whether they paid into the pot or not and whatever time of life they decide to live here!

  5. eeyore
    Posted June 4, 2017 at 6:08 am | Permalink

    Yes, excellent policies. Shout them from the rooftops. I’m all in favour of plans to cut taxes and “leave the people’s money to fructify in the pockets of the people” (Gladstone).

    That is one reason I deplore tax-fixing deals between governments which seek to set up oppressive monopolies denying people and businesses choice in the market-place of regimes to live under.

    To deny choice is to deny dignity. If you value freedom you’ll be a tax-cutter. So no fructifying with Mr Corbyn!

    (I am aware of the damnable outrage at London Bridge. It should not stop the nation’s great business this time. That really would be giving in.)

  6. Lifelogic
    Posted June 4, 2017 at 6:11 am | Permalink

    Indeed it would be a huge advantage if they cut the absurdly high Stamp Duty (up to 15%) and CGT. Allowing properties to change hands without such absurd mugging of people. The 28% CGT is not even indexed against inflation anymore – it is far too high a rate.

    The government raise less tax not more by having rates so high. They also damage the housing market, reduce supply of properties and harm the economy in the process. Though rather less than Labour’s “we will just steal your property off you or halve it in value by giving part of its value to your tenants” – Their lets steal of landlords proposals and their garden tax insanity.

    • Spratt
      Posted June 4, 2017 at 9:56 am | Permalink

      The stamp duty hike was poorly thought through. We need a swingeing property tax on non U.K. residents and companies. Also, if 2nd homes are charged higher duty it is time to require declarations about property ownership in other countries with severe penalties if not admitted to. This could also free up some social housing as I know people who have subsidised tenancies from housing associations or councils but have a very nice house in their country of origin. Etc ed

      • Spratt
        Posted June 4, 2017 at 9:58 am | Permalink

        I mean residential property of course not commercial

        • Lifelogic
          Posted June 4, 2017 at 6:24 pm | Permalink

          Why tax residential investment heavily and then not tax commercial property it makes no sense at all. It just results in higher residential rents.

          Workers and their families needs somewhere pleasant to live, just as they need somewhere to work. Both are equally needed would you rather they lived in tents or their cars? Tax should be neutral, the market demand should decide how it is best invested not some idiotic central planning by government officials or fiscal manipulation.

          • Spratt
            Posted June 4, 2017 at 8:10 pm | Permalink

            Sorry, my attempt to clarify obviously confused matters. When I said I meant residential it was because I had suggested a heavier stamp duty for property bought by companies . Clearly commercial property is often bought by companies rather than individuals and it wouldn’t be appropriate to apply a differential stamp duty in those cases. I didn’t mean to suggest that residential stamp duty should generally be higher than commercial

      • Lifelogic
        Posted June 4, 2017 at 12:41 pm | Permalink

        There are large taxes already – the enveloped dwelling tax, the stamp duty, the non deduction of interest tax, capital gains tax, IHT, taxes on rents, land registry fees, VAT on repairs & extensions, Building reg taxes ….. how much more taxes do you want? In general these just hit the poor tenants rents anyway if they are let out.

  7. Richard1
    Posted June 4, 2017 at 6:18 am | Permalink

    Absolutely right. All these rates need to come down to inventivise investment and growth and to raise more revenues. Corbyn had had it extraordinarily easy in interviews with his ridiculous claim that an incremental £50bn pa could be raised from only the top 5% and ‘corporations’. Quite why the Conservatives aren’t pointing out these issues more is a mystery.

    Every homeowner in the county is now in peril from Corbyn’s planned property and garden tax. People need to wake up and look at what’s happening in Venezuela to see what’s in store for the UK if the conservatives are not re-elected.

    • Lifelogic
      Posted June 4, 2017 at 7:07 am | Permalink

      Do not worry Corbyn will not get in despite May’s lefty incompetence and the BBC’s best efforts. Very few in England want a Corbyn dog wagged by an SNP/Niccola Strugeon tale. The voters are not daft enough to fall for his pathetic magic money tree, Father Christmas act.

      No student debts, council house for all, higher wages, four more bank holidays, nationalised everthing, more money for schools, more money for the dysfunctional NHS, the homeless, state sector workers, free school lunches, free child care, in fact free money for almost everyone …….. all paid for by circa 50,000 rich people who will probably already have left or taken evasive action – taking their money, investments, hard work, good ideas and jobs with them.

