This is an article the Mail asked for then decided not to run.
The budget needs to bring the deficit down. It should lower price rises and increase growth. The Treasury seems to think with the Bank that it needs to get inflation down first with austerity policies and falls in money and credit. They want to punish us for the big mistakes the Bank made printing so much money, and keeping interest rates too low for too long. The Treasury late in the day wants to put up taxes to pay for all the spending they unleashed as they tried to offset a lockdown and a big inflation. If they overdo the gloom and taxes they will push us into a recession. Recessions usually put the deficit up, as revenues contract and unemployment costs rise. It is time for some fresh thinking, not for more of the same old boom/bust official advice we have seen too many times in recent decades.
You cannot achieve the aims of cutting the deficit, controlling inflation and growing the economy without targeted tax cuts. Of course the Treasury are right in saying these should not be unfunded. They need not be. The Treasury should know all about unfunded spending rises, as they did enough of them over the last three years. If they had borrowed the money by selling long term bonds that would not have been such an inflationary problem, but instead they ended up effectively borrowing short term from the Bank of England. Now they are paying the price with big rises in the interest rate the Bank of England now chooses to charge them and we are all paying for the extreme monetary expansion they triggered to pay the bills.
We need targeted tax cuts to get prices down. Why not suspend the VAT on domestic fuel for the coming year? That would take domestic heating bills down by 5%. Now oil and gas prices have risen again on global markets, why not have a temporary cut in fuel duty to relieve some of the pressures on people and businesses when they need petrol and diesel to get to work and to deliver goods and services to our doors? When the government gave people subsidies for their fuel bills it did not help take the consumer price index down. Cutting the tax would. That has a beneficial knock on effect on spending , when it comes to updating benefits, pay and prices for CPI changes.
So how could we pay for this? As it happens the Office of Budget Responsibility has once again got its forecast wrong and understated revenues from existing taxes by £20 bn so far this year. That would more than cover it. If the Treasury insists on being more prudent why not sell the remaining shares in Nat West and use that money to pay for these temporary tax cuts to get inflation down? They could organise a great sale for the remaining holding with a popular offer, some free or discounted shares for employees and the retail public. Try cheering us up for a change.
The UK economy needs more domestic supply to help control price rises. Inflation is too much money chasing too few goods. The Bank now wants to squeeze the money, but we should also try producing more goods. Since February 2020 the UK has lost 800,000 self employed from the workforce. Some of this was covid created problems, but some of it is the tax changes introduced under IR 35. These make it more difficult for a self employed person to get contracts from businesses. The government should want to rebuild our self employed sector and should help do that by reversing the 2021 and 2017 tax changes. There are also things that can be done in the Employment Department to offer more support, mentoring and training to people currently out of work to work for themselves. Self employment offers great flexibility for the business person and the customers alike. We need more capacity in a whole range of services and specialist goods that the self employed excel at.
We should also want to boost our small businesses. They too offer a great way to expand capacity and supply quickly and in a low cost way. Raise the VAT threshold from £85,000 to £250,000 . This would enable a large number of businesses to do more, relieving a major barrier to their expansion. Small businesses turn down work and decline to take on an extra staff member because they do not want to have to register and put 20% on all their prices. The Treasury should also restore tax free shopping for foreign visitors to boost the tourist trade, and do more to lower business rates bills.
How could we cover these costs? The cost would be quite small even on Treasury arithmetic, and in practice could generate substantial additional revenues as more business was transacted and more earnings created. The public sector has presided over a 7.5% fall on its productivity in the three years 2020-22, which is roughly a £30 bn increase in costs for doing the same things. Now lockdowns are well behind us we need to get back to 2019 levels of productivity. This will entail a slimming through natural wastage of the civil service and other public sector administration, made easier to achieve by the wonders of modern computing. It should be possible by sensible personnel planning without redundancies to save £5 bn a year by the end of the first year of the programme.
The government should reorient its grants to stop famers growing food to offer future grants to promote more and better food production. The policy of using more of our own oil and gas instead of relying more and more on imports will also raise the amount of tax revenue the Treasury collects, and will add well paid tax paying jobs to the economy for the new fields. It also cuts world CO 2 output by substituting domestic gas down a pipe for LNG by ship with so much CO 2 generated to liquify, transport and gassify the product.
The Bank should not carry on selling bonds at large losses and sending the bills to the Treasury. It should allow its bond portfolio to run down as the Treasury repays the money borrowed through the bonds over the years ahead. This will lower the state deficit excluding the Bank by many billions.
The Conservative party needs to recapture its tax cutting beliefs and show once again that only with tax cuts can you control the deficit, grow the economy and conquer inflation.
November 7, 2023
Yay, bring back Liz Truss! Seriously, Conservatives, PLEASE bring back Liz Truss, and watch what happens
November 7, 2023
@Lemming; Bringing back any previous PM would likely be a gift to any Parties opponents.
Even if that wasn’t the case, given the problem for the Conservatives is retaining electorally needed *centrist* floating votes, if the Party required a former leader to return it would make more sense to ask Theresa May…
Yes a few votes will be lost on the edges but many more will be gained in the all important centre ground.
November 7, 2023
😂🤣 yes Mrs 6% in a national election! Even Sunak will do better.
November 8, 2023
Lynn, I guess you missed the Irony in my comment…
November 8, 2023
Mrs may has no chance, having admitted, for instance, that she was lying about “down to the tens of thousands” and actually believed in fat higher immigration and was pulling the levers of power in that direction. She is also the one who introduced direct entry to superintendent rank in the police which has turned out to be a complete disaster. No no no.
November 8, 2023
@Iain gill; You make that judgment from your own perception, not from those who flip between Tory and Labour, those who do not see immigration as you and other commentators to this site do.
November 7, 2023
Liz Truss has been proved right if you would only open your eyes.
November 7, 2023
The truss interlude is unfortunately the reason we do not now have at least some of these sort of policies. They have been (erroneously) discredited.
November 7, 2023
@Richard1; Oh right, so the Markets judgement is “erroneous” now, when it doesn’t suit those who always used to say Trust the Markets to judge ?…
November 8, 2023
Jerry.
You forget that political decisions were made when the markets panicked.
