How lower taxes could help economic growth

Three recent posts have shown how the government has used higher taxes to stop or reduce activities that it does not approve, with considerable success. These policies have slowed the economy a bit as a result.

Given that the government knows how to do this, wouldn’t it be a good idea if it did more the other way, identifying how cutting taxes might stimulate more activity?

It does recognise that taxing work too much is a bad idea, and has been cutting the tax on work by removing more people from Income Tax altogether and raising the tax free allowance generally. This has been a helpful background to boosting employment, which has been rising steadily as Income Tax has been reduced by this method. The more that can be done to reduce the tax on work the better, as all political parties claim to believe that work is a good thing. If you want more work in any given country you need to ensure the tax rates on work are internationally competitive. The UK needs to revisit its rates in the light of the sweeping US tax cuts.

There are other examples where taxes have been raised on behaviour which the government says it favours. Most of these relate to entrepeneurship and saving. The government says it wants people to save so they have money for their old age and for any adverse event that may befall them. It says it wants to encourage more people to set up their own businesses and to venture their money to help establish and expand other people’s businesses.

If this is the case then why has the government hiked Stamp Duties? Why does it persist with a 28% Capital Gains Tax rate on property? Why has it cut pension tax reliefs?

Stamp Duties and Capital Gains tax are taxes people do not have to pay. They are easily avoided by doing nothing. Those in the fortunate position of having made past successful investments can sit on them. Those who aspire to own investments can be put off by the transaction taxes. People keep properties that may be too big for them or are no longer in the best place for them as they do not wish to pay the CGT on sale or the Stamp Duty on buying something more suitable. As we have seen Buy to let investment in new homes or conversions to provide more rented accommodation for others has been hit hard by higher taxes.

The government could and should do more to promote savings and enterprise. The best and most energetic can flourish, but we need a tax system which makes it easier for everyone, so the more marginal projects find cash and support.

This entry was posted in Uncategorized. Bookmark the permalink. Both comments and trackbacks are currently closed.

117 Comments

  1. jerry
    Posted April 11, 2018 at 5:45 am | Permalink

    A big assumption that those who receive tax cuts will not merely take the money and ‘run’!

    Of course by contrast higher, or at least the same tax, rate along with higher govt spending in new and renewal of big ticket infrastructure projects could also boost economic growth, just as it did during the 1950s (and to a lesser extent the 1960s and into the ’70s), many small and medium sized builder for example made their fortunes this way during the post war council house boom – along with those they employed, who would then buy new cars and household white goods etc. further boosting the economy, and of course govt. tax receipts.

    The vast majority of people in the wider society do not object to paying tax -even paying more tax if the extra is ring fenced for a specific need, unlike the majority of the posters in the vortex of opinion that is this site, what people object to is how their taxes are spent.

    • mancunius
      Posted April 11, 2018 at 4:19 pm | Permalink

      “if the extra is ring fenced for a specific need”
      Since that is the entire premise of your argument that people do not object to paying ‘more’ tax, and since there is not a single current instance – income tax, NIC, road tax etc. are all unhypothecated, your argument is self-contradicted.
      The ‘vast majority of people in the wider society’ with their lack of interest about what their net tax rate actually is, and where their taxes go, are cannon-fodder for the cynical Treasury.

      • jerry
        Posted April 12, 2018 at 6:37 am | Permalink

        @mancunius; But it is in the gift of Govt to hypothecate such taxes!

        • NickC
          Posted April 13, 2018 at 5:38 pm | Permalink

          Jerry, And it is in the gift of subsequent governments to un-hypothecate such taxes!

    • Narrow Shoulders
      Posted April 11, 2018 at 6:08 pm | Permalink

      Dipping into a space that offers different opinions to the ones you usually espouse and hear does not make your opinions any more correct Jerry.

      The Lib Dems offered tax rises in a previous manifesto and got nowhere. The Conservatives offered increased taxes in their latest manifesto and lost a large lead. John McDonnell offered to tax other people and became more popular.

      Few like taxes and most people think they could be spent better

      • jerry
        Posted April 12, 2018 at 12:02 pm | Permalink

        @NS; I could say the same about your views, just because I am in a minority on this site it doesn’t mean you or the majority here are (always) correct. Only this morning (12th April) a survey of BSA [1] on attitudes to NHS funding suggests that the majority would accept or approve of taxes increases and/or a separate hypothecated tax for the NHS.

        [1] by The Kings Fund

    • Adam
      Posted April 11, 2018 at 6:35 pm | Permalink

      Ring-fenced tax hampers a Chancellor’s flexibility to act in changing circumstances. The fence applies only if the Chancellor could not be trusted: If so, no such person should be elected.

      • jerry
        Posted April 12, 2018 at 6:37 am | Permalink

        @Adam; Nonsense.

        • libertarian
          Posted April 12, 2018 at 6:54 pm | Permalink

          Jerry

          Its not nonsense it is precisely and exactly the reason government gives for not hypothecating taxes .

          Adam is correct , it just shows a management failure on behalf of government , who spend money like a drunken sailor on shore leave

          • jerry
            Posted April 13, 2018 at 6:08 am | Permalink

            @libertarian; In your opinions Walter, only in your opinon. Anyway govt’s can and do hypothecate taxes, the apprenticeship levy, plastic bag tax and sugar tax [1] being three national examples, whilst the London CCZ is a govt mandated hypothecate local tax.

            [1] although that latter tax has been hypothecate to the wrong govt department!

          • NickC
            Posted April 13, 2018 at 5:42 pm | Permalink

            Jerry, Get a life! Most taxes are not hypothecated – not even NI – and never will be for exactly the reasons Adam and Libertarian state.

          • jerry
            Posted April 14, 2018 at 8:54 am | Permalink

            NickC, Get a clue! I have explained why both Adam and Walter are wrong. There is no reason why taxes can not be hypothecated. By your rational, nothing can or should be done differently, thus we should never have had Thatcherism, never mind Monetarism, & you would still be extolling the virtues of Keynesian economics…

    • NickC
      Posted April 12, 2018 at 9:29 am | Permalink

      Jerry, Your ideas worked so well in the USSR didn’t they?

      • jerry
        Posted April 12, 2018 at 12:12 pm | Permalink

        NickC, Whilst your ideas work well in the USA, don’t they….

        • Edward2
          Posted April 12, 2018 at 9:41 pm | Permalink

          Just compare standards of living and the freedoms each enjoy.
          You sure Jerry that Russia is better?

        • NickC
          Posted April 13, 2018 at 1:55 pm | Permalink

          Jerry, No one’s perfect but yes, indeed, they do work better in the USA.

          • jerry
            Posted April 13, 2018 at 3:23 pm | Permalink

            @NickC; Everyone in the old USSR had a job, everyone had access to medical care and drugs, can the same be said of the USA? As you said yourself, no one’s perfect but…

  2. Miss Brandreth-Jones
    Posted April 11, 2018 at 5:46 am | Permalink

    We seem to be penalised at every turn for working hard or collecting savings. Unfortunately the energy of those who still try will eventually wane and the others will have nothing to live off where taxes go to helping others. Income tax changes haven’t altered my wage in the slightest. In fact yet again for the 5th year running I am informed that the tax office have got it wrong and I owe them money.