  8. acorn
    Posted June 4, 2017 at 7:20 am | Permalink

    These manifesto tax cuts will not be self funding because they are not compatible with the balanced/surplus budget policy. The UK economy just isn’t large enough and productive enough for the population it needs to support, due to three decades of Thatcherism. Unfortunately for the UK, the conservative party is ideologically constrained from using the magic money tree.

    Expect another hand brake turn on tax and or deficit, like yesterday’s on housing. CCHQ suddenly found out that Social rented housing, is different from Affordable rented housing. Naturally, the manifesto meant the more expensive version.

    Reply Margaret Thatcher left office 27 years ago so it’s absurd to carry on blaming her for something she did not do.As always you remain silent on the European disasters of the ERM and the Euro crisis which did damage our incomes and jobs a lot.

  9. Narrow Shoulders
    Posted June 4, 2017 at 7:21 am | Permalink

    How much of the raise in the higher rate threshold to £50,000 will be funded by raising the upper earnings limit for NI over £50,000 Mr Redwood?

    Two thirds of the recent threshold raise was taken away again by the increase in the upper earnings limit from £43,000 to £45,000. Surely this was an increase in tax which contravened your 2015 manifesto.

    Notable that the predominantly self employed media did not cry out about the attack on middle England after making such a fuss about the removal of class 4 NI rates for the self employed.

    Your party is as addicted to tax and spend as Labour, it appears that even is Mrs May and your party get back in she will be a lame duck as her mandate will be reduced not increased. You are fortunate that Mr Farage took a break from politics otherwise UKIP would be giving you real pause for thought as well as Labour making gains.

  10. stred
    Posted June 4, 2017 at 7:23 am | Permalink

    I live in a house which I used to let and would like to move, as the council is making the whole part of town residents parking and halving the number of spaces, though selling permits to all at £150. I would have to pay £140k CGT, though the real value of the gain over 25 years is 40% of the nominal value.

    After reading about Jezza the Red’s plans for property and tax rates, while visiting a very nice part of Holland, I wondered whether I could emigrate there and claim refugee status. My bird had bought a book on this, as her tax rates would be sky high if he creeps in with bribes to non- taxpayers and yoof in debt. A quick look at their tax rates dampened this idea.

    Dutch taxes are apparently- 0-20k eros- 37%, 20k-33,600-41%, 33600-57600-41%, 57600 and over-52%. Very high for low earners and a bit higher for high. Mortgages are allowable.

    • Know-Dice
      Posted June 5, 2017 at 5:42 am | Permalink

      Can’t you live in that property for two years and then there is no CGT due?

      • stred
        Posted June 5, 2017 at 11:11 am | Permalink

        No. There is a reduction pro-rata to the length of stay but it is too long to wait until worthwhile. The ex gets my tax free main residence allowance. My children would be better off financially with me dead and would be left with enough for a small flat. Unless I need someone to take me to the toilet, in which case Mother Theresa will swipe most of what’s left. Conservatives are now the party of a bit lower taxation than the Marx Brothers.

  11. Thames Trader
    Posted June 4, 2017 at 7:44 am | Permalink

    Stamp duty should be adjusted so that home owners trading down in the market pay little or no tax to encourage them to free up large properties.

  12. Ed Mahony
    Posted June 4, 2017 at 7:46 am | Permalink

    ‘As we saw yesterday, setting a lower tax rate can bring in more revenue’

    Sweden pays considerably higher tax (60% highest rate) than in UK.
    Sweden has higher GDP per capita than UK by a fair bit (about 7% if memory serves me right)
    Sweden’s national debt is way, way lower (at least half) than the UK’s.
    OECD judged Sweden’s healthcare best in world in 2010 with only 600,ooo Swedes taking up health insurance.

    • Ed Mahony
      Posted June 4, 2017 at 7:51 am | Permalink

      BTW, I’m in favour of lowest taxes possible. But at same time, I want to look at other countries to see what they’re doing right, and in Sweden (and other countries) there’s a sense of patriotism / public duty in which people are more happy to pay for good public services than in other countries. This isn’t socialism (socialism imposes). This is just people loving their country more, at least when it comes to public services. So taxation is ultimately about cultural/sociological factors not economic ones. At least when we look objectively at Sweden as opposed to look at this purely ideologically.

