A picture of Nigel Lawson hangs in the study at 11 Downing Street. I was told Rishi Sunak asked for it to be placed there. I understand Jeremy Hunt Ā approves. As both men admire Nigel, why are they so wedded to high and higher tax rates?
Nigel Lawson brought intellectual self confidence and energy to the task of being Chancellor. He fearlessly slashed income tax and corporation tax rates. Extra revenue poured in as growth improved. He was soon able to claim after large cuts that the rich were paying more tax, were paying more tax in real terms and were paying more income tax as a proportion of the total. What’s not to like? Why not do the same again?
The Chancellor should see that charging people on Ā£100,000 a year 60% on anything above Ā£100,000, more than people on much higher incomes are charged above Ā£125,000, makes no sense. It also annoys the doctors we want to keep here and working in the NHS. Get rid of that anomaly.
The Chancellor agrees we need more self employed. The loss of 700,000 since covid from self employment is bad news. It is partly caused by the 2021 tax changes. Reverse them. We need more plumbers, electricians, white van men and women to help look after our homes and businesses. It needs to be worthwhile to them. They do not want an IR 35 and VAT nightmare.
The Chancellor himself advocated a much lower corporation tax rate when he put together his leadership bid. It was right then and right now. Ireland shows us how well it works. They raise four times as much tax from business per head than we do because they have such an attractive low rate. Why insist on higher rates to collect less tax?
The problems seem to stem from OBR and Treasury forecasts and accounting. They do not allow enough for extra revenue from changed behaviour when tax rates are cut. They ignore the evidence from modern Ireland or from the UK under Lawson. To them a corporation tax rise delivers more revenue, yet it was Osborne’s corporation tax cuts that delivered higher receipts. The Chancellor should cut the rates and explain why he thinks the OBR revenue forecasts are too low. He can always hike the tax rate again if thereĀ was anĀ exception to the rule that lower rates give us more revenue.
The government wants more investment. The super deduction from corporation tax helped a bit but did not produce an Irish style business bonanza. They could keep the deduction for longer, but will also need lower rates. Businesses model the cashflows over the life of an investment, not just the first couple of years when they are putting moneyĀ in and benefitting from a tax offset then. A country with a low headline rate gets more investment enquiries. The UK is getting a bad reputation with a 31%Ā Ā hike in the Corporation tax rate planned, and with an avalanche of unpredictable windfall taxes. Getting oil and gas out of the North Sea instead of importing will lead to a 50% Corporation tax levy and a 35% windfall levy, making Ā it one of the worst places to risk large sums for more energy. No wonder some good prospects are sitting under the sea with their owners unwilling to get into production anytime soon. We will collect less revenue because less oil and gas will be produced here by having such high tax rates. We will also lose out on all the high paid jobs and profits oil and gas activity bring.
As this is to be a budget for growth the Chancellor should raise the threshold for business to register forĀ VAT from the current Ā£85,000 turnover. There are many businesses that turn work down to stay below the threshold and probably some that illegally Ā do extra for cash to evade registration. A higher threshold would mean more work and profit to tax and more supply capacity in a world of shortages and high prices. Put it up to Ā£250,000 and let small businesses expand.
It is no good saying this time they will stick up taxes and hope somehow the deficit comes down, with a view to tax cuts next year. Next year is too late for them to have a beneficial effect on the economy before the election, and too late to stave off the downturn this year. High taxes stop growth which makes deficit reduction more difficult. We need a growth budget now, with some Thatcher/Lawson verve. More revenue comes to those who cut tax rates. Bigger deficits come to those who frighten off business and slow an economy Ā too much.
The Chancellor should beware that President Biden is splashing the cash big time on a series of incentives through tax breaks and subsidies to draw much investment into the USA. We need energy, semiconductor, transport, broadband and much other investment here inĀ the UK. The big players are telling us they will get better terms and conditions in the USA. The UK shouldĀ improve its pitch by easing the tax squeeze. Why not suspend VAT on home energy all the time prices are high, saving money on the subsidy bills? Why not set out the prices and conditions that will end the so called windfall taxes? If the government says they go on untilĀ 2028 whatever the gas or electricity price they are not windfall taxes, but general energy taxes that price domestic supply out of the market.
The Thatcher governments were great tax reformers. As the Chancellor gazes up at Nigel Lawson in search of inspiration he should remember this record. They took standard IncomeĀ tax down from 33% to 25%, and the top rate of income tax down from 83% to 40%. They cut the corporation tax rate by a third and Inheritance tax down from a top rate of 75% to 40%. NigelĀ Lawson abolished the Investment Income surcharge, capital duty, National Insurance surcharge, development land tax and the tax on lifetime gifts.
Because of this the economy grew faster and more revenue came in. If our modern leaders truly revere Nigel Lawson they should start cutting tax rates.
March 8, 2023
Good morning.
Pure virtue signalling from the shameless usurper.
March 8, 2023
+1
Those on the Left say that now we have two Chancellors and no Prime Minister.
March 8, 2023
Both dire tax, borrow, print, over regulate, piss down the drain & big state pushers of expensive “renewable” energy. Both PPE grads with zero grasp of science and logic. One a failed chancellor the other a failed Health Sec.
March 8, 2023
Actually, he also had a picture of Labour chancellor Hugh Gaitskell!
Sir John, you might enjoy reading this alternative budget proposal here: https://britishpatriot.substack.com/p/a-patriotic-budget-part-1
This is the first in a series of pre-budget articles, focusing initially on corporation tax and investment incentives. It comes at the subject from very much the same angle as you do – and you even get a nice mention!
I’d be genuinely interested in your comments.
