The Chancellor gave us an upbeat message yesterday in his FT interview. He is putting growth at the forefront of his economic policy, as I urged. He thinks we can achieve the average growth rate since 1945 of 2-.7-2.8%. It’s a bold ambition, given the poor rates of growth we have witnessed in the advanced world since the banking crash and Great Recession in 2008-9. Most forecasters now think the trend rate of growth is more like 2% than 3% from here, with some now thinking the UK and the Euro area can only manage 1.5%.
On Tuesday I am leading a debate in Westminster Hall for 90 minutes on how we can put in place a Growth strategy. We clearly need to reverse Mr Hammond’s fiscal squeeze, as the government has promised to do. The state debt rules hold the EU in thrall and help keep growth down because they keep taxes up. They do not flex for the Laffer effects of lower rates bringing in more growth and in due course more revenue. The USA went for big tax cuts in 2016 and delivered much faster growth than the EU as a result.
We clearly need the Bank of England to get in line with all the main Central Banks of the world and have a policy which fights slowdown and recession instead of promoting slowdown. I have written plenty about that since the spring of 2017 when the Bank started to tighten.
Today in preparation for the debate I am asking for ideas on which taxes and which tax rates should we cut to get faster growth. There are three broad categories, tax on transactions , tax on work and income, and taxes on growing a company and owning and managing assets. Some of the tax rate cuts could bring in more revenue, some will result in lower revenue.
Transaction tax cuts to consider that could boost growth include Stamp Duties, Vehicle Excise Duty, and VAT on some purchases.
Taxes on employment and income include Income Tax, National Insurance., the Apprenticeship levy, and IR35.
Taxes on managing and owning businesses and assets include Capital Gains Tax and Business rates .
January 19, 2020
Sir John,
I wish us all well with that growth target!
Suggest a special tax break for our fishing fleet and men/women. They have 12 months to build and train enough boats and fisherfolk to take back management of our fishing grounds.
Fishing boats should be given accelerated depreciation allowances, 100% of boat and tackle, all to be taken in the first year of ownership – leasing banks take notice,
Fish receiving/processing ports similar allowances on equipment,
fisherfolk training and apprenticeships be given special status and funding.
Fishing is totemic, we must take back complete control of all our waters and not allow foreign vessels in for at least 5 years to encourage recovery of stocks.
January 19, 2020
Well good luck with that, but I think it is rather unlikely that Boris will take back complete control of our waters.
January 19, 2020
Why not? Its relatively low cost, would bring immediate employment, particularly in the north-east, and the PR for the Government, seen to be doing something that makes a real difference, would be priceless. Who in the HoC would vote against?
January 19, 2020
I agree, but I fear it will be traded away as part of the EU deal.
January 19, 2020
The UK’s boarders should be respected. You couldn’t treat any other countries territorial waters with such disrespect.
The people who set the definition on the Captcha test don’t seem to know the difference between a car and a van. They should use the generic term “motor vehicle” if that’s what they mean. Some of the images are very low res. I find that “crosswalks” are the easiest to pick out.
January 19, 2020
* borders
January 19, 2020
Maybe sights are set on the wrong target?
If only UK crime could be reduced to the same rate as the European Union average, then that would save three or four percent of GDP, according to plausible and diligent research.
No one would have to work harder for lower pay, nor consume yet more energy to achieve that either.
January 19, 2020
We already cut police numbers as a response to lower reported crime figures, now there is clamour to replace the reduced police numbers!
January 19, 2020
‘…..nor consume yet more energy to achieve that either.’
Yes, what would be consumed and how much more to achieve growth?
JR et al never say, probably ‘cos they have never thought about it. Non thinkers, MPs I mean, lead to emergencies (climate change) bad management (HS2) and disasters. Why think when you need do nothing for 5 years at a time and still collect a good salary?
January 19, 2020
… bad management… yes, see LL’s posts below.
January 19, 2020
Crime rate reduction sounds great. What measures do you suggest to make it happen?
January 20, 2020
Make being an employee less demeaning.
January 20, 2020
How?
January 19, 2020
You do realise European criminals in their droves under freedom of movement have come here to escape justice especially East Europeans
January 20, 2020
Yes, some have.
They know that the UK did not implement – as it would have been normal and proper to do – European Union police database sharing, and so it has been a relatively safe haven for them.
January 19, 2020
Perhaps the dreadful HS2 could be cancelled and part of this saving used to build fast fishery protection vessels.
Appledore shipyard??
January 19, 2020
Michael McGrath
That will not happen.
Everyone knows Boris Johnson will simply cave in to Macron’s demands for French rights to plunder our maritime resources, we will then be extremely angry and that will be the end of the Conservative party at the next election.
January 20, 2020
Appledore Shipyard –GREAT idea! Revitalizing our fishing fleet has tremendous potential for secondary manufacturing and services. Will the Boris Government seize the opportunity?
January 19, 2020
Like Milton Friedman “I am favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible.” “Inflation is taxation without legislation.”
But having said that it is really the cutting out of government inefficient spending, pointless spending, damaging spending and endless waste that is needed as this drives the head for more tax. Having taxes above the Laffer point is clearly idiotic but it should be well below this point not at it. Taxes should be at a level that is needed to fund the few things that government can do better than individuals like defence and law and order some safely net for those who cannot work for health reasons. 25% of GDP is more than enough for this.
Turnover taxes like stamp duty are particularly damaging as is inheritance tax at the absurdly high rate of 40% over just a £325K threshold (despite the £1m each promise made by Osborne/Hammond). The double taxation of interest for landlords is clearly unsustainable as you are taxing profits that have not even been made;
Copy Singapore with GDP per cap PPP about double ours and government spending in 2019 was 14.32 % GDP.
January 19, 2020
CGT rates are far too high and clearly they should also be indexed to inflation or again you are taxing profits that have not even been made.
January 19, 2020
Yes, I entirely agree. The present CGT regime ensures capital is locked in to avoid the penal rates, rather than allowing it to be invested properly.
January 19, 2020
Indeed and the high stamp duty rates (on transferring properties) makes it even worse.
January 19, 2020
@mickc
Yes, it does seem to be more like a punishment for making a profit than a way to fund public spending (wasting would be a better description). At the very least, alignment of all tax rates to a flat level of say 20% would be a good first step towards unleashing the power of the economy.
The IHT threshold should be significantly raised to bring it in line after the years of fiscal drag, or preferably the death tax should be abolished completely. My own financial activity is being severely and artificially constrained by the various tax traps.
January 19, 2020
Tax in Singapore has an income tax rate from at 0% to 22% max above about £180,000. There is no capital gain or inheritance tax. Individuals are taxed only on the income earned in Singapore. The income earned by individuals while working overseas is not subject to taxation barring a few exceptions. Sales tax is 7%.
Can we go for something sensible like this please?
The UK is hugely overtaxed and has fairly dire and declining public services too. Tax is an incentive not to work. In the UK with income tax at up to 45%, NI at about 23% (both of them), CGT at 28% VAT at 20% and IHT at 40% it is more of an instruction to leave the country.
Plus we have all the other taxes on top – insurance tax 12%, stamp duty up to 15% (18% is now even proposed), fuel duty, road tax, alcohol tax, sugar tax, fuel taxes, the expensive renewable energy agenda, the smart meter agenda (both in effect more taxes), council tax, business rates, congestion tax, Air Passenger Duty, parking taxes, licences taxes and fines and all the rest on top.
January 19, 2020
One cant do anything, go anywhere, without the Government slapping a tax on it.
Where does all this money go? Surely it cant all go on an ‘Ageing population’!
January 19, 2020
All sorts of lunacies like renewable energy subsidies and HS2. Endless overpaid staff with gold plated pensions many doing positive harm. Huge compensation bills for NHS negligence. Millions spent in inquiries into major incidents and NHS or Police ineptitude, the smart meter incompetence …..
January 19, 2020
So basically you want to cut government spending by two thirds, £560 billion. For a start you could shut down the whole of the DWP and save about£275 billion; Education would save another £90 billion and Health would save £153 billion. And, if the Treasury stopped issuing savings certificates, that would save about £40 billion.
Then you would have a social economy pretty much the same as Singapore. you could even have, like Singapore 20% of the population made up of migrant construction workers paid about $14 for a 12 hour shift.