      • Ed Mahony
        Posted June 4, 2017 at 8:02 am | Permalink

        ‘as opposed to look at this purely ideologically’ – apologies, didn’t mean to say that, and i don’t think that either

      • Original Richard
        Posted June 4, 2017 at 8:57 am | Permalink

        “But at same time, I want to look at other countries to see what they’re doing right, and in Sweden (and other countries) there’s a sense of patriotism / public duty in which people are more happy to pay for good public services than in other countries. This isn’t socialism (socialism imposes). This is just people loving their country more, at least when it comes to public services.”

        I think you will find that this altruistic attitude will be eroded in Sweden now that their government has decided they should become a multicultural society.

      • Narrow Shoulders
        Posted June 4, 2017 at 10:38 am | Permalink

        When you were looking up Sweden’s taxes did you come across any details about the feckless or net recipients. How many long term unemployed do they have? How long can you claim unemployment and what is their disabled ratio Ed? Does Sweden have quangos and what is their per capita net contribution to the EU?

        Patriotism does not overcome the feeling of being mugged!

      • mickc
        Posted June 4, 2017 at 11:05 am | Permalink

        Ah yes, Sweden an example to us all! A country prepared to sacrifice its women in order to allow those of an entirely different culture to settle, and whose prosecutors do the bidding of another country.

        I remember the Headmaster of my secondary school pointing out that Stockholm has a magnificent City Hall….built whilst he was rather busy fighting the Nazis…. He was, incidentally, staunch Labour, no anti Social Democrat he!

        Indeed, a country to be emulated….

        • Ed Mahony
          Posted June 4, 2017 at 12:13 pm | Permalink

          I’m not saying Sweden is Paradise!
          And lots of things we do better than the Swedes.
          But on the point of taxation, just making the objective point, they have relatively high taxation, whilst being relatively wealthy, much lower national debt, whilst being judged as no. 1 country for public healthcare by OECD in 2010 with only 600,000 Swedes taking up health insurance.

          And something to be learned here, not from a political or economic POV, but from the POV of cultural/sociological attitudes there, in particular, a sense of patriotism / public duty / work ethic on the issues of taxation and getting value for tax payers money.

          Facts. Can’t really argue with that. And what is absolutely clear is that if we had more of a sense of patriotism in general, including better sense of public duty and work ethic (and not just about taxation / public services but in a much more broader sense), our country would be so much better. Our people, a lot happier.

          So the real challenge is how do we increase sense of patriotism, sense of public duty and work ethic in our country?

    • libertarian
      Posted June 4, 2017 at 9:46 am | Permalink

      Ed

      As I told you and posted the FACTS yesterday your figures on Sweden are totally inaccurate . Oh and Why are you comparing a country smaller in size than London with the UK ? If you want to do that why not choose Hong Kong or Singapore both of which have vastly lower taxes and stronger economies than Sweden?

      • Ed Mahony
        Posted June 4, 2017 at 12:23 pm | Permalink

        @Libertarian,

        ‘As I told you and posted the FACTS yesterday your figures on Sweden are totally inaccurate’ – i think that’s an exaggeration.

        ‘Oh and Why are you comparing a country smaller in size than London with the UK ?’
        – that’s a fair point. But then you have to make a similar argument to people such as Lifelogic who use Hong Kong and Singapore as a model to base the UK economy post Brexit. I would say, however, that we’re more similar to the Swedes in a cultural / sociological sense than to the Asian population of Hong Kong and Singapore.

    • libertarian
      Posted June 4, 2017 at 10:42 am | Permalink

      Ed

      You need to do some research my friend, not just read headlines

      The number of UK high earners paying the hidden 60 per cent rate is set to double by the end of the next tax year. Taxpayers earning between £100,000 and £123,000 a year lose their tax-free personal allowance, and therefore face an eye-watering marginal rate of 60 per cent. It will affect at least 800,000 people this year, up from 588,000 in 2010-11. If that pattern continues, a million people will be dragged into the tax band by the end of the next tax year. So MORE people in UK pay 60% tax than people in Sweden who pay the highest rate which is in fact now down to 57%

      • Ed Mahony
        Posted June 4, 2017 at 12:28 pm | Permalink

        @Libertarian

        My main point was about cultural / sociological attitudes in Sweden rather than the economic specifics (although important) that do, of course, vary over time.
        Regards

      • acorn
        Posted June 4, 2017 at 5:00 pm | Permalink

        So, exactly what is the problem here then libby? 1.2% of the population have a 60% tax problem; how does that affect the other 98.8% of the population?