    • Hope
      Posted April 11, 2018 at 3:36 pm | Permalink

      JR is this satire or a joke? Under the Tories we have been taxed more than the last Labour Govt and May currently engaging on fixing the U.K. To EU control without a voice on tax. Hammond has taxed everything he could, even if it means wrecking our economy as you pointed out in the blogs about Cars, energy, sin taxes, flights, and he would have hammered the self employed if not stopped etc. over 300 tax increases under Tories. Tories promised a community charge cap, 5.6 percent this year plus several add ons.

      Probably best not to talk about tax, your party lies with every word it utters.

      • APL
        Posted April 11, 2018 at 5:28 pm | Permalink

        “Under the Tories we have been taxed more than the last Labour Govt ”

        John can write in this detached manner because Hard working MPs have been fortunate enough to be able to bung themselves a £10,000 pa pay rise, thanks to the generosity of their adoring British public.

        Poor MPs, it was the last Parliament, largely constituted of the same MPs that sit in this Parliament, that made them take the extra cash.

        So there’s nothing these poor helpless, hapless MPs could do about it, see.

      • Lifelogic
        Posted April 11, 2018 at 8:34 pm | Permalink

        “Probably best not to talk about tax your party lies with every word it utters.”

        Indeed – The conservative party is the party of low taxation or it is nothing. Yet we have the highest tax levels for 40 years! Yet we have Hammond pretending to be another “low tax at heart” person.

        The voters are not complete idiots but Hammond alas clearly thinks they are but is himself.

        • APL
          Posted April 11, 2018 at 9:52 pm | Permalink

          Lifelogic: “The conservative party is the party of low taxation or it is nothing. ”

          It is nothing.

  3. duncan
    Posted April 11, 2018 at 5:52 am | Permalink

    Higher taxes are the price we must pay for the government’s cowardice regarding their refusal to reform public sector spending and their continual capitulation under public sector union threats of strike action

    For this PM it is politically advantageous to raise taxes and build up debt rather than incur damaging political headlines as a result of a dispute with the public sector.

    She is absolutely prepared to throw the private sector taxpayer under the wheels of the public sector juggernaut simply because she’s not guided by principle but by political expediency. Thatcher was the exact opposite. She understood that necessary reform would mean conflict with a vested interest fighting to protect its privileges and its institutional position

    We are in effect picking up the cost of Labour’s client state and my party’s refusal to dismantle it. Labour’s use of the public sector and other areas of state spending to design a system that promotes their party’s interests is a scam of immense proportions and yet the Tories sit idly by and pander to it

    Why my party can’t explain to the public the con-trick of Labour and how the taxpayer is conned into financing their political position is beyond me

    One can only hope that should we won the next GE that
    Tory MPs will see the error of their ways and despatch this PM back into the wilderness

    • getahead
      Posted April 11, 2018 at 6:34 pm | Permalink

      Or before the next election, I suggest. We need a Leaver P.M.

  4. Richard1
    Posted April 11, 2018 at 5:53 am | Permalink

    All absolutely right. But there’s unfortunately no sign that this is the direction of travel of Mrs May & Mr Hammond. Perhaps they are so consumed by Brexit that nothing remotely radical can be contemplated until after – ie now 2021. The best that can be said is Corbyn & McDonnell would be far far worse. 2021 is running v late up against the next election.

    • Hope
      Posted April 11, 2018 at 3:31 pm | Permalink

      No, Barnier demanding repression clause on tax, environment and food, i.e. He wants to prevent U.K. Becoming more competitive and fully aligned Including regulatory alignment, it means the worse of all worlds under disasterous May.

      So to summarize, £100 billion to talk about trade, ECJ applying after we leave, mass immigration to continue aft we leave, EU controlsterritorail waters and fishing stocks, regulatory alignment whether a deal or not and now a regression clause for tax, food and environment! Has our Tory govt lost the plot?

  5. Anonymous
    Posted April 11, 2018 at 6:06 am | Permalink

    I think we’re going to war with Russia. The pygmies seem determined to do it.

  6. Mark B
    Posted April 11, 2018 at 6:27 am | Permalink

    Good morning.

    They can also increase jobs by reducing Corporation Tax. This would also attract overseas companies to the UK.

    Alas, the UK Government is wedded to ‘Big Spend’ projects that do nothing more than waste money.

  7. oldtimer
    Posted April 11, 2018 at 6:38 am | Permalink

    Agreed. UK tax policy is based more on the politics of envy than revenue raising efficiency, on being too preoccupied with telling other people what they must or must not do than getting the most bang (tax revenues) for the buck (the direct and the opportunity cost). Fundamental tax reform probably has more potential than any other measure to transform the UK economy.

  8. Narrow Shoulders
    Posted April 11, 2018 at 6:52 am | Permalink

    Quite, and when will your government start to let me keep my child benefit which I will then spend into the economy?

    Why has your government increased the upper earnings limit for NI to negate the small increase in the higher rate tax threshold?

    Why has there never been any increase in the thresholds for the removal of the personal allowance at £100K or the top rate of tax at £150K?

    Could it be that PAYE serfs can not avoid paying these taxes but the ones you mention are voluntary?

    More people pay compulsory tax than voluntary taxes. How about concentrating savings on us?

    Maybe you could offset it by imposing compulsory revenue taxes on multinationals that pay few voluntary taxes in this country.

  9. APL
    Posted April 11, 2018 at 6:52 am | Permalink

    JR: “How lower taxes could help economic growth”

    A big fat jucy Tory lying carrot.

    Meanwhile taxes will go up and we’ll keep being beaten by inflation.

    “Theresa May, Donald Trump and Emmanuel Macron said those responsible should be “held to account”.

    So, now we see that it doesn’t matter what a Western leader says when he campaigns. His campaign promise is turned on its head and ‘no more foreign wars’ is transformed into ‘more foreign wars’.

    It’s the same old gang, the US, France and UK doing the dirty work of the Moslem brotherhood and Saudi Arabia.

    I suppose, that’s what comes of allowing Middle Eastern monarchs to buy your country.

  10. Fedupsoutherner
    Posted April 11, 2018 at 6:53 am | Permalink

    Why is it that this present Tory government don’t seem to be able to see the obvious no matter what the subject?

    • getahead
      Posted April 11, 2018 at 6:43 pm | Permalink

      I think they, the Tory government, certainly the two at the front, do not want to see the obvious.
      They call themselves Tories but in no way are they conservatives. Their actions betray them as socialists.