January 19, 2020
LL – that tax list is really an eye opener – it should be common knowledge as a list for everyone to rattle off. You also say – ‘Can we go for something sensible like this please?’ If not, can anyone say why not? JR?
January 19, 2020
I missed of the pension pot limit tax of 55%
January 19, 2020
For so many years the govt were urging people to provide for their own retirement rather than rely on the state pension. – Now we know why.
Once the money is locked into a pension scheme the govt can raid it whenever they want to.
No wonder people lost faith in the pensions system!
January 19, 2020
@lifelogic
The British colonial govt launched the Central Provident Fund in Singapore in the 1950s, and since independence the S’pore govt have extended and improved it. It works very well without encouraging welfarism and encourages people to work and contribute to society, rather that sponge from it.
January 19, 2020
Indeed whereas in the UK government seem to want to encourage and augment the feckless at every turn.
January 19, 2020
Why not make companies/firms more responsible for workers’ health?
January 19, 2020
Yes, just add to the existing jungle of regulation and red tape, we cannot have employees needing to take any responsibility for themselves, can we?
January 19, 2020
Companies taking care of their workers is a very old idea. Pre Welfare State.
Convalescent Homes, dental care etc. In fact an employment centred hospital, based on a contribution system still exists today. And very good it is too.
It takes pressure off the NHS and reminds employers where their duty lies.
The employer class only ever backed the idea of the NHS to slough off responsibility.
January 19, 2020
Everhopeful
“Why not make companies/firms more responsible for workers’ health?”
They already are, it’s a requirement of the Employment At Work Act.
January 19, 2020
As a prerequisite to cutting tax I would first look at government spending. Just as a household unit suffering reduced income reduces spending, or is that too Margaret Thatcher.
If I were a clever economist I would calculate where we are on the Laffer Curve in the three main areas of taxation you highlight. I would then know to what levels taxation could be reduced to achieve the same or higher tax take.
I would take a good hard look at government capital spending, of which HS2 is a prime example. Anything which does not give a profitable return would go and be replaced with something that did. I take an open minded stance on defining profitable in that I consider the NHS a profit centre. A healthy population is cheaper to run than an unhealthy one. However I am not much into vanity projects which government has a weakness for, be they railways, IT projects, or domes. Invariably there are better ways of doing things. HS2 is 70s technology as demonstrated by the Japanese with the Shinkansen. Personal medical records could be carried on a Dongle on your car key ring or on a necklace. Does anyone know of what profitable use the Dome is put to.
Yes, economic strategy post Brexit requires some high level input from individuals with a track record of success. Not the usual banking and Treasury sources.
January 19, 2020
We should not be aiming for the Laffer point – we should have tax levels far, far below this point.
Taxing at the Laffer point is rather like a managing agent of a large block of flats charging a service charge as high as possible (up to the point where it is so high that so many people abandon the flats rather than pay it) then it is better for the agent not to increase the rates further as they get less back by doing so.
What should happen is the managing agent should charge only what is needed to manage the block efficiently (for the few things the agent can do better than the flat owners). It is MPs job as representatives of the tax payers to ensure that this is what government does. They have alas failed hugely and just allowed, encouraged even huge extortion from tax payers and delivered fairly dire public services too.
January 19, 2020
You missed a word – …the discredited Laffer point…
January 19, 2020
How on earth is it discredited? If you tax at 100%+ no one is going to go to work (or even afford to get to work) so you raise nothing, If you tax at zero % clearly you raise no tax either. Somewhere between these two points you must raise the highest sum hence the Laffer point!
January 19, 2020
Martin in Cardiff has a bee in his bonnet about the Laffer curve.
As you have explained, Lifelogic, it is very simple and makes perfect sense. Only someone who thinks the European Union are our friends could fail to understand it.
January 19, 2020
Read up on “the Kansas Experiment” i.e., tax cuts based on Laffer curve arguments.
The real “Laffer point” is generally nowhere near where those who use that argument would like it to be.
January 19, 2020
This is the only time anyone has been able to come up with any counter theory.
The exception to the rule.
And if you really read up on the Kansas experiment you see how it isn’t a good counter argument.
But the left love to drag it out.
They hate Laffer because they hate wealth and they are envious of others.
We must all be taxed into poverty and equality.
And end up part of the dependent client state.
They say we need high rates because they want to punish others.
The top 1% now pay nearly 30% of all income tax.
Take care of the golden gooses.
January 20, 2020
I don’t hate any reasoned case as Laffer’s was at all.
However, people with their own agendas will cloak a flimsy case in the trappings of respected work.
That is what I expose.
No, the Kansas experiment is not the only instance by any means.
January 20, 2020
You expose nothing by showing Kansas as the main argument to claim the whole theory doesn’t work.
High rates may satisfy the left’s envious desire to punish and discriminate against the better off, but in today’s globally competitive environment all they do is to reduce economic activity and reduce revenue for the State.
January 19, 2020
agricola
Agree about controls on spending.
So how about looking closely at the House of Lords, and the suggestion of moving it away from London, sounds good in theory, but what about the cost of new premises, storage of robes, paperwork/records, research, security, and duplication of personnel and systems.
What will become of the existing Parliament building given it is to have £Millions spent on it.
Can it be used as Mp’s offices, meeting rooms, overnight accommodation (to save paying for Mp’s flats) or will it all go to waste.
May save a few bob on the Lords clocking in for their expenses, but is this a real problem, and will our Lords really want to travel to another part of the Country to meet up for a few hours discussion.
I am all for diversification, as long as its cost effective.
January 19, 2020
Alan Jutson
“May save a few bob on the Lords clocking in for their expenses”
Better still abolish this unelected relic of bygone privilege and replace it with an elected upper house on the lines of the US senate where 100 are sufficient for a population of over 300m.
And throw away their ridiculous robes. They look like something out of a pantomime.
January 19, 2020
Perhaps shorts and T shirts?
Would that be any better.
Or a nice drab grey boiler suit.
January 20, 2020
Edward 2
You are talking nonsense again, Margaret does have a point and you do not except provocation
January 21, 2020
I think a little tradition is nice bill.
I like our Monarchy and the House of Lords
I realise you and Margaret prefer the EU system of democracy.
January 20, 2020
MH – – well it is a pantomime.
January 19, 2020
I couldn’t agree more.
January 19, 2020
We have rules that stop government assistance to companies given unfair advantage to one business over another. As we see with the FlyBe assistance and legal action from other airlines.
But why do we not stop unfair competition directly by the state in healthcare, schools, universities, by the BBC, in social housing, in transport (where trains and buses are subsidised not taxed much) yet cars are hugely over taxed.
In relation to (the envy of no one sensible) NHS now has 900 cases being investigated in the Shropshire Maternity Scandal. This is just one hospital and one area of medicine within the NHS. Clearly the NHS is better than having no health care system at all. But if it did not exist or at least charged those who could pay the market rate we would have plenty of healthcare choices. Similarly in education. Free (or heavily subsidised) at the point of use kills more efficient competition and choice.
The real win win for government is cut in red tape (these increase GDP and safe both the government and industry time and money. Also go for cheap on demand energy and cut all subsidies for “renewables” or electric cars. When the technology works and is cost effective people with buy it without the need for tax payer bribes.
January 19, 2020
Maybe the answer is to cut the things that swallow up huge chunks of tax-gathered money?
Less government and less welfare state. More EARNED money in the pocket.
Still… since that just isn’t going to happen with the prevalence of woke politics …
Stamp Duty should be hugely reduced. It really does put one off moving house. A huge disincentive.
A quick look at govt. Environmental Taxes is quite horrifying. How on earth can small businesses hope to function whilst trying to work out how many angels can dance on the head of a pin?
January 19, 2020
Why do you say “Maybe” when you surely mean “Clearly” the answer …..
January 19, 2020
🤔 Yes! Agree.
Should say …theft…loot..extortion……..
No more beating around bush.
January 20, 2020
Clearly the answer is to end the things which swallow up huge chunks of the ordinary person’s otherwise disposable income.
Private landlords’ extortionate rents, that is.
January 20, 2020
You rent the property or you rent the money (with interest) to buy the property – your call! Unless you inherit wealth that is.
January 21, 2020
Or make the money.