As they sometimes do.
The question for politicians is should they immediately react or should they stay firm.
November 8, 2023
there is money to be made when markets rise or fall!
November 8, 2023
@Sam; As I said, you either believe in the judgement of the “Market” or you don’t!
Some Labour party Minister in the 1970s and before were very good at ignoring what the “Markets” thought, the 1967 and 1976 Sterling crisis’s were the result… If you’re going to have a market economy, based on free trade, ignore the “Markets” at your peril, they really don’t give a damn is they buy their widgets from the UK or planet Zog.
November 9, 2023
Markets go up and down in this free trade economy you talk about Jerry.
Sometimes they overreact.
The job of Government is to decide how to react or even if they should react at all.
You are advocating a government that must always follow the requirements of the markets.
That doesn’t seem very a good policy to me.
November 7, 2023
JR, your article is in DM today.
No chance of Sunak and Hunt acting in our national interest. No evidence whatsoever but plenty of evidence that acted to harm our country: economy, taxation, sell out N.Ireland, Windsor sell out, fishing and fishing waters, got rid of red diesel for farmers increasing food costs, steel manufacturing closed, Spain allowed to build our war ships, written off billions lost to Sunak’s school boy errors, allow BOE to lose billions on bonds, billions lost/wasted in foreign aid scams, net stupid lunacy, our fuel and heating bills, no cogent energy policy, politicising police, crime rife everywhere, billions given to criminals entering the country etc etc.
November 8, 2023
rename yourself – Abandon Hope?
November 7, 2023
The more bonds Bailey sells the less room for tax cuts. Bailey knows this but like the pro-EU Treasury they want a pro-EU Labour government so selling bonds increases the likelihood of that possibility. Indeed I suspect some Europhile Tory MPs want to see a Labour government who I have no doubt will take the UK back into the EU and then of course racialise this nation and criminalise white, straight men
The Tory party is a vehicle of treachery barring a few MPs but Labour would open up the doors to the world and ‘rub this nation into diversity’ to change forever its very soul
November 7, 2023
@DOM; “to change forever its very soul”
If the electorate have chosen such a path how is that “treachery”, it is anything but, in a parliamentary democracy!
November 7, 2023
Utter Drivel. Manifesto never attempted let alone delivered!
November 7, 2023
@Hope; Indeed you do post utter drivel… If the Party that won the last election has failed to live up to their promises then the electorate can always chose a different Party at the next election, it’s called a parliamentary democracy. Duh!
November 8, 2023
A question. Why are you lefties so unpleasant? You will not brook any contrary opinion to your own warped views, and offer only insults in reply, which seems typical of the breed.
November 8, 2023
@graham1946; “A question. Why are you lefties so unpleasant?”
Pot, kettle, I might ask the same of you “righties”…
I tend to reply as I have been spoken to, want a civil reply, act with civility yourselves! 😉
November 8, 2023
Hope, there is lots more that needs to be done (immigration) but;
They did put in millions of extra funding into the NHS, they have got extra nurses and doctors. They have hired more police, not pcso assistants like Labour is promising again. The Tories don’t even speak of how much extra they have invested in schools and science.
Lots of people here on John’s blog moan about what this government is trying to do to achieve their Net Zero by 2050 promise, but again they haven’t told us since 2019 how much they have invested in clean energy and green infrastructure.
They haven’t raised the rates of income tax, VAT or national insurance, they increased the personal allowance for NI they should have moved the other thresholds in line with inflation that is a very socialist policy to follow.
November 7, 2023
The electorate was given the option of reducing it to 10s of 000s Jerry and voted for it several times. It just never happened.
November 7, 2023
Regarding opening the doors to the world and rubbing this nation into diversity to change forever its very soul …. what do you think the Not-a-Conservative-Party has been doing for the past 13+ years?
Last year 1.2 legal immigrants were waved in ….. and 40,000 criminal migrants, mostly fighting age males from countries which are anti-Semitic and vehemently opposed to Israel, were given a free ferry ride and “free everything.” And they’re here for life, because Sunak isn’t deporting any of them ….. he’s getting the backlog down by accepting any sob-story they say, giving them asylum or leave to remain and, eventually, citizenship. And then they’ll ship in their extended families.
Over the past 25 years in particular, social cohesion in the UK has been, and is being, deliberately destroyed by the Westminster Uni-Party.
November 7, 2023
Should be 1.2 million legal immigrants.
November 7, 2023
You rightly call for targeted tax cuts, but these must go hand in hand with a drastic curtailment of the Civil Service and Quangos. What happened to Cameron’s Bonfire of the Quangos? Why do we need so many useless group-think nonentities in departments such as the Treasury, Home Office etc? Why does No 10 need such a massive staff overhead – I am sure that Mrs Thatcher ran the government on a much leaner office.
November 7, 2023
Or Cameron’s Big Society to promote UK values etc. Exact opposite to force us to accept alien culture and forced into silence!
November 7, 2023
The matches were wet.
November 7, 2023
No mention of inheritance tax.
November 7, 2023
Well Osborne promised £1 IHT thresholds each some 15 years back but it was never delivered it is still £325k now worth more like £200K. So who would trust them this time (they will not even be in power even if they wanted to actually deliver this time).
Rees-Mogg gets most things fairly right but is rather deluded on Energy (No grasp of physics/energy/entropy one assumes). He said on his GB show last night when the wind energy is not needed we can use it get hydrogen virtually for free!
So we spend a fortune building subsidised wind farms (using lots of fossil fuels to do this) these then generate electricity often when we do not actually need it. They then suggest we expensively split hydrogen with it (wasting more than circa 40% of the energy in the process & using very expensive electrolysis plants & needing expensive catalysts to do this). Then very expensively compress, store and transport it and convert it back to heat or electricity wasting up to another 60% of the remaining energy.
Not such a great plan Jacob. CO2 is hugely inferior to Natural Gas in many ways anyway and we do not need to make Natural Gas as we have plenty or could have with fracking etc.
If we have extra electricity far better to let people have it cheaply and find thinks to do with this cheap electricity at off peak times. Plenty of uses that are not very time dependant like heating, refrigeration plants many industrial uses, car etc. recharging… far easier to transport electricity (and even natural gas) too than Hydrogen. As we have existing grids.