  11. Pete Else
    Posted April 11, 2018 at 7:00 am | Permalink

    The state does not want lower taxes. Politicians do not want lower taxes. They want more for the insiders and their friends whilst giving just enough back to prevent revolution. Taxation is never for the benefit of the taxed anymore than mugging is for the benefit of the mugged. The history of every government has been to progressively raise taxation until the people scream or the country collapses. Central banking fraud has allowed government to raise taxes on the future but spend today thereby not suffering the consequences of their theft immediately. This does not work forever. We see western politicians trying to divert attention from their criminality with ridiculous accusations and beating war drums just as all governments have througout history when the game nears it’s end. All this jabber about lowering taxation is just smoke and mirrors like all politicians theatrics.

    • libertarian
      Posted April 12, 2018 at 6:55 pm | Permalink

      Pete Else

      Nailed it. Thanks good post

  12. nhsgp
    Posted April 11, 2018 at 7:08 am | Permalink

    If this is the case then why has the government hiked Stamp Duties? Why does it persist with a 28% Capital Gains Tax rate on property? Why has it cut pension tax reliefs?

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

    It’s because you’ve hidden 10 trillion pounds of pension debts off the books.

    As a result you have to screw people.

    30% of taxes go on the debts

  13. Old Albion
    Posted April 11, 2018 at 7:23 am | Permalink

    I certainly agree Stamp duty is way too high. I recently found a new home I really fancied. I calculated the stamp duty on the sale price of my current home. It worked out at £20K !! That is an awful lot of money that I, as a retired person could use, but no, I have to give it to the treasury.

  14. Epikouros
    Posted April 11, 2018 at 7:37 am | Permalink

    The larger the state and the number of things that government is responsible for the greater is the need for that government to increase its revenue. To the most part that is done by the imposition of more taxes and borrowing(deferring tax until some unspecified date in the future or if specified when it becomes due usually then rolling it over). As the state’s size and responsibilities increases greater is the demand for taxes and borrowing. This makes tax gathering and borrowing with all its inherent adverse or incentive making consequences which you have named but a few a very complicated juggling act.

    It appears to me that the adverse far outnumber the incentive making consequences with the added disadvantage of resources being taken from those better equipped to make best use of them and then put in the hands of those who are inefficient and wasteful in their use. This situation cannot be sustained indefinitely. Better jugglers and juggling techniques can be applied but there comes a time when the limit of proficiency and number of objects that can be juggled will be reached. At that point the objects will no longer hang in the air but will fall farcically to the ground which will make us all laugh not with mirth but with anxiety. We will then realise the folly of having government that is too large, with too much power and responsibilities. Responsibilities and power that should have been left in the hands of those who they have been taken away from(unfortunately quite often willingly given).

  15. agricola
    Posted April 11, 2018 at 7:44 am | Permalink

    Reducing taxes for the individual encourages saving, improves the chances of buying a house, allows more spending, but most important is the psychological effect of removing the burden of debt. It gives rise to positive thinking.

    For business a marked reduction in tax would encourage investment in the very latest technology, increasing productivity and competitiveness. It is an incentive for overseas business to set up in the UK.

    The key is to stop government spending which it does with consummate ease on vanity project but fails to do where it is blatantly necessary.

  16. Posted April 11, 2018 at 7:44 am | Permalink

    How long has a re-write of our taxation system been on the cards? – Far too long.

    Instead of focusing on others, it is time the British people came first, and that requires a tax system that is worthy of our aspirations, that doesn’t rob us blind – that also means that everybody contributes, but with so many now living on benefits, the whole thing becomes unfair….
    I still would prefer a purchase tax, that taxes more on the non-essential items – then more would pay – There are a thousand ways to improve taxation, and it’s time it happened.

    • Adam
      Posted April 11, 2018 at 6:40 pm | Permalink

      UK Tax is needlessly complex in the extreme.

  17. Lifelogic
    Posted April 11, 2018 at 7:57 am | Permalink

    Indeed taxes are far, far too high and far too complicated (which is another inconvenience and cost on top). The personal allowance has gone up by £350 (worth just £70 to most), but council tax alone is going up by perhaps circa £100 and there is a 20% increase in insurance premium tax (to push up all your insurance bills up by typically £30) and NI has increased too. Renters have higher rents due to Hammond’s totally moronic taxes on profits not even made (by taxing interest twice) again not sustainable. His 3% extra stamp duty alone might push up some rents by about 3% even without this.

    People earning over £50K lose child benefits and people earning over £100K lose their personal allowance. This is hardly cutting taxes! Hammond is a total menace he is killing the cow he is trying to milk.

    Banks that pay circa 0.25% on deposits and charge circa 5% – 30%+ on loans hardly encourage the economy, investment and business activity either.

    The absurd 28% CGT rates (and without even indexation against inflation) is really just asset theft, it is also not sustainable and does huge damage to the economy and house provision. As does the absurd over regulation of the banks.

    May really needs to get a sensible chancellor who understands that taxes and tax complexity are far, far to high and that most of government expenditure is hugely wasteful and often actually does positive harm. The government is the problem not the solution. Government “services” are generally fairly dreadful too despite this huge expenditure.

  18. Eh?
    Posted April 11, 2018 at 8:03 am | Permalink

    The government says it wants people to save … their old age …… It says it wants to encourage more people to set up their own businesses… to venture their money to help establish and expand other people’s businesses.”
    Really?!
    I want the government to save my tax money and with it to venture capital to make profits for use in my old age. Otherwise, I am likely to feel the government is a con-artist, a thief, and at best a bad accountant

  19. Andy
    Posted April 11, 2018 at 8:06 am | Permalink

    Stamp Duty is actually a vital tax which we need to use to encourage decent behaviour in the housing market. We do not have enough houses for people to own more than one of them. So we need to tax those who have multiple homes to force them to sell. We must stop pensioners using additional properties as their own little retirement fund – at the expense of younger families who need a place to live.

    • stred
      Posted April 11, 2018 at 3:24 pm | Permalink

      Truly, a Cameron Conservative. Why not pop into Central Office and see if there are any vacancies.

    • Edward2
      Posted April 11, 2018 at 3:37 pm | Permalink

      Odd how people like you always want to ban others from doing things.
      What’s next Andy?
      Bans on owning more than one car or bike or even one wristwatch?

      • Andy
        Posted April 11, 2018 at 4:14 pm | Permalink

        I didn’t say we should ban anything. I said we should tax it to discourage behaviour. I agree with Mr Redwood on this – tax can be used to change behaviour.

        I would favour drugs being legalised and taxed too. Why allow all that money to go to gangs and criminals when it could be going to the exchequer?

        • Narrow Shoulders
          Posted April 11, 2018 at 6:12 pm | Permalink

          I am with you on the drugs legalisation and taxing Andy.

          But only to reduce taxation (and policing costs) not as an increased source of revenue.

        • Edward2
          Posted April 11, 2018 at 6:36 pm | Permalink

          You said…We must stop…etc
          Specifically pensioners and their right to own more than one property.
          If you stop them by law or by taxing them so punitive ly they cannot do that, then effectively you are banning them.

