I have read some really bad ideas in recent days of what Rachel Reeves could do to help fill in the big black hole she has dug.

The latest is to levy CGT on homes sold for more than £1.5 m. That rumour is a good way to get some more well off people to leave the country before the next budget, taking the money from selling their home before the tax. We already have far too many wealthy and high income people leaving, hitting future tax revenues.

Such CGT would also lead many people to stay in their larger homes and adapt them to old age rather than paying the tax when they downsize. Any extra CGT would be in part offset by less  Stamp Duty and less business and income tax as the volume of house transactions fell off.

There is the idea of cancelling Stamp Duty and imposing an annual levy on the buyer of the house, indexed to inflation. This would lead to a big loss of revenue in the early years as the government would lose all Stamp Duty on buying a home and levy only a fraction of the duty each year on the new owner . I cant see the Treasury buying that. The original proposal was based on not raising more revenue overall even over the longer term.

There is the idea of higher Council tax. Angela Rayner is pressing  ahead with taking more  grant away from areas with dearer properties to give more to poorer areas anyway. This amounts to another tax rise on more prosperous families and areas.There are limits to how much Council Tax people can and will pay.

There is then the idea of introducing new bands for more expensive  properties to levy a higher rate. It would be difficult to do that without a general  revaluation as establishing modern values for some dearer properties would invite challenges about other properties whose historic Council Tax valuations have been shifted by markets since I introduced the  tax   as Local Government Minister. At the very best  all existing higher band properties would need valuing to decide which to promote to the new dearer bands.

All previous governments, Labour, Coalition and Conservative vetoed ideas of a revaluation as being very disruptive and unpopular. Will this government go to war again with people who have worked hard, aspired, and bought themselves a decent house?  Will this government want to hike Council tax enough to force low income pensioners to sell up a home that has gone up in value since they bought it? A lot of people  are house rich and income poor. It should not be a crime.

The government which has a passion to submit to harmful international court opinions is surprisingly angry with an actual judgement from a UK court. This contradictory approach is even more bizarre when the court is seeking to accelerate the government’s own stated policy of ending use of hotels as migrant hostels. Can anyone explain this as it seems to mean the government wants to be on the unpopular side all the time?

Many have had enough of government failure to control our borders. The protesters and the millions who agree with them are not racists. They are not against migrants because of their race, creed or colour. They are against criminals.They are against anyone who breaks the law to get into our generous country wherever they come from.

The people who come on boats are often breaking several laws

1. It is against the law to seek illegal entry

2. It is against the law to pay  money to a criminal gang to bring them to the UK. They are financing the crimes of the gang which probably include money laundering, tax dodging, other illicit trading.

3. They knowingly get on a dangerous unlicensed boat. Those who do bring children are putting the child’s life at risk.

4. They may take up illegal work when they have been told they should not.

5 As soon as they work they are tax dodging and become benefit cheats.

As far as many protesters are concerned some young male illegal migrants are trying to jump housing queues and extract benefits and public service support on false pretences. The public wants the Uk authorities to know who anyone is, where they came from and if they have a criminal record before accepting them.

Many communities resent the priority given to housing and paying them.At a time when UK citizens are put on long waiting lists for social housing and have to play by the rules to get benefits there is resentment at how the normal rules do not apply to these illegal arrivals

I agree with many western politicians that the Russian invasion of Ukraine was wrong. I agree Russia compounded the outrage by persistent attacks on civilians and on unacceptable  targets like hospitals, nuclear power stations and blocks of flats.

The western politicians who say they do not want a compromise peace now want Ukraine  to fight on. Doing so without the EU is very unlikely to lead to an unconditional Russian surrender or all Russian forces leaving Ukraine. Ukraine has done a brave job restraining more powerful forces for 3  years but lacks the resource to evict the Russians. The only way for European politicians to right the moral outrage they condemn would be Russian surrender and the replacement of Putin as Russian leader. I do not see Europe having a combination of the forces and resolve to force this.