        Don’t give me this JR crap about these high earners flying off to low tax countries and the UK suffering economically because of it. It doesn’t happen!!!

        Can you imagine what the spouse and children of these “tax flyers” say? OK, mum/dad, you go, the rest of the family is staying in the UK; don’t ring us, we’ll ring you.

        • libertarian
          Posted June 4, 2017 at 9:56 pm | Permalink

          acorn

          What are you burbling about? At least make an effort to read the threads before spouting your left wing drivel.

          As you are hard of thinking here’s a synopsis

          Ed M posted that we ought to be more like Sweden as they pay high rates of income tax

          I responded that in fact in the UK MORE people than in Sweden already pay higher rates of tax

          I made no mention of whether I thought that was fair, too high, too low or anything else I just stated a fact about the numbers.

          No need to apologise, I’m used to you being wrong

          • acorn
            Posted June 5, 2017 at 8:51 am | Permalink

            So sorry, it is just your inflammatory pompous arrogant comments yesterday, used the wrong words in the wrong places, which indicated that you had a cut-and-paste level of understanding of the Swedish tax system. I will put you on my “no point in replying” list for the future.

          • libertarian
            Posted June 5, 2017 at 4:02 pm | Permalink

            acorn

            ” I used the wrong words when I cut and paste” Hmm do you know how computers work?

            Apology accepted have a lovely day

  13. Caterpillar
    Posted June 4, 2017 at 7:57 am | Permalink

    Yes, when domestic property prices have risen due to proximate land value, and people hold and do not sell property that they other wise would it does show that the tax system supports/encourages a market failure. This is where the (perhaps only) reasonable Labour policy of a Land Value Tax would take effect (I realise that the calculation of land value needs to be better done than a finger in the air estimate). All parties need to move on from just discussing tax levels to a fuller discussion of purpose and structure.

  14. alan jutson
    Posted June 4, 2017 at 8:23 am | Permalink

    I agree with your comments John, and I think we all recognise what has been promised, the problem is all the small print and the constant increasing of taxes on more and more elements of the economy, a particular trait over the last 25 years by Governments of all colours.

    So called stealth taxes appear now in every single Budget.

    The fact that my personal allowance will go up by £1,000 in the next 5 years was simply dwarfed by the simple few paragraphs about Social care and the fact that I will now be excluded from any help at all until I get down to £100,000, when a 3 bed semi in Wokingham is valued at £500,000.

    Labours calls for a wealth tax will just put many pensioners who are so called property rich and cash poor into massive debt.

    • Hope
      Posted June 4, 2017 at 9:20 am | Permalink

      Your taxes are being spent by the billion on interest on the debt that Osborne promised to eliminate by 2015. The interest is more than some public services receive! Yet Cameron, Osborne and May decided we should borrow £14 billion more each year to give away to corrupt govt’s, consultants, sixth to the EU and to Govt’ who are increasing their military spending while they devastate ours!

      No Alan, your comments over the years are far too sensible to agree with JR. We paid our taxes in the expectation we will receive some of the shared public service in our dotage or time of need. We worked hard to strive to improve our living standards for our families. We did not work so any EU citizen could walk freely into our country and get exactly the same as us without paying a penny in the pot! Noe should we be expected to queue behind them at hospitals, GP surgeries or dentists. Nor housing lists because they have moreover children and attract more points! We did not work to make our nation a third world country where every public service is free to them to the point of being overwhelmed. We did not work and go without so our home would be sold leaving our families a residual amount to pay the probate tax!

      Brought to you by Major, Cameron, and communist Chair May. You did not work all your life through hardships and then in death wish not to give it to your family. Time for change, vote for change. The liblabCon have had their day. They wanted to be ruled by the EU and act as managers for the same.

    • cornishstu
      Posted June 4, 2017 at 5:27 pm | Permalink

      It might go up by a thousand but the amount of tax you save as in real money in your pocket is a mere £200 which is swallowed up not least by the green levies on all our energy bills never mind the all the other stealth taxes. Government has to cut spending there are so many areas where money could be saved without affecting the essentials and until that happens as far as I am concerned it is just legalised robbery.

  15. Bert Young
    Posted June 4, 2017 at 9:19 am | Permalink

    I am not surprised at today’s blog . Low taxation should always be at the heart of any Conservative manifesto . Whoever put together their present manifesto ought to be kicked into the long grass ; it was an attempt to pull in Labour voters and it has failed . Opinion polls cannot always be believed , but , there is a trend and it does not auger well for Theresa’s ” Strong Leadership “. I am horrified at the thought of a Labour coalition .

