Fiscal squeeze continues in UK

Tax revenues were up by  a massive 9.7% in January, creating a record surplus in a month where the government usually collects more money than it spends. Public borrowing is running 46% lower than last year and is on target to hit the Chancellor’s wish to cut it sharply.

Stamp Duty revenues are down for the year so far and down in January, reflecting the continuing  impact of higher rates. The government should cut the rates to help the market and would then collect more cash from this source.

Income tax revenue was  particularly strong.

The government is squeezing the economy too much and could do with some  cuts in tax rates  to promote growth. The right tax cuts would also boost revenue. Property taxes including business rates are particularly damaging at a time when we need to see more redevelopment and change of use as the digital revolution sweeps through our High Streets and industrial parks.

State debt as a percentage of GDP is falling, and now stands at 62% after deducting the debt the Bank of England has bought up

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91 Comments

  1. Peter
    Posted February 21, 2019 at 11:53 am | Permalink

    “The government is squeezing the economy too much and could do with some cuts in tax rates to promote growth.”

    The government is also robbing many fairly ordinary individuals via inheritance tax. The average person never used to be affected by this. It’s a nice little earner for government though.

    Most people are not familiar with trusts and cannot plan to gift assets seven years before they die. So the government cleans up and proceeds to squander much of what these people managed to accumulate over a lifetime.

    People will soon learn that they need to hide assets as happens in many Third World countries. I cannot blame them.

    • Merlin
      Posted February 21, 2019 at 2:18 pm | Permalink

      Very weird post this.

      ‘A nicer little earner for the government’? Are you saying paying taxes are a bad thing?

      I’m afraid that due to demographic pressures, you are likely to see tax rises continue until 2030. It’s not the government’s fault.

      • Lifelogic
        Posted February 21, 2019 at 5:09 pm | Permalink

        Of course paying taxes (above what is needed beyond defence, law and order and a few basic services) is a bad thing. Especially if the government are as wasteful, misguided and full of greencrap as the current one. Taxing people to fund things like HS2 and subsidies for renewables is just pissing people’s hard earned money down the drain. The NHS too is appallingly inefficient, about 50% of degrees are virtually worthless too.

        Let people spend and invest their own money. About two or three times as efficient that way.

      • libertarian
        Posted February 21, 2019 at 7:25 pm | Permalink

        Merlin

        What an even weirder post,If its not governments fault for wasting taxpayers money, whose is it?

        I guarantee we absolutely won’t see tax rises until 2030 , we are already the most heavily taxed we’ve ever been

        • Rien Huizer
          Posted February 22, 2019 at 11:12 am | Permalink

          @ Libertarian

          Thought politicians tried to convince voters to vote for them by promising both tax cuts and popular spending increases. A technoctaric government such as Singapore might do more or less what you want but even there there are pet projects and forms of patronage.

      • Mark B
        Posted February 22, 2019 at 8:34 am | Permalink

        Are you saying paying taxes are a bad thing?

        He might not be but I have no qualms saying so. Question for you. At what level of taxation would it become too much for you to bare ?

        • Lifelogic
          Posted February 22, 2019 at 8:24 pm | Permalink

          20% of Gdp is more than,sufficient.

      • NickC
        Posted February 22, 2019 at 6:04 pm | Permalink

        Merlin, Taxation is Theft.

    • oldtimer
      Posted February 21, 2019 at 4:05 pm | Permalink

      IHT rates are scandalous. The operation of the seven year rule onerous and unfair in an age when older people may face unexpected medical bills not covered by the NHS and rising costs of care. The start point for IHT should be raised to £500k each, total £1 million: the seven year taper should be reduced to three years and the rate reduced from 40% to 20%.

      • Lifelogic
        Posted February 21, 2019 at 5:20 pm | Permalink

        Indeed they are and they ratted on the £1M threshold promise from Osborne but you can buy shares in a trading company or qualifying collective vehicle, farmland or give it away (seven years before you die) so ways around it can be found sometimes. But they keep moving the goal posts. Or you have can a death bed marriage or civil partnership! Or spend it think of it as a 40% discount on the price of a holiday or similar!

        Capital Gains, Corporation Tax, National Insurance tax, Insurance Premium tax now 12%, fuel tax, vehicle duty, alcohol tax, probate tax, vat, stamp duty land tax, pension pot taxes (55%), carbon taxes, greencrap taxes and all the rest are all way to high too.

        • Lifelogic
          Posted February 21, 2019 at 8:24 pm | Permalink

          Only 2 years of ownership needed for trading company shares I think.