March 8, 2023
Liz Truss did all of this
March 8, 2023
Kendo, Hammond has costed Net Zero at Ā£3 trillion. We spent half a trillion on the furlough, and the Usurper ran a deficit of a quarter of a trillion for two years while he was Chancellor. We spent Ā£2 billion a month on free tests. We have made an open ended commitment to the Ukraine and another to the Channel invasion. I’ve lost count of what we are spending on the NHS but am going to suggest up to Ā£160 billion.
Are you seriously suggesting that leaving Corporation Tax and NICs at their present levels; taking a penny off income tax; and 5p off the top rate to return it to the New Labour level “did all this”? The gas package was large, but it was to prevent small business going bust, and households ditto. If that had happened it would have been a very false economy. It was already known that gas was coming down in price.
Pay attention to what the Governor of the Bank of England did the day before the Growth Statement and in the succeeding days.
Of course it was convenient for the anti growth coaltion to blame it all on Miss Truss, but more and more people are now admitting she was right. They are lauding her other polices too, e.g. on childcare.
March 8, 2023
How meaningful is the “4x the tax per head than the UK” claim for Ireland’s corporation tax take?
The implication is surely that we could get 4x more CT per head if we adopted Ireland’s rates. We have 67m inhabitants, Ireland 5m. We’d need 13x more businesses to come here than Ireland has attracted, in order to produce the same increase per head of population (other things being equal).
Apologies if my maths is wrong or my thinking muddled and I’m happy to stand corrected.
I don’t argue about the principle that lowering tax rates often produces a greater overall take (and what’s not to like about that?) but I do object if comparisons are misleading, because it debases our public debate. We’ve had too much of that over the past few years.
March 8, 2023
Ireland hasn’t really attracted those businesses though, you’ll just find that many organisations have set up an Irish entity through which to route, for example, all their European business even though their staff, customers and business transaction are all in other countries. They then use the internatlonal tax transfer rules to, for example “license intellectual property” e.g. corporate branding at a level which just so happens to balance out the profits made in each country.
As an example of the games that large companies play, Starbucks in the UK buys all its coffee from that well known coffee producing country Switzerland!
March 8, 2023
Spot on Peter, and what has happened in the moves to persuade countries to align Corporation Tax to eliminate these multinational tax cheats? Answer? Nothing- just fine words.
March 8, 2023
I’d say it’s not about aligning Corporation Tax rates, it’s about doing away with all the rules that allow multinationals to creatively shift their profits around in a completely artifical manner to minimise their tax. If the ability to do this was done away with and all profits were taxed locally in each country in which they were made, the problem goes away and local companies are competing on the same level playing field as the multinationals.
If you do business in the UK, your UK profits should be taxed at whatever the UK rate is and that tax is paid in the UK with no artificial profit shifting allowed. Same if you do business in Ireland, France, Germany, USA, India, Japan or wherever.
Reply Where profits are made is a judgement, not a fact. Products and services contain elements from a variety of countries so estimated transfer prices and work in progress valuations are required. Tax authorities try to do this and companies have to handle different tax authorities taking different views.
March 8, 2023
Ireland is operating under EU law; the EU is just one notional state and companies can put their Head Office anywhere in it although Corporation Tax rates can vary by country, apparently: just another EU anomaly.
March 8, 2023
Why doesn’t the EU ask Ireland to increase its tax rate to more than 20%?
Why do people like you not condemn Ireland for not paying in to support NATO 2% of GDP
Why do you not condemn them for only paying around 0.32% of their GNI in foreign aid. According to the OECD, 2020 official development assistance from Ireland decreased 4.1%
Especially when we are constantly told they are doing so well.
March 8, 2023
Well, could it be because the EU does not impose the level of tax rates that its member states must have?
Could it be because Ireland while being in the Partnership for Peace is not a full member of NATO?
Ireland had its foreign aid ODA going down by 4.1%, shameful really. So now please tell me, what do you think of the UK ODA going from 0.7 % down to 0.5% a decrease of 28.5% ?
March 8, 2023
+1
March 9, 2023
Hefner, Ireland should pay the people in nato that protect them so they can be āpartners for peaceā. The UK should try that one! Just cheapskates basically, they want to remain neutral but share in the protections of having powerful nato members on their borders and near neighbours and we canāt just leave them to it because they could become a leaky problem for us.
The EU gives plenty of āguidanceā and has minimum levels of VAT, they all wanted a 25% rate and yet they give these countries a derogation. It seems everyone expects Scotland, Wales, Northern Ireland to stump up their taxes, nato payments, foreign aid,
I have already said hefner the extra 0.2% will Iām sure be made up by all of the cost of the rescues at sea that should come from the foreign aid budget, the legal aid, the processing of applications that is taking the Home Office staff ages because 98% arrive in boats without documentation. The hotel rooms and other accommodations we provide, plus meals, plus allowances, plus medical, schooling, other education, interpreters. We should demand all this is added up and added to the foreign aid budget. As should the cost to the NHS for treatments from people from all over the world not paying national insurance but still getting treatment in the UK. I shall wait to see if all this is added in the total of our foreign aid spending this year before I make my judgement of whether the UKās contribution has dropped or NOT.
March 10, 2023
One more point Peter with your +1. The EU may say they do not have a ‘direct role’ in collecting taxes or setting tax rates BUT…
The EU does however, oversee national tax rules in some areas; particularly in relation to EU business and consumer policies, to ensure:
ā¢ the free flow of goods, services and capital around the EU (in the single market)
ā¢ businesses in one country don’t have an unfair advantage over competitors in another
ā¢ taxes don’t discriminate against consumers, workers or businesses from other EU countries
Yet they allowed Ireland to discriminate (for all the time we were members) to have an unfair advantage over competitors against businesses in what was their bordering EU member. They also allow them to have this advantage over France and Spain etc.