    Hammond’s Autumn Statement got things off to a bad start . At a time when initiative building and optimism for the future was required , the opposite was the case ; the snap election was then called in the belief that Corbyn would be ridiculed to death ; he hasn’t been . Corbyn has developed a sympathetic following and the result is now nip and tuck .

  16. NHSGP
    Posted June 4, 2017 at 9:28 am | Permalink

    So why can’t you say there will be no tax rises?

    IR35 has been a complete disaster. Look at the tax take from the 100-200K earners. It’s halved.

    What’s happened is you forced lots of small business out of business, forcing people to take lower paid jobs with corporates.

    The corporates aren’t subject to IR35 and they just offshore their profits. The small businesses pay their taxes here.

    More complete economic incompetency from May and Hammond doing what’s best for their mates in the corporate world.

  17. Antisthenes
    Posted June 4, 2017 at 9:33 am | Permalink

    Taxes are pernicious accept for the rare exception when government’s proclivity to use force or the threat of it to extract money out of us or to make us behave in a way that they believe desirable we can accept as justified. Unfortunately that which should be rare has become the rule not the exception and governments do both with increasing alacrity. Most taxes, rules, regulations and laws are not about making funds available and creating an environment for the betterment of society but for the betterment of vested interest groups within it. Those vested interests who are in power or need to be bribed to keep a group in power or to promote an ideology, or who have a cause that they have managed to fool enough others into believing it is worthy of funding. The list is long and not exhaustive as new reasons for doing so are found almost daily. We tax for tax’s sake not because it makes our lives better as there are better ways to do that so when we have to do it we should do it sparingly as the unintended damaging consequences far outweigh the good it ever does.

  18. Bob
    Posted June 4, 2017 at 9:35 am | Permalink

    Under a ukip government the tax free allowance would go up to £13,5oo p.a.

    IHT would be raised to £1m per couple before being completely phased out.

    They would also scrap the Tory Probate Tax.

    • libertarian
      Posted June 4, 2017 at 9:58 pm | Permalink

      I’m afraid the sun is due to super nova long before we have a UKIp government

  19. Original Richard
    Posted June 4, 2017 at 11:12 am | Permalink

    The UK’s productivity is 30% below that of France (BBC R4 World of Business 08/04/2017). This is because UK employers have access to unlimited cheap labour subsidised by our non-contributory health and benefit systems and therefore have no incentive to improve productivity.

    If an industry or individual company believes it needs cheap non UK labour then it should pay health and benefit insurance for these employees and these employees should be on temporary work visas only.

    Otherwise :

    Continually importing very large numbers of migrants who are not paying tax at least at the higher rate will eventually mean the end of non-contributory health and welfare benefits. This is in addition to the detrimental social and environmental effects of a rapidly increasing population.

    Continually reducing the percentage of voters who pay direct taxes will eventually lead to a Venezuelan type government.

    • libertarian
      Posted June 5, 2017 at 7:23 am | Permalink

      Original Richard

      “The UK’s productivity is 30% below that of France (BBC R4 World of Business 08/04/2017). This is because UK employers have access to unlimited cheap labour ”

      Er hold on, productivity is calculated on the basis of input costs of which wages are normally the largest component versus output income. So If you are right about low wages it would BOOST our productivity figures not reduce them.

      Personally I think that the productivity numbers and measures need to be totally reassessed in light of new working methods and technology etc

  20. Denis Cooper
    Posted June 4, 2017 at 11:24 am | Permalink

    Off-topic, I see that Christopher Booker is perpetuating the EEA myth:

    https://behindthepaywallblog.wordpress.com/2017/06/04/trump-has-revealed-the-dirty-secret-of-the-paris-accord-it-is-meaningless/

    “Among our biggest problems will be Mrs May’s decision that we should leave the European Economic Area to become what the EU classifies as “a third country”. At least remaining in that would have made our leaving the EU incomparably easier.”

    Firstly, even if we stayed in the EEA the EU would still classify us as a “third country” once we were no longer an EU member state. When the EU’s chief Brexit negotiator Michel Barnier referred to “… third countries closely associated with the EU, such as Norway and other EEA countries, Iceland and Liechtenstein”:

    http://uk.reuters.com/article/uk-britain-eu-norway-barnier-idUKKBN1591TO

    I don’t think that was carelessness on his part, he was just stating the fact that those states have not avoided being classified as “third countries” by being in the EEA.