        • Anonymous
          Posted April 11, 2018 at 8:36 pm | Permalink

          Always in the wrong, Andy.

          • Stred
            Posted April 12, 2018 at 8:17 am | Permalink

            Skunk is causing a crisis in mental health, especially in the young. A large proportion of school children have used it. Aggressive behaviour and irrationality are symptoms. Perhaps why so many vote for banning everything except drugs.

  20. Ian wragg
    Posted April 11, 2018 at 8:13 am | Permalink

    No matter how much you reduce direct taxation we feel no benefit due to 6% rise in Council Tax and above inflation rises in fares and power bills. All inspired by government policy.
    We are one of the highest taxed countries in the world and have lousy public services provided by an overbearing and overpaid public sector.

  21. Prigger
    Posted April 11, 2018 at 8:19 am | Permalink

    The government always asks applause for not stealing quite so much money from people in tax. ..and “the government has used higher taxes to stop or reduce activities that it does not approve” There are many taxes I wish not to give government. I do not approve of their use. I should have an option NOT to pay certain taxes.On the whole I do not approve of military action outside the UK and outside our territorial waters.
    I do not wish my tax money being exported by government going looking for trouble. I blame the schools here.

  22. Ancestry tracer
    Posted April 11, 2018 at 8:29 am | Permalink

    Government should not ask what we can do for it but what it can do for us. What has the government produced for us? Will it increase its productivity? How, in what way? The name of the father is not mentioned on the Government’s birth certificate. Is there any significance in that?

  23. Lifelogic
    Posted April 11, 2018 at 8:30 am | Permalink

    Hammond cannot really reinvent himself as a low tax chancellor as he tried to in his Telegraph article recently. Just how stupid does he thing we are? He has just been a continuation of the appalling tax borrow and piss down the drain Osborne.

    As Milton Friedman rightly put it many years ago (though government spending (largely waste) in the UK is now circa 46% of GDP, plus we have all the cost of absurd complexity, expensive greencrap and silly regulations on top:-

    “I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible. The reason I am is because I believe the big problem is not taxes, the big problem is spending. The question is, “How do you hold down government spending?” Government spending now amounts to close to 40% of national income not counting indirect spending through regulation and the like.

    If you include that, you get up to roughly half. The real danger we face is that number will creep up and up and up.

    The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes.” –Milton Friedman

    Also May and Hammond have not grasped this simply point! They still foolishly think more government waste, more taxes and more daft regulations are the answer!

    • Lifelogic
      Posted April 11, 2018 at 2:25 pm | Permalink

      So with the 46% of actual government expenditure plus the addition over regulation and tax complexity and expensive green crap energy taxation you get up to perhaps 60%+ in the UK.

      All for dire & appalling services to.

  24. Leslie Singleton
    Posted April 11, 2018 at 8:36 am | Permalink

    Dear John–The marginal prospective new businessman looks at what he has to do these days working for the Government, for which, rather than get paid as one might expect, he is taxed left right and centre and has to take on very significant responsibilities (too many and much to list) and, as like as not, he says, Thanks but no thanks–and that’s before worrying about making his new business work, assuming he can find the time.

  25. mickc
    Posted April 11, 2018 at 8:39 am | Permalink

    Well, best of luck with this one!
    May is much more interested in sucking up to Trump and getting us into a war which is not our business than she is in benefiting the British people.

  26. Bachelor Boy
    Posted April 11, 2018 at 8:53 am | Permalink

    I am not interested in the slightest what the government favours in my behaviour, what it wishes to change. I did not marry it at any time, unless I was so drunk I can’t remember.

  27. acorn
    Posted April 11, 2018 at 8:56 am | Permalink

    Left, Right or Centre politics, Brexit or no Brexit; the following identity is always true in a fiat currency economy. Take your pick of which element to change to get the UK economy out of terminal austerity.

    GDP = C + I + G + X – M

    C = consumption of consumables
    I = investment in non-consumables (stocks, bonds, houses, coffee pots, etc.)
    G = government spending of all types
    X = exports
    M = imports

    Or stated differently;
    GDP = C + S + T

    C = consumption of consumables
    S = savings
    T = taxes

    From there we can conclude:
    C + S + T = GDP = C+ I + G + (X – M)

    If rearranged we can see that these three primary sectors must net to zero:
    (I – S) + (G – T) + (X – M) = 0

    (I – S) = private sector balance
    (G – T) = public sector balance
    (X – M) = foreign sector balance

    Notice first that all accounts are partitioned into the three primary sectors of the economy: the public (domestic governmental), the private (domestic nongovernmental), and the foreign (everyone else). Another way to look at it is: (G-T) = (M-X) + (S-I), which says quite literally that the portion of our national debt that has not gone to covering our foreign-trade deficit is in our money supply, i.e., in the pockets, purses, and bank accounts of the nation’s private sector. (Paraphrased and edited from Wigwam blog at Shadowproof)

    • libertarian
      Posted April 11, 2018 at 8:08 pm | Permalink

      acorn

      The economy isn’t in austerity….. thats a made up trope.

      The government has over borrowed and is living beyond its means, and wasting vast amounts of money to boot

    • Edward2
      Posted April 12, 2018 at 9:11 am | Permalink

      Terminal austerity you say acorn
      State spending is up every year for decades.
      State spending was 340 billion in 2000
      By 2020 it will be over 800 billion.
      Cuts austerity etc are just myths.

  28. Posted April 11, 2018 at 9:01 am | Permalink

    ”…..wouldn’t it be a good idea if it did more the other way, identifying how cutting taxes might stimulate more activity?”

    It certainly would! And wouldn’t it be a good idea to make our host Chancellor of the Exchequer? I’d vote for him! Who wouldn’t?

  29. Bob
    Posted April 11, 2018 at 9:08 am | Permalink

    The tax free allowance should be the same as the minimum wage? Otherwise, the Chancellor can continually raise the minimum wage without sharing the burden of providing it, in fact on the contrary, the Chancellor is positively rewarded with more tax each time he hikes the minimum wage.

    Who will guarantee businesses a minimum profit margin?
    And what do you do when an employees whose work output doesn’t justify the minimum wage?

  30. NickC
    Posted April 11, 2018 at 9:25 am | Permalink

    Statists love high taxes because the income gives them more power. Statists exist in all the main parties, but particularly Labour and LibDems both of which have convinced themselves that spending other people’s money somehow makes them generous and compassionate.

  31. Lifelogic
    Posted April 11, 2018 at 9:33 am | Permalink

    It is not just marginal projects that cannot get funded at sensible rates. The misdirected banking regulations are doing huge damage. Property development funding is not that easy to find at sensible rates and had endless strings attached too. Second charge lending also very hard to find at all (even at high rates).

    The Basel rules, the slotting rules and Hammond’s idiotic double taxation of interest are doing huge damage. I have been put off some development deals due to the hassle involved with the banks just not being worth it. We also have all the new stress testing rules on buy to lets. Does this chancellor want more homes or not?

