This is a copy of my article in the House Magazine.
The Treasury employs plenty of intelligent people, but their collective views and decisions are often wrong. None more so than the idea that the UK economy needs Ā a further tax on jobs just as it is recovering from the pandemic collapse. It will make work less worthwhile and damage businesses struggling to rebuild their cashflows. Leisure, hospitality and travel willĀ be the Ā sectors hit worst by the squeeze on take home pay, the very sectors the health Ā measures hit hardest.
The Treasury says they need to impose a tax rise because they need an extra Ā£12bn. They have no idea how much extra revenue they might need, as they have no idea how much revenue the current wide range of relatively high taxes is going to collect. They had to admit their absurdly pessimistic forecast for the budget deficit this year was Ā£50bn overstated by the half year point, mainly because they had grossly underestimated the revenue. In the latest figures they have found another Ā£12.9bn, exactly the sum they said they would need from the tax raise!
In my speech on the last Budget Ā I Ā drew attention to some of the errors Ā of the 20-21 forecast and predicted that this year āthe deficit will fall very rapidlyā as it has. In Finance Bill Committee I stressed how wrong past forecasts had been and how wrong this yearās estimate was likely to be.
The Treasury and their Office of Budget responsibility helpers got their budget deficit forecast wrong by Ā£91 bn last year. I can forgive them some of that, as the pandemic year was extraordinary. The policies followed meant a collapse in revenues and a surge in one off spending that was bound to create a big hole in the accounts. Even so I did warn last year that the forecasts were continuing a long tradition of undue pessimism. This year by general agreement was going to be a year of recovery. History tells us our tax revenues are very sensitive to rates of change in growth. Very strong growth such as we experienced was bound to lead to a surge in revenues. Why couldnāt the Treasury see that? Why did they do their best to sandbag recovery by threatening Ā a whole range of tax rises for next year to dampen confidence and put businesses and companies off spending?
The Treasury double up their gloom with their way of presenting the costs of the debt. They want people be terrified of the rising costs of meeting the debt burden. The large increase in debt interest costs they have put in the accounts confuse actual interest payments to bond or debt holders, and the extra cost of eventual capital repayment on the index linkedĀ bonds they have issued. Tucked away in the technical explanation they do confess that the state does not have to find theĀ cash to service the index linking in the way it has to find the money to pay interest on conventional bonds. What will happen with the indexed debt is when it comes due for repayment it will effectively be rolled over, the government reborrowing the enhanced value . This Ā is of course only the same debt in real terms as the initial bond issue amount. There is no need to panic about debt interest the government does not have to pay.
The government also fails to account sensibly for all the debt the Bank of England owns. They want to alarm us about the interest that the Treasury has to pay on that debt. This is a needless worry as the Treasury pays the interest to the Bank which it owns, so the interest is still to its credit and can be paid back as a dividend to the Treasury.
There is no case for a National Insurance hike. People need to keep more of their pay to meet their bills, especially given the tripartisan policy of more import dependence in energy to expose us to ever dearer and scarcer energy from the continent. The Treasury has found far more money down the sofa than they think the NI raise would yield.
January 27, 2022
‘The Treasury and their Office of Budget responsibility helpers’.
A significant clearout of this department staffing is required.
How long do we continue with people and a structure that dismally fails, causing all manner of negative effects on the wealth creation of the country, and the living standards of its poorest people?
Sir John does a better job…employ him !
January 27, 2022
100% support for Sir John as Chancellor!
January 27, 2022
Hear hear. John would make an excellent Chancellor.
January 27, 2022
+100
The problem is the Treasury thinks all the money belongs to them and they think it correct to leave us with spending money.
They are following the WEF in ensuring that eventually the state will own everything and we will own nothing.
You only have to listen to the clown who says private car ownership should be banned.
This is exactly what they believe. Of course, like lockdown it doesn’t include them.
January 27, 2022
Listening to Jeremy Vine at lunchtime on the subject of inflation, it seems that, with the latest price rises, many poor people don’t have enough spending money for essentials.
January 27, 2022
+ 100
I really think JR would do a magnificent job as Chancellorā¦mind you, heād need good luck dealing with āthe attitudeā of the staff/helpers!
January 27, 2022
And the other Tory MPs with their net zero/expensive energy religion & their tax borrow and piss down the drain, regulate to death & ever larger government agendas.