January 19, 2020
The Sunday Telegraph is very good today especially these comment items and the letters against the idiotic HS2 project – nearly all of which I agree with:-
It is despicable to ignore sex abuse because of the abuser’s race
Dia Chakravarty
Daniel Hannan
Scruton was the greatest thinker of our age
I’ve learnt the hard way that bad police reform breeds pen pushers
It’s time for Boris to tackle the tyrannical silencing of free speech on our campuses
Iain Mansfield
The bureaucratic blob is winning the long war against Brexiteers
Tom Welsh
Wake up, Britain – Huawei is a threat to national security
China has the incentive, and will soon have the means, to harvest UK data for its own illiberal ends
Robert Spalding
January 19, 2020
Good morning.
IR35 Is not a tax but legislation against aspiration. But yes, amend or repeal.
It is going to be said by many as it has been but, repeal the Climate Change Act. Reduce Corporation Tax so that we can attract some of those business from Ireland and Luxembourg to the UK. Start the process to abolish Stamp Duty by slowly reducing it. Get rid of inheritance tax. All these taxes are going to give more money in people’s pockets to spend. Money that will find its way to Treasury in the end.
January 19, 2020
Singapore growth rate has been over 6% average for the past ten years. So why are we only aiming for a pathetic 2.8%? Far more scope in the UK for growth if you get the bloated and inept state out of the damn way.
6% for ten years nearly doubles GDP but 2.8% for ten years gives just a 30% increase. It is GDP per cap PPP that is perhaps the best measure. 3% GDP growth with a 3% increase in population does not help living standards, it probably makes them worse as we are just more over crowded.
January 19, 2020
Thank you for my daily laugh. You give the start to my day a real uplift.
January 19, 2020
They will probably import more people to increase consumption whilst per capita goes down.
January 19, 2020
1: Introduce basic income / citizen dividend to all over 18 made up from 3 parts
a) VAT increase 0f at least 10% redistributed equally (this a first step to a progressive consumption tax to eventually replace income tax)
b) replace emission trading with carbon tax (with border adjustment) + dividend (i.e. all carbon tax collected is paid as dividend equally to all)
c) centrally created money (direct to individuals)
2: Change the additional stamp duty to start on 3rd house not 2nd
3: Zero business rates for high street shops receiving >50% revenue from books
4: Zero APD for domestic flights using electric powered take off
January 19, 2020
They haven’t real sorted electric cars yet. Sensible, economic, practical and safe electric aircraft a rather a long way off. Other than as virtue signalling gimmicks.
I suspect aircraft will move towards using manufactured or bio fuels unless there is some huge quantum leap in battery technology. I do not expect this – it is not the like computing and electronics where we have seen massive leaps in cost, size, speed and power usage.
January 19, 2020
Sorry lifelogic I ended up posting in wrong place.
January 19, 2020
Sinapore’s growth rate in 2019 was 0.7%.
This year is predicted to be little better – maybe worse.
Hardly an economic miracle.
Meanwhile workers in Singapore enjoy far fewer protections meaning u scrupulous employers can exploit them.
It’s easy for old people not to care about workers seeing that you mostly don’t work.
Singapore is facing a new reality. Developed economies do not grow as quickly as developing ones. China will learn this too soon.
January 19, 2020
You buy Chinese goods ? You don’t care about workers either then.
The easiest way to cut a worker’s legs from under him is to import more workers whilst already outsourcing his work.
This happened whilst in the EU.
This is what caused Brexit.
You still don’t get it.
January 19, 2020
Anonymous
“This happened whilst in the EU.
This is what caused Brexit.”
Not ANOTHER excuse for the Brexit debacle.
I can think of ONLY one reason that I believe is responsible:
IGNORANCE!
January 19, 2020
Margaret H, Well, you don’t think much do you? You have been told repeatedly why we voted to escape from your corrupt, dirigiste EU empire; and all you say is “nah, nah, not listening!!” That’s your IGNORANCE!
January 19, 2020
Nothing ignorant that, when you’re already poor, your government is importing MORE poor people into your area.
I can’t believe they did this to an enfranchised population and expected nothing to happen.
January 19, 2020
Andy: Does it ever cross your mind that some old people have not only worked for a lifetime, but have family members, who they care about, who go out to work.
Your constant bashing of older people is getting very boring. So much so, that I am beginning to hope that when you are old, you will be reading similar nasty remarks about yourself.
January 19, 2020
They are about twice as rich as the UK in GDP PPP per Cap. As I said growth has been over 6% average PA over the past 10 years.
The only real protection for worker is good availability of well paid jobs if they do not like their current one. No government employment protection these usually do more harm than good.
January 19, 2020
Andy
“It’s easy for old people not to care about workers seeing that you [they] mostly don’t work.”
They’ve done their work, real work, and in conditions that people like you would not survive.
I think you should enlighten yourself as to what old folk had to endure rather than ignorantly put them down all the time, you might then show some respect.
January 19, 2020
Well said Steve.
January 19, 2020
There are two type of old folk.
There are the 85+ old who really did endure hardship during the war. The older they are the harder it was.
And then there are the Baby Boomers. Who endured no hardship whatsoever, who were given everything, who took everything and who have repeatedly shafted the country.
Which old do you mean? I mean the latter.
January 19, 2020
Oh so when you say pensioners you actually mean those over 85.
Not public sector workers retiring on cushy state pensions in their 50s.
Good to know.
January 19, 2020
Salaries are higher in Singapore and unemployment is lower than here.
What is the problem supposed to be?
January 19, 2020
LL – you are giving many excellent economic numbers for Singapore but what is wrong with the country which many would never want to live there?
January 19, 2020
The people are lovely, the weather is great, the food is delicious, the MRT is spotless, they have sensible taxation and their government is efficient, what’s not to like?
January 20, 2020
Bob – -and the airport is possibly the best in the world.
The downside is the endless skyscrapers for housing as you travel further afield.
January 26, 2020
And it can be a bit humid sitting almost on the Equator. The 6 m people on 280 sqm (density 7800/km^2) might limit the possibility of gardening. But it can be nicely replaced by watching the 80,000+ ships a year going through the Malacca Strait. What is not to be liked?
And a true Brit would not want to miss a full breakfast in Raffles.
January 19, 2020
Successive Chancellors have been obsessed with cutting income tax, probably the fairest major tax, making up the revenue by more distorting impositions. Thus Messrs Lamont and Clarke introduced taxes on insurance (doubled by Messrs Osborne & Hammond), flights, landfill, VAT on fuel etc. I recall you, sir, being very critical of the last. How many riding schools have closed due to high insurance, and have readers tried insuring a car for a son or daughter? How much are Flybe’s troubles due to APD? And how much does landfill tax cost councils clearing fly-tipping? I would prefer to see a small rise in PAYE and cut out the plethora of unfair taxes.
To repeat a comment of mine a little while back, Osborne’s stealthy removal of sick pay recovery for employers was iniquitous in making businesses carry welfare costs of sickness, and should be reversed.
As others are already commenting, if we want to see healthy growth, we need to repeal the Climate Change Act, put fracking back on track and abandon the zero carbon legislation, all hugely expensive attempts to tackle a non-problem.
January 19, 2020
To increase productivity the UK needs much more investment in modern industrial equipment and infrastructure for business.
Not more houses, schools, and hospitals which are a form of consumption.
January 19, 2020
I’m afraid that’s true. We are desperately in need of more industry to sustain a standard of living now.
The people had chosen to limit family growth through contraception and abortion. They wanted sustainable lifestyles but politicians, civil servants and EU officials decided otherwise.
If we had wanted there to be more schools, houses and hospitals we would have had more children.
In my own family, in two generations, we have reduced our family numbers by a third and that this is a national trend is evidenced by an ‘ageing population’.
The British were doing the right thing regarding consumption and the environment but the Blair government onwards threw this into reverse. So now our island’s carbon footprint is going to have to increase and that’s even with living standards falling.
January 19, 2020
Depends who you are targeting and what behaviour you don’t want to punish.
– I would like a reduced income tax but initially I suggest leaving income tax levels as they are and increase personal allowance significantly – everyone benefits.
– I would prefer VAT replaced by Sales Tax at a significantly reduced levy, say 15% – everyone benefits. I stopped buying so much when the rate went to 20% and still have to justify to myself every non-essential purchase. To me VAT = EU.