Electricity to Hydrogen to electricity again is a hugely inefficient process (just to “store” electricity) and can be very dangerous too. Hydrogen perhaps has a few niche areas that might make sense at best. But Diesel, petrol, electricity and Natural Gas are far better and far more flexible and far cheaper in general.
November 8, 2023
Nothing left to tax soon?
November 7, 2023
What you suggest may or may not improve the economy. I don’t know I’m not an economist.
Offering some minor tax cuts now will be done not for the good of he economy but simply as an election bribe. It won’t work, the Conservatives are doomed. Your hopeless Gov. has paved the way for a Labour Gov. next year. What a disaster …………………
November 7, 2023
Cutting taxes and the vast government waste and red tape always help an economy. This as people are so much better at spending and investing than are government.
Whatever the Tories promise it will not help as:-
A. They will not get in so will not be able to deliver anyway and
B. no one would trust them as far as they can throw them after the past 13 years of appalling tax borrow and piss down the drain government to deliver (even if by some miracle they did win power again).
Labour will of course be even worse on Woke, on Diversity, on public services, on fair competition in Schools, Health Care, transport, housing… on anti-Semitism, on the mad net zero religion zealotry, on taxes and on economic mismanagement but we are getting all this already from Sunak and Hunt’s dire socialist & globalist government.
November 7, 2023
LL,
As a matter of Fact and record evidences Tories worse on economy than Labour! Hard to believe but true. Cameron made it law to waste billions on statutory footing in foreign aide. Same for energy etc. Johnson had a 85 seat majority to do anything- change all things Blaire brought in- instead he did all things woke and net stupid on steroids after years of writing the opposite!
November 7, 2023
So a rather pathetic and tedious King’s Speech.
Basically – My Government will continue with the totally misguided net zero lunacy but very slightly slower.
My Government intend to thieve even more off landlords to try to buy the votes of tenants (who will actually also also suffer as a result). Even more than they did with Osborne’s interest deduction theft.
My Government will continue to waste money on various daft train projects, green crap and endless other lunacies.
My Government has a mad smoking ban plan by birth date (though we will continue to do almost nothing about hard drugs or other crimes).
We will destroy the economy in order to reduce the inflation that Sunak caused with his QE, lockdowns and tax borrow, print and piss down the drain policies as Chancellor.
Er… Not much else.
November 7, 2023
i agree with what you say LL so put brain in gear! The answer is Vote Reform UK – they will have 600 candidates and are known for telling the truth.
November 7, 2023
+1. They are also the only party offering Conservative policies.
November 8, 2023
LL, you are not getting anything like what Starmer’s party are promising you don’t seem to be listening, with their “rich will pay for everything”. Only the 300,000 rich are a bit savvy; if even 20% of them depart, the people considered rich drop down and down, and people who don’t consider themselves ‘rich’ get dragged in.
They are implying they will give more money to the performing arts, to schools, hospitals, and railways, there is talk of renationalisation that costs folding money and when the State runs things they’re always on strike removing and reducing services with nowhere else to go. They are going to give tonnes more money to social services and the care services, more money into immigration and process people faster (that means allowing them in and giving them homes). More affordable home building. Bigger student grants, lower student fees, more foreign aid, more spending, more spending, more spending and the normal people won’t have to pay a 1p more.
November 7, 2023
I have visited the Maldives again and can confirm that after 35 years the sea level has not risen by so much as one centimetre.
The level of the high and low tide on the harbour wall came up to the same steps as it did when I was in my 20s.
I blame the climate for not doing what politicians want.
November 7, 2023
Javelin-sharp on the spot measurement.
November 7, 2023
Net zero is doing exactly what the politicians want:- an excuse for more taxes, more red tape, more regulation, restrictions and ever more interference. Also an excuse when we get flooding etc. often due to poor flood defence systems and building on flood planes – not us mate it is all “Climate Change” so we must tax and regulate you even harder!
We will not spend £10 million on a simple & sensible flood defence scheme for your river but tax you even more on carbon and energy now and perhaps in 100 years you might or might not get 2% less heavy rain falls!
November 7, 2023
LL,
It is to force wealth from west to east as globalists want to make us poorer.
November 7, 2023
True. The beastly climate won’t listen to the likes of Attenborough and the BBC twits. Something must be done. The leaves on my tree started shedding exactly the same time as 20 years ago. Must have a word with it.
November 7, 2023
Most people of my age would assert that the climate in this country has changed a lot. My roses are back in bloom and lupins are growing again. I’ve got daffodils half way up to full height. The leaves are on the trees much later than when I was a child. Winters are now so mild. Can’t remember the last frost. Normally by early November we would have had one cold snap.
November 8, 2023
Mike,
Last year it snowed in December and it snowed in March. Guess what? It has done this many times before.
The BBC ought to know we have storms about this time of year, the new craze to name them helps reinforce climate scam. If the Environment Agency did not follow EU environment policy led itself for climate and conditions of this country by spending the majority of money on infrastructure than salaries and pensions it could cure flooding. £3 billion, £500 million on infrastructure. What business could survive on this model? The LA took back some responsibility and charged us more taxes in addition!!
November 8, 2023
It snowed in March 1962.
November 7, 2023
Our new King was told by the trees that there has been/is a climate crisis – so listen up!
November 7, 2023
Isn’t that something to do with land structure underneath and pooling.
November 7, 2023
Presumably your agenda does not match the Daily Mail’s in every respect. This is the Daily Mail’s loss as you set out very clearly what is wrong with so much of government policy and what should be done to set it on a better course. Recent forecasts of the large number of quoted businesses that intend to delist from the London Stock Exchange this year for other more business friendly climes is as good as an example as any of businesses voting with their wallets. Quite how those in charge expect to raise the tax revenues they need for their bloated state is a mystery when they do all they can to drive them away by a toxic mix of regulation, legislation and taxation – just as they have done for small businesses and for farmers paid not to grow food. The collective political class seemingly has lost its marbles.
November 7, 2023
+1
One is not supposed to tell truth these days!