“The EU also works with EU countries on the coordination of economic policies and corporate and income taxes. The aim is to make them fair, efficient and growth-friendly. This is important to ensure clarity on the taxes paid by people who move to another EU country, or businesses that invest across borders. This coordination also helps to prevent tax evasion and avoidance.”
Works with members on the ‘Co-ordination of corporate taxes!’ except those EU countries they allow to work against other members interests. Why do you think people were so *** off. It’s always been one rule for some and another rule for the UK, who were always targeted for their fees, fines, and taxes.
PLUS, if Ireland and other countries are allowed to opt out of NATO for PEACE reasons, why don’t those other countries stumping up their 2% say ok but you have to put 2% of your GDP into peace missions.
March 8, 2023
I think it’s more the principle Wanderer and there is no doubt in my mind that the RoI benefits hugely from their tax policies at our expense.
At one time, If you were a Microsoft ‘Reseller’ in UK, you ordered all your MS material from Microsoft Ireland. That’s where the ‘goods’ (e.g software – mostly just a master CD) were shipped and invoiced from. This was for all business sold here to UK businesses (and same applied to the rest of Europe). I assume this is still so, as MS Ireland describes itself as the EMEA ‘Hub’ and currently employs 3,500 people near Dublin (MS UK has/had about 3,000 staff although cuts are in progress). The UK was a very large part of the EMEA business, about 30% and most likely still is. The MS direct business in RoI would have been miniscule by comparison but I’d guess they get far more tax than the UK does from MS. I think you will find this practice is mirrored by a number of other large US Corporates. So don’t see it as just Corporation Tax but also lost VAT and well paid jobs. The latest Corporate tax rise will just reinforce this behaviour by multinationals. They don’t have to come here – you can’t make them! It’s a very stupid, very short sighed policy from the Treasury and completely bonkers if you want growth
March 8, 2023
By the way (in case I didn’t make it clear) any rise in UK Corporation Tax won’t effect these multinationals that are already effectively by-passing UK taxation ( RoI being just one example) but it will most certainly cause problems for your local car dealership, launderette, pub/hotel chain etc. The Left continually tell you that all these “greedy” multinationals should be punished but (being multinational) they can move their money & investments where-ever they desire. It’s the smaller, local (e.g. national) businesses that will really get hammerd by all this nonsense. Expect a lot more UK business liquidations over the coming year, as dwindling cash reserves (or bank credit lines) simply dry up. Mr Hunt is going to accelerate this problem and frankly it’s just beyond belief that a Conservative Government would consider such a thing. The only rational conclusion is that they are simply not conservatives….
March 8, 2023
I think you’ll find that many IT companies structure themselves in the manner you’ve described.
You are also right that it’s the smaller companies that suffer. The solution is to get rid of the rules which permit moving profits around artifically. Tax profits where they are made, not where they end up being declared as the result of expensive lawyers and accountants.
March 9, 2023
In theory that would be a good idea Peter but clearly it’s not so simple in practice. What has worked is to set taxes at a level where (costly) avoidance schemes become less attractive.
March 8, 2023
Indeed Lawson is also right in being against the insanity of May’s moronic Net Zero law and the absurd climate alarmist religion. The insanity of the May government setting Net Zero targets in law without any realistic way of ever hitting them and at huge damage to the economy (and the environment). Thus exporting jobs and whole industries (usually increasing world CO2 output). Lawson has excellent book on this “An Appeal to Reason”
and through his Global Warming Policy Foundation is doing good work. Needless to say the climate loons are even blaming the current cold spell on “Man made climate change”. Some nutters even blamed Covid and Earth Quakes on it.
Cut taxes, have a bonfire of red tape, halve the size of the largely parasitic state sector, generate productive jobs and kill unproductive and parasitic jobs, control immigration. Also kill soft loans for worthless degrees, scrap HS2, get real and fair competition in education, energy, banking, housing and health care.
March 8, 2023
The whole party could learn a lot from now Lord Lawson. He is the inspiration behind the GWPF and Net Zero Watch.
He was fortunate that the WEF was not such a powerful destructive force in his day of being Chancellor of the Exchequer.
I doubt very much if he or MT would have been taken in by their philosophy.
As stated many times on this site the ability and capabilities in real terms of 88% of our elected politicians is dire.
March 8, 2023
Lawson also recognised the danger of environmentalism as policy, seeing it rightly as ‘political dynamite’ and steering Thatcher away from it. By contrast, Sunak loves it and has no issue with Net Zero being a legal commitment. The hugely expensive energy we now have is the overriding reason for the UK’s accelerating decline, which tax cuts will not reverse.
March 8, 2023
Turbo. Now there was a sensible chancellor on many fronts…not just financial. Of course it was back in the days before universities became woke and churned out the idiots we have now.
March 8, 2023
An excellent article. It should be noted there is full freedom for the UK to do this if we want to. Unfortunately there seems little chance of it happening. The blob – now revealed to have had a terrible influence during covid – is in control. A Labour govt beckons unless there is a radical change.
March 8, 2023
What is the āblobā?
March 8, 2023
It seems to be a change altering social comment on organisations who seek to control minds via outrageous statements from what ought to be responsible bodies.
Got that? Nor me….
March 8, 2023
The established orthodoxy which has now captured the vast majority of parliament and indeed all our institutions, and can no longer be changed by the electorate simply voting it out.
March 8, 2023
When a PM is defenestrated for planning to cut income tax rates ie Truss, then you must surely realise that this country is now controlled by those whose intent is deeply antagonistic to what I would describe as ‘free world’ in which the individual is king NOT the political State. I call that despotism
March 8, 2023
Hear, hear.
March 8, 2023
Hear hear indeed
March 8, 2023
And in addition, as Andrew Kenny says, the virtuous way to increase poverty is by applying a minimum wage.