  2. Lifelogic
    Posted February 21, 2019 at 12:01 pm | Permalink

    Economic illiterate Hammond is indeed squeezing the economy far, far too much. The very high taxes we have are hugely damaging to an economy as governments are so much less efficient at spending and investing money. Also so much money is wasted on the journey much of it is spent on things that give no or even negative value. Absurdly complex taxes (that he also gives us) are another impediment and one that does not even raise any tax, as is the endless red tape, the attacks on pensions, landlords, tenants, the gig economy and the expensive nonsense energy agenda. They we have the threat of Corbyn due to May’s appalling lack of vision and Hammond and Carney’s project fear.

    Imagine how well we could do with a sensible government and chancellor.

    Oh and we also have endless adds from the Mayor of London (at tax payers expense), telling how polluted London air is – to justify his new motoring taxes. Does wonders for confidence.

    • Lifelogic
      Posted February 21, 2019 at 12:15 pm | Permalink

      May wrongly yesterday said the government was cutting taxes (a blatant liar or just totally ignorant?).

      Milton Friedman on the four ways to spend money number 4 :-

      Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what value I get. And that’s government. And that’s close to 40% of our national income.”

      Probably closer to 50% in the UK now. Plus the red tape, and compliance costs (effectively additional back door taxes) on top. Hence we have the highest taxes for 40 years and very poor and declining public services too. But they are keen on hotting gender and diversity targets so that is OK.

      We also have vast numbers of people working (in the state sector and the private sector) in largely unproductive jobs ( in compliance, taxation, accounting, hr, health and safety consultancies, planning consultancy, law, payroll red tape, green crap, lobbying …. )

      • Lifelogic
        Posted February 21, 2019 at 5:22 pm | Permalink

        hitting (not hotting)

  3. ian
    Posted February 21, 2019 at 12:03 pm | Permalink

    Beat my 30 billion but will it last.

  4. Peter Martin
    Posted February 21, 2019 at 12:10 pm | Permalink

    “The right tax cuts would also boost revenue.”

    Possibly yes. For any given level of taxation rates the revenue is approximately proportional to the level of economic activity. So if a reduction in the level of those rates increases the level of activity, to a higher extent, then the Govt will receive more revenue.

    Not that it really matters that much. More economic activity can lead to too much inflation. Too little means too much recession and unemployment. So the task for Government is to strike a sensible balance, in its spending and taxation policies, between these twin perils.

    • Lifelogic
      Posted February 21, 2019 at 12:33 pm | Permalink

      20% of a much larger GDP is far better for all than 45% of a depresses GDP as now. People and businesses know how to spend and invest money so much better than Hammond does. The NHS is dire and declining.

      Ban gas hobs and heating in six years, ministers told. Will someone please kill all the scientifically illiterate green loon crony “industry” and all the green crap lobby groups. What total loons they all are.

      Cooking and heating with electricity is, in general, far less efficient. Huge amounts of heat and energy are wasted at the power stations and in transmission.

      • NickC
        Posted February 22, 2019 at 9:14 am | Permalink

        Lifelogic, Yes banning gas hobs in 6 years or the proposed ban on the sale of new internal combustion engined vehicles in 21 years is green lunacy. It is mostly promoted by those with little or no scientific or technical experience.

        As well, we know it isn’t going to happen. That’s because the requisite infrastructure is not being built: another 380 electrical energy producing power stations in 20 years anyone?

      • Rien Huizer
        Posted February 22, 2019 at 3:29 pm | Permalink

        @ Lifelogic

        The UK economy is as close to full capacity as you can get. Any form of stimulus (assuming you do not believe that stimulus is generally pointless, only benefiting politicians’ standing with the ignorant) would create the problem of either requiring increased immigration (not popular with Ukip sympathizers) or the slower route via increased investment in capacity expansion (or better efficiency). The most likely outcome would be more inflation, especially unfortunate in the case of a no deal outcome since that would probably depress the GBP exchange rates (another source of inflations), widen the CA deficit and since the Treasure has promised he would move toward fiscal stimulus in that case, increase interest rates (regardless of BoE short term policy rates) for longer term debt.

        • Edward2
          Posted February 23, 2019 at 8:31 am | Permalink

          Presumably you think countries like Germany France Holland and many others in the EU are also close to capacity.
          They have similar numbers on their economic indicators.
          The UK is a good way off from being at full capacity.