November 7, 2023
This is a good article, but far too sensible for a rag like the Mail to publish. Few would disagree with the tax cutting points made here, except perhaps those concerning fossil fuels. We could bring the nation’s electricity bills down substantially if the excessive windfall tax on renewable energy was scrapped. To howls of objection from the fossil fuel lobby, of course
In this piece, there is no mention of manufacturing, nor exports, which surprised me. If we are to get the twin deficits under control and reduce the national debt, our manufacturers and exporters need tax breaks and support. Unfortunately, this country knocks entrepreneurs and business startups and constantly places obstructions in their path. And if anybody does manage to produce a decent exporting business, the government encourages it to be sold off for dollars; the factories and well paid jobs are moved overseas
In 2021/22 fiscal year the Treasury borrowed and spent £128.4bn. That was £5.5bn higher than in the previous year. (source BBC business news 05/10/2023) We have been living beyond our means for far too long. We either increase exports and/or cut public spending or bankruptcy for us as a nation is inevitable.
November 7, 2023
SG, Thank you, your second para shows precisely where the effort needs to be made; more exports to reverse the trade deficit, and less government spending/waste to reverse the budget deficit. Not much of this in Sunak’s plan is there?
The BoE selling gilts at whatever price is fine; the money received is removed from the economy (QT) as is, presumably, the cash payments from Treasury to Bank to cover the ‘losses’. The BoE’s purpose is to manage money supply, there was too much supply under QE, and now it’s being reversed. This causes interest rates to rise which increases the value of money, therefore lower inflation.
November 7, 2023
@SG – Agree, second paragraph spot on.
If that manufacturing/export revolution were nuclear fusion then everyone would be happy.
Unfortunately our manufacturing tradition and creative innovation have long since been sold off…
November 7, 2023
@ Peter Wood “The BoE selling gilts at whatever price is fine; the money received is removed from the economy…” – but rather than crystallize otherwise temporary book losses for us taxpayers to fund (which is anything but “fine”) if the intent is to remove money from economy why does the Bank not ask the Treasury to issue for public purchase some newly-minted bonds?
November 7, 2023
Renewables already benefit from being overpriced. Better to decouple the offer prive of renewable electricity to that generated by gas to reduce bills.
Renewable are supposed to be “free” after all
November 7, 2023
Agreed NS
November 7, 2023
“We could bring the nation’s electricity bills down substantially if the excessive windfall tax on renewable energy was scrapped”.
Nonsense so called “renewables” (they are not renewable) get far too much subsidy and market rigging already.
November 7, 2023
Difficult to reduce the trade deficit when they allow millions in each year. People need food and goods – and we import most of them.
November 7, 2023
When even the Daily Mail doesn’t want to hear about or promote Conservative economic policies, you know the Party is over.
November 7, 2023
Meanwhile we all play the global game of DIVERSION.
This war …that war…which side? How? Where?
This bug…that virus…Oh! Oh!
The economy!
And the AGENDA is freed to roll on out.
15 minute cities.
No entry to the countryside.
No travel.
No meat.
Talk about anything but all that and loftily examine the distractions.
Dismiss it all as “conspiracy”.
But none of it has gone away.
What is inflation compared to what is being done to our world?
This is the game the West has always played! And the same folk pocket the spoils.
Another COP coming up soon.
November 7, 2023
+1
November 7, 2023
…..Conservative policies. No Sir John’s policies, they know its not going to happen so a pointless publication. More tax, spend and welfare/waste.
November 7, 2023
+1
November 7, 2023
The first line in your post was in a way the most informative one, Sir John. It’s not just the BBC, then.
I’ve read and re-read your article wondering what on earth it could be that would be a red rag to Daily Mail readers. No luck so far.
November 7, 2023
The oligarchy must prevail!
November 7, 2023
@ Hat man – Sir John’s submission made no mention of Diana, late princess of Wales nor did it reveal what price houses in his street currently sell for.
November 7, 2023
You can’t suspend VAT on domestic fuel because Northern Ireland is still in the EU and it would expose the government lies.
We have to charge a minimum 5% on goods unless we get Brussels permission.
November 7, 2023
@Ian wragg; Nonsense on stilts! Why can’t NI have a different tax rates, after all the CL and IOM also have had different tax rates, did not and still doesn’t make them any less a part of the UK since 1973.
If there is a problem it has nothing what so ever to do with NI protocol, but everything to do with the Westminster-Holyrood relationship and the SNP demands to have more ability to set and raise their own taxes.
November 7, 2023
Well said Ian. Spot on.
November 7, 2023
But Northern Ireland is part of the EU and Scotland can’t adjust VAT rates. The IoM was never in the EU.
November 7, 2023
@Ian wragg; NI is not a part of the EU, any more than Norway is…
“Scotland can’t adjust VAT rates”
No, because their devolution agreement doesn’t allow, but they would love to have such powers!
Remind me, what is the VAT rate on the Isle of Man, in the Channel Islands?
November 8, 2023
Jerry
The Isle of Man and the Channel Islands are not in the EU.
November 8, 2023
@MiB; I never said they were!
My point *was* neither the IOM nor CI are in the EU, any more than NI is now, but both are British Crown Dependencies, both set different tax rates to those in GB & NI, never mind the EU – why can’t NI also set their own tax rates (assuming they had a functioning devolved government of course)?
Some Brexiteers need to be far less parochial…!
November 9, 2023
Jerry.
The relationship of the Isle of Man and the Channel Islands to the EU, is very different to the relationship of Northern Ireland now has with the EU.
If you were to read the Northern Ireland agreement with the EU, especially concerning its taxation and VAT elements then you would be better informed.
November 7, 2023
You very right Ian, simple way then is to stand up to the eu , they are total trash and we can kick the bullies out.
November 7, 2023
Nice try, but it is not in the DNA of the BOE, OBR, Treasury or your consocialist chancellor. End of story.
November 7, 2023
Indeed Sunak was Chancellor when they created all this inflation and government debt with tax, borrow, QE and piss down the drain policies (like Furlough. Covid Loans, QE, lockdowns, net harm vaccines, HS2, test and trace, pointless masks…)
November 7, 2023
Personal tax cuts are needed at the lower end of incomes. Disillusion with politics, indeed their future, the millions are intending to remove this Government. Survival is the name of the game for these millions.