– Remove IHT completely, along with it’s rats nest of financial and legal entanglements
– Move to combined NI on earnings, including deferred income such as pensions but not on savings which will have already paid once already. Provide a clear breakdown of deductions and how government expenditure is taken from it – I never received it despite the Osbourne promise.
– Get rid of stamp duties, ensure there is a duty on financial bodies to clearly pass on the saving.
– reducing costs and complexities for businesses is a whole other catalogue of targets
January 19, 2020
On modifying the tax and regulatory environment to promote business and industry I suggest one key goal and metric should be re-shoring/onshoring.
January 19, 2020
Stop taxing people for going to work.
January 19, 2020
The majority of HMRC revenue, around 52%, is from taxing work/income while 21% comes from VAT.
What do you suggest they replace it with?
January 19, 2020
I meant taxing them for getting to work. Transport.
It’s a kick in the nuts to have to repair the car that you got to get a job and would get rid of if you didn’t need to get to work and then have VAT whopped on top of the bill. Ditto petrol… parking.
If only people knew.
For many the benefits of going to work and being unemployed are pretty marginal.
January 20, 2020
OK.
Not sure how it would work though, free public transport wouldn’t address the needs of many.
Perhaps everyone gets a commuting personal allowance against tax.
I’ve been redundant/unemployed, it sucks.
January 19, 2020
Inheritance Tax should be abolished, or at the very least the nil rate band vastly increased….and no false Osborne style false promises about it!
January 19, 2020
Faster growth requires a willingness to invest and take risks. Focus on removing or reducing taxes that inhibit or restrain enterprise, investment and the savings needed for that investment in innovation and growth. Obvious candidates are CGT, IHT, high rates of income tax, stamp duty on all transactions. Legislated taxes resulting from the Climate Change Act (which should be repealed along with the 0.7% aid commitment which should be discretionary for disaster relief) need review and reduction/elimination. Too much capital is tied up in non or poorly performing assets. People need incentives to rethink their investment needs and priorities.
January 19, 2020
I appreciate the direction you are going in wanting to reduce taxes, but changing rates is just fiddling at the edges. The whole tax system needs a total revamp. It is unjust and costly to collect – a philosophical redesign, fit for this century must become a priority:
– to make basic living easier by removing taxes on food and clothes;
– VAT should be increased on Luxury items, especially those imported;
– income tax is expensive to collect and administer and punishes the individual – There are much better ways of collecting this tax;
– large companies should be encouraged to be fully responsible for the health & well being of their employees to reduce the burden on the NHS.
With the tax bible a confusing morass of complicated excessive rules, now larger than the bible, allows the rich to escape taxes, and cries out for a massive rewrite.
January 19, 2020
Raise the Personal tax allowance to £20,000 over the next 5 years.
Scrap Stamp Duty on the family home.
Scrap VED completely.
Scrap all insurance taxes.
Scrap tax on savings accounts.
Index link Capital gains tax so allowance can be rolled over year on year if not used.
Remove the family home out of any IHT calculation.
Raise the personal allowance to £1,000,000 for IHT.
Remove University Tuition fees for health care professionals, in exchange for a fixed contract to work for the NHS for 10 years after qualification.
To help pay for the above:
Remove subsidy for electric cars.
Remove the House purchase savings scheme.
Put a tax on fuel if you remove VED, will also stop fraud /non payment, and time in court.
Savings made on Government departments because no calculations/collection required on any of the above proposals
January 19, 2020
a lot of good stuff there, Alan.
my take:
Raise the Personal tax allowance by £1,000 for the next 3 years.
Scrap Stamp Duty on the owner purchased for home, under £500k.
Stamp Duty begins at £500k 2%, property above £1m 5%.
Scrap VED completely for under 1500cc petrol/lpg, fixed rate £200 above 1500cc.
VED for diesel fixed rate £250, electric zero.
Reintroduce windscreen sticker, and a MOT proof sticker.
MOT to begin at 4 years (at 2 year intervals).
Introduce 5p per litre special tax on petrol and diesel to be spent on pothole repairs.
Remove the family home out of any IHT calculation.
Raise the IHT allowance to £750k for each individual.
Refund 20% of University Tuition fees for junior doctors, in exchange for each year worked for the NHS for 5 years after qualification.
Child benefit to be £25 per week each for 2 children, £10 per week for third, nothing thereafter. Those on current payment to be fixed to 16 years old. Review every 4 years. Threshold for Families in which parents each earn less than £50k to be raised to £70k ( to receive child benefit without having to pay the money back).
Council Tax to be frozen for 3 years from April 2021/2.
Amend current policy aims to keep primary class sizes for pupils at Foundation Stage and Key Stage 1 to a maximum of 25 (from 30 pupils). Adjust minimum size of other Primary school classes to 32 (from 30).
January 19, 2020
Alan Juston,
Perhaps we should consider an opposite position on inheritance tax. If we are to believe that anyone can make a success irrespective of background then perhaps we should give everyone equal opportunity to make it themselves, 100% inheritance tax would be more consistent – or a little softer 100% on any wealth over median wealth (to be passed on randomly in a NI number lottery, giving everyone a chance of inheritance – because of course it doesn’t make a difference).
January 19, 2020
Caterpiller.
What is the incentive to build up a company/business/funds/investment and be self sufficient, if it is all going to be taken away by the State.
How about those who pass away early in life through illness or accident, when those funds would support the family. ?
January 19, 2020
I’m not in favour of constantly increasing the personal allowance. If we could make sure that everyone has skin in the game plus a better understanding of how much the government takes from them in total, I think voters would be more likely to demand better value for money.
January 19, 2020
W M C
£20,000 equates to £10 per hour minimum wage for working 40 hours a week.
Thus everyone in full time work will be at least on £20,000 per year which would be the starting rate of tax, so they all have skin in the game.
January 19, 2020
There is no scenario under which Tory hard Brexit leads to growth of 2.7%.
The Chancellor sounded like a complete buffoon even suggesting it. Unicorn thinking.
Meanwhile he has made it clear many businesses will lose out of Brexit.
And he has told the others they have to prepare for regulations to change.
But he would not say which regulations and what they will change too.
He is, in effect, trying to shift the blame for what is coming. It will not work.
If you want to boost the economy slash pensions so you can cut taxes.
Raise the state pension age to 75 immediately to get old people back into work.
They can always pick fruit or work as nannies or in coffee shops.
It is economically unsustainable having millions of people sat around watching Countdown and going on cruises every few months at everyone else’s expense.
January 19, 2020
You’re going to find it so frustrating when good Tory supply side growth measures + free trade clearly boost growth well above the eurozone!
Most remain voters of course will be delighted. You’re in the 20% (ie 10% of the population) who, when surveyed after the referendum, were desperate to see Brexit be a disaster and the EU ‘punish’ the UK.
January 19, 2020
Alas there is zero chance of anyone being happy with Brexit. Most of you don’t like Johnson’s capitulation – and you all voted for it.
The EU will not punish the UK. It just will not give us terms as good as membership without the commitments and responsibilities that go with it. Of course we will still be able to sell into the single market. But there will be checks, and extra bureaucracy and the additional costs you all voted for.
There is zero chance of 2.7% growth for the UK anytime soon.
January 19, 2020
Tell me you wouldn’t be disappointed if 2.7% happened.
January 19, 2020
… And I know plenty of old people working in coffee shops, driving buses and working as nannies.
Why do you think they’re called nannies ? Looking after the babies was they’re traditional role and many of them have reverted to doing it now… whilst in the EU !
January 19, 2020
their
January 19, 2020
Anonymous
Yes, for their family and unpaid, not a salaried job.
January 19, 2020
Margaret H, So that effectively puts money in the pocket of their young relatives. And it’s still work.
January 19, 2020
Because two workers are now needed to buy the house that your generation could afford on one wage. This happened whilst in the EU.
A significant drop in living standards.
None of the grandparents I know ever foresaw themselves doing the child rearing bit again. It’s not done out of pleasure and they all look drained.
January 19, 2020
Anonymous
Nothing to do with EU but personal greed encouraged by government policies. Our house bought in pre EU 1964 was sold 8 years later for over 4x that amount. After that things went mad with dinner party talk preoccupied with boasts about how much their houses had increased in value. Madness.