          • Rien Huizer
            Posted February 23, 2019 at 11:48 am | Permalink

            @ Edward2

            Well, Holland and Germany are probably at the extreme border. In holland vacancies equal unemployment, usually a sign of severe labour shortages in key sectors (not universal of course, there may be a few unemployed tuba players for instance). That is one of the reasons builders in Holland hope that all the Polish bricklayers and plumbers will be deported from the UK. Germany has a similar pattern with eunemployment concentrated among people who lack mobility. The dip in growth (in Germany, not in Holland with a very strong fourth quarter) has a lot to do with restructuring of motor car production. Given that people must renew their cars anyway, that will be a passing phenomenon. In fact what you see there is a reduction of potential (the capacity for building diesl cars is virtually scrapped) along with a reduction of output. That does not affect capacity utilization.

            France will be interesting: Macron’s reforms should free up quite a bit ot capacity Longer working hours and -lifes) but it will take time and many of the older workers may lack the discipline and motivation to be productive after having been robbed of their early retirement.

            What you may have seen is a dip in consumer confidence in both countries, especially in Germany and Holland. That is the consequence of a lot of scaremongering by some media about the future cost of environmental measures. But that has nothing to do with the Dutch economy because it is not primarily consumption-oriented (houseold consumption is below 50 % of GDP), a number more typical of an East Asian economy than a European one.

  5. Lifelogic
    Posted February 21, 2019 at 12:23 pm | Permalink

    Javid and the home office really should reverse their foolish decision over Shamima Begum and cut his losses now and save the tax payer the legal costs. The story will otherwise run and run. No one wants Javid as the next Tory leader anyway, after all he supported remain. It just makes him look rather nasty, unpleasant not obeying the international law.

    He will lose in the courts anyway.

    • Iain Gill
      Posted February 21, 2019 at 12:59 pm | Permalink

      a far bigger problem is his decision to openly admit the government has no intention of doing anything to deliver the commitments on immigration which were black and white in the last few Conservative manifestos.

      • Lifelogic
        Posted February 21, 2019 at 5:26 pm | Permalink

        Indeed. I am not against immigration but we do need some quality controls on it decided by the UK according to need.

    • Bob
      Posted February 21, 2019 at 1:46 pm | Permalink

      She wanted to live in an Islamic state.
      She is entitled to citizenship in her native country Bangladesh (which is an Islamic state).
      What’s the problem?

      • Lifelogic
        Posted February 21, 2019 at 5:25 pm | Permalink

        Bangladesh will not take her as they have made very clear.

        • Bob
          Posted February 22, 2019 at 8:32 am | Permalink

          @lifelogic

          “Bangladesh will not take her as they have made very clear.”

          She should challenge them in court then.
          Bangladesh citizenship if conferred upon anyone born of Bangladeshi parents – wherever that may be.

          • Bob
            Posted February 22, 2019 at 8:33 am | Permalink

            * is

          • Lifelogic
            Posted February 23, 2019 at 3:01 am | Permalink

            not “is” but “can be sometimes”.

        • Stred
          Posted February 22, 2019 at 9:27 am | Permalink

          Isis kidnapped, raped and murdered on the basis of race and religion. This has to be a war crime. Try them at the Hague.

    • Zorro
      Posted February 21, 2019 at 1:58 pm | Permalink

      Indeed, a peculiar decision which flies in the face of logic. She never held Bangladeshi citizenship and was born in the UK. When designing the legislation, it was aimed at depriving those who had acquired GBR nationality but had been citizens or still were of another country. In trying to look strong, he looks a bit daft!

      Zorro

      • Zorro
        Posted February 21, 2019 at 2:00 pm | Permalink

        She should be put on continual and mandatory diversity and equality courses. That should put the fear of God in her!

        Zorro

      • Andy
        Posted February 21, 2019 at 9:56 pm | Permalink

        I believe both her parents were born in Bangladesh and even though she was born in the UK that does not necessarily mean she was a British Subject.

        • zorro
          Posted February 23, 2019 at 6:10 pm | Permalink

          They were legally settled here – she is British.

          zorro

    • Denis Cooper
      Posted February 21, 2019 at 2:22 pm | Permalink

      The correct time to deprive her of her UK citizenship was when she transferred her allegiance to another state, namely Islamic State.

      As suggested at the time, November 2015:

      http://johnredwoodsdiary.com/2015/11/15/is-the-west-at-war-with-isil/#comment-789315

      “… if any UK citizen wishes to give it their allegiance as if it were a new state then we should take them at their word and initiate proceedings to remove their citizenship. I’m not keen on the concept of dual citizenship in the first place but the idea that somebody can in effect take out citizenship of the purported Islamic State while retaining their UK citizenship takes it to a new level of absurdity.

