Tax this, tax that. It is all the government wants to do as it stumbles from budget to budget, from OBR forecast to OBR forecast. Tax employing people. Tax family farms. Tax small businesses. Tax motorists. Tax people who save. Tax people who buy food wrapped in hygienic plastic. Tax people who earn more. Tax people who dispose of their waste legally. Tax people for driving battery cars. Tax people more for buying diesel or petrol cars. Tax people with gas boilers. Tax companies with windfall taxes that sell us petrol and diesel. Put VAT on school fees. Tax rich foreigners more. Tax banks more. Tax landlords more. Tax people making capital gains more .
The reactions to this tax attack are predictable. Very rich people move to one of their homes in a less hostile tax jurisdiction and take their savings and businesses with them. Younger people planning to work hard and set up businesses go elsewhere to do that. Employers offer fewer jobs. People are deterred from promotion or working longer hours by the tax traps higher up the earnings scale. People stop buying so many cars. Voters become angry about a government that seems to want to stop them being better off. Consumer confidence falls leading to slower growth and less tax revenue. Landlords stop renting out homes. People with assets hold them for longer to avoid capital gains tax.
No one is happy . The government collects less tax from less activity, and from fewer better off people staying to pay. People are unwilling to take so many risks, to try new things, to build new businesses.
Lower tax rates can lead to higher tax revenues. If we halved our corporation tax rate to match Ireland’s we could grow our business base as they have done,. They collect 3 times as much business tax per head as we do with half the rate.
If we lifted the bans on new oil and gas and removed the windfall additional tax, just leaving in place double corporation tax, we would get a lot more tax revenue from the new oil and gas we would be producing for ourselves. We do not get anything like the same tax on all those imports this government prefers.
If we reduced taxes on capital more money would flow into the country, and more domestic savers would create more transactions and jobs as they rearranged their property and share holdings.
Instead of a gloomy outlook based on dividing up a shrinking or small cake, we could have policies that grew the cake giving scope for many more to be better off. More cake would bring more tax revenue. Lower tax rates would assist in faster growth and a better financed public sector.
January 19, 2026
Why ‘could the Government do with more revenue’?
It proves every day that it has far too much, so much excess that it has plenty to make an international fool of itself.
The Government should have 1/4 of the revenue it currently has and learn to ‘make do’.
January 19, 2026
Correct Lynn. 78% tax on gas and oil extraction bringing in only £9 billion against £26 billion estimates. Starmer spaffing money about like a man with no arms. Chagis springs to mind.
Digital ID which no one wants and much more.
Relentless rises in council tax so the employees can work a 4 day week and reduce services.
The whole government machine is financially out of control and us heading for sn almighty crash.
We need a bond market strike to reset this profligate government. The sooner the better.
January 19, 2026
Exactly.
January 19, 2026
Politically cloth eared, the Tories have suffered from the austerity accusation since Cameron and still are.
And what does ‘making do’ mean? It’s hollow.
January 19, 2026
Agreed Lynn. More revenue is the last thing this Government needs. It will be spent adding more costs to the UK economy.
Oh to have a massive rethink on what Government needs to do (as I noted yesterday on there being just 4 key ministries in the 1800’s). From biblical times through to the medieval period a 10% tithe was the going tax rate. What chance we aim for that?
January 19, 2026
yes and the state puts perverse incentives in the system like zero national insurance, both employers and employees, for the first 12 months in the country of a work visa holder. so big outsourcers optimise for maximum tax free, eg pair people up, one in the UK, one abroad, and they swap them every 12 months, so that 2 person unit is perpetually in the UK working without paying any national insurance. they time it so they are only in the country for 6 months of any tax year, so personal allowances are far higher pro rata. and of course people here on work visas are allowed to be paid tax free expenses that any brit working away from home is not allowed to claim. and so the state itself encourages brits to be displaced from the workforce and replaced with foreigners long term, for simple tax avoidance reasons.
when I worked abroad I always paid more tax than the locals, brought genuine unique skills the locals did not have, paid for my own health care, and fully intended to return to the UK at the end, most foreigners working in the UK are abusing the system.
January 19, 2026
multinationals organise their corporate structure so that tax liabilities become liable mostly in countries with lower corporate taxes. the UK company is setup to be owned by a company in a lower taxed country. the UK company pays the company which owns it abroad large sums, eg as a fee for use of corporate intellectual property like brand names, so the UK company makes minimal profit and minimal tax is therefore due in the UK, the profit shows in the books in the lower tax base country and so the overall multinational get the profit and pays least tax possible.
indeed there are often multiple layers of such ownership structures so that multiple tax havens are used, even if one tax haven puts up taxes the profit will be moved to another haven.
there are many ways in which high taxes here just mean large corporates declare no profit here, and move the profit to lower tax countries.
so large tax rates here just result in lower tax take in the UK.