NATO could defeat Russia, but only at considerable cost and by taking a large risk. I support the many politicians, led  by President Biden and now President Trump, who have kept NATO military forces out of the conflict. Russia would not decide to keep the war narrowly focussed on long  suffering Ukraine. People,

I have been a strong supporter of the present and previous government policy that the UK should not declare war on Russia or be dragged into the war in Ukraine. I have supported NATO making it clear it will not send troops or fire weapons into Ukraine or Russia  and will not let Ukraine join NATO all the time it is in dispute with or at war with Russia.

Because I do not wish to see UK lives at risk over this conflict I have not presumed to add my voice to those telling the combatants what to do.Like most people in the West I condemn the Russian invasion  and especially the Russian tactics that include killing civilians, destroying homes, hospitals and other civilian facilities.

I have also been critical of the EU’s role in the removal of a more pro Russia elected President of Ukraine in 2014 to tilt Ukrainian policy to the EU and to weaken links with Russia which led to the Russian seizure of Crimea. That event does not excuse Russia’s  war but is important context  when considering how to end the conflict. What to us is a war of Russian expansion is to Russia a war of EU expansion, which they think could lead on to Ukrainian membership of NATO.

It is difficult to see how this long and bitter war can be brought to an end. The EU long on pro war rhetoric fails to impose wide ranging sanctions and is still buying Russian gas to help pay  for  the Russian troops. The EU has been slow to offer sufficient weapons and other support and has sought to rely on US provision in many crucial areas. The US has never been as committed. President Biden helped bring on the invasion by implying  Russia might get away with  a “minor incursion”, whilst President Trump has always argued Europe should lead  the response as it is another European war.

The EU has offered plenty of verbal support to Ukraine to prolong  the war. It now needs to offer effective support to help Ukraine liberate some territory. The UK should not get more involved as this is primarily an EU interest as Ukraine is a candidate member and the EU has strong views on the settlement of its eastern borders. The UK has no border at risk. France with strong views on the war and a leading  EU member could take over some of the burden of supplying free weapons from us, as her contribution has been a lot smaller. According to BBC figures the UK has provided three times as much weaponry as France, and the US 18 times as much as France in cash terms.

I am being contacted by media for interviews in the long run up to the next budget. When I say the need is better control of public spending there is still a disbelief that it can be cut. Let me have another go at identifying some of the most obvious wasteful and less desirable spending that the government needs to cut or control.

 

Bank of England bond losses, running at around £30 bn a year

Illegal migrants put into hotels and on benefits running  at an extra £2bn a year

51,000 people a week going onto Universal Credit, with 46% now on the benefit not being expected to seek work  £2.5bn extra for one year of additions

£20 bn over a period of years on carbon capture and storage

Continuing large cost overruns and outgoings on the much delayed HS2

£40 bn additional cost from lost public sector productivity in the main services

£35 bn over 99 years to Mauritius for Chagos

£650 m to subsidise mainly imported batteries/ battery cars

 

 

 

 

The Chancellor regards herself as boxed in. The OBR is likely to tell her she needs to raise more money in tax or cut spending  to cut the deficit. She will be reluctant to raise main  Income tax rates or VAT as they are seen as taxes on working people she pledged to protect. Her attempt to pass off an increase in  Employers National Insurance as within her promise was badly received and has done big damage to the new jobs market. Her efforts to cut spending so far have ended in failure, with the ill judged attacks on the pensioner fuel payment and disability benefits being seen off by Labour MPs.

We are now seeing various stories in papers already in the long run up to the budget trying out various ideas to raise more cash from the better off. The government has so far  failed to come up with a definition of working people they promised to protect from tax rises. That would be helpful before making budget decisions and having to defend them. It pushes the Chancellor into the path of entrepreneurs, small business people, savers and the retired. Many of these groups are important to the government if they wish to succeed in  growing the economy faster, in financing better services, in stimulating investment and in getting more people into jobs.

The badly judged changes to Inheritance tax affecting small family businesses and farms have led to lost investment and jobs, to sales and closures, and to anger about how the people who do much  to lift the economy are to be hit. The Treasury and OBR find it difficult to work out how tax revenue will respond to such changes. Their lack of a dynamic model may conceal an overall loss in total tax take when you consider the impact on ,jobs, investment and growth of the tax decision. Whatever the truth, all can agree that the maximum possible extra revenue is small compared to the huge increases in spending that have been put through in the last year.