Can you name an EU country where a similar madness took place? No, the reason why so many British people bought houses in France, Spain, Greece etc was because they cost a fraction of the price property fetched here.
And my experience was that grandparents were always expected to help look after their grandchildren. I can’t remember any of my mother-in-laws contemporaries proposing to spend the winter months in the sun. They were too busy looking after the next generation.
January 20, 2020
Have you ever left the UK and travelled in Europe Margaret?
Property prices in Europe have risen greatly too.
Try looking at house price rises in places like Barcelona or Ibiza or France.
They were cheaper decades ago but not now.
Like the UK there are a few cheap areas but you are, as usual stuck in the past.
January 20, 2020
mh – -you were lucky to have grandparents. I lost 3 of mine due to the WW1, and flu – over 20 years before I was born.
The fourth was made a widow with 2 very young daughters during WW1.
I suspect many on here might say much the same.
January 26, 2020
Edward2, why should Brits want to buy a holiday house in one of the continental conurbations? Don’t you think they would prefer going to some pleasant but les crowded places? There are still a lot of such places on the other side of the Channel for prices at least third or more cheaper than in South of England. What about a villa in Occitanie (5 bedrooms, 1 acre) for €300k or an old farm in Vogelsberg (5 rooms, a big shed, 5 acres) for €250k. This last price has actually been reduced in the last six months. Interested?
January 19, 2020
Indeed, there is no reason for employers to be involved in pensions beyond what is agreed between employer and employee. They are merely a specific type of savings policy.
People who have begun contributing via NI should be rewarded appropriately at any age they choose to retire or take a career break, but there is no reason to remove money via NEST or NI and suck more cash from businesses. The benefits system covers any shortfall at any age without the need for employer involvement.
January 19, 2020
@Andy; You are of course quite correct, if the only markets you believe available to you are the EU27 and those within the EFTA!
Trouble for europhiles like you is, there are another 130 odd countries (some small and some large, indeed some very large) that we can trade with post Brexit, some we are not allowed to, or have restricted, trade with as members of the EU.
Given a fair wind, a free hand, and some decent business orientated measures from HMT 2.8% is a realistic aspiration.
January 19, 2020
There are precisely ZERO countries we do not trade with now which we will be able to trade with after Brexit. None, nada, nil. We might be able to trade with some on different terms – but to claim there are huge entirely new markets the EU stops us trading with us just not true.
You would hope we will continue to be bound by internationally agreed sanctions on countries like Iran, Russia and North Korea. But nobody would put it beyond this government to renege on those.
January 19, 2020
@Andy; Nonsense. If a country can not trade freely due to EU rules it means by definition new markets open up once those rules do not apply!
As for your second paragraph, indeed if sanctions are applied by the UN then I’m sure the UK govt will obey. On the other hand you seem believe that the EU is the international arbitrator of such matters, they are not…
January 19, 2020
you are such a laugh, the old joke rings a bell – you ought to be on the stage – sweeping it.
January 19, 2020
Taxes on employment and income include Income Tax, National Insurance., the Apprenticeship levy, and IR35. Is the wisest choice as if the people have more money most will spend it. So logic says this is the surest form of growth as long as the companies are allowed to keep some of it to grow. Andy’s comment is illogical. Send pensioners to work leads to more use of hospitals and care levels and huge resentment as the pensioners have spent a life time paying into the system and raising their young. The young used to reach maturity at a reasonable age but now it seems that they are unable to activate their brain cells until middle age at least. Everyone knows change is coming but some are cowards and some are not
January 19, 2020
Andy,
Maintain a low wage, low income approach does not tend to help an economy grow – life quality, capital investment and efficiency gains tend be better. Nonetheless if you wish to pursue this route as well as increasing pension age then reducing school leaving age should also be followed – a small.leaving age of 11 would make many more people available for fruit picking, nannying, and waiting.
January 19, 2020
Attitude angry
Negative nonsense
Dull desperate
Yawn!
January 20, 2020
clever initials ….but you have to ask yourself why so?
Perhaps a retired parent slapped his bum very publicly for talking nonsense.
January 19, 2020
Does the Conservative Party have a coherent economic strategy that goes beyond adjusting tax rates? For example, regarding the plight of British Steel, during the May premiership, BBC reported that leaving the single market means the UK will no longer be bound by the EU’s state aid rules, and that Jeremy Corbyn had argued that leaving the EU gave the Government the opportunity to support our steel industry. The report goes on to say, however, that “the EU is concerned” that this opportunity for the UK could “undermine the single market”, and observes that the Political Declaration (“PD”) calls for “open and fair competition”, including in the matter of state aid. BBC noted, though, that Mrs. May had failed to get the PD through Parliament.
Boris Johnson, of course, has “succeeded” where Theresa May failed, with the relevant provision on state aid being found in Clause 77 of the PD. And now we have the recent report that the Government’s proposal to rescue Flybe (by deferring duty payments) is being challenged on the basis that it is against the EU’s state aid rules. Obviously, the “transition period” comes into play here as well, but the BBC report on the steel industry strongly indicates that the effect of the Political Declaration will be to keep us subject to EU single market rules, at least in the area of state aid, much as Clause 72 of the PD is said to effectively keep us in the Common Fisheries Policy.
January 19, 2020
Kevin
This is what worries so many people!
Although it would be more disruptive and messier, I think the Gordian Knot needs cutting, in the form of no deal. I understand that most issues have been agreed, that needs agreeing. No deal would then mean the fisheries and defence etc negotiations would be done in on an equal footing. There’s too many “traps” in the Political Declaration .
January 19, 2020
Ah the joys of central planning. It’s worked so well before we can all be confident now that the politburo- sorry cabinet have decided to let the proles have some growth all will be well for us all.
I, at least, am completely confident that the brilliant minds at the Treasury and Bank of England will get over their problem of being wrong on every single forecast they’ve ever made and print even more money to paper over the cracks some more.
January 19, 2020
An excellent article by Jeremy Warner in the Telegraph. Remove all CGT from owning shares in smaller companies, not just particular companies on AIM.
https://www.telegraph.co.uk/business/2020/01/17/time-running-save-dying-stock-markets/
Reform unfunded public sector pensions – essentially a tax
January 19, 2020
We don’t need a debate on what taxes to cut and how government should spend the monies we give it. This debate’s been had many times before over the decades. Repeating something that you yourself know to be true and yet continually avoid addressing is madness
Your party know what needs to be done. Just admit you haven’t the political courage to do it. Slashing direct tax and smashing Labour’s client state is fundamental to giving this nation back its dignity, pride and footing. You refuse to do both because it’s easier not too.
Your embrace of oppressive social intervention policies at the atomic level is disturbing and reveals a party without a moral soul and appetite for aggressive political interference and social control. That compliant mindset does not lend itself to reform of Labour’s client state. It’s a mindset that’s been warped by decades of gender and race politics. It’s a mindset that this nation doesn’t need.
The influence of London based political activists, pressure groups and the infection of the body politic by leftist and progressives is still controlling how your party implement policy. The culture they’ve managed to create is forcing your party down a path that is causing deep resentment and concern.
January 19, 2020
Tax, dear boy, tax
January 19, 2020
Broadly speaking tax something if you want less of it and don’t tax it if you want more. We want more work and investment so let’s tax it less. I suggest CGT at a flat rate of 20%, potentially to come down in future. 47% is far too high as a top rate of income tax – we need to have the lowest marginal rates in Europe to compete post Brexit. This will produce a lot of wailing and nashing of teeth from the left so I suggest an early cut to 35%. Stamp duty is a tax on labour mobility so let’s cut the ridiculous levels, and correct the housing market through planning reform. Inheritance tax is apparently very unpopular though it applies to few people – so let’s at least implement the Osborne pledge to increase the limit to £1m. Not sure about vehicle excise duty etc. VAT or a similar sales tax is much easier to levy, and much more difficult to avoid, so I’d suggest not restricting its scope.
Above all we need the U.K. to be super competitive and attractive for investment and employment. All tax measures should be tested against this requirement.
January 19, 2020
Please consider the following taxes for reduction:
– VAT business rates;
– income tax;
– carbon taxes – all types should be removed – they do nothing for the environment;
– scrap HS2;
– reduce or eliminate tax on all groceries, and most clothing;
– reduce VAT on home energy usage.