January 19, 2026
even for families, there are multiple thresholds where the sensible decision is to stop working to avoid punative taxes. one is the threshold where you have to repay your family allowance to the tax man, I know plenty of people who just stop working towards the end of the tax year to avoid this. it is completely crazy from the UK top level position to be actively encouraging people to not work.
January 19, 2026
lots of freelancers have just stopped working, decided to retire many years earlier than they would have otherwise just because of the punitive tax position of IR35. why work when you have to pay genuine business expenses out of taxed income, when your main competition are employees of big consultancies who get the very same expenses tax free. its a doom loop of less activity, less efficiency, all because the state thinks it has a clue who should work where under what contractual deal. killing freelancing, which still has no agreed way that the state is happy it is legally and contractually done under. the state doesn’t like personal service companies, it doesn’t like umbrella companies, it doesn’t like sole traders… the state doesn’t understand or want freelancers. yet the country needs freelancers, so there is massive amounts spent on accountants to deal with the complexity.
January 19, 2026
The government believes that it can print money and distribute it ‘fairly’.
It can. But if nobody works that money will buy nothing.
Politicians can’t comprehend that people work for financial reward. For instance they think people work for the NHS ‘because they love it’, in spite of the evidence of strikes for more pay from poor (and I mean bad) Doctors bringing home upward of £100k pa.
When the bad (overpaid) Doctors went on strike the waiting lists decreased because competent Doctors (consultants) did a bit of work and motored through it.
We are dealing with seriously stupid people in the political class.
January 19, 2026
taxes also distort the country. the whole second hand shop business and network was destroyed when the state decided to let charities run similar businesses but do it with far lower taxes, they get to do it with zero council tax, and other massive perks. charities do not run such businesses anywhere near as efficiently as private people were and can. so massive recycling is being done far less efficiently than it would be done by the non charity sector, far less tax take for the UK, and almost certainly even the charities are worse off. it is state manipulation gone mad.
January 19, 2026
My Lord,
It seems to me that this and the previous government will regulate it, tax it but, if they cannot get a piece of the action, they ban it.
The state is increasingly becoming the enemy of the people and I find it rather depressing.
The levels of taxation we have currently is like a pair of new shoes with the laces tied together, we will never be able to run.
It seems the Gangster State sees all money and assets as theirs and just wants to give us a small amount of pocket money for which we must be eternally grateful and worship the state.
Problem is, whilst our deluded government thinks it is rich and wants to get involved in every costly thing that is happening around the world and throw money at everybody every where, things will never improve and they will have to tax us more and more.
January 19, 2026
Taxing us more and more will produce less and less as JR points out.
The Government is in its own doom loop.
We must let it die!
January 19, 2026
You have defined socialism UK style almost perfectly. Add to it almost total incompetence in foreign affaires and you score 180!!!
January 19, 2026
It isn’t lack of money or the need for more in order to provide better quality services.
It is the misuse of the bounty they are already in receipt of.
The never ending saga of ‘funding cuts’ from many Labour run councils that forever seem to be down at heel places to live.
Funding cuts indeed! Perhaps it’s how and where and on whom they spend the money that is the issue.
Just a shame so many Labour voters in the run down Labour areas never asked that question, but just repeated verbatim, ‘it’s funding cuts’ ‘it’s the rich’ etc.
A Labour run government was never going to be any different to a Labour run council, why would anyone assume such???
January 19, 2026
You were an influential member of the Tory PLP and I am certain would have made the same argument. Yet they bent the knee to the EU on VAT and Corporation Tax despite the example of Ireland and proven effective of Laffer. Sunak went further and sighed a world agreement to prevent Corp Tax used as an economic weapon.
So the problem is that it is endemic across the political class and I guess the Treasury. Even if they claim it is Keynesian a part of what he said is missing.
You make a statement of fact but as ever the ‘why’ is missing and without that, a solution cannot be found.
January 19, 2026
Very rich people move to one of their homes in a less hostile tax jurisdiction and take their savings and businesses with them. Younger people planning to work hard and set up businesses go elsewhere to do that. Employers offer fewer jobs.
I emigrated to Australia some years ago. My nephew has just followed suit.
I know Albanese, the PM, is as idiotically left as Starmer but the majority of Australians won’t wear it in the way Brits do. Albanese won’t last. As far as UK law is concerned I can’t see that there is anything in UK law stronger than convention to compel Starmer’s Gang to face the electorate. Australian law is much stronger and forces a general election on Albanese whether he wants one or not.