January 27, 2022
Exactly. The current Conservative parliamentary party would never allow John to be Chancellor. Heād want to cut taxes and save money, something totally alien to them, not being real Conservatives.
January 29, 2022
That was what ”Yes, Minister” portrayed so well – that the heads of government can be changed but their civil serpents will remain the same, contriving to maintain the status quo.
January 27, 2022
+100
January 27, 2022
I agree 100% and Rishi Sunak is an extremely intelligent man who had all the right ideas at the outset but now appears to have come under the ”spell” of the OBR. Sajid Javid got fired when he was under this ”spell” and refused to remove some senior staff.
One has to assume the PM is also becoming infected and should initiate a complete clear out.
One mistake is bad luck, the second is carelessness, and third is total incompetence or is it staffed be Marxist Remainers?
January 27, 2022
Every single Brexiter who has actually taken on responsibility for delivering Brexit has either let you down (Sunak, Johnson, Gove) or run away when the going got tough (Frost, Baker, Davis). The problem isn’t the politicians, the problem is Brexit. You will never get the fantasy Brexit you want because it requires everyone else – the EU, Ireland, the US, Australia etc – to fold, roll over and give the Uk everything it wants. That is not going to happen, not ever. Sooner you wise up and realise Brexit is going to be be a very bad very humiliating fudge for the UK, not a fantasy, the better off we will be
Reply NOt so. Brexit is about being free to make our own decisions. Remain forces in Parliament and government have still restricted our freedoms undesirably. I never not wanted anything from the EU beyond trade under WTO rules as most favoured nation, an automatic right. They want tariff free which is fine.
January 27, 2022
Reply to reply. You OK hun?
January 28, 2022
Silly response Lee.
Is that the best you can do?
January 27, 2022
āRemain forcesā¦ā Poppycock, we have LEFT the EU, there are no Remain forces any more. You got your Brexit, you won. I wonder if you will ever accept responsibility for how badly itās going, or are you going to whine forever more about imaginary āRemain forcesā
January 27, 2022
Oh come off it Len
There are large numbers of people in Parliament and in the establishment who still want to reverse Brexit.
Did you not see what Heseltine and Odonis said recently?
January 27, 2022
Iām intrigued. How badly is it going? I havenāt noticed anything. We might as well still be in – apart from the Ā£350 million a week.
January 27, 2022
If Rishi thinks he’s got an eye on the top job after this performance he’s kidding himself, the papers will be after his hide next.
January 27, 2022
He’s already lost my vote if we do have a leadership contest
January 27, 2022
The first thing Rishi did, even before Covid, was a 90% reduction in Entrepreneurs CGT tax relief. So little doubt about where this anti-business, big state, tax to death dope is coming from. Then he even used some of the money so some tax payers could pay to fund others to eat out in restaurants (after all the wasted collection, admin and distribution costs that is). What insane economics do they actually teach in PPE Oxon?
January 27, 2022
Good morning.
Any more news about the missing Ā£29bn ?
Thought not.
You have got to ask, and I am sure I have said this before, what is the projected government expenditure for the full financial year ? Only then do you know how much you need to take in taxes. Why can’t government do that ?
Historically the UK has never had so many type and so much taxation. It use to be the case that tax was collected to fund the King’s wars. This was back in the days when money was really worth something as it came in the form of gold and silver. Now it is a promissory note of some mythical value and measured up against similar notes. Getting the people to accept a piece of paper rather than a gold piece was a master stoke. Now they could have as much money to spend as they can just print it. And print it they have ! Still, nice to see gold doing so well.
January 27, 2022
You say taxes used to be collected to fund the King’s wars….. perhaps the Emperor is planning one or some other unnecessary carbuncle bridge/building so the coffers must be filled.
January 27, 2022
Taxes mostly pay for stuff for old people. Pensions – a huge chunk of our taxes. Social care – another huge chunk of our taxes. Health care for the old (who use the NHS most) – a third huge chunk. Debt repayment as the pensioners never paid their share when they were working – another huge chunk.
We could properly cut taxes if we stopped funding these parasites. They are the richest demographic in the country. If granny has to sell her house to live – GOOD. We need grannies in small flats and not rattling around in big houses.
Reply I am not going to post more of these attacks on the elderly. There is also a lot of spending on infants and children through maternity, health and education services which you never mention.
January 27, 2022
Reply to reply
Thank you Sir John.
January 27, 2022
No young Andy
Each illegal immigrants cost the taxpayer Ā£40,000 just for their board, keep and pocket money p.a., this excludes their free dental care and any other health care costs.