  32. formula57
    Posted April 11, 2018 at 9:41 am | Permalink

    “[The Government] does recognize that taxing work too much is a bad idea…” – but only after Chancellor Hammond’s budget proposal to increase taxes on the self-employed was reversed, thanks to the intervention of yourself and others.

    We could do now with having a government that is on the side of the people please.

  33. Ed Mahony
    Posted April 11, 2018 at 10:16 am | Permalink

    Be great to see lower taxes (so people become more self-reliant) but lowering taxes can also be over-hyped.

    Sweden, Denmark + Norway have relatively high taxation and relatively high GDP per capita.

    Studies show, people generally will pay 49% tax, but really get bothered at 50% +. It’s psychological. (I’d like to see tax way lower than 49% but not for economic reasons but to get the poor being more self-reliant).

    Also, lots of rich have far more money than is good for them! Scientific studies v. clear about this. In fact, common experience tells us money can destroy people – individuals, relationships with others, enjoying life in general (both pleasure + culture). Obsession of money can lead to life being miserable for others at work as well.

    Somehow we need to persuade the poor to work harder / more self-reliant (work ethic) and get the rich to be more generous and creative with wealth 1.giving to their families if struggling 2. giving to decent charities 3. giving to patriotic projects like building beautiful civic buildings 4. spending more time on enjoying life (pleasure + culture + developing themselves). Carry on working if they want but not just for money (work ethic).

    • Ed Mahony
      Posted April 11, 2018 at 10:20 am | Permalink

      Also Charles Dickens Christmas Carol is an exaggeration, but there is much truth about Scrooge. Scrooge exists in all of us. And it destroys individuals, families, communities and the sense that work is something good and positive.

      And, yes, there are many lazy poor as well. They need to pull their finger out as well and become more self-reliant. And even though the real poverty of Dickens’ Victorian England doesn’t really exist here, it does exist in other parts of the world.

    • Ed Mahony
      Posted April 11, 2018 at 10:22 am | Permalink

      ‘but lowering taxes can also be over-hyped’

      – i think we need to be pragmatic about it. When it best suits a country at a particular time in its economic cycle and question, even, the nature of the economic cycle (boom + bust can’t be the way forward, again and again – can’t we figure out a way of just steady growth over the long to very long-term?).

    • Ed Mahony
      Posted April 11, 2018 at 10:32 am | Permalink

      ‘giving to patriotic projects like building beautiful civic buildings’

      – where are the beautiful buildings bequeathed to us by the Victorians? They had loads of wealth. And built lots of Satanic Mills (which you can still see the relics of to a degree) But where are the Florences and Venices of Victorian England?

      I hate socialism and love industry, business + and people doing well. Money can brings lots of good things if acquired fairly, spent on oneself in an interesting way, and given away to others, who really need it, generously and creatively. But there are lots of rich who are hoarding their wealth like dragons hoarding gold (not forgetting how greed – as opposed to work ethic – plays a part in our society, and how greed ruins people, individuals, communities in general).

      It’s important to say all this, because a few years Boris Johnson said, ‘Greed is good.’ It isn’t. It never is. It destroys lives. But work ethic is good.

      • Ed Mahony
        Posted April 11, 2018 at 10:43 am | Permalink

        ‘Boris Johnson said, ‘Greed is good.’ It isn’t. It never is. It destroys lives. But work ethic is good’

        – And I am not being Utopian. Look at the great Quaker business people who did so well in this country, basing their great business enterprises not on greed but on work ethic. And they knew far more about business than Boris Johnson (has Boris ever done a business people?).

        And I’m NOT pointing the finger at any individual regarding greed / hoarding. As I can be the exact same. But we – as a country – really need to re-asses economic policies and the values that underpin them. Politicians have a role to play in that (as do people in business, religion, the arts and education). Ironically, doing this would make people much happier (which would in turn improve productivity, reduce levels of depression and ill-health and dependency on the NHS and so on, improve family life and so on, make our economy more steady growth instead of boom + bust etc).

    • stred
      Posted April 11, 2018 at 4:52 pm | Permalink

      My bird recently took an extra job and doubled her pay. She was taxed at 40%. She filled in the tax online in January and paid £20k. Then they sent it all back and she asked why. Yesterday she received a letter telling her the removal of her allowance meant she is now paying 50% over £100k. and please send an extra £2k. She has to get up at 4am and gets home at 9pm. Yesterday, the flight was cancelled and eventually it was diverted. I had to drive 220 miles to pick her up and we got home at midnight. She also works weekends. Get bothered is a good description- leading to can’t be bothered. By the way, Sweden decided to have no Inheritance Tax and make it worth while for successful people to live there.

  34. bigneil
    Posted April 11, 2018 at 10:20 am | Permalink

    CUT taxes?? Where would the cash come from for ever increasingly costly projects like the HS2? How on earth would govt get the cash to throw away on foreign aid ( that never seems to cure ANY of the problems, because they just want MORE next year ). The EU has demanded – and TM has agreed to – that we take in God knows how many more from the 3rd world, who are going to do nothing positive or constructive. THEIR lives here come from our taxes. Their housing, their benefits, their kids schooling, their healthcare and all their translators. ALL from our taxes.
    Even Paul Daniels would be amazed at how this is supposed to work.

    and Off Topic – You sometimes put up a request for posters not to send in multiple posts because of the workload – understandable – but recently one person had many posts on the same day. I stopped counting at 20. Another one seemed to be similar. Relatives? Friends?

    • Peter
      Posted April 11, 2018 at 6:46 pm | Permalink

      You should realise this site is an echo chamber. Multiple posts might support the the argument Mr. Redwood is trying to put forward.

      Posts that do not do so often get held in moderation so as not to influence the mood on here; then released when people have moved on to the next topic.

      An Aunt Sally figure is allowed to post Remain stuff as it encourages people to knock down the simplistic posts standpoint put forward.

      Certain topics are taboo on here and get deleted. Israel, banksters and diversity are examples of this.

  35. ChrisS
    Posted April 11, 2018 at 10:25 am | Permalink

    We have discussed this subject many times before here and your thoughts are exactly in line with my own and a clear majority posting here.

    The problem is that Hammond, like his discredited predecessor, simply hasn’t been listening. At least Hammond supposedly has extensive experience in business but why does he not see the logic of your argument ?

    There is no doubt that he wants to raise more taxes and the position over CGT could not be clearer : a lower rate or a return to taper relief, would certainly yield a lot more cash and quickly. Just cutting the rate of CGT would be seen as encouraging get-rich-quick schemes whereas he could break the log jam in the investment property market by reintroducing taper relief using the argument that he wants to encourage longer term investment. I have several properties I would like to dispose of if it were not for the penal rates of CGT.

    Could Hammond’s failure to change CGT be a classic case of “Yes Minister” syndrome where the Chancellor can’t or won’t challenge the entrenched lib/lab views of the civil service ?