āHow can I increase poverty and unemployment while at the same time posing as a moral saviour?ā You can imagine politicians, academics and trade union leaders wrinkling their brows as they ponder this question. Then a light bulb moment: āOf course! The minimum wage!ā
The rising minimum wage will throw people out of jobs, prevent small businesses from starting up, make sure poor people can never become employers.
Free people t0 offer jobs at a wage they can afford to pay and accept jobs for a salary they are prepared to work for.
March 8, 2023
Hmm. History shows that that mechanism leads to people living in slums and working 14 hour days for slave wages. No thanks.
March 8, 2023
You heard of āmodern slaveryā which we have recently imported into the U.K.?
Dependence on the State is also a type of enslavement. It deprives people of purpose and hope.
Have a look at Zimbabwe – under Ian Smith the Capitalist, it was Breadbasket of Africa, āreleased from the freedomā you fear it now has base rate of 200% and itās population has walked to neighbouring countries which retain some sort of market, where they can sell their Labour and EAT!
March 8, 2023
and zero hours contracts. It allows statistics reporting numbers employed to rise wonderfully, yet reduces earned income average to hopeless values, forces benefits to be paid to astonishing numbers of ‘workers’, demoralises millions and enables unethical business to make profits.
Terrific isn’t it?
March 8, 2023
Lynn, I don’t think it will throw people out of jobs. I think it may reduce their hours (which is an aim) from 37.5 to 35; people will try to concentrate on their busy hours and hire part-time to cover peak demand times.
MT Zero hours contracts pay holidays 1 day every 9 days worked. You can’t pay zero hours workers less than the NLW, NMW. These jobs usually appeal to people who want to choose their own hours, like the retired who want three months off in the summer or will work on days to suit them. These contracts aren’t all bad and in times of peak vacancy rates if someone wants to work full time they can get those jobs instead.
Benefits are more paid out to part-time guaranteed 16 hours per week workers who usually ask to have all the school holidays off, because they can then claim they do 16 hours per week even though they only work 39 weeks.
March 8, 2023
I stand corrected, zero hours contract are the best thing that ever happened to the working class of UK.
March 9, 2023
MT do you know anyone that is working zero hours work that wants full time but canāt get a full time job?
If you do what type of job do they do, and what type of job do they want to do? Iām genuinely interested.
March 8, 2023
The people who own small businesses create their own jobs. Their salary is the profit turned. Every time their costs go up, their take-home-pay is reduced. I know many small business owners who dream of taking home the minimum wage, especially for the hours they have to work.
These are the people āgiving up their jobsā and those they employ consequently lose theirs too.
You appreciate that 70% of those employed are employed by āsmall businessesā?
Consider a situation where benefits have to be seriously curtailed. Itās a disaster created by the āwell-meaningā (letās be charitable) who are sending million to hell in the handcart provided.
March 9, 2023
Lynn staff numbers have decreased when putting rates up last year, clients wouldnāt pay the new costs and I have concerns that will happen again from April, if it does then hours drop and people donāt get replaced. I have been a small business employer for 40 years.
March 10, 2023
Can I add that a couple of reasons people feel they’re not better off compared to gross incomes from the past. Is in the past those gross incomes (in the private sector) were often with overtime for 48 hours per week and more. Since 1998 hours per week have dropped, so they are now ‘time richer’ as they have dropped about 10 hours per week overtime. This is never mentioned in anyone’s reports, so why not?
They also have 5% less income as they have put off their income until they retire with the workplace pension, their employer is putting 3% in as well as the near 14% frp, 6 Nov (prior to this it was 15.05%) Employer’s NI payment.
The National Insurance Class 1A rate on expenses and benefits for 2022 to 2023 is 14.53%.
March 8, 2023
Please let us know, Sir John, how Jeremy Hunt answers these questions which I expect you have put to him.
March 8, 2023
@ Clough. I can do that! Whatever the actual question, the answer will be along the lines of: –
“My Right Honourable friend makes a good point and I confirm that as a Government we are committed to lowering taxes. We will do so at the right time, mindful of the extent of total borrowings. Meanwhile, the increases I have announced are expected to help reduce the deficit”
March 8, 2023
Well said – nail/head!
March 8, 2023
That is what I always wonder! Do they never read anything except their own blurbs? I would like a definitive rejection of Sir John’s suggestions, from both Hunt and Sunak.
March 8, 2023
If government really wants to increase the self employed especially trades people reduce benefits so that it is worth the claiment getting out of their pit and going to work.
When running my own business I had many applications from young people looking for work to get a trade. When it came to starting salary they were claiming and receiving more than the basic starting rate. The cost to me was already high taking into count all the other legislation that had to be taken into account, insurances, holiday sick pay, Health and Safety, transport etc.
Customers do not want to pay the extra costs for training. The answer is quite simple give them basic skills training in secondary education. Not all are destined for University so change the curriculum to accommodate them.
March 8, 2023
Or provide self employed trainers with even half the resources of a “professor” of sports science or beauty therapy at university.
March 8, 2023
Setting a national minimum pay rate seems daft, especially when other benefits have to be added to bolster it.
Consumers dictate what is worth buying and at what price. Business conforms to consumer needs or fails. Employers consume employee services and should pay what each employee supplying them is worth.
Self-employed folk have no national minimum pay. Many work weeks speculatively or competing for a tender receiving nothing. Some may receive just Ā£2 an hour for their paid work, or result in loss. Those who maintain their own standards rarely work speculatively and thrive from charging high rates which their clients prefer as delivering value for money.
Quality and value pay, not minima.
March 8, 2023
Sir J,
I don’t think you appreciate the current PCP Rishi government dogma.
More industry is bad,
more energy consumption is bad,
more land use for food production is bad.