Whereas pensioners, who have paid into the system for decades get less than Ā£9,000 p.a. and no free dental care.
Your grandparents must be so proud of you…
January 27, 2022
Andy, your complaint that “pensioners never paid their share when they were working” is nonsensical, unless you have proof that the majority of pensioners were engaged in tax evasion. If they paid the taxes that the governments they lived under said they should then they have paid their share.
January 27, 2022
The evidence is in the deficit of most years when present day pensioners were paying tax. Nothing was put by in surplus to pay the pensions of today; it was all squandered by the borrow and waste governments of the day, which they voted for.
January 27, 2022
Reply I am not going to post more of these attacks on the elderly.
…
Well said.
January 27, 2022
Finally John! Why has it taken so long to deal with his regular toxic attacks on the elderly?
January 27, 2022
Thank you, Sir John.
Andy’s comments, could be construed as a hate crime, if they were applied to anyone else.
One day, he will be old himself, and will have time to reflect on his hatred of older people.
January 28, 2022
For there to be a Hate Crime there has to be a crime, such as an assault, for which a defined motive – e.g. simply because of race – aggravates that into a Hate Crime.
Someone simply expressing an opinion that you do not like is not a hate crime, therefore.
Commenters express their extreme dislike of pro-European Union people here repeatedly.
That is not a hate crime, and nor is stating facts about on what revenues are spent, and how the commenter feels about that.
January 27, 2022
Not a moment too soon. This deliberate attempt to take over large chunks of your blog by calculated rudeness has been tolerated far too long and I am sure encourages many readers to switch off to something more sensible – which was clearly the aim.
January 27, 2022
John C,
Aunt Sally figures can be useful though.
That said, I would prefer to see the better argued alternative views that no longer seem to feature on here.
January 27, 2022
Quite right John. A lot of money is spent on young drug addicts and children in care due to young feckless parents..
January 27, 2022
Plus they old people have paid all the taxes many for very many years.
January 27, 2022
Well we have a “War on the virus” , and seemed to have lost that one so, maybe Russia might be considered a bit of a pushover by our Lilliputians š
January 27, 2022
You may have rather more to worry about!
Reviewing the info on the Russian economy and military that the west appears to be working on (looks like it’s around ten years out of date),Ben Aris,editor of Business New Europe,has just tweeted:
“This is actually terrifying.The shockingly low level of expertise on what is going on in Russia is going to lead to massive miscalculations that will get us all killed.”
If blocked from SWIFT,Russia has just confirmed it will switch to the yuan -“we will support the Chinese economy” and Mr Putin has also agreed military co-operation initiatives with Cuba,Venezuela and Nicaragua.
January 27, 2022
And Qatar has said it it does not have the capacity to produce significantly more gas to replace any disruption to the Russian supply.
January 27, 2022
Russia, China, USA – sounds more like 1984 every day.
Except I think the Chinese and Russians take their dictators very seriously, and are in a state of fear.
Americans, well rather a lot of them, view their ‘elected’, or paid for leader , with a lot of disdain.
January 27, 2022
We need more money for juicy public sector pensions, earlier retirement and secure employment. Labour’s army of unionised client State worker bees doesn’t come cheap. Keep clapping yourself into poverty ala NK lackey. Played by a Tory government who have the principles of a guttersnipe
And more lolly for the bottomless pit that is the now out of control, untouchable, unaccountable political organisation that is the NHS, still loyal and bidding for Labour with the Tories desperate NOT TO OFFEND NHS managers, appeasing them and silencing them with more wads of cash to finance, well I’m not sure how they abuse public money these days. And the patient? They have no power so they don’t matter
All that we see today is John’s party refusing to confront the power of the left that is now in control of our world. You’ve become a Socialist by association John….
Your party’s embrace of Socialism and the poison of progressive barbarism will destroy our country. FACT
January 27, 2022
+1. Spot on Dom.
January 27, 2022
I second that.
January 27, 2022
UK public sector pensions these days for many ordinary workers are no longer final salary, and are, if anything, poorer than those available to ALL employees in e.g. France and Germany.
A large swathe of them are fully funded, e.g. for councils, the BBC etc., and so require no input from the income tax or NI payer either.
Most of the people who do the actual work for them, e.g. refuse collectors, have been outsourced to the private sector in any case.