      I would allow exceptions, especially for minors and vulnerable adults, on a case by case basis, but the general defence that removal of citizenship would leave somebody stateless, that is without any homeland, should not be admissible.”

      But I expect this submission will get vaporised, like the last one before we upset the Bangladeshi government by claiming that she is one of their citizens …

      • Rien Huizer
        Posted February 22, 2019 at 3:33 pm | Permalink

        @ Denis Cooper

        Do you believe that nonsense that the group that calls itself “Islamic State” is a state in the legal sense? That sound like the “War on Terror”. Hyperbole, effective for politicians perhaps but not to be taken too seriously.

        • Denis Cooper
          Posted February 23, 2019 at 8:00 am | Permalink

          You should read the rest of my comment from that time, starting:

          “Islamic State calls itself a state, it already has many of the attributes of a state and it is set upon acquiring the rest … ”

          It is not for you or me to say whether a self-proclaimed state is or is not a state. As far as those giving it their allegiance were concerned it was a new state, the caliphate, and that should have been enough to disqualify them from continued UK citizenship.

    • Lifelogic
      Posted February 21, 2019 at 3:12 pm | Permalink

      My gooness I agree with Corbyn & Dianne Abbott but on thos they are right. Javid should take the statement from the Bangladesh authorities and legal advice as an excuse to back down now if he is remotely sensible.

    • bigneil
      Posted February 21, 2019 at 3:21 pm | Permalink

      SJ’s actions to keep her out are purely so he can say ” I tried”. Nothing else. Everyone knows she’ll be here, all on the taxpayer teat.
      “UK -safe haven for terror supporters – – All found”

    • Sir Joe Soap
      Posted February 21, 2019 at 8:14 pm | Permalink

      Rubbish.
      You want to encourage other 15 year olds to skip school and have a holiday and a few children in Syria or some other terrorist state then feel they can come back home to a nice house and care?
      You either stop them from going or stop them coming back. As we’re too weak under schoolmistress May to do the former we should do the latter.

  6. libertarian
    Posted February 21, 2019 at 12:43 pm | Permalink

    Shows why politics has no place in business

    The European Medicines Agency was hoping Brexit would be a strong enough reason to exit its no-break £500 million London lease.

    Instead, the agency now faces the prospect of paying double rent for the next 20 years following its relocation to Amsterdam.

    The U.K. High Court on Wednesday rejected the EMA’s argument that its London lease was “frustrated” by Brexit, and said the agency “remains obliged to perform its obligations.”

    • a-tracy
      Posted February 21, 2019 at 4:48 pm | Permalink

      They could try to re-let it, like lots of small businesses I know that got clobbered with old school 20 and 25 year long lets.

      • Rien Huizer
        Posted February 22, 2019 at 3:37 pm | Permalink

        @ a-Tracy

        Looking at the comments of many here that the London is booming there should be no shortage of prospective tenants, unless this is a bespoke building (medical/pharma research). Who is the bright spark who signed that lease, btw.

    • Richard1
      Posted February 21, 2019 at 5:06 pm | Permalink

      Yes that is an amusing side effect.

      the EU are also threatening to force EU persons to trade shares only on EU exchanges, not ‘recognising’ London. this will reduce liquidity and force up dealing costs, and probably lead some companies to change listings. this is what is meant by the cost of regulation. Pointless political interference and protectionism which raises the cost of capital for business. no wonder the EU is the slowest growing major economy in the world.

      • Lifelogic
        Posted February 21, 2019 at 8:27 pm | Permalink

        Exactly.

    • Lifelogic
      Posted February 21, 2019 at 5:29 pm | Permalink

      But will they pay up? They will probably add it to the £39 billion (about £1,500 per UK houshold) that May wants to give them for nothing.

      • Rien Huizer
        Posted February 22, 2019 at 3:38 pm | Permalink

        @ Lifelogic

        Very likely!

    • James
      Posted February 21, 2019 at 8:41 pm | Permalink

      It is clear that the more asinine of the people that we have been negotiating with in Brussels wish to ‘punish’ us for leaving in order to deter others from doing so. There is no goodwill from them. Mrs May’s entreaties have been rebuffed, in the same way as were those of Mr Cameron. We should simply walk away, (JUST LEAVE) and invite them to come and see us in London when they are ready to talk sensibly and in good faith. They are unfortunately terrified that we will thrive and prosper outside the EU, which I believe we will indeed do to an astounding degree.