The 21st century is going to be a century of tumultuous change; we’re going backwards.
March 8, 2023
Spot on Peter. It’s really quite daunting.
March 8, 2023
Peter Wood :
Yes, they want us to return to a time when the weather determines our lives
March 8, 2023
The spreadsheets look good if you import everything ….in a brave new world
March 8, 2023
Lawson understood economics and lived Conservative values.
Sunak & Hunt? Not so much…
March 8, 2023
There are very few conservatives in the Tory Party. Just look at their actions not words. Highest taxes….. ever. Highest legal and illegal immigration…. ever. Worst health waiting lists and no dentists….. ever. Worst education places…. ever. Most left wing, woke Councils, police, quangos, Treasury, Home Office, Sue Gray etc. We need Reform, not words. The Consocialists haven’t and won’t cut the mustard.
March 8, 2023
Sunak and hunt are almost the opposite of Nigel Lawson. They are tax, borrow, print and waste, big government, over regulate & pushers of the climate alarmist religion. The Lawson made some big errors especially over the ERM with his spat with the wise Sir Alan Arthur Walters, Chief Economic Adviser Margaret Thatcher 1981 to 1983. Leading to the John Major disaster and burying of the Tories for three + terms. Still not really returned properly even now.
March 8, 2023
The good old impartial and deluded BBC:- Gary Lineker will be ‘spoken to’ by BBC after appearing to compare migrant policy to Nazi German. The Match Of The Day host, 62, criticised the government’s Illegal Migration Bill as “immeasurably cruel” and compared language used to announce it as “not dissimilar to that used by Germany in the 30s”. How many tens of millions more does Gary want?
The real problem is that Sunak and the Tories are all hot air and no real action as we have seen for many years. Without leaving the ECJ he will be stopped by the courts anyway.
March 8, 2023
If it ever happens, I’m a bit concerned about the exceptions. Do we want to incentivise severely ill people to come here for free treatment at the taxpayers’ expense? And are these ’18 year olds’ those who can prove their age or are prepared to submit to tests, or just the 40 year olds who claim to be 18? What do we do with the 18 year olds? And will male migrants just set out in their early teens to get under the 18 year bar?
March 8, 2023
To me, Hunt having a picture of Nigel Lawson on his wall is a bit like a tart wearing a crucifix necklace.
March 8, 2023
Oh, very good.
+1
March 8, 2023
It is part of their disguise – they want to pretend to be Thatcherite, low tax, pro business, high growth Conservatives while actually doing the complete opposite of tax, borrow. regulate to death and waste.
March 8, 2023
Lol, Bill, if I were Lawson reading this, I’d visit them and turn my photo to face the wall.
March 8, 2023
Could the last person wanting prosperity please switch the lights out as it has bankrupted us.
March 8, 2023
Lights Javelin? What lights? Blow out the candles would be more realistic.
March 8, 2023
blow out the ‘imported’ candles
March 8, 2023
The people controlling Sunak and Hunt don’t admire Nigel Lawson and don’t want low taxes. They want alignment with the EU and no attempt to compete with it.
March 8, 2023
Donna
So it would seem
Is it not strange that all these accusations against all the perceived dodgy dealings going on by high positioned Ministers within the EU do not attract any media comments?
Is it a calm before the storm?
March 8, 2023
Donna: I tend to agree. In fact I’m convinced, they are ‘on a promise’ to the EU on this and much else. Many on here have been saying this repeatedly for I don’t know how long. I can honestly say that of the commentators and economists I’ve personally heard speak, the CT hike is a mistake and described as idiotic by some.
March 8, 2023
They’ll give the largest companies all sorts of offsets that SME’s can’t apply for.
March 8, 2023
Soon theyāll dispense with visaās altogether ā¦..I mean whatās the point, 50k odd people in boats from Europe, 500k overstayers from worldwide ā¦maybe we should just give up, the EU and WEF have won
March 9, 2023
Makes you wonder why we bother having passports doesnāt it. I wonder what France would do with people that floated in from England in a rubber boat claiming asylum?
March 8, 2023
Oh yes, the “economic miracle”, which consisted of replacing confidence based on job security with that based on lax credit secured against a deliberately-pumped residential property bubble, and which both fed on each other in a very vicious circle.
That’s gone well, hasn’t it?
March 8, 2023
Fair point. Thatcher and Lawson let loose a credit boom with massive house price rises followed by a house price crash, house repossessions and a stagnant economy for half a decade that led to New Labour. They, of course, did exactly the same thing and it let to the banking crisis in 2008. The Tories the repeated the trick again by keeping interest rates close to zero for a decade. Now, finally forced up, young people who want to have a family face mortgages of hundreds of thousands of pounds or rents that take half their earnings. Throw in childcare costs and Thatcher/Lawson and Blair/Brown and Cameron/Osborne and (too many to list) those since have really buggered things up for young people.
March 8, 2023
Yes, the economically illiterate Lawson caused a major disruption in the housing market, collapsing chains with his panicked increases in the bank rate too late to stem his ‘Lawson boom’.
March 8, 2023
It was US dodgy ratings agencies helping US finance to export the contingent negative equity of US poor around the world which led to the global banking crisis, Mike.
As anyone of any general knowledge knows.
March 8, 2023
But any bank of any standing should have checked out what it was buying, simply bad debts.
Don’t blame the American ratings agencies for UK incompetence.
March 8, 2023
It was originally Carter in a very small way, but later Clinton in a big way, compelling them to lend to people who couldn’t afford it.
March 8, 2023
ācompellingā? Clinton signed the Graham-Leach-Bliley Act in 1999 that repealed the Glass-Steagall Act and deregulated the banks, which thereafter started to advertise āsubprimeā mortgages. Over the following years these were packaged in mortgage-based securities bought by most banks. One might have expected top bankers and rating agencies to understand the risks of these securities.