The private sector on the other hand, still has very lavish defined benefit provision for its senior management, notably in the financial sector.
January 27, 2022
“The private sector on the other hand, still has very lavish defined benefit provision for its senior management”
At the risk of puncturing your ideological bubble, the private sector doesn’t pay pensions out of our tax revenues.
January 27, 2022
+10
January 27, 2022
“and so require no input from the income tax or NI payer either”
They were “funded” from the tax payer in the first place !
If you wish to deny a financial executive his bonus or not contribute to it the answer is simple – take your business elsewhere.
We have no such options with public sector wastefulness and lazyness, which is why unions prosper there more than in the private sector.
January 27, 2022
“A large swathe of them are fully funded, e.g. for councils, the BBC etc., and so require no input from the income tax or NI payer either”
And who do you think pays them NLH? Surely it’s the ratepayers & license fee payers who have no choice in the matter? Nor are we comparing their pensions with folk in other countries – simply how they compare with the private sector (e.g. the people who pay their taxes & rates to fund their pensions) and my understanding is that someone on a money purchase scheme would have to earn very much more that his/her public sector equivalent to fund the same indexed linked pension.
So the sooner our Public ‘Servants’ learn to live by the same pension norms as most tax payers have to – the better and fairer it will be.
January 27, 2022
And the customers of the private sector pay for their top brass’s lavish, defined benefit pensions too.
Also, public sector employees are very much tax payers themselves.
You appear to favour breach of contract by employers, but that seems to be usual for right wingers whether it’s international treaties or any other kind of binding agreement.
January 27, 2022
‘public sector employees are very much tax payers themselves.’
Agreed , they are paid to much – especially in the case of commuter train drivers, who have very little to do and experience little stress. Bus drivers for example have to be 100% alert and get arm waving and verbal abuse for doing their job – safely. What with endless road signs, bus lanes to restrict their movement, half-blind pedestrians, jay walkers, moped would-be Ayrton Sennas, and irate moaning travellers and rowdy youngsters they need to be wary of – it isn’t much fun. All for indifferent pay.
January 28, 2022
Some of the “top brass” of private sector compnies are paid far too much but at least the shareholders can look at their results/perfomance and make a judgement about whether they are good value for money (or not).
Unfortunately, many shareholders don’t seem very bothered about taking an interest in the way a company (that they own a part of) is managed – but at least they can do something about it if they want to.
No breach of employment contract would be required in terms of existing FSPs, just a change of employment terms for all new employess. However, I’m quite certain that the CS Unions will never willingly allow that to happen. But as an interim, I’d suggest a review is undertaken on London Weighting Allowances with the CS – and that they are removed (or reduced) pro-rata – based on the degree of WFH being enjoyed.
January 27, 2022
The BBC and the Councils the employer is us and our annual contribution is at least 25%.
January 27, 2022
Not so NLH. 25% of my Ā£300 a month council tax goes towards council pensions giving them a much better pension than the ones my husband and I have to live on.
January 27, 2022
Well, you weren’t barred from applying for those employment contracts were you?
January 27, 2022
Is that a reasoned argument for the disparity between pensions in the public sector and the wealth creating sector NHL?
January 28, 2022
how stupid can your remarks get?
January 27, 2022
Do you know?
How many people are employed by the state.
The total wage bill.
The total cost of employing them.
How many people are currently receiving public sector pensions.
The average age that people in the public sector have retired at over, say, the last 10 years.
I would love to see a graph showing that data over the last 50 years.
January 27, 2022
You right wingers are absolute suckers for the Politics Of Envy, aren’t you?
January 27, 2022
Here’s another one, Sir John. Please remove this type of comment. We all know the 2 main offenders. It might even be one posing as two. Anyway, enough.
January 27, 2022
Well said Dom. The Establishment Parties all march to a drum-beat that accentuates the LEFT.
LEFT, LEFT; LEFT, RIGHT, LEFT. For every one vaguely conservative measure, we get three blatantly left-wing ones, irrespective of which party is in government.
January 27, 2022
Youāve had a Conservative government for 11 years, marching to Farageās tune. Lots of words describe that but LEFT is not one of them
January 27, 2022
Complete nonsense Len.
January 29, 2022
Peter 2
Is that a way to behave?
January 29, 2022
It certainly is when Len posts complete nonsense.
January 27, 2022
I agree DOM, with a feeling of sadness and desperation.
January 27, 2022
Agree Dom especially your comments on the NHS.