January 19, 2020
Replace VAT with a more adaptable purchase tax system, some items or purchases would end up being taxed at a (perhaps far) higher rate, others at a far lower or even zero rate.
Remove VAT/PT tax from B2B purchases made by companies and sole traders registered with HMRC.
Repeal IR35, the same goal (stopping bogus self employment) can be achieved via other employment laws. NI contributions are an outdated concept, the income raised no longer being ring fenced.
Sort out UBR once and for all, the current rules on exemption etc. are a minefield that puts off many small businesses from expanding or even being created.
Revive the lower rated ‘Light Goods’ VED for commercial vehicles below 3.5t used for business purposes, including mobile adversing, were the vehicle is registered to (legally owned) and used by the business.
Effectively abolish the TVL ‘tax’ within the life of this parliament [1], by that I mean retain the TVL fee but decriminalise it, at the same time reducing the fee paid to the BBC, only funding a core PSB service, if the BBC wish to involve themselves in non core activities then they should do so via their existing “BBC World” brand and it become a subscription service within the UK.
At the same time create, at arms length from govt and all broadcasters, a standalone UK version of CSPAN to broadcast the Parliaments and other political events – paid for via any remaining voluntary TVL fee, and a surcharge on both IP and over the air TV subscriptions.
[1] surely, if a charter is granted it can be revoked?
January 19, 2020
We have a party in government whose mindset is one not of conviction and principle but of the political. Therefore the decision to reform both direct taxes, indirect taxes and the reform of the socialist State will only be made if it is politically convenient. The fact that the left and white man-hating progressives now control most aspects of the British state and its concomitant public sector will result in zero reform, more Tory capitulation, more intervention in business and our personal lives and further gargantuan waste
January 19, 2020
I agree with all those who have indicated that they think a radical overhaul of the Tax system is what is needed, rather than tinkering at the edges with cuts in rates. However, while we are waiting, probably in vain if recent past experience is anything to go by, for the former to happen, the four things that seem to me to have done most short term damage are Stamp Duty on property transactions, Vehicle Excise Duty, the Apprenticeship levy and IR35. With the first and last it is not just the rates that cause the problem, but their complicated nature which not even HMRC understand. Reducing or removing these together with a cut in VAT seem to me to be the things that would give quickest results.
January 19, 2020
All of those please Sir John. The tax revenue will increase markedly and the wealth creators will be unleashed to deliver a massive Brexit boom.
January 19, 2020
The basic misunderstanding by politicians is that they can “boost” and economy. They can’t. They can only frustrate it. It is not macro economic spending and overall tax cuts we need but a massive shift of assets, wealth, capital and income from the State, regulated utilities and big business to entrepreneurs, small businesses, the regions nd long term investors. Three taxes need radical overhaul: Capital Gains Tax (which un-indexed is a Marxist confiscation of private property) VAT charges on the non VAT registered and Business Rates (now being addressed after 10 years of decimating the High Street). Empty property Rates must be abolished. And we need a Department for Regional Development.
January 19, 2020
Sir JR
There is a major fiscal deficit in the US costing US$ 1 trillion a year for the federal budget, this is not sustainable even short and medium term, so tax cuts have to be made very selectively as we will otherwise end up with too big a deficit as the US at over 100% of GDP
January 19, 2020
First review spending, difficult as our chancellor is going for Keynesian inspired growth. Then:
Increase import duties on anything we can make or grow here.
Reduce VAT by the same take or more.
Give back child benefit over £50K but make it universal for only two children resident in the UK.
Taper CGT.
Either remove IHT breaks from the very rich who can tax plan or remove IHT for all.
Tax benefit recipients as though it was income (including child benefit) and use the proceeds to increase the threshold for NI.
Make public transport commuting costs tax deductible for all.
January 19, 2020
Sir JR,
You call the growth rates of 2,8% bold and ambitious, I would say that is a diplomatic way of describing the ambition of Mr Javid
The other objective of not following EU standards and rules is a another rather naïve way of looking at the future competition of some of our sectors such as the car industry, pharmaceuticals and food industry. But Mr . Jarvid was a banker he has never really worked in industry or manufacturing.
January 19, 2020
The measures to achieve 2.8% growth will probably lead to inflation within two years. The so called Tory public expenditure increases are Corbyn light. We’ve been here before. In the early to mid 1970s, 5% growth in one year following the public expenditure bonanza in the 1972 budget was followed by 3 years of stagflation. In the late eighties / early nineties, one year of 5% growth was followed by 3 years of stagflation. This time, the cause was inflation caused by tracking the Deutsch Mark followed by deflation caused by tracking the Deutsch Mark. There is no reason to suspect a different outcome this time.
To avoid this fate, we will need increased tax revenue. Cancellation of the cut in corporation tax and the increase in the 40% income tax threshold will help. Few businesses and middle class people will vote with their feet because of these. Cutting CGT and maybe reducing the 45% income tax rate to 40% should lead to increased tax revenue. Councils will need a couple of extra Council Tax bands at the top end in order to finance home care properly. If we are going to have a property tax, let’s have a proper one. This responsibility should NOT be transferred to central government and it should be charged for.
What is the rationale for lots of different VAT rates? The whole argument in favour of VAT vs the old purchase tax system was that distortions to the economy would be avoided. There are other better ways of helping the poor. I would like to see VAT reduced to a flat 10% applied to all goods and services.
The big one, to await a change in public opinion, is to end the ludicrous free-at-the-point-of-consumption die-on-the-waiting-list system of financing our NHS. I’ll wager that the forthcoming expenditure splurge on the NHS will fail to achieve its objectives. There will still be unacceptable waiting times. A system of modest charges for GP appointments and non-emergency attendance at A&E will get the hypochondriacs out of GP surgeries and the drunks out of A&E. We should also spend a lot less on geriatric medicine. Since I started working in 1964, life expectancy conditional on reaching retirement age has increased vastly for males and significantly for females, even allowing for the increase in their retirement age. Among our ‘rewards’ from this lunatic conspiracy between the medical profession and the pharmaceutical industry are that 800,000 people live to ‘enjoy’ dementia (not to mention the ruined lives of their carers) and that 2,000,000 people in extreme old age take 7 different types of pills just to keep going. This behaviour is absolutely gaga. The very least we can do is to get the elderly to contribute to their costs and to stop disapproval of suicide – assisted or otherwise. (Sod the God squad) Who knows, if we get some demand management and extra revenue for health care services, we might be able to afford more on mental health and to treat people close to their homes. It should not prove difficult to help the poor by allowing GP surgeries and hospitals to set up charities to help fund their charges.
And on the expenditure side, bailing out banks and airlines must be an absolute no-no. We could also reform the running of our railways to avoid any taxpayer contribution.
January 19, 2020
I see being reported today that an order is being placed for the first Small Modular Reactor (SMR) to be built on an existing nuclear site so the blob won’t be able to derail it.
This could be a major boost to the economy and our balance of payments.
Have we actually got someone with real knowledge in the government. That would be a first.
January 19, 2020
I would like to see more generous tax arrangements to encourage investment in R & D.
January 19, 2020
@Gordon Merrett; The problem there would be where UK R&D ends up, any tax breaks should only kick-in retrospectively, when R&D leads to manufacture here in the UK.
January 19, 2020
My priorities would be:
a) Abolish the ‘factory tax’ and allow immediate capital allowances on all investment expenditure. This will boost investment resulting in a higher tax take overall.
b) Reduce taxes on the wrong side of the Laffer curve to boost economic activity and so raise more revenue. For example top rate stamp duty.
c) Remove excessive taper rates in the income tax, pensions tax relief and universal credit systems as these are distorting people’s priorities and thus stifling the economy.
d) Remove VAT on home renovations and green products, as the most cost effective way of achieving our housing and carbon objectives.
January 19, 2020
The Conservative Party is copying the desires of the wish list from all the other groupings.
From were I am sitting it would appear all MP’s see themselves as interventionists. Yet none of them have the slightest idea how to permit the people of this great country to achieve fulfillment. Time and time again Parliament believes that they are the best ones to spend others hard earned cash. Time and time again Parliament gets it wrong, they waste more money than they put to good use.
From a tax point of view we need less of it paid equally by all, without all the baloney and double talk – that only government can get results. They(government) are wrong every time only the People can get results, and that means different things to different people and different groups. Meaning any attempt at top down control fails and fails big time.