      • Rien Huizer
        Posted February 22, 2019 at 3:39 pm | Permalink

        @ James

        The UK is punishing itself, imo. I watch it on a daily basis.

      • margaret howard
        Posted February 23, 2019 at 12:09 am | Permalink

        James

        ” Mrs May’s entreaties have been rebuffed, in the same way as were those of Mr Cameron”

        Because they were just the latest in a long line of British politicians constantly demanding special treatment and opt outs no doubt in the belief: we are special.

        The other EU members were sick and tired of our moaning fully aware that we begged to be allowed to join a bloc that turned us from the ‘sick man of Europe’ into the world’s 5th largest economy, since Brexit alas already dropped to 7th place.

        • Edward2
          Posted February 23, 2019 at 8:37 am | Permalink

          More cut and pasted nonsense from you Margaret.
          It wasnt the EU that turned this nation round after years of useless Trade Union dominated socialist government but three terms of Thatcher government.

          We have gone from 5th to 7th whilst in the EU!
          When good things happen you say it is because of the EU
          When anything less good happens it is the fault only of the UK
          Do you not realise how silly this logic seems to others.

    • Mockbeggar
      Posted February 22, 2019 at 9:33 am | Permalink

      The High Court will probably be overruled by the ECJ.

      • Rien Huizer
        Posted February 22, 2019 at 3:41 pm | Permalink

        @ Mockbeggar

        Why would this be a matter for the ECJ? This should be a simple commercial transaction and the reason for the alleged breach of contract (a form of force majeure) in within the competence of an English court, applying English Law, probably.

  7. Bryan Harris
    Posted February 21, 2019 at 12:44 pm | Permalink

    One can only agree with the general thrust of this argument, the government is being too severe, still following EU dictats, and needs to change course by a limited amount.

    Interesting comment “State debt as a percentage of GDP is falling, and now stands at 62% after deducting the debt the Bank of England has bought up I wasn’t aware that the BoE was allowed to do this on a grand scale – Just how much state debt is the BoE holding?
    I’m still concerned at the way this government increases taxes, in a stealthy way, and indeed, what other increases we can expect this year….?

    • acorn
      Posted February 21, 2019 at 5:20 pm | Permalink

      The consolidated gross public sector debt is about £2,540 billion, 125% of GDP; including the £185 billion the ONS insists is the BoE contribution to public sector debt.

      For reasons which are unclear, the Treasury has shifted the liability for the Term Funding Scheme (£126 billion) from inside the BoE Asset Purchase Facility fund, directly onto the BoE Balance Sheet, so it now looks like a BoE Bank loan.

      Prior to this the BoE had about £560 billion of liabilities and equity of about £4.5 billion. That is it was lending at 125 times the banks own capital reserves. In 2008 private banks were going bust on 30 times equity reserves.

      The bottom line is this is all smoke and mirrors. The BoE and the Treasury are one and the same in a fiat currency economy. The Treasury has an account called the National Loans Fund, the magic money tree lives inside it and issues the currency. It creates brand new Pounds Sterling whenever the government wants to spend “money”. It eventually will get all those Pounds back by taxing them every time they move.

      • Bryan Harris
        Posted February 22, 2019 at 8:14 am | Permalink

        @Acorn – Thanks for that great analysis

    • zorro
      Posted February 21, 2019 at 7:17 pm | Permalink

      JR is referring to the effect of the UK government’s QE programme.

      zorro

      • Bryan Harris
        Posted February 22, 2019 at 8:14 am | Permalink

        @Zorro- Ahh, OK thanks

  8. Iain Gill
    Posted February 21, 2019 at 12:58 pm | Permalink

    Immigration still out of control.

    British intellectual property being moved abroad to undercut this country faster every day.

    Worst public services in the developed world, where the citizens are constantly bullied, and get rationed substandard services.

    Dire quality political class self reinforces ever more.

    Views of the people routinely ignored.

    Government employment stats corrupt.

    I do love this country, but I dont see it through rose tinted specs.

  9. The Prangwizard
    Posted February 21, 2019 at 1:28 pm | Permalink

    Hammond is taxing and sqeeezing us so he has plenty of money to give to the EU under May and his surrender deal.

  10. Bob
    Posted February 21, 2019 at 1:50 pm | Permalink

    “Stamp Duty revenues are down”

    UKIP would abolish stamp duty and IHT, HS2, foreign aid and get us out of the EU.

    • Lifelogic
      Posted February 21, 2019 at 8:29 pm | Permalink

      All sensible policies that would benefit the economy hugely.