I don’t agree with electioneering handouts normally, but in this developing nightmare for so many voters it is necessary.
Then we should also consider the plight of business, the SME are finding life difficult, many giving up.
November 7, 2023
Personal tax cuts are needed at the lower end of incomes.
Indeed there are not much incentives to work really after commuting costs, child care, tax, NI, loss of benefits… for many really – so they do not bother. Being rational given the daft system that pertains.
November 7, 2023
Afraid I have lost all faith in the Conservative Government managing anything properly at the moment John.
It’s either too little too late, or too much too soon, with £ Billions of taxpayers money being wasted every day.
Saddest fact of all, there is no real sensible alternative.
Aware you are trying your best to try to influence matters for the better, but it would appear you are in opposition to almost everyone else’s thoughts in Parliament who just seem to want to continue to waste money, tax us to death, re-distribute the proceeds, discourage private enterprise, and then wonder why the economy is not growing.
November 7, 2023
@Berkshire Alan – ‘Conservative Government managing’ thats is the joke of the day
November 7, 2023
Indeed. The Tory’s ESG rules are now significantly affecting investments in the City. Companies voting with their feet to go to wokelees markets, based on profits and profitability, not positive ( discrimination) action. Best person for the job always works except the public sector. Remind me how they’re doing?
November 7, 2023
Thank you for keeping these matters in front of people. A pity the Treasury and the Bank don’t pay attention, at least so far. HMG could usefully direct at least some of its resources to maintaining our country’s ability to make high quality steel, which requires a blast furnace able to produce from primary iron ore, whereas an electric arc furnace requires feeding with scrap steel.
November 7, 2023
The inflation with which we are currently afflicted is caused by the fossil fuel cartel’s collective decision to quadruple the price of gas after the pandemic BEFORE the Russian invasion of Ukraine. The government paid them £billions in direct subsidy to prevent the nation from freezing last winter
The high price of electricity in the UK is directly caused by Sunak, Hunt and Shrapps decision to infict the renewable energy industry with a huge windfall profits tax – without the tax breaks and outright taxpayer subsidies given to big oil – which has stopped any further development in the N Sea dead in it’s tracks. And which has forced the price of renewable electricity up from about £60/MWh to £440/MWh (Source; Department for Energy Security & Net Zero September figures) As well as destroying an industry in which the UK was a world leader and killing the nascent export industry of renewable electricity to the EU.
Labour’s Green Plan will sort out this idiocy. The recent byelection results have demonstrated that many Conservative voters will support the green revolution at the forthcoming general election
November 7, 2023
Oh my ….,! what planet are you on? The reason energy prices are so high is because of the subsides being given to the renewables industry. It is also being driven higher by the ongoing demand from the Green lobby that we, here in the UK do not pump our own indigenous gas out of the ground. If we fracked for gas we could actually supply Europe and have much lower priced domestically. Hey ho, why give work and wealth to domestic energy extraction when you can waste money importing the same stuff from abroad eh?
The people are not going to vote Labour because of some crazy Green policies they promote. People will vote Labour simply because they are not Tory. The incompetence of the past Tory administrations will ensure people could not care less who sits in Parliament. The choice is between Tory incompetents and Labour incompetents. Pick which one you fancy. Heck why not go for LibDem incompetents, and go for peak political crazy.
November 7, 2023
If subsidies are given to the renewables industry – and Sakara Gold says there are windfall taxes too – it sounds like a subsidy is given with one hand and taken back as a tax with the other. Sounds like a looney bin.
November 8, 2023
@Mike Wilson; Depends on how much the deferential is between subsidy and windfall tax, renewable investors can still be quids-in by a good margin. Yet there are no subsidies to off-set the massive carbon taxes etc, for the oil and gas industries, even new nuclear has often been stymied to advance the solar and wind sector. As you say, a looney bin.
November 7, 2023
With either of the first 2 it is we’ll rob the clothes of your back. With the last option it is Emporer’s new clothes.
November 7, 2023
@SG; “The high price of electricity in the UK is directly caused by Sunak, Hunt and Shrapps decision to infict the renewable energy industry with a huge windfall profits tax”
Nonsense, the high cost of energy is due to the MASSIVE subsides (such as via a “strike price”) being paid to renewable energy companies who then all to fail to provide anything close to 24/7 365 day supply, necessitating other costs to prove (often non renewable) back-up cover. That before we ever consider the effects the Russian invasion of Ukraine has had. When of MASSIVE subsides are not available there is no uptake of renewable licenses.
“Labour’s Green Plan will sort out this idiocy”
Yes, by creating a State owned ‘GB Energy’ company that will take the profit motive out of the UK renewables industry, as an investor, be careful what you wish for!
November 7, 2023
Ah, so that’s why the Green Party is doing so miserably in the polls, Sakara. Its supporters are voting Conservative, from what you say.
November 7, 2023
Not only are your government incapable of incentivising the country and its economy, they are strategically inept.
The trade unions are worried that by changing blast furnaces to elecric arc furnaces in what remains of our steel industry they will lose jobs. Possibly true but doing this limits the type of steel you can produce which may suit the Chinese who since 2020 own British Steel. Where were your government when this was allowed to happen.
November 7, 2023
@agricola
A Conservative Government that decimates the UK’s resilience and safety by using taxpayers money to pay foreign entities(Worlds Largest polluters) to close down the production of the type of steel the UK needs, and import it from the same entities that are paid to stop UK production. Replacing the UK capability to make high quality steel and become a recycling plant that cant compete says it all. You have to question their(Conservative Government) motive, use the UK Taxpayer to fund more World Pollution.
Everything industry wise this Conservative Government has done in 14 years has had the focus of closing UK production down, lose the UK jobs, then import the replacement from the Worlds Largest polluters
November 7, 2023
@agricola; “the Chinese who since [March] 2020 own British Steel. Where were your government when this was allowed to happen.”
The government was in the same ideological place they have been in for the last 44 years, during most of that time hiding behind supposed EEC/EU competition laws, but since Brexit, since 11 p.m. GMT on 31 January 2020 that has not been impossible. The government basically doesn’t care who owns our strategic national assets, just so long as it is not the British State!