To put the blame on Carter, Clinton or the people ācompelledā to take these mortgages is rather amusing, to say the least. What about putting the blame on āvoluntary regulationā by banks or/and the regulatorsā refusal to prohibit predatory lending by banks?
March 8, 2023
Fishy and Hunt are going ahead with the mind blow, job and investment destroying corporation tax rise next week and MPs will do nothings to stop them.
Having taxed landlords to death, we now have a shortage of rental policies.
Half a million net keep swelling our ranks.
Just who is this government working for.
March 8, 2023
Ian Wragg
Whoever and whatever they are working for, it is definitely not the people of this country.
March 8, 2023
Maybe just maybe all of our MPs are supportive of the Sunak & Hunt tax rise ……Only SirJ opposes
March 8, 2023
But it’s madness to raise corporation tax by this amount as we have seen with Astra Zeneca and ARM. Many others we don’t know about. It is economic self harm.
March 8, 2023
Gove is attacking the landlords and ladies.
Farming is being phased out too. By Lord Deben’s Climate Committee.
March 8, 2023
No mention of the higher rate thresholds? Is it only Ā£100K earners who are dis-incentivised by taxes. ERS threshold remans at Ā£8K not Ā£12570 like the EES. The basic rate threshold has been frozen until 2025.
Benefits are not taxed and are rising by the rate of inflation – how about our government learns how to budget within its means before seeking more money.
I want to pay less tax to a much smaller state.
March 8, 2023
We are all aware I hope, in this slough of despair, that the next things to fall to the climate nut jobs areā¦.
Anaesthetics
Banning them seems to have the backing of the medical ā professionā too.
There soon wonāt be anyone left to tax!
March 8, 2023
One inhaled anaesthetic, desflurane. All others (intravenous) not banned at all. Another case of OTT reaction?
March 8, 2023
I think we all have a good idea of what is required from the Chancellor on budget day. The battle is between an historically proven boost to enterprise and Treasury/BoE damp orthodoxy. I will judge it by instinct and the comments of such as Liam Halligan who has no political party loyalties to take into account.
March 8, 2023
I think the point made is a qualitative one proven starkly by the multiplier. Nobody realistically expects a 4x increase overnight but I could equally say that a pool of 67m for labour beats 4m so companies are more likely to site here.
March 8, 2023
Nigel Lawson made a point of abolishing at least one tax per Budget. He appeared to focus upon particularly irritating and iniquitous taxes. If the present Chancellor will not bring himself to abolish Inheritance Tax in this year’s Budget, perhaps he might consider abolishing Air Passenger Duty on this occasion and pledging IHT’s abolition next year after first raising the threshold to Ā£2 million this year.
March 8, 2023
The Irish model is attracting startups as well as keeping corporation tax low on trading (but not investment) companies.
It begins by offering start-ups up to EUR 200’000 as 50% capital equipment grants mixed with 50% employment grants for first 6 months wages. So ROCE can be 50% of what it would be in UK.
First 3 years trading profits free of CT allowing build up of reserves to fund working capital.
Local LEOs although bureaucratic seem to work with startups rather than looking for reasons not to help.
Enterprise Ireland picks up the baton for growing companies with the 50% capital grant contribution.
Combine all this with similar R&D tax credits and property costs at 50% of UK and there’s far more incentive to carry out manufacturing.
I’ve a feeling that if Ireland ever left the EU their politicians wouldn’t screw up market access either
March 8, 2023
Sir Joe, do the other G7 nations offer offsets like this?
March 8, 2023
And homeowners could be saved VAT @ 20% on all sorts of small work done by tradesmen at their homes. Raise VAT registration to something like the Ā£250k Sir John suggests. Easing cost of living in one simple step.
March 8, 2023
People saved from paying VAT!? I think you need to get with the program. You exist to consume and be taxed.
March 8, 2023
Margaret Thatcher was a higher quality performer than the low grade individuals now in office who guess and bungle.
March 8, 2023
Lawson was doing a great job but in different times, we were part of the EU then we had momentum and there was oversight from Brussels where the technocrats were running the show. Where it all went wrong was when Lawson and others thought we should cut free from the EU and manage better by ourselves all alone when we clearly can’t – now we have stagnation or something very like it caused in large part by navel gazing and being rudderless.
March 8, 2023
Newsflash the BBC live reporting 9:15 are reporting that March night is the coldest ever ā¦.since 2010, extreme climate change bringing an arctic blast (to parts of the Scottish highlands)
I mention this today to remind everyone that the endless climate change forecasts will base the mainstay of the Chancellors budget with net-zero the only solution, and the reason for high taxation
I donāt know whatās worst, high taxation or the false premises for the high taxation
March 8, 2023
I was given to understand that the green fields of England would soon be deserts. They are being covered by this odd white stuff that often happens in March.
March 8, 2023
Its climate change I tell yeah, its climate change and the only solution is net-zero ā¦.we must remove this cancer of snow, the extreme cold of winter, also lets remove the four seasons
March 8, 2023
Only socialists tax more and we have a Conservative Government! Why does the UK have to struggle to meet the 3% debt to GDP EU rule? How come the Left leaners have so much power, they were not voted in? When there is a change of Government the Administration should be changed as well.
March 8, 2023
Why all the fuss about that tedious G.Lineker? So he makes opinionated remarks whenever he feels like it. His employer, the BBC, does it all the time – every day. End his contract by all means.
March 8, 2023
Good point – also with Gary Lineker you get what it says on the tin, I prefer to know where people stand and whether you like him or not, at least he puts his head above the parapet ā¦thatās more than be said about the great many MPs
March 8, 2023
I sat next to Nigel Lawson in Eurostar first class out to Brussels (or back I cannot remember)… good bloke, thoroughly nice chap.