January 27, 2022
It certainly seems so. Vote Conservative as we are very slightly less green crap, red tape pushing, tax to death socialists than the alternatives. Crime figures up and detection rates down again too. So what do we actually of any value given these huge and increasing tax levels? Almost nothing.
January 27, 2022
All that we see today is Johnās party refusing to confront the power of the left that is now in control of our world. Youāve become a Socialist by association Johnā¦.
….
It is all about global collectivism for mind games and total control. The central bankers want us marked and tagged, they are teaming up with the pope to make it happen.
January 27, 2022
+1
January 27, 2022
Thankyou. You have identified new examples of project Fear, for example on interest costs of which I was unaware. I can understand the need for caution when making assumptions so that actual outcomes produce nice surprises rather than nasty ones. But this looks like deliberate manipulation. If they want something in reserve in their forecasts just call it contingency to cater for the unknown and unpredictable.
January 27, 2022
Old-timer. The unpredictable??? When Carrie decides the colour scheme in the flat is out of date?
January 27, 2022
Or if Johnson is ousted his successor will surely want to cover up the ghastly, expensive decoration – that will require a few cans of whitewash.
January 27, 2022
However, a national debt of only one third of this amount is preposterously unaffordable, if the government presiding over it happens to be a Labour one.
Isn’t it?
January 27, 2022
It would seem there seems to be a very vibrant, job security market within the treasury built upon failure to predict the real financial situation at given times.
Do they not realise when these figures are published, they can be sending out all the wrong signals to international markets and the world in general?
Something doesn’t appear to quite right
Is it procedures, processes or people. Surely the country cannot go on continuaÄŗly rewarding failure to do the job they are being paid for? What is the real cost for doing nothing.
If all government departments really declared war on waste in every form and not just talked about it, one can only fantasise about the impact on the tax payer and what could be achieved.
January 27, 2022
and if the tax payer/man on the Clapham Omnibus really declared war on the political establishment as it is and stopped continually handing them the power to carry on, then one can only fantasise about the impact and what could be achieved.
All this hand wringing and pleading with the state monopoly parties to be ‘fair’ and play nice just isn’t doing any good.
January 27, 2022
The reason for this idiocy is one of two: Either government and the civil service are totally incompetent, or they do not want Brexit UK to succeed and are willing to deliberately destroy the UK economy to prove it.
The current policies are so destructive I really cannot imagine the Ministers and senior civil servants would gain any employment at all if they were as stupid as they appear, so I have to assume it is deliberate policy.
January 27, 2022
I have to agree with you, Shirley. Doing the opposite of what needs to be done to succeed, every single time? No one could be that incompetentā¦ so, I agree, it must therefore be deliberate.
January 27, 2022
Shirley, it must be the case. And though it is theoretically possible to vote out a party, there is not a lot to he gained when it would inevitably lead to the other, but identical party taking over.
And the civil service, who are in some ways the main problem, can not be voted out.
January 27, 2022
And government has only just connected a labour shortage with too-easy rules on claiming Universal Credit! I welcome the toughening-up and ask why wasn’t this done a year ago?
January 27, 2022
Presumably because the government didn’t want to break it to those on benefits that work might mean leaving the house?
January 27, 2022
Don’t believe the hype…there isn’t a labour shortage there’s a well paid full-time permanent vacancy shortage
January 27, 2022
I confess Sir John. I am confused by debt and interest that need not be repaid.
I do under stand the damage that high taxes do to business and confidence. If the extra revenue is not needed then why raise it, especially at a time of high inflation. The additional taxation is in itself inflationary. So why does the Treasury burden us with it?
Reply Where the state has bought up the debt there is no cash cost for interest.
January 27, 2022
Perhaps to answer my own question, to pay a large number of unnecessary civil servants that need packing off into the real world to do something useful and productive with their lives.
January 27, 2022
They only do what government and its various ministries tell them to do.
January 27, 2022
+1
Yes, and the govt. and thus the ministers do what the WHO, WEF, Chinaā¦..
Whoever ( answers on a postcard) it is that actually gives the orders.
Why else would lockstep policies change over night?
January 27, 2022
I’d like to beleive that NLH but someone once said that he’d entered goverment thinking that there were levers to pull but discovered only string to be pushed.
We worry about our political leadership but don’t seem to worry very much about the quality of the senior Civil Servant managers tasked with implementing their policies…
January 27, 2022
Well, if you will elect people who want to swagger and to wallow in power but not to do much actual work, then you must expect them to delegate an awful lot.