November 7, 2023
But had the BoE not used QE (printing money) would that not have flung the UK into a recession, both in 2007/10 and again during Covid, meaning even less room for tax cuts, as the UC benefit bill increased. I also find it a bit ‘off’ that our host accuses the the Bank of imposing austerity policies, when it has been the government who imposed such measures, and since 2010, having won that years election pledging such policies. Is our host really suggesting his own Party have wasted 13+ years, using the wrong set of economic polices…
“You cannot achieve the aims of cutting the deficit, controlling inflation and growing the economy without targeted tax cuts.”
We did exactly that, in effect, after WW2, tax cuts were the last thing to be promised, we grew the economy by making things, “Export or die” was the motto.
How does raising the VAT threshold from £85,000 to £250,000 help small business, agreed they would not have to charge 20% on their prices but they would then have to pay 20% on all their B2B purchases, and if their own ‘factory gate’ sales are B2B there is (effectively) no sales VAT anyway. I suspect if the threshold was raised there would simply be far more voluntary registrations.
There is a case for tax cuts, but not how our host suggests, the Chancellor needs to tackle excessive indirect taxation that has grown like Topsy since 1979, Council Tax, UBR, fuel duties, VED, indeed the basic rate of VAT, cuts that would be far more effective boosting growth as it leaves more money in everyone’s pocket.
November 7, 2023
All very sensible. Doubtless that’s why our wonderful government will continue to ignore excellent advice.
November 7, 2023
Sir John
Tax is contentious but so is the runaway debt this Conservative Government is piling up to dump on the Taxpayer.
What is out of kilter is the Conservative Governments lack of fiscal responsibility, their spend, spend mentality. They need to bring all their avenues of expenditure under control, they need to reign in their prolific spending departments, cut out the out of control Quangos and so on. Everything that is fundamentally wrong is under their direct management – yet the refuse to take on their duties.
We have high inflation, because of high taxation and high borrowing increasing costs. These 2 Chancellors don’t seem to understand it is they that are the problem, they have increased costs throughout the UK. They are the ones that created this spiral. They spend money with out the responsibility for a return, then they punish the Taxpayer to balance their spend, spend mistakes.
Do we need them any more, I think not.
November 7, 2023
Why the Mail was fickle is unknown. The article is rich in intellectual qualities which they might have thought beyond what some of their readers could readily grasp, juxtaposed with their distracting pieces on entertainment and trivia. The OBR 20bn forecasting error being enough to fund valuable tax cuts is a stunning reality, worthy of an article in itself.
November 7, 2023
How would one price the sale of the government’s holding in NatWest, I wonder? The sector is altogether unattractive and NatWest with its ridiculous “values” and dire track record is particularly so.
The current shareholders need to replace the board and conduct a root and branch overhaul of the management so that the focus is once again placed on the customer and core banking activities.
Alternatively make Nigel Farage a gift of the government’s holding and let him get on with it.
November 7, 2023
+1
Surely nil is the number of Nat West staff deserving of ” some free or discounted shares for employees” after the toxic culture they promoted and revelled in, as shown by the disgraceful disclosures in the Farage affair.
November 7, 2023
Indeed. But you say “The Conservative party needs to recapture its tax cutting beliefs” well they cut taxes a bit from about 1980 to 94 (but we had Major’s moronic ERM to suffer with 15% interest rates up to 92) since then it has all been large increases.
Worse still the spending mainly wasting as a % of GBP has risen even more. If they spend it they will have to get it back one way or another borrowing, taxing, printing money or inflation. Where are these belief’s certainly not with Sunak or Hunt or this Conservative Party.
Sunak (who was chancellor when the BoE caused the inflation and the vast increases in borrowing) and Hunt will never be trusted whatever they promise as they will not win and even if they did they would not keep their promises.
The Net zero rip off intermittent energy lunacy, tax complexity and endless red tape are further taxes on top of the very high tax rates.
November 7, 2023
John, If you had been appointed chancellor when Truss became PM there may have been a chance for your ideas to have been introduced.
Sadly, the powers that be in the Tory party are driven by unknown operators from who knows where, so not only did you not get the gig, but Truss was thrown out by the same unnamed controllers influencers.
Sunak is not going to change anything, until he has dealt with that desperately urgent issue he is focused on….i.e. smoking.
I am also told the Home Secretary wants to reintroduce transportation for criminals to foreign far off lands. The last time this was done, was back in the 19th century. We managed to ship 7000 ‘criminals’ out to Australia in a single year! We knew how to get things done in those days (1833).
On the premise that those breaking immigration laws are criminals. Does that mean we may ship thousands back that arrive by unregulated Channel crossings?
Just asking.
November 7, 2023
We owned the places we could ship them out to in those days;not so today!
Before Australia was colonised I believe we even offered convicts to Catherine the Great to help her fill her vast empty spaces.I don’t think she took us up on the offer-she preferred German immigrants.
November 7, 2023
“domestic heating bills”
This Conservative Government try’s to encourage the installation of ‘heat pumps’ for domestic heating, while at the same time taxing energy use up to the hilt. Heat Pumps are not magic, they consume a massive amount of electricity, all which is short supply in the UK, which then has the burden of taxes on taxes to discourage use.
Often quoted is the high use of ‘heat pumps’ elsewhere, what is not quoted is that those same Countries have secure, abundant, cheap electricity. Something that this Conservative Government has fought against in the last 14 years
It is the Conservative Governments constant fight against the people of the UK that is the problem
November 7, 2023
John will you do an article on the steel situation I know it’s a subject you have knowledge of.
November 7, 2023
But the wider Conservative Party has not lost its tax cutting beliefs: the only part of it that clearly has, is the Parliamentary Conservative Party, and in particular this Government. We need new Conservative leadership, and the only way we will get that is if they lose the coming election. Victory for Sunak would be a disaster in the long run, whatever Starmer might do in the short term.
November 7, 2023
If the aim of the Chancellor is to create a prosperous Britain, then yes, tax cuts NOW.
If he is determined to ruin the country, as seems his intent, then he should just carry on as before with his high tax rates and continue to throw money down the nearest drain.