    Secondly it will not be our unilateral choice whether or not we stay in the EEA after we have left the EU; while it might be easy to make the necessary treaty changes that would need the agreement of all of the EEA member states as well as the EU:

    http://brexitcentral.com/free-trade-agreement-single-market-customs-union-parties-say-means/

    Thirdly if we did stay in the EEA we would not regain complete control of our immigration policy. Even Booker has admitted that at best it would be only “some limited” control, and this pressure group British Influence say much the same thing:

    http://influencegroup.org.uk/eea/

    “… if the UK can prove that it is being materially or socially harmed by free movement, then it can act to curb it. This cannot be open-ended, and it may incur retaliation, but it allows for more control than currently exists.”

    Personally if I was an EU negotiator and therefore totally committed to the indivisibility of the “four freedoms” I would not contemplate allowing the UK to stay in the EEA when there was clearly an intention to try to use those safeguard provisions in the EEA agreement to routinely control EU migration into the UK.

  21. behindthefrogs
    Posted June 4, 2017 at 12:16 pm | Permalink

    Is it fair that the rich pay a higher rate of tax on earned income compared with unearned income? It is about time NI contributions were merged with income tax so that there was effectively a single tax rate.

  22. Denis Cooper
    Posted June 4, 2017 at 1:14 pm | Permalink

    Also off-topic, there’s a moderately interesting article here:

    http://www.politico.eu/article/germany-even-worst-case-brexit-will-be-bearable-for-eu/

    with the headline:

    “Germany: Even worst-case Brexit will be bearable for EU”.

    But it could just as well have had a headline saying that it would be “bearable” for the UK, given that the trend growth rate of the UK economy is about 2.5% a year.

    “The study simulates the effects of eight different Brexit scenarios on the German and the EU economy.

    In the most positive scenario with a comprehensive free trade deal between the EU and the U.K., the study predicts a long-term output loss from a pre-Brexit trajectory of 0.1 percent for the EU and 0.6 percent for the U.K.

    In the scenario where the U.K. and the EU fail to strike a trade deal and fall back on World Trade Organization rules, the study predicts the U.K. economy would lose 1.7 percent of economic output over the long-term, while German and EU GDP would be 0.2 percent and 0.3 percent below their previous pre-Brexit trajectories, respectively.”

    So that would be o.6% loss of UK GDP for their best case and 1.7% for their worst, WTO, case, without taking into account any countervailing factors.

  23. Terry
    Posted June 4, 2017 at 5:00 pm | Permalink

    Yes, a big failing within the party is its lack of product marketing.
    The so-called Poll Tax was a great idea but badly marketed so that the socialists could poor scorn on it and ultimately promote riots in the streets. As a result, my wife’s pensioner parents had to pay the same council tax as the house next door with four young salaried workers living there. She was not pleased.

    If Mrs May is confident in her manifesto, she should have ensured that it was actually promoted and not read out like an inventory list.
    The disaster of the Care Plan for the Aged could have been avoided had it been properly prepared and professionally presented. Likewise yesterday when ‘No tax hikes for the high earners’ became an open goal for the opposition parties.
    In today’s multimedia society, presentation is everything.

    The Americans are world champs at it and The Conservatives must follow their way to win big. Not to win ‘big’ will not help but hinder our Brexit. And that would be another disaster.

  24. Posted June 5, 2017 at 11:21 am | Permalink

    I agree with the points you have made, in particular the 28% tax levied on second homes. Why not go back to taper relief, such that after 7 years there is no tax to pay? That would reduce the temptation to apply for planning permission only to sell on to someone else, but would allow those who had lived a long time in a house to sell it and made it available to those who need it more.

  25. Lindsay McDougall
    Posted June 6, 2017 at 5:37 pm | Permalink

    I don’t know why the Conservatives are not making a better job of hammering Labour’s economic policy. You need to make a convincing case that Labour will not be able to raise anything like the £49 billion pa of revenue that they are relying on, in which case debt and inflation will really take off.

    This will involve explaining terms like Laffer curve and fiscal drag in layman’s terms and giving supporting numerical evidence, not on a blog but in the popular media. What is Mr Hammond doing? Submarine May begets submarine Hammond?

    Actually, this is something that John Redwood could do given access to popular media,

  26. Cedric Woodhall
    Posted June 9, 2017 at 7:45 am | Permalink

    Redwood for Chancellor!

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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