    There appears to be nobody else in the present cabinet, who has much experience in business or understands simple economics. This particularly applies to the current PM and her predecessor.

    Quite frankly, I can see no difference between present economic policies and those of the dreadful Con/Libdem coalition.

    That is a terrible indictment of a Conservative Government

    Until we get a chancellor who understands business properly we will make no progress.

    • stred
      Posted April 11, 2018 at 4:56 pm | Permalink

      Even the high tax French have taper relief.

  36. Denis Cooper
    Posted April 11, 2018 at 10:34 am | Permalink

    Also off-topic, JR, would our government really be prepared to go along with this?

    https://www.telegraph.co.uk/politics/2018/04/10/michel-barnier-demands-britain-signs-brexit-non-regression-clause/

    “Michel Barnier … has demanded Britain signs a “non-regression clause” to guarantee it stays shackled by Brussels red tape after Brexit.

    Signing up to the clause would convince the EU-27 governments to support a future trade deal by reassuring them that Britain would not undercut EU standards on tax, health and the environment to poach investments, said Mr Barnier.”

    The original text of his speech, rather than the Telegraph’s gloss, is here:

    http://europa.eu/rapid/press-release_SPEECH-18-3162_en.htm

    “Is Brexit a threat to the future of the EU’s environment?”

    Here I would point out yet again that only about 12% of our GDP and only about 6% of our businesses are involved in exports to the rest of the EU, and yet the EU has expected – and UK politicians have in the past supinely agreed – that the whole of our country and all of its economy and every person and business shall be subject to paramount EU laws.

    As I have argued before:

    http://johnredwoodsdiary.com/2018/03/19/governing-ourselves/#comment-925726

    we do not extend that kind of privilege to any other of our 160-odd non-EU/EAA trading partners around the world. For example, we do not accept that because we want to export products to the United States we will agree to run the whole of our country according to US law in its entirety, as adjudicated by the US Supreme Court.

    And of course this fundamentally nonsensical proposition that if some of us in the UK want to be able to sell our stuff easily to the rest of the EU then all of us must submit to EU laws, about half of all our new laws, is at the root of the supposedly intractable, but in reality hypocritically fabricated, problem of the Irish land border.

    • Posted April 11, 2018 at 4:37 pm | Permalink

      I have wondered for some time if the Capital Gains Tax rate is 28% in order to harmonize it with the CGT rate in the rest of the European Union.

    • GY
      Posted April 11, 2018 at 5:00 pm | Permalink

      May will agree to it as she has already told them that she doesn’t want us to have any economic advantages over the EU after BRINO. Madness.

  37. Andy
    Posted April 11, 2018 at 10:36 am | Permalink

    Today the CBI – people who (unlike the Brexiteers) actually understand business – make clear that the cost of ditching EU regulations massively outweighs any possible benefits of your Brexit.

    The CBI outlines, very clearly, the industries your Brexit may destroy. It includes all the important ones. The areas which may benefit from your Brexit are all small and relatively insignificant. To reach this conclusions they have spoken to actual business people. The Tory hard-right Brexit pensioners speak only to each other.

    Evidence of the destruction the Tory hard-right pensioners are doing becomes clearer by the day. But like flawed generals the pensioners ignore the evidence because they know best. Brexit is the political equivalent of the Charge of the Light Brigade or the Battle of the Somme.

    The generals will get the place in history they seek. But it will not be for improving our country. Guy Fawkes has a place in history too

    • Posted April 11, 2018 at 4:02 pm | Permalink

      Don’t be a dope any more than you can help, Andy. At a guess, I would say that many of us here are around the same age as you. We’re not all pensioners. Some of us have the interests of our children at heart, as well as that of our country. Two ideals that you may not have quite grasped yet.

      As for the rest of your rant – don’t you think that the ones who shout loudest against Brexit are the ones with vested interests?

    • stred
      Posted April 11, 2018 at 5:04 pm | Permalink

      Of course, big manufacturing businesses would like to stick to EU regulations because they sell a lot to Europe. They would be mad not to make their products not comply if they want to sell them there. They would also be mad not to manufacture to comply with US regulations to sell there, as they already do. All they have to do is keep doing the same and declare it. Big business also likes complicated EU regulation for products manufactured by small competitors, because it keeps them out. If you are taken in by their scheming, you are naive.

    • GY
      Posted April 11, 2018 at 5:04 pm | Permalink

      Most British businesses do not export so are burdened with excessive EU regulation. Larger companies want to maintain status quo as they can cope with unwanted bureaucracy. CBI receives EU funding – did it mention this? None of their scare stories have come to pass.

    • Glenn Vaughan
      Posted April 11, 2018 at 5:06 pm | Permalink

      Andy – How does it feel to be sweltering under the heat of oppression – from pensioners!??

    • Edward2
      Posted April 11, 2018 at 6:40 pm | Permalink

      One minute Andy you are all supportive for those less fortunate in life.
      The poor the young the small business person.
      Now you are supporting multi nationals and big PLC’s
      The ones you recently berated for failing to pay their “fair share” of tax.
      Odd logic

    • libertarian
      Posted April 11, 2018 at 8:15 pm | Permalink

      Andy

      As you are successful business man ( snigger) I would expect you to know that there are 5.7 million businesses in the UK. The CBI has just 250 members ( they claim more as one o0f their members the NFU has 50k members of their own) The CBI represents big multinationals , you know the rent seekers who demand that the regulations are there to discourage innovative smaller businesses from taking market share,

      99.7% of all businesses are SME’s , they provide the lions share of jobs and GDP….

      Sacked your staff yet ….

  38. Adam
    Posted April 11, 2018 at 10:41 am | Permalink

    Taxing good work is backward, & counter-incentive.

    Tax should be applied to high consumption, waste, criminality & discouragement of other bad things.

  39. zorro
    Posted April 11, 2018 at 11:00 am | Permalink

    Indeed, why has this supposedly Tory government done such silly counterproductive and counterintuitive things? Answers on a postcard, or perhaps T May will answer. Although, you might wait some time as it took her nine months of dithering to trigger A50!!

    zorro

  40. Posted April 11, 2018 at 11:23 am | Permalink

    Perhaps they could try spending less and doing what they do more efficiently.
    When I look at the new Public Appointments which are listed each week on “ConservativeHome”, one wonders what happened to the promise to reduce the number of quangos. We need cuts, not of the austerity type where you cut back on funding everywhere, but cuts to the unnecessary matters in which the government gets involved.

    Do we need so much management? Why do we need a “NHS Counter-Fraud Authority”? We have the NHS trusts with their boards and highly paid management structure. Surely the Trust should look after issues like this themselves, that’s what they are paid for like the board of any public company. Or are we saying that they can’t be trusted?