November 7, 2023
“The Conservative party needs to recapture its… ”
But how? I guess you’ve not read Dorries’ book, alleging that Gove created a cabal in the party to bring in lefty type MPs via CCHQ to shift the party to the left.
You have to fix that rather than mere generalisations saying “the party needs to…”. We all know the “what”, the “how” is the tough ask.
November 7, 2023
When you say left,I think you mean “liberal left” not “hard left”.Liberal left is code for fascism….which is why the liberal left and the hard left hate each other.
November 8, 2023
and some have no time for both types!
November 7, 2023
I guess the article is way too deep for the modern Mail reader. They’d switch to the celeb pages before the end of the 2nd paragraph – that publication has shifted into a new space in recent years.
But… re the 800,000 self-employed “lost”. I’m not sure if you’re read the Treasury’s position on this. They wish to move all work to PAYE, so if you tell them there’s 800k fewer self-employed, they won’t see that as cause for concern, quite the opposite: will celebrate it.
November 7, 2023
“Of course the Treasury are right in saying these should not be unfunded”.
Only later is this inaccurate statement partially corrected by: “How could we cover these costs? The cost would be quite small even on Treasury arithmetic, and in practice could generate substantial additional revenues as more business was transacted and more earnings created.”
I sense a shift to the same strategy as you stated with net zero. You seem to feel that you must be saying what they say or you won’t be heard. It’s a rather worrying approach, since it has everyone saying the same wrong things and the public will be believing that message, since they hear no dissenting voices. The approach that works in modern society is to loudly state your contrary position – that works even for those who are wrong, so it should work even better for those who are correct.
Lowering tax RATES can increase overall revenues. That does not need to be “funded”, in fact it can fund other things. That is a message worth hammering home.
November 7, 2023
@XY How do you cover the costs of the Treasury all the while those in charge, the Government refuse to manage.
November 7, 2023
A pity that the Mail did not publish Sir John’s article . It spells out clearly what the process is that the Government should be pursuing . The Mail does not wish to say anything that is in disagreement with the Sunak/Hunt programme . The time has come for incentiveness in order for the country to respond and feel that there is hope on the horizon ; as things stand now rich and poor alike are left in limbo . Sunak stands little chance in being elected unless he adopts the sort of change our host outlines .
November 7, 2023
Obviously you are right and no Conservative should have any quibbles.
Regarding the last paragraph, it must be assumed that every Conservative knows all of this and does not want to achieve the aims you have stated.
I wonder why?
November 7, 2023
Sir John
All good points, but isn’t it just dancing around the problems?
This Conservative Governments approach to spending is out of control. They dump UK Taxpayer money here there and everywhere without attaching responsibility or accountability to it.
They keep growing and rewarding the State without seeking a return on what after all is a Taxpayer investment.
They use taxpayer money to remove manufacturing from the UK, then force the import of the very same strategic resources back from countries that don’t reciprocate, and are the sources of the bulk of the World Pollution.
At the root of everything is a clumsy clunky expensive run tax system that has long passed it sell by date. We have to have subsidies, allowances and hand-backs all layered on top of one and other to try and fail to address the unfairness in the system.
The source of all the UK’s ills is with this Conservative Government refusal to manage, giving Taxpayer money away is not managing.
A punitive tax regime isn’t managing especially when you take into account they have also doubled the UK’s borrowing since they have been in power just to keep pace with the uncontrollable growth and spending within government and the State.
Nothing this Conservative Government has done in the last 14 years has promoted UK growth, resilience, security and economy – every policy has been maliciously to encourage the opposite.
November 8, 2023
Yep spending is out of control, not least in the NHS, and there are no politicians prepared to say how rubbish it is. We need to copy the Australian or New Zealand healthcare systems and stop pouring money into the current failing system.
November 7, 2023
Dropping VAT on domestic fuel (something the Conservatives introduced in 1994) won’t cut bills by 5%, it’s actually less than 5%. Someone currently paying £100/month would see that reduced to £95.24 with the removal of VAT, not £95.
It’s fairly basic maths and should be explained correctly.
November 7, 2023
More to the point is that VAT was introduced on domestic fuel “because the EU demanded it”. But when we left the EU, most politicians (with sieves for memories) paid it no attention.
And why should they? They sit there in parliament with not a penny to pay for their heating, lighting and hot water, and their food is subsidised.
November 8, 2023
It was introduced because it was approved in Cabinet in 10 Downing St and voted through in Westminster. The UK government at the time wasn’t compelled to do anything, it chose to.
November 7, 2023
Peter you should be in Government, we need someone who can correctly calculate percentages.
I wonder how many politicians would get it right ? (I will exclude our host)
November 7, 2023
Agreed – £5 saved on your example, £60 per year. Suppose anything is worth saving, however, the Standing Charges have a far bigger impact working out at approx £200 plus per year.
November 8, 2023
It’s not even £60, it’s £57.12.
November 7, 2023
We need a proper Conservative government to do these things.
Alas, we do not have a Conservative government.
November 7, 2023
@Kenneth – Then again it is the Conservative Party complicit with CCHQ that want to fight the people rather than become ‘Conservative’ Expect more lies on the doorstep
November 7, 2023
@Kenneth; Well it is not what I call a Conservative government, and I suspect many floating voters too, indeed didn’t Mrs Thatcher place more emphasis on sorting our the dire economic mess her government inherited in 1979, most tax cuts had to wait until well into her second term if I recall, indeed her Chancellors first budget actually put the tax burden up for many.
November 8, 2023
Wrong Jerry
In the first budget after the 1979 election top rates of income tax were cut 83% to 60% as were standard rates cut from 33% to 30%
November 8, 2023
@Sam; Indeed you are wrong.
Taxes are more than just Income Tax! Go check the historical VAT rates, prior to the first Thatcher era budget the standard VAT rate was 8% [1], VAT rate was increased to 15% on 18 June 1979. VED also rose for many companies and sole traders due to the scrapping of the Light Goods class. Anyone whose was tax code was below the standard rate saw a real world increase in their tax burden, due to changes in indirect taxes.
That change in VAT has stuck with me because the sector I was working at the time in saw panic buying between the announcement on the 12 June and implementation on the 18th!
[1] 12.5% on petrol and certain luxury goods
November 9, 2023
Major tax reduction happened in the first year of the Conservative government in 1979. Which you originally said didn’t happen.