    • Bob
      Posted February 22, 2019 at 8:35 am | Permalink

      I forgot to mention, they would also abolish the BBC Licence Fee.

  11. ian
    Posted February 21, 2019 at 2:13 pm | Permalink

    The gov has beaten services into the ground to get to this point and also has the highest taxes on record, not including income tax but they are now set for the foreseeable future 2022.

    Council tax due to go up by 5% every year as far as the eye can see, shifting gov spending of people tax, directly to the people, energy cost up 10% this year with more to come each year, more spending cuts still in the pipeline.

    Spending now going up with HS2 6 billion a year for 15 years, student loan 6 billion a year to try to bring the debt down that seats off the books forever, NHS 5.25 billion for 4 years, the lowest of all new payment going out of the three, just goes to show where their priorities lay, not with the people who are dying while waiting or waiting for a care home, other spending will need to increase on pensions, police, roads, overseas aid, schools, you name it, another 10 billion or so.
    Tax cuts coming only for big businesses, ie company tax, the promised 17% tax rate.

  12. MrVeryAngry
    Posted February 21, 2019 at 2:54 pm | Permalink

    Nope. Business Rates are not damaging at all as they are not incident on business but on the landlords that rent accommodation to businesses. They are in practice a tax on rents. A Very Good Thing. (FTAOD I own a business that rents its accommodation and pays BR and I can absolutely assert that my rent is lower than equivalent offices in my town with BR subsidies and similar, but my total cost of premises – i.e. rent + expenses + BR – is roughly the same as theirs.)

    • nhsgp
      Posted February 21, 2019 at 5:17 pm | Permalink

      How about we put a 12K a year poll tax on you. Doesn’t matter if you earn any money, its at tax that works like business rates. You owe it before you earn any money

    • Lifelogic
      Posted February 21, 2019 at 5:34 pm | Permalink

      Yes to a degree, but the high rate taxes reduces the supply of properties available to rent (as it is less attractive to build them) so you do pay more due to the law of supply and demand. Also many businesses own their own properties.

    • libertarian
      Posted February 21, 2019 at 7:28 pm | Permalink

      Mr Very Angry

      What utter drivel , my business rates went up 400% last year . I rent my space too and I pay my business rates on top of my rent and energy costs

      Hate to think what business you run, but you need a better grasp of business costs

    • Sir Joe Soap
      Posted February 21, 2019 at 8:17 pm | Permalink

      No they’re a tax on physical business. Run your next Facebook from home or be Corporate Bank Ltd with half your workers working from home business-rates-free and you’re fine, but try running a business making something and you’re stuffed with business rates.

    • a-tracy
      Posted February 22, 2019 at 9:34 am | Permalink

      It depends where you are in the Country Mr Angry, some locations business rates are affordable and some shop business rates on rental properties are extortionate.

      I was surprised once when I saw much cheaper business rates in London as they have much higher footfall than local rates.

  13. Mark B
    Posted February 21, 2019 at 3:16 pm | Permalink

    Can we please, please, please get rid of Stamp Duty Tax. Clearly the government do not need it and why it needs this money when it does not offer anything in return or, is set aside for homeless people I do not know. You are taking money away from people who want to live in a property. People have a right to live somewhere !

    • Lifelogic
      Posted February 21, 2019 at 5:36 pm | Permalink

      And all the absurd landlord taxes (double taxation of interest and SDLT) that hit tenants and kill supply of rental properties and job mobility.

    • Lifelogic
      Posted February 21, 2019 at 5:38 pm | Permalink

      In years you move home you can often end up paying far more than 100% of your taxable income!

  14. formula57
    Posted February 21, 2019 at 4:20 pm | Permalink

    We obviously need a Chancellor of the Exchequer who will do right by Britain rather than the one we have now who does not.

  15. Iain Gill
    Posted February 21, 2019 at 5:16 pm | Permalink

    The Conservatives could win a lot of brownie points if they offered to take on regular MP surgery cases for the voters where the MP has a prison sentence. Spread the workload out among Conservative MP’s, and put a few people from central office in the town listening to the people.

    Dont think the Labour party have got their act together…

    • a-tracy
      Posted February 22, 2019 at 9:35 am | Permalink

      Good idea Iain

  16. nhsgp
    Posted February 21, 2019 at 5:16 pm | Permalink

    State debt as a percentage of GDP is falling, and now stands at 62% after deducting the debt the Bank of England has bought up

    ===========

    Have you told the public sector workers you don’t owe them a pension?

    Legally its a debt.

    Why is it not reported?