All the peoples are equal, manipulation and intervention just breads more distortion. The UK’s tax system is from the dark ages. You could easily reason that the whole lot needs scaping and starting over
January 19, 2020
Gee, practically thirty minutes on the royal family in today’s BBC ‘The World at One’. How low can the country get?
January 19, 2020
hefner
I like Mr Markle’s description of the Harry and Meghan soap opera/pantomime:
“Walmart with a crown on it.”
January 19, 2020
The first time I’ve heard someone say they’re quitting their job to spend less time with the family.
January 19, 2020
Or to put it another way:
” Does anyone know how to fly a plane ..who didn`t eat the fish ?”
Hilarious
January 19, 2020
The media has interviewed the only two Canadians on Earth who were a bit surprised its snowing. Climate Change Chumps are running out of people saying “It’s never been like this before!”
January 19, 2020
John Bercow has been nominated for a peerage by Jeremy Corbyn.
We know why Shami Chakrabati was ennobled, but I’m not sure what Bercow has done to earn such a plaudit from the extreme left.
January 19, 2020
Corbyn was saved the horrendous job of actually carrying out the nonsense he’s talked for decades, by the antics of Bercow. You scratch my back and I’ll ….
January 19, 2020
@Bob; Like him or loath him Mr Bercow is an ex-speaker of the HoC, name me a previous ex-speaker in modern times who has not been offered a peerage -you won’t be able to, the only two have been Edward FitzRoy and Sir Harry Hylton-Foster – both died in office, 1943 and 1965 respectfully.
Just a shame that the current Tory party is so eaten up with bitterness that it has taken the ‘resignation’ nomination of Mr Corbyn for the correct thing to be done.
Before you ask, I loath Mr Bercow.
January 19, 2020
Bercow clearly liked breaking with conventions. We should put only good and decent people in the Lords. It is stuffed with dire, pro EU, climate alarmist lefties and people with vested interests and consultancies already.
January 19, 2020
@Jerry,
Bercow regularly flouted Parliamentary precedent, so why break a habit, especially in view of the reputational damage his tenure has inflicted on the office of the Speaker.
January 20, 2020
Apologies, my reply to @LL; was meant to be tong in cheek, I forgot to add the emojo! 😳
January 20, 2020
@Bob; “Bercow regularly flouted Parliamentary precedent”
As have many other Speakers, from not wearing wigs to changing procedure rules, and remember, if a majority of MPs become so unhappy they can always sack the speaker (if the speaker doesn’t take the hint).
Your comments probably say more about your own bitterness than they say anything about Mr Bercow now or then.
January 20, 2020
@Jerry,
You’re comparing minor issues like dress code Bercow blatantly ignoring precedent to push a political agenda?
What more fitting way to repay his treachery than to ignore precedent in true Bercow style.
BTW Jerry, accusing other people of bitterness just because you’ve lost an argument says more about your character than mine.
January 20, 2020
@Bob; What ever. No one as blind as someone who simply refuses to see past their partisan party-political mind-set, I guess.
By objecting, perhaps blocking Bercow from a peerage, some are simply lowering themselves to his level…
January 21, 2020
@Jerry
No, it’s not lowering themselves it’s just demonstrating that partisan political chicanery to the advantage the other side in international negotiations by a Speaker cannot be seen to be rewarded.
Impartiality of the Speaker is not optional.
January 21, 2020
@Bob; “Impartiality of the Speakerity of the Speaker is not optional.”
But “Impartiality of the Speaker” was the last thing you wanted, and that’s what got your goat (and many others besides), the fact that Speaker Bercow was being impartial when it came to allowing opposition and backbench time, or for amendments to be made so to enable the democratic process.
No doubt had the Brexit boot had been on the other foot, had the now ex-speaker made it easier for Brexiteers to be heard and table amendments, in the face of a Remain government, people like you Bob would be the ones demanding the peerage. Just like they demand a peerage for Mr Farage..
My problem with Speaker Bercow was how he conducted himself personally as speaker, such as his shouting at and belittling of others during PMQs, not for his procedural rulings.
January 19, 2020
Bob
Well it’s obvious really, just join the dots.
January 19, 2020
Service’s to the Labour Party!
January 19, 2020
Don’t cut tax rates, life is too short, abolish the tax (and you can reduce the number of Revenue employees). I would like to live in a free society, so abolish Capital Gains Tax, Inheritance Tax and Stamp Duty.
But is the abolition or reduction of such taxes legal under the Withdrawal Treaty/Declaration, level playing field and all that for the next fifty years? Never mind, cut the tax that we pay to the European Union, VAT.
January 19, 2020
Deflate the housing bubble so put a one way capital gains tax on housing with very few off sets.
January 19, 2020
I’m no expert but I hate stamp duty as it penalises those of us who live in the South. I particularly dislike the threshold system where purchases under a certain value are stamp duty free, at least make it a flat percentage.
January 19, 2020
1. Scrap IR35 entirely (fiscal cost = zero).
2. Scrap VAT as a system and replace with a retail sales tax (fiscal cost = zero).
3. Halve the take from stamp duty on house transactions (fiscal cost = c£6bn).
4. Amalgamate income tax and employees’ NI (leave employers’ NI separate) (fiscal cost = zero).
The aim should be to drastically simplify the tax system, without risking too many unintended consequences, and without too many changes too quickly.
January 19, 2020
@NickC; In other words, create massive confusion for all without any benefit for anyone – other than property speculators…
January 20, 2020
@NICKC –
Very much agree on combining NI and Income tax – and if we made PAYE a tax paid by employers on head count or salary paid, that would help to get rid totally of Income tax.
Income tax has to go – and there are ways in place already to tax at source for interest made on investments – lets see the end of this most intrusive, and too personal tax
January 19, 2020
I think the simplest and best tax cut would be to significantly raise the personal allowance whilst keeping the withdrawal of that personal allowance for those earning six figure salaries. This would drive immediate spending so help growth. It would also be disproportionately beneficial to the rising number of working poor increasingly driven to use of food banks.
The rate of IHT could be increased to help offset this. It is a difficult tax to avoid and would help redistribute some of the large, unearned capital gains made by the older generation who have benefited from house price inflation.
January 19, 2020
When we leave the EU,our VAT payments , some of which go to the EU,will be available to cut taxes. So start with stamp duty and inheritance tax. This will also cut down on the number of civil servants who work on this.
January 19, 2020
on a lighter note(?):
Introduce a new consumption tax on coffee, made on the premises ready to drink, not beans or instant.
Introduce a new tax on handbags.
Introduce a maximum fine for overstaying car parking of £5. Fine for no ticket maximum £10.
All carparks to have bays marked at 45 degree angles.
New licence for dogs £20 per annum, and be chipped. Fine £50.
Cats to have collars and bells or owner to be fined £50.
Whistleblower telephone numbers per council.
Birdseed to be VAT free.
January 20, 2020
Bring back the hat tax. And the window tax.
I’d bring in a car-washing tax too. Would raise a fortune in Yorkshire.
January 20, 2020
and an enormous hike in VAT on Scottish, Welsh, and EU flags…
– better still, ban them in England.
Double tax on green wellies, and all Burberry products.
January 20, 2020
I think that your suggestions re dogs and cats are spot on, actually.
However, I seem to remember that when the dog licence was abolished, fouling actually went down, the psychology being that people felt that the licence was their payment for others to clear up the mess?
Otherwise yes.
January 19, 2020
to have marked growth surely we need to have increased trade and with better productivity- but if we are instead hellbent on shutting down trade with the EU and with no sign yet of an alternative market opening up- also if our new intended markets are going to be geographically so far far away I don’t know how productivity can come into any of this- all I can see are additional transportation and handling/insurance costs while JIT will be a thing of the past- so then I ask myself where can this growth come from?- maybe the financial and services sectors? but in the meantime looks to me like we’ll continue to have money just going round and round? not much hope for growth there
January 19, 2020
The absolute key is to make all taxes simple & understandable & fair. The first need is for the government to live below its income to start repaying our massive debts. Lets have the bonfire of the quangos we were promised. Cut every quango budget by 50% from April & then a further 50% from next April, Drop top tax rate to 40% from April & increase allowances to 15k before tax paid, to another £50k before higher rate tax kicks in, so £65k before you pay higher rate tax. Drop all tapering of allowances to treat all fairly. Reduce IHT to 10% after a £1 million allowance. Change Vat to a flat rate where everything is taxed & the government does not have to repay it, so getting rid of many civil servants. CHarge National Insurance at a lower rate on the full income of people. Reduce RFL to sensible flat rate & take VAT of electric cars for 5 years to encourage purchase. Reduce Insurance tax to 5% max or nothing, the same with APT. Reduce stamp duty to 0% on homes up to 1 million, then 5% on the amount over that. Above all, simplify, simplify, simplify & cut goverment expenditure to fit income, not the other way around!