March 8, 2023
Nigel Lawson was indeed a tax reformist, some great ideas that successive governments have ignored including taxing turnover rather then profit ….governments where scared to death of his policies
March 8, 2023
The policymakers know all of this, Sir John.
Never mind the small matter of the budget the far bigger force of destruction is their unilateral Net Zero project which is specifically designed to reduce industrial output with expensive and intermittent energy, reduce agricultural output with regulations and reduce living standards through behaviour change (draconian legislation) in order for demand to match supply.
Weāve seen it all before in the last century in both Russia and China and the resulting deaths. The unscientific, ideological attack on the most important chemical for life on this planet, CO2, is even more dangerous than Lysenkoism.
March 8, 2023
Original Richard
We can all dream but it will never happen.
Net Zero Watch urges UK government to stand up to the wind lobbyās blackmail
Net Zero Watch director, Dr Benny Peiser said:
“Wind farms are awash with billions of subsidies every year, making energy bills more expensive year on year. To blackmail the government and demand even more handouts, at a time when households are struggling to make ends meet, is reprehensible and should be categorically opposed by ministers.”
https://notalotofpeopleknowthat.wordpress.com/2023/03/08/net-zero-watch-urges-uk-government-to-stand-up-to-the-wind-lobbys-blackmail/
March 8, 2023
turboterrier :
They dare not stand up to the wind lobbyās blackmail. They have far too much political capital tied up in renewables. A suitable fudge will be found.
Eventually it will end in tears
March 8, 2023
All the points raised by Sir J and his criticisms of the present economic mantra coming from 10 Downing Street I fully support . The country is being stifled by its present approach and change is absolutely essential . There has to be a revolt in the benches of the Conservative Party for better things to take place ; we cannot continue the way things are . If this does not happen I certainly will not vote for them next time .
March 8, 2023
Spot on Bert
March 8, 2023
I recall listening to Lawson in The Commons as he slashed the top rate of income tax. Socialists in the office where I was working could not believe it. Their groans of envy signalled that they knew their Party would be out of office for yet another five years.
Lower taxes DO make sense. The author of this article should be the Chancellor.
March 8, 2023
Correct Nicholas …correct on all counts
March 8, 2023
Sir John, there is no UK economy Boris Johnson and his follows from the Cabinet Collective ensured that couldnāt happen, We must never loose sight this isnāt a Conservative Government this is still a remain in power Boris Johnson Government. His and their Net Zero race required the UK shun economic activity on these shores.
The problem with this religion, is no other Country in the World would trash their economy that way. The World gets to laugh at how ridiculous the UK is forcing its self to become. We just all get to pay for it…
March 8, 2023
Not sure you’re right about no other country, Ian. Germany is trashing itself twice over, once with boomerang sanctions, all so as to ‘stick it to Putin’. And it’s also sacrificing its economy on the altar of net zero. What other country would do that? Oh yes, ours – as you said.
And which countries are going to do rather well out of it all? The USA and China, where European businesses are moving to, and in China’s case where a new coal-fired power station opens nearly every week. ‘Funny old world’? My God, if MT could see us now….
March 8, 2023
From the MsM
The Company Geothermal Engineering in Cornwall has found energy locked deep below the ground has the potential to heat every home in the UK.
That is clean energy for the whole of the UK
The investors and backers the Chinese no sight of the UK Government. In a Nutshell the Chinese get to own UK electricity production, then charge and remove earnings from the UK. The UK taxpayer under this Government is excluded they are just the fodder, the money tree that gets to pay twice.
March 8, 2023
Fracking for shale gas or drilling for thermal stream isnāt gucci enough, the energy of choice is offshore wind-farms with the governments stated aim being the āSaudi of Windā ā¦it doesnāt really matter that wind doesnāt produce enough energy and shale gas & thermal steam will ā¦the decision already been made at WEF
March 8, 2023
No sight of the UK government – good thing too, as they would only screw it up like everything else. If only the investors were UK companies and private individuals, but they have all their means taxed away before they can do anything useful with it.
March 8, 2023
Is that the same GEL that was discussed on 01/07/2021 on guardian.com āFull steam ahead for Cornwallās geothermal energy projectā? At the time the potential was to provide heating for the Langarth Garden Village (potentially 10,000 inhabitants).
How has this morphed into āthe potential to heat every home in the UKā?
And looking at the various documents for GEL on company-house, the new finances (rather small Ā£12 m) come from a private equity firm Kerogen Capital based in London and Hong Kong.
Does that make āthe Chinese get to own UK electricity productionā?
Ā£3m have been added by Thrive Renewables, a new name for Triodos Renewables originally started by the Dutch bank Triodos. Does that makes GEL partly Dutch?
March 8, 2023
The UK has an economy?
āA French company has won the contract for post-Brexit border checksā The UK taxpayer gets to pay the French yet again with UK taxpayer money to look after a key part of UK infrastructure. Just as with the UK Passports.
This Government never ever assess the loss of earnings from UK taxes when they fund the Exchequers in Foreign lands. Why isnāt UK taxpayer money being used to support the UK economy? Why isn’t the loss of taxes from these activities not part of the assessment, value of contract?
When Foreign Companies remove earnings from the UK, which they do, the taxpayer looses ā they have to pay more tax to offset the out flow of money. Things still need to be paid for. Then when the Government is awarding non UK domiciled Companies UK taxpayer money they are rubbing salt into the wounds ā the taxpayer has to pay twice over.