  17. BR
    Posted February 21, 2019 at 6:51 pm | Permalink

    Everything depends on escaping the EU next month without signing the God-awful WA. I didn’t realise how bad it was – I wonder if JR even realised all of its problems.

    No way we should do anything that involves agreeing the WA (Brady, Malthouse or Fred Flintstone).

    Have a look at the spreadsheet at the end of this by ‘an anonymous civil servant’:

    https://brexitcentral.com/political-declaration-not-vague-wish-list-attempt-bind-uk-eu-policies/

    No fewer than 147 (yes you read that right, one hundred and forty seven) problems, many of them very serious issues.

    • Lifelogic
      Posted February 21, 2019 at 8:36 pm | Permalink

      Indeed far better not to sign May’s appalling WA.

    • margaret howard
      Posted February 21, 2019 at 11:03 pm | Permalink

      BR

      “Have a look at the spreadsheet at the end of this by ‘an anonymous civil servant’:”

      Written by
      A Civil Servant

      “The author is a serving Civil Servant whose anonymity we are protecting.”

      I wonder why?

    • Pominoz
      Posted February 22, 2019 at 1:26 am | Permalink

      BR

      That article, assuming it is wholly accurate, is absolutely frightening!

      How can anyone, who genuinely wished to deliver the Brexit that people voted for, spend two years coming up with such tripe which is clearly designed to keep us shackled to the EU indefinitely.

      Let us hope there are sufficient sensible MPs in the HoC to ensure we get out on WTO rules. The EU is a ‘house of cards’ and it is essential that we are as far away as possible when everything falls to pieces. Once the EU has disintegrated – and it surely will – the fraudulent actions of those in control will, I hope, be exposed and prosecuted.

      One of the reasons I live here in Australia was my concern, many years ago, of the increasing control by the EU and the will lack of Sovereignty of the UK. Although I am unlikely ever to return to live, I feel passionately that true Brexit must be achieved and that, when it is, real success will be achieved through global trade unhampered by the bureaucracy imposed by the unelected in Brussels.

  18. Caterpillar
    Posted February 21, 2019 at 6:51 pm | Permalink

    I agree that a fiscal stimulus would be helpful but given that UK savings ratio (Y-C)/Y is rubbish then investment is likely to remain rubbish. Focus should not be a willynilly taxcut that simply ups C. I would prefer,

    Speed up HS2 delivery between old oak common and Curzon Street.
    Build West fork of HS2 to Manchester and HS3 Manchester to Leeds.
    (These transport links will help city scale effects for future growth).
    Either bring corporate tax cut forward or have an investment encouraging policy (depreciation based or other).
    Consider speeding up electric car infrastructure Inc battery/chemical business – let’s get some benefit from the destroy diesel policy.
    Change the additional stamp duty cut off to 3 not 2 properties – labour mobility.

  19. Denis Cooper
    Posted February 21, 2019 at 7:08 pm | Permalink

    Off-topic, I would strongly recommend the well informed and intelligent speech given by the Tory MP Marcus Fysh in today’s Commons debate about free trade agreements:

    https://hansard.parliament.uk/commons/2019-02-21/debates/68C1429A-EBEC-40DF-BB99-D00DB8D95666/FutureFreeTradeAgreements

    Starting with a very familiar demand:

    “Future trade deals must be part of a coherent trade strategy, and it is imperative that, as part of that strategy, we rapidly set out what our tariff schedules will be … ”

    I was particularly interested in details of the government’s gross exaggeration of the costs of the trading documentation which will become necessary:

    “These measures cost about £50, not hundreds and hundreds of pounds. The value of the goods on a truck crossing the channel can be £10,000 if it is carrying bread or bread products and up to £300,000 for beef or beef products, so £50 is just a tiny fraction of that. We are talking about, at most, 0.5% of the value. According to the Government’s impact assessment, the cost of customs administration in the event of no deal would be 5% to 6% of the value, which is wrong by an order of magnitude.”

    And this about the intrinsic pro-EU bias in the Treasury’s models:

    “… we should not get the gravity relationship wrong. In the UK, the factor of linkage between trade and distance is only about 0.23%. When we back that number out of the Treasury’s forecasts before the referendum, we get the figure of 0.9%. The figure of 0.9% is the intra-continental EU gravity factor, and it is my contention that the wrong one has been used in our models. That undercooks the benefit to us from free trade around the rest of the world and really overcooks the value of the EU’s trade. I am not saying that we do not want the EU’s trade – we absolutely do – but we want to trade with Europe and with the rest of the world.”