January 19, 2020
Sir John
As you read through the input of your contributors a picture emerges that there should be tax relief for this or that. New taxes on this thing or another. Then we need tax incentives to do this and so on.
What that shouts out loud and clear is the whole comprehension of tax is broken, not fir for purpose. People are have to get tax breaks for one thing or another, or direct hand outs. Each time it is because a tax is actually penalizing some and not others.
That is the whole problem and the misguided adventure of interventionist Governments.
Tax is there to pay for the infrastructure, the safety and security of the people. If you like the framework so people can thrive and achieve. Therefore if all tax was paid by ability and equally we would all be paying less and there would be no need for the endless bureaucratic tinkering.
January 19, 2020
Pension Tax relief is designed to incentivise people to save for their retirement …. but with a max annual contribution of £40k and a lifetime limit £1.055m which if exceeded can causes an excess tax libility of 55%. High Net Worth workers (e.g. Doctors) are reducing their hours to avoid breaching this lifetime limit, we are told.
My suggestion is as most pensioners won’t be paying 40% tax on their pensions, except the very wealthy, why give High Net Worth people 40% tax relief up front, better to limit this to the standard rate of tax 20%. Cleverer people than me need to work out how much in tax relief the Govt would save from higher earners, but I would propose in return for increasing the lifetime allowance to say £1.5m+… so the Doctor’s and similar feel they are incentivised to go back to working fulltime, rather than severely penalised.
Many overseas countries allow pensions to be paid tax free, with their initial contributions invested from their tax paid income. UK govt should evaluate the best of these schemes.
Effectively the UK sort of does this and more already with Cash/Stocks/Shares ISAs, with annual contributions limited to £20k pa and no lifetime limit.
I would suggest annual limits are reviewed perhaps for over 50’s for example to enable them to grow their pot larger prior to retirement, increased to say £40k.
Allow the state pension to be accessed earlier than NPA (normal pension age) with fair actuarial cost reduction for early access. This is done widely already in company schemes.
Scrap IHT on already taxed income/assets or at least increase its odious start from £2m+.
Imho scrapping IR35 will overall increase the tax take for HMRC as more contractors will be incentised to grow their businesses and create more wealth and spend their toot in the economy, boosting sales tax receipts in other areas – noted others want EU VAT gone 😉
January 19, 2020
As a software freelancer, I have a grievance with IR35. HMRC have always declined to issue rules, but seemed to think guidelines sufficient. As a contractor, I know that my time in each contract will end, quite rightly, without redundancy pay. I will not get relocation if I take a contract far from my current home and I must train myself. If I am ill or wish to go on holiday, that is at my cost. I accept and even welcome these conditions but face the possibility that HMRC will come along later – having seemingly accepted my working conditions – and deem me to have been in permanent employment.
Many contractors took the risk and faced down HMRC who challenged a few in court an almost always lost.
Since their threats to individuals failed, they now threaten the client companies. They have rightly determined that legal departments are far more risk averse so, in many cases, simply determine that all contracts are caught by IR35.
The result will be that many companies will take steps that reduce their efficiency and this is bad for the economy.
January 19, 2020
Why not 2.9%?
January 20, 2020
All tax cuts are to be welcomed and should be easily achievable provided that the all too evident government squandering is axed. However, tax reductions on work and income are clearly evident on most peoples payslips. That would have the benefit of gaining support from working people and perhaps turning them away from the squandering socialists.
Whatever policies are put in place we cannot afford another Labour government, or one with significant LibDem influence, for the sake of ourselves and our descendants. That needs to be kept in mind.
January 20, 2020
JR: “2.8% growth would be great”
Yes it would. Now subtract the inflation target and we’re left with 0.3% growth.
Ah! That’s not so good.`
Reply The Chancellor was talking about real growth rates.
January 20, 2020
JR: “The Chancellor was talking about real growth rates.”
Ah! So he projecting a 5.8% growth rate – which has never happened in a mature economy. and an inflation adjusted growth of 2.8%
I’d like to be as upbeat as the next guy. But that’s away with the fairies.
January 20, 2020
Cut income tax for the lower paid by raising the threshold (if you earn the equivalent of the minimum wage or less, then you don’t pay income tax): that extra money in pockets will be spent, profiting businesses and raising the transaction tax take; it will also be mightily appreciated by many of the voters the Party will need if it wants to get a second term.
The measure is simple to understand (and boast about), and plays to a sense of fairness.
January 20, 2020
While I am sympathetic to the idea of minimum wage meaning no income tax, I wonder if this is really fair, because a party promising to increase income tax is more likely to attract your vote if your income isn’t affected.
January 20, 2020
Minimum wage over 25s = £8.21 x 35 hour week (if they are lucky to get that much work = £14,942 per annum.
Explain to me why they don’t become liable for Income Tax!
Now if they don’t get a full year’s work, or leave the country early, I’d agree.
Minimum wage 21 to 24s = £7.70 x 35 hour week (if they are lucky to get that much work = £14,014 per annum.
January 21, 2020
“In 2018 male, full-time employees in the United Kingdom worked an average of 39 hours a week, with women working an average of 34.1 hours a week. During the period between 2000 and 2018, the year with the highest average weekly hours for men was 2000 when it was 39.8 hours, and for women it was 2014 at 34.5 hours”. Statista.com
January 21, 2020
Yet the Independent newspaper in April reporting figures from the TUC said “Britain’s long hours culture is continuing, with workers putting in the longest hours in the EU, a new study suggests…..
Full-time employees in this country worked an average of 42 hours a week last year, almost two more than the typical EU employee, said the TUC.The UK’s 42-hour week compares with 37 in Denmark and 39 in countries such as Holland, Italy, Belgium, France, Sweden and Ireland, according to the study”
January 20, 2020
Oh, I forgot- get rid of the “Tampon tax”. Cost minimal, political gain considerable.
January 20, 2020
National Insurance should really be seen as two taxes, Employers NI (ERNI) and Employees NI (EENI).
The first is a tax on a business throughout the time it employs a worker; the second is a tax on the employee through the same period – assuming that the worker earns a PAYE salary.
EENI was created as a levy, to pay for a State pension and entitlement to out-of-work benefits and to use the NHS. Other than the pension aspect, it stopped being that a long time ago and became simply another income tax. It would be sensible to roll this up into income tax and allow for a zero-rate band, as we have now, to ensure ongoing pension entitlement.
ERNI is another beast altogether. No other country that I know is this stupid. Even without it, we would be taxing employment higher than other ways of working (so-called ’employment statuses’), but with this in the equation the level of taxation on employment is disproportionate in the extreme.
It means that a company is paying 14% more than the salary they pay to the employee. In a global economy, is it any wonder we see jobs go abroad, such as call centres, when the British worker is immediately 14% more expensive than, say someone based in India? That’s before we begin to address the difference in cost of living which allows foreign-based workers to demand less to begin with. The pressures on British-based workers earnings are therefore enormous – no wonder we see calls for protectionism.
The only justification I have ever heard for keeping ERNI is “we take too much tax in ERNI to abolish it”. So… gradually reduce it, while shifting the burden elsewhere. Increasing the allowance for small businesses to take them out of it would be a good start.
ERNI is also the root cause of all the employment status legislation and ensuing court cases. IR35 dumps some workers into a Ltd Co structure and when caught by IR35 (which may only be decided many years later, long after it’s too late for the worker to re-negotiate or simply leave), they are then expected to pay both forms of NI on top of all the income taxes others pay. Even our awful tax system was never designed to have the worker pay the employers taxes in addition to all the employee taxes.
Does any Chancellor have the courage to make such fundamental changes?
January 28, 2020
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2.8% growth would be great