We read that she might limit the amount people can gift in their lifetimes to reduce the Inheritance tax bill on death. The  super rich pay much of the IHT total. They may well simply leave the country or hire better advisers. Quite a lot of them have gone already after the last budget. She would need to greatly reduce the amount and frequency of gifts to have any noticeable effect on IHT revenue overall.

We read she might remove the tax free lump sum from pension savers. That would be a significant change in the rules that have persuaded many people in the past to make savings into a pension fund. She could of course increase the income tax take if she discouraged enough people from saving for their pensions. This would be a short term boost with bad long term consequences. Getting more people to retirement without second pensions would place more burden on state benefits. She might limit tax relief to stop people on higher incomes from saving so much for their retirement. This would be less damaging to state budgets in future.

The danger in the whole approach is she will make the same mistake as last time. The last budget slowed growth, knocked confidence, led to well off people leaving the country, delayed or cancelled investments and business expansion. More cheese paring tax rises on those who can help the economy grow and can create jobs is a very bad idea. There is no substitute for curbing public expenditure. This country does not tax too little but spends too much.

I am glad the Shadow Home Secretary escaped the man with  the knife when he was visiting the Calais jungle yesterday. Chris Philp had gone to see for himself what actions and support we are now getting from the French authorities to stop the boats  and smash the gangs. The government claims  its 1 for 1 deal will deter the illegal migrants. Chris Philp found it has made no difference. The government says the French will now stop more boats but there no evidence. The Shadow Home Secretary  reported that the  area of the camp at Calais was lawless and without police.

We now see a 100 person migrant ferry boat, no small rib. This indicates big growth in this illegal business, with those involved  showing complete scorn for the French and UK governments. Illegal migrants hit new highs in numbers and arrests are down on the previous year. Labour’s dilution of the law and scrapping of Rwanda has made things worse.

The government should   see its offer of good hotels and benefits is too generous. Its failure to deport is fatal. People are in no mood to pay more tax to finance this  catastrophic policy failure to keep our borders safe.

 

When I studied history I specialised in economic history and the related history of science and technology. I had to study general UK and European history. I was very happy studying UK history as it is my country. Understanding its roots, achievements and mistakes was useful. It was also easier as the buildings, books , paintings and archaeology were  all around me making understanding easier.

I did not find European history so enriching. I thought it odd the University required European but not American or Asian, given the trends in world economics and politics. The course has since been reformed to tackle this.  In order to handle the course I concentrated most on France, Spain and Italy as I could read some of those languages and had visited a range of places in those countries which gave me a bit more feel for the societies and their past.

Mainly I grew interested in the impact European countries had on the British story. The more I read the more I realised the UK’s involvement with the continent had plenty of downsides. The UK – or England – was successfully invaded by both the Romans and the Normans, with lands stolen  and people enslaved. In the sixteenth century England had to fight off a major amphibious invasion by Spain, the super power of the day rich with colonial silver. In the centuries that followed Great Britain spent much treasure and spilled much blood fighting against French attempts to dominate the continent by force of arms. In the twentieth century twice the UK suffered terribly from standing up to German attempts  at military domination of the continent.

Many of these wars brought death , destruction and loss with no obvious wins for our country. We would often have been better off leaving it to the continental countries to have their own wars. Standing  out and for a time alone against the  Germans in 1939-45 was a crucial sacrifice for the benefit of us and the wider world.

It was always difficult trading with the continent as they tended to grow similar things and make similar things to us. We were much more enriched by the legitimate distant trades with hotter  climates and different cultures in Asia and the Americas. The Dutch became such intense trade rivals it led to naval wars over commerce.

I read of a continent with strong tendencies to autocratic governments, to bullying super powers and to ceaseless dissatisfaction with borders. It made me sceptical of the UK plunging into legal and treaty based versions of continental control and disputes. For that I am grateful to the course designers who probably thought it would have the opposite impact. For every civilised painter or architect they liked there were  several despots and needless wars in the story.