  41. What's happening?
    Posted April 11, 2018 at 11:35 am | Permalink

    When you have by our taxes, our soldiers sent to places they cannot pronounce nor wish to, and arrive back, the ones who survive, still unable to pronounce those names, then having established democratic freedom there, we are inundated with refugees from this new land of freedom,opportunity and, the government taxes us again and again to house them, well I’m looking into anarcho-libertarianism, there must be a way of getting shut of government, there has to be, there just has to be!

  42. Ron Olden
    Posted April 11, 2018 at 11:51 am | Permalink

    TODAY’s OUTPUT FIGURES

    I forecast a couple of weeks ago here that inmates of the Remainiac Mental Hospital and Lies Factory would celebrate what would be bound to be slightly a lower output figures than expected for the second half of the first quarter, and blame it on Brexit.

    ‘Experts’ (needless to say), are, as ever, taken by surprise.

    I wonder how I guessed the numbers would drop? Could it be that I looked out of the window?

    I also arrived unassisted at the astonishing revelation that if cars and lorries are on the road less because of the weather, and therefore not buying so much petrol, and it’s harder to deliver petrol and oil in any case, oil refineries are likely to refine less oil.

    I even managed to work out that if the main North Sea Oil pipeline has been shut down owing a crack being discovered in it, North Sea Oil output is likely to gave dropped.

    Manufacturing is still 2.5% up on a year earlier anyway and after March will speed up again.

    How was manufacturing doing in the years before the Leave Vote? The anwer is that it was either static or falling. It only started rocketing immediately after the Leave Vote and the consequential fall in the overvalued Pound.

  43. Peter Martin
    Posted April 11, 2018 at 11:58 am | Permalink

    The Keynesian concept is that the economy can be slowed down by cutting govt spending or raising taxes or both. On the other hand it can be boosted by raising Govt spending or reducing the levels of taxation or both.

    Just which ‘speed’ option has to depend on the state of the economy at the time. Is inflation likely to be a bigger worry than high unemployment?

    The question of tax and spending levels is largely a matter of political inclination.

  44. NickC
    Posted April 11, 2018 at 12:25 pm | Permalink

    Please . . . no war against Syria. We have been deceived twice – over Iraq and Libya – not again. We have no proof that the reported chemical attack in Douma was carried out by the Syrian government; no proof even that an attack was carried out at all. Mrs May unerringly does the wrong thing by mistake where Tony Blair did it intentionally, but the result will be the same.

    • stred
      Posted April 11, 2018 at 3:17 pm | Permalink

      Given a choice between being on the end of a bomb filled with chlorine and one filled with high explosive, I know which I would choose. A wet towel work with chlorine, for a while. How many high explosive bombs have we and the US dropped on the wrong target? Just a thought for all those doing moral repugnance and using words like animals and must do something.

    • Andy
      Posted April 11, 2018 at 3:39 pm | Permalink

      Nobody can be allowed to gas children. Missile strikes now to take out as much of Syria’s military capability as possible and, while we’re at it, let’s blow up Assad’s palace. If he’s in it at the time – good.

      • GY
        Posted April 11, 2018 at 5:10 pm | Permalink

        …. warmonger. Deposing benign dictators in Moslem countries has not worked out well. Independent proof is required before any action should be considered. Attack Syria and you are attacking Russia.

      • stred
        Posted April 11, 2018 at 5:18 pm | Permalink

        Guido and comments are showing Shiite and Christian children who were being held hostage in a cage, along with thousands of others in the area where the chlorine was used. Others say that a chemical factory run by rebels was found and that all the ‘moderates’ are linked to the Islamist extreme groups. The whole place is a horrific can of worms where the truth is hard to discover.

        words left out ed Better not to make holes in the can. World wars happen by mistake.

    • Norman
      Posted April 11, 2018 at 5:07 pm | Permalink

      Looking at this from afar (so to speak), the bellicose rhetoric of the past few weeks seems utterly mad. Russia must be understood, in the same way you deal with a wily neighbour – you have to understand their psyche, which is a product of their history and geography. Notwithstanding the horrors of the tragic civil war in Syria – and from what I know, there are no paragons of virtue on either side – the way the West has handled this situation is a recipe for more death and destruction. Of one thing we may be sure: the Russians will never respond to school playground tactics. Is it too much to expect that our government should be firm, resolute and just – able to be reasonable, but to ably defend its interests if all else fails?

  45. Ron Olden
    Posted April 11, 2018 at 12:54 pm | Permalink

    There’s no excuse for the 45% Top Rate of Income Tax..

    If it were cut to 40% it would make administration and compliance cheaper, and would raise more money, just as happened when it was cut from 50% to 45% by George Osborne.

    The very high marginal rates which arise owing to the withdrawal of the Personal Allowance at Higher Income levels are also highly damaging.

    It would be better to allow people to keep their allowances and simply lose their Higher Rate Pension Tax Reliefs on Pension Contributions.

    I’d also be astonished if cutting the Inheritance Tax Rate (IHT) from 40% to 28% (the same level as the top rate of Capital Gains Tax), didn’t raise significantly more money as well.

    In fact inheritances would be best (and fairer) charged as a single Capital Gain in the hands of the recipient of the bequest. Not as a huge imposition on the total Estate.

    Apart from that, the worst Marginal Tax rates on earnings, are on people who haven’t yet migrated Universal Credit but if it had reached their locality in full would be able to do so.

    Some of them are still better off not working. I person on ESA, with limited capacity for work for example, but who’s health might be permit him to do few hours work a week on minimum wage. loses his benefit pound for pound for every pound he earns.

    Given that it costs money to go out to work, he’s actually worse off trying to work than not working.

    But the Universal Credit withdrawal rates also need to be cut to no higher than the top rate of Income Tax, and the earnings disregard needs to be raised so that people with more children or dependants of some other sort can earn more without losing their UC.

    Why would people go out out to work extra hours if the (net) proceeds and satisfaction they they get from doing so, doesn’t cover the value to them (monetary and otherwise) of their lost time?

    I wouldn’t.

  46. Chris
    Posted April 11, 2018 at 12:56 pm | Permalink

    Hammond and May need a lesson from President Trump. I fear, however, they are so blinkered, and, quite frankly, not very bright (nor do do not seem to possess the wisdom/entrepreneurial spirit needed for inspired leadership) that your words will fall on deaf ears, Mr Redwood.

    • Andy
      Posted April 11, 2018 at 4:21 pm | Permalink

      We’ll see the real impacts of Trump’s tax cuts in about 15 years – when the next generation has to pay off the bill.

      • Edward2
        Posted April 11, 2018 at 7:12 pm | Permalink

        Or improved growth creates better tax revenues and less welfare costs from greater numbers in work and that reduces the level of Govt debt.
        Thought you were a keynesian kind of guy Andy.

  47. LucasH
    Posted April 11, 2018 at 1:37 pm | Permalink

    Yes..and so what? and what’s next? That’s why we have politicians elected to bring about the necessary changes we need to progress the economy and wellbeing of our people / there’s also another way of looking at things..’the more money revenue rakes in the more for government to waste’..
    Anyway theres little point in whinging to the people..if taxation in any area has reached the point of diminishing returns because of stupid CGT and Stamp Duty rates for instance then prevail upon the Chancellor to change things.,that’s your job..you sit not a million miles away from him..