Income tax reduction was a huge change which put extra money into the pay packets of millions of people.
November 7, 2023
Tax cuts worked for Hong Kong, Germany post WW2 and during the Thatcher years so why are the Treasury and the Chancellor so against them? Is it again a case of the blind leading the blind? All to the detriment of this country and its economy. They made the mess, they cannot be trusted so PM give the job to someone who will ‘get it done’. LOL, If you can find him/her among your closed shop of sycophants. We desperately need completely new blood in Downing Street , Whitehall and Westminster, if this country is going to recover from the diabolical mess the current incumbents have made.
November 7, 2023
I find the Liberal Democrats a waste of space, they have no policies other than be the opposite of who they are trying to de-throne.
Then we get – “Sir Ed Davey claimed the King’s Speech was full of “cheap gimmicks and reheated policies” and showed the Conservatives are “out of ideas”.
And I find I am in 100% agreement with him, 14 years on, making the same promises with the same vigor. This time I know they will once more renege on all commitments and they will keep treating the people of this Country with contempt, while at the same time they keep giving our money away and refuse to manage.
November 7, 2023
A thought from the kings speech. By all means ban the sale of cigarettes to those attaining 14 years of age in 2024 and younger. Between 2024 and 2028 a seller of cigarettes may be able to judge the age of a customer. In 2034 a 24 year old cannot buy cigarettes, but a 25 yead old can. Making such a judgement over the counter I would deem impossible.
The only way to police such a ban is to carry a mandatory Identification Card. Horror you may say, but my experience in Spain with such a card, because I was resident there, was totally positive. Smoking apart, it would instantly separate those who are legitimately resident in the UK and those who are not. A benefit I suspect the majority in the UK would approve of, with a health improvement as a bonus. Discuss.
November 7, 2023
I see Rishis kings speech has put the final nails in any hope of the conservatives winning the next election. I am staggered that this country has come to this, both main political parties completely and utterly useless. There needs to be massive change, most of it is obvious, but it’s clear the current political class is never going to do it. Trouble ahead.
November 7, 2023
Probably the best Labour Party King’s Speech I’ve ever heard
November 8, 2023
They needn’t bother with a manifesto, Sunak is doing it all for them!
November 7, 2023
King’s Speech:
“My Government will promote the integrity of the Union and strengthen the social fabric of the United Kingdom.”
https://www.newsletter.co.uk/news/politics/passing-reference-to-the-union-shows-why-unionists-should-not-kickstart-stormont-says-jim-allister-4400712
“Passing reference to the Union shows why unionists should not kickstart Stormont, says Jim Allister”
“The TUV leader said: “The passing reference to the integrity of the Union in His Majesty’s speech will provide little comfort to unionists.
“This Conservative government has been responsible for huge constitutional vandalism to the Union going so far as to put into suspension one of the two crucial legs of the Union – the economic integrity of the UK by agreeing to a border in the Irish Sea.”
Mr Allister said: “There was little in today’s speech to suggest that this will change under Mr Sunak’s premiership and certainly nothing which would encourage unionists to contemplate kickstarting devolution under the leadership of Michelle O’Neill and Sinn Fein, a party which exists to destroy the UK, not promote and strengthen it.””
November 7, 2023
Conservative MP Bob Stewart has been convicted of a ‘racially aggravated public order offence’ by Westminster magistrates after telling a political activist who was harassing him to ‘Go back to Bahrain’. Can anyone explain why this is a public order offence or how it is racially aggravated? Once again, the Conservative government have done nothing to counter the woke march through our institutions. The Home Secretary should be censuring the police officers involved and ensuring that the magistrates are removed from the bench.
November 8, 2023
Bob was found guilty by the chief magistrate, who is a judge. Which makes it far worse. The fact he was sitting indicates they knew it was politically tough decision, and they had pretty much predetermined the likely outcome. And the usual complaints avenue about junior magistrates will not work. But the rest of us get crazy decisions from the courts every day, it’s only notable when it happens to someone in the public eye. The courts like much of the public sector have been captured by a woke nonsense idiology.
November 8, 2023
What if he had said ‘go back to Sheffield’ , or similar?
November 8, 2023
Another step to the left and they’re slowly getting rid of all the tory brexiters
November 7, 2023
No surprise at all that the Mail refused to run your article, Sir John: the idea of running an economy that is not primarily aimed at taxing the living daylights out of the population would be like not filling up a newspaper with nonsense when there’s no news.
November 7, 2023
Now I’m back home I skimmed reading of the King’s Speech – ‘high spots’ on the BBC website.
To say I’m underwhelmed is putting it mildly.
What a waste of time, cost and everybody’s attention – getting hopes up that some meaningful Bills were planned.
Not a bit of it – go Sunak please – you are amongst the worst ever PMs.
November 7, 2023
remember the note left in the drawer ‘we spent all the money’?
This time it will be ‘ we didn’t have a clue what to do’.
November 7, 2023
Well the government lived up to expectations.
November 7, 2023
Dear Sir John,
Everything you say here is true, but I think upon reflection you may concede that the article is a little long, and would be more effective if it dealt with fewer issues in order to give them more impact.
Personally, I think a huge issue that should be brought to public attention is the continued commitment by the Treasury to indemnify the Bank of England’s losses on its Bond portfolio, which continues to be disastrous for public finances. This money, which we’re borrowing from the markets, is then being passed to the Bank so they can turn it into nothing. I am convinced that this lies behind the cancellation of HS2 – we simply don’t have the money to keep paying. You have rightly raised this issue repeatedly, but so far I don’t think the issue has been crystallised successfully enough to enter the public discourse the way (for example) stopping the boats has done. I would like to see media articles solely about this issue, comparing the spend on the QT programme to a Government Department (it is more than the education budget as far as I can make out), and clarifying the mechanism behind it. This should be national news. Shining a greater light on this issue and having a debate about it would be useful to the next Chancellor, if they want to revisit this agreement – which any half decent Chancellor would.
SR
November 8, 2023
What would happen if every business charged VAT at 10% on every £1 billed no threshold? with 20% only on luxury goods but from whatever size of business that sells them?