    The EU Commission has estimated that the EU Single Market has been worth a gain of about 2% of GDP averaged across the member states, while another study suggests that for the UK the gross benefit has been half of that average; the added costs may be several times that gross benefit, and yet somehow the Treasury and others keep coming up with vastly exaggerated figures for a net benefit which might easily be a net disbenefit.

    Under the section on “Proposition 5” here:

    https://briefingsforbrexit.com/evidence-based-policy-or-fake-news-eleven-economic-propositions-made-by-remain/

    “The Treasury’s 2016 document and the more recent ‘cross-Whitehall briefing’ claimed UK GDP would fall by 8% in the long-run in the event of the UK leaving the EU and reverting to ‘WTO rules’. This estimate is probably 3-8 times too high.”

    • Mockbeggar
      Posted February 22, 2019 at 10:24 am | Permalink

      As is often the case with you, this is an excellent post. I also read the article in Briefings for Brexit when it was first published. It raises the question: are all Treasury Civil Servants so biased towards Remain that they can’t recognise their own exaggerations?
      It’s time someone stood up there and told us the true facts. Is Hammond so mesmerising that they agree with his every word?

  20. Dominic
    Posted February 21, 2019 at 8:07 pm | Permalink

    Yes, let’s all pay more taxes to Labour’s client state and into the EU coffers. What a wonderful use of our hard earned…peed down the drain by a political class who view the British taxpayer as nothing more than something to be abused for political purposes

    That money is either in my bank or in the bank of Labour’s client state…

  21. Sakara Gold
    Posted February 21, 2019 at 9:21 pm | Permalink

    We should scrap some of the “jobs for the old boys” quangos. Most of their chairpeople are on salaries of £150,000 for a three-day week, not to mention their non-contributory index linked final salary pensions. That ought to save a billion or two, certainly more than we are clawing back from the disabled

  22. hefner
    Posted February 21, 2019 at 10:28 pm | Permalink

    Investor-State Dispute Settlement (ISDS) appear to be part and parcel of the future trade agreements that Dr Fox is seeking with the USA, Australia, NZ, and other Asian countries post Brexit.
    I had understood that Sir John was opposed to ISDS being part of trade agreements some months ago when TTIP was discussed. What is his present position on the question? Would he be favourable to such agreements where the UK could be condemned to pay (huge) fines to companies for having included some restrictions on business practices.

    Reply I did not express an opinion. Any dispute resolution procedure other than the standard WTO one has to be fair to both parties and independent, and will need to be judged on the wording of any draft.

  23. margaret howard
    Posted February 21, 2019 at 10:59 pm | Permalink

    BBC tonight:

    “The UK won’t be able to roll over an EU trade deal with Japan in time for a no-deal Brexit, Trade Secretary Liam Fox has said.

    It was one of the most important EU trade deals the UK hoped to replicate ahead of the 29 March withdrawal date.

    The trade department also said it would not be able to roll over the EU’s customs union deal with Turkey on time.

    In 2017, Mr Fox said the UK would be able to replicate 40 EU free trade deals by Brexit day.”

    Oh dear, it’s all unravelling!

    But so far the department has only been able to finalise “continuity agreements” with seven of the 69 countries and regions with which the EU has trade deals.

    • NickC
      Posted February 22, 2019 at 6:23 pm | Permalink

      Margaret Howard, Pretty fast work considering it took the EU at least 46 years to achieve the 69. So the UK rate is about twice the EU’s?

  24. Lindsay McDougall
    Posted February 23, 2019 at 2:04 am | Permalink

    State debt is 85% of GDP. You can’t deduct the part ‘bought up’ by the Bank of England. The Bank is a State institution. You are practising the same sleight of hand previously applied when the debt of Network Rail, now up to £60 billion, was kept off the balance sheet. That mistake has been corrected; it doesn’t excuse another one.

    Reply Totally different. The Network Rail debt is a state debt it has to repay. The QE bonds are a state debt which has been bought back by the state so it is no longer a debt owed to anyone.

  25. An appeal to JR
    Posted February 23, 2019 at 8:42 pm | Permalink

    I was fascinated by the strategy of the Greek govt in dealing with their EU debt crisis. They played hardball with the EU despite having little leverage. I thought it was a good try to send a Marxist economist who lectured the EU officials and told them they were all idiots, that didn’t work, but it was a good try to get the debt written off, next, I was impressed that when EU leaders tried to appeal directly to the Greek PM who was in Brussels at the time, he ignored them and flew home. When has TM ever done anything like this?

  • About John Redwood


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

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