  48. Rien Huizer
    Posted April 11, 2018 at 1:47 pm | Permalink

    You need taxes to fund the government. With the current growth scenario, revenue growth will outstrip expenditure growth (infrastructure backlog, NHS, defense misspending corrections). UK taxes are not very high (compared to EU and US (all inclusive, fed, state, local) so scope for Laffer curve effects very limited. You may like to promise tax reductions, but if you want to govern, you cannot afford the promise..

  49. John
    Posted April 11, 2018 at 1:57 pm | Permalink

    The reduction is pension tax relief for high earners is also a tax on entrepreneurship.

    Previously the pension rules always allowed for the scenario of an individual who spent decades building up a business, investing in that business rather than their own pension who then comes good in the end. They then end up over 50 with a large income and no pension so they need to put large sums in to catch up.

    Todays Conservative government thinks these individuals should be limited to paying in a maximum of £10,000 a year.

    I think if they are not careful these individuals may start offshoring their earnings in stead of playing by the rules and getting hammered.

  50. Denis Cooper
    Posted April 11, 2018 at 2:15 pm | Permalink

    Off-topic, again:

    https://openeurope.org.uk/daily-shakeup/labour-shadow-trade-secretary-rubbishes-party-six-brexit-tests/#section-1

    “The EU’s chief Brexit negotiator Michel Barnier yesterday told Sueddeutsche Zeitung that “Norway Plus,” which would see the UK remain in the EU single market and customs union after Brexit, “is the only option that allows for frictionless trade without any checks [at the borders]. With all other scenarios, there will be checks.””

    Why? It is a typically baseless assertion that there is no other conceivable scenario which would avoid the need for new checks on goods as they cross the borders.

    Our present laws implementing the EU treaties and laws, in particular those parts of the EU acquis which relate to the EU Single Market and Customs Union, are deemed to provide adequate reassurance to the other EU countries that there is little need to check our exports as they cross the borders.

    The true foundation of the “frictionless” trade is that our trading partners accept we have passed into our law, and will conscientiously enforce, satisfactory domestic measures to render it unnecessary for them to routinely intercept our exported goods at the border so they can be checked before being allowed to enter.

    Why then should it be impossible to design alternative UK laws, UK laws not based on the EU treaties and laws and without such an unnecessarily wide reach beyond mere trade, which would provide those countries with an equivalent level of reassurance that they will still not need to check our exports even after we have left the EU?

    Is that because any EU member state which dares to avail itself of a withdrawal clause written into the treaties by agreement of all member states must henceforth be treated by the EU as an untrustworthy counterparty, maybe even a kind of pariah state?

  51. Peter
    Posted April 11, 2018 at 3:17 pm | Permalink

    Inheritance tax is now being used by British governments, of both parties, to rob the prudent once they are in their grave.

    Such an unjust tax will only encourage people to hide assets and I applaud those with the foresight to do this.

    • Andy
      Posted April 11, 2018 at 4:22 pm | Permalink

      By prudent you mean fortunate. If you are rich you pay more – it is a simple fairness.

      • Peter
        Posted April 11, 2018 at 6:52 pm | Permalink

        Except it is not the rich who pay inheritance tax. They have all their assets protected by lawyers.

        Robbing Peter to pay Paul was never a great idea. A charter for the feckless. In the hope the feckless will vote you into power.

        Trouble is the prudent will not put up with this for very long.

      • ChrisS
        Posted April 11, 2018 at 8:07 pm | Permalink

        Utter rubbish

        Those that are better-off pay a hugely disproportionate percentage of the overall tax take.

        The Institute for Fiscal Studies shows that about 90% of income tax is paid by the 50% of taxpayers with the highest incomes, while more than a quarter is paid by the richest 1%.

        By contrast, 40% of the population don’t have incomes high enough to pay income tax at all since personal allowances were almost doubled since 2009. ( An unwise LibDem policy embraced over-enthusiastically by the Conservatives )

        How can this hugely disproportionate tax burden possible be justified ?

        (source : http://www.bbc.co.uk/news/uk-politics-39641222)

      • Anarcho-Libertarian
        Posted April 11, 2018 at 8:42 pm | Permalink

        Why is it fair to pay more tax if you’re rich? You don’t pay more for a beer at the pub because you have had a good overtime week!

      • Anonymous
        Posted April 11, 2018 at 8:44 pm | Permalink

        Wrong yet again.

        Always wrong, Andy.

      • Edward2
        Posted April 11, 2018 at 9:37 pm | Permalink

        The rich do pay more Andy
        You mean even more.

      • fedupsoutherner
        Posted April 11, 2018 at 9:56 pm | Permalink

        Andy, you are so short sighted. People are not always rich because of birth right but due to very hard work sometimes risking everything they own to make a success of their businesses. We know people who have put everything on the line to start up a business and make it successful. They have worked every hour God sent and forgone holidays and weekends for years. Why should they be expected to pay shed loads of tax? They are making sure they are independent in their old age. What’s wrong with that? You go on about pensioners being a burden but seem to bear a grudge when they are able to fund themselves in their old age due to hard work.

  52. ian
    Posted April 11, 2018 at 8:16 pm | Permalink

    Over the time the con party has been in power, it has done nothing to prevent another financial crisis from taking place in the future, it has done nothing for 50% of the people who live in a lower wage world, and has not improved their living standards or services, even people up the ladder are moaning, and they are getting all the perks of saving, pension and dividends, with cheap money, of cos most of the money has gone to companies and the 1% with overseas aid ending up in companies accounts from all over the EU and USA.

    When they try QE again, sometime in the next 18 months, it will work at first but after a while, it will go negative on them and the depression will get deeper for another 4 or 5 years, for information, this depression started in the year 2000.
    QE will end up in the wastepaper bin with all there other financial policies and at the same time politician will ask financial whizz kids to come up with something else that can keep the plates spinning where stocks never go down and the economy keeps on booming even if it is not.

    By 2030 65% of all assets will be owned by the 00.1%.

  53. mancunius
    Posted April 11, 2018 at 11:43 pm | Permalink

    We spend more of our taxes on the foreign aid budget every year (13.4 billion) than on the whole of the police budget for England and Wales. This is not even an elective choice by the people, or even merely by the government. It is enforced by a law passed in the dying days of the LibDem/Cameron Coalition, in which virtue-signalling, well-off UK politicians urged on by the UN, took money off poor people in Britain and handed it to – guess what – the UN and NGOs (more than a third). Nearly two-thirds of the cash goes directly to third world countries, much of it ending up in the pockets of the well-off political and state employed elite.
    In my view, this not only flies in the face of fiscal common sense: it is utterly corrupt and disgustingly wasteful.

  • 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.

  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page