March 8, 2023
In addition to taxes mentioned by Sir John, increases in personal taxes are a disincentive to spending with reduction in economic activity. The Higher Rate tax for instance, I know of at least one bright young entrepreneur who has moved to Singapore, because he doesnt see the point staying in UK and being heavily taxed if he is successful. Truss was right. Dividend taxes similarly. At one time there was a credit against deemed taxes within the company. A retired person with an investment portfolio is a very different case from someone who puts his business in a limited company in order to choose salary or dividends to minimise tax – the Treasury assumes everyone is the same, as far as I can see.! I have written to the Chancellor years ago, pointing out that excessive Capital Gains Tax is a major obstacle to efficient portfolio management. I wont start on Inheritance Tax!
Taxes need to be as low as possible. That is what a Conservative Chancellor should have as a major aim.
March 8, 2023
No, there is a thing called Entrepreneursā Relief (with a present limit of Ā£1 million) that makes the calculation of CGT for entrepreneurs different from that for āa retired person with an investment portfolioā (www.gov.uk HS275 Entrepreneursā Relief 2020, last updated 6 April 2022).
March 8, 2023
If they make a loss.
March 8, 2023
Sir John
Like most people I get 100% the gist of what you are saying and proposing.
However, this is not a Conservative Government. It is not even a Conservative Party supported Government, the party has been excluded.
This is a Boris Johnson trash the Conservative Party and the UK economy Government. The man may have been moved aside but it is still his disciples from the collective responsible cabal that was and still is his Cabinet.
All your calls for Government to Manage, see sense, use logic, recall and learn from history, even use to common sense, are just brushed aside, that is not their purpose – their Masters that call the tune are elsewhere
March 8, 2023
Excellent article, Sir John. But you are so far apart from Sunak & Hunt I wonder how you can be in the same party? Sunak is a dreamer with his Windsor agreement & new Immigration law. Hunt can’t think out of the box & lacks the intellectual ability to challenge the Treasury & OBR.
Compared to those two, Margaret Thatcher & Nigel Lawson were intellectual giants.
But where is the massive rebellion from Conservative MPs saying they will vote against the budget unless the Corporation tax remains at 19% or is reduced, that the freezing of tax allowances should be dropped, VAT on heating should be dropped & government spending cut to finance it all?
March 8, 2023
Mr. Redwood – yours is a voice in the wilderness.
March 8, 2023
Iād suggest the wilderness of westminster and not the wilderness of the country
March 8, 2023
The Telegraph has reported this morning that a French company has won the contract for post-Brexit border checks.
The outsourcing company Sodexo has been selected over the London-listed Wincanton Group to run Inland Border Facilities by HMRC. Wincanton had been successfully operating the checks for the last two years, apparently without difficulty. It would therefore seem that Sodexo won the contract purely on price. This is, of course, the same Sodexo company that was selling meat for our armed forces and school meals service that was found to contain horse meat !
What chance is there of us achieving a high-growth economy post-Brexit when the government gives away contracts like this worth the best part of Ā£100m a year to a foreign competitor. It’s the same scandalous behavour as we saw when a foreign country was given the contract to print UK passports !
The French would never allow a contract like this to be given to a UK Company, why should our government ?
March 8, 2023
Perhaps this deal secured Rishi’s better ‘cooperation’ with the French.
March 8, 2023
Why, Chris? Because they’re French and we’re…. I dunno.
March 8, 2023
Correction: Sodexo UK, 1 Southampton Row, London has won the contract. its share, SW, on the LSE today was at ā¬86.60.
From Wincanton website āWe can take care ā¦ with a range of outsourced and integrated supply chain solutionsā. So is Sodexo more outsourcing than Wincanton? The difference is that Wincanton is essentially serving the UK market (Ā£1.2 bn turnover) whereas Sodexo has activities in 55 countries and a 21 bn turnover. Could it be a better deal for the IBF/ Home Office/ HMRC/ taxpayers?
March 8, 2023
I Hope Jeremy Hunt and Rishi Sunak get a copy of this blog.
March 8, 2023
Regarding the over taxation from the Chancellor and the Treasury v the Self Employed and SMEs. Is it another case of Lions led by donkeys?
Like the Government’s lockdown policies, their debilitating tax rises make no sense either.
March 8, 2023
‘The loss of 700,000 since covid from self employment is bad news’. No Sir John, the loss of 700,000 since *lockdowns* from self employment is bad news. A cold virus didn’t force businesses to close. The consequences of Government action did. Anyone who has been reading the Telegraph recently now knows the politicians were not following medical science, but had other motives. And as your blog posts on the economy have shown, supporting the small business sector isn’t among them.
March 8, 2023
Apropos your ālets produce more foodā tweet Sir John:
Heartbreaking message received from a Dutch farmer.
āTonight was the last time we milked our cows. After 90 years, this is it for the organic dairy sector. We arenāt allowed to continue because we are labelled a āpeak polluterā. We fought for three years. Our government destroys lives.ā
I understand the Sunak Government has instructed the NFU that āfood production is irrelevant in the U.K. – we are a rich country and can buy our food inā.
Looks like nobody will need slimming pills!
March 9, 2023
Lynn. Reading that post is truly upsetting. Where is the madness going to end? Eating the entrails and its contents of a mashed up cricket is not appealing. Drinking plant based derived ‘milk’ is not exciting either. Our lives are being taken over and relying on others for food is madness. If there is another world conflict then we are doomed trying to import so much food.
March 9, 2023
Yes, I like it. Nigel Lawson is one of my heroes. I might add that if tax cutting leads to less revenue, there are many public expenditure cuts that could be implemented, some of which would be popular.
Now the key question, the will to power. Are those Conservative members that disapprove of the Sunak/Hunt economic policy prepared to vote down their proposed tax increases? Put your votes where your mouths are.
March 9, 2023
Brilliant. This is everything I believe in terms of the economy. Well done. However, are they listening?!!