For instance, ordering a lockdown is power.
Organising a proper test, trace, and isolation facilities, along with all the ramifications as Jacinda Ardern’s team did is work on the other hand.
See the difference?
January 28, 2022
I have a feeling that many New Zealanders would prefer to be here in UK rather than locked down in NZ – except of course those here who are unable to go home given the cost of isolation and shortage of approved hotels for same.
As for “swaggering” politicians – can you point me at any obviously better alternatives?
January 27, 2022
Like YES MINISTER I think there are plenty who spend their time providing reasons to expand their empire, creating more jobs, undermining what they perceive to be short-term bosses who will be gone shortly.
January 27, 2022
+1 – release them them to get a productive job or stop then doing positive harm as so many of them do.
January 27, 2022
And here’s another thought… The Treasury cold find ways to cut spending. I know it is a quaint idea, used to be a Conservative principle.
I note a couple of days ago you were concerned about MMT and the link to inflation (which is all too real). Would you not agree a reduction in money supply/lower Government spending would help bring down inflation?
Reply yes I often recommend spending reductions. I have been pressing for an end to the very costly test and trace system for example, and for an end to migrant hotels.
January 27, 2022
Reply to reply: We know these illegal immigrants will never be deported regardless of their asylum status, so under this government, ending the migrant hotels will mean they have been given a house. The biggest saving would be to end illegal immigration altogether. Other countries manage it, so why are our lot not able to stop it? Removing the red carpet treatment and other incentives would be a start, and is entirely achievable, if the will was there. Boris prefers immigrants and gives them better treatment than the indigenous LEGAL citizens. There is no other explanation why he throws such a large amount of money at these uninvited guests, and his continual watering down of the point system.
January 27, 2022
Our lot are capable of stopping immigration, and are capable of deporting immigrants, but they just don’t want to.
Johnson is on record as being in favour of immigration and of giving existing illegal immigrants an amnesty.
January 27, 2022
Yes Shirley, Boris ALWAYS betrays his own people in order to capitulate to his enemies. This is due to his STUPIDITY and COWARDICE. He doesn’t want conflict and believes his own side will acquiesce more readily than his enemies, so he prefers to accommodate the later and betray the former. That’s why he betrays Northern Ireland rather than have a dispute with the EU; that’s why he treats illegal immigrants better than the British people; that’s why he imposes extra costs on us all rather than be criticised by environmental extremists; that’s why he offers EU fishermen generous quotas at the expense of British fishermen. The list just goes on and on. Boris is a TRAITOR to Britain and the British people because he prefers to be a QUISLING appeasing our enemies. That’s why this vile man must GO.
January 28, 2022
+ 1000000
January 27, 2022
That is now considered heresy these days.
January 27, 2022
As with every other failing Department (which seems to be most of them) the problem Sir John identifies at The Treasury wont be resolved until there is a clear-out of the left-wing Civil Servants running it.
We have Brownian economics because we have Brownian personnel running The Treasury. And Sunak, supposedly a Thatcherite Conservative, has joined The Blob and has Stockholm Syndrome.
God forbid they should try and recover the Ā£billions stolen from taxpayers by fraudsters because they didn’t put in place the most basic checks on businesses when spraying OUR money at them during the Covid restrictions.
January 27, 2022
God forbid they should try and recover the Ā£billions stolen from taxpayers by fraudsters because they didnāt put in place the most basic checks on businesses when spraying OUR money at them during the Covid restrictions.
…
You were 10 times more likely to win govt contracts if you had political connections, researchers found.
January 27, 2022
Down the road in St. Ives, Cornwall, around 50% of all residential properties are second homes and apparently many are registered as businesses as a way to avoid paying council tax. At the start of the pandemic when Sunak was chucking taxpayers money around here, there and everywhere, many of the ābusinessesā were being handed Ā£10,000 grants. We had the spectacle of councillors on the local news begging them not to take this money if they werenāt entitled to it. Apparently Ā£22 million in St. Ives alone, just a small seaside town, was given to those second homers who just happened to be registered as a business but in reality were actually sitting empty just waiting for their owners to turn up now and again to enjoy them. One would like to think those councillors were warning the Government what was going on so what did Sunak do about it? Iām guessing nothing. How many more places like St. Ives did this happen? Another example, a couple I know run a tea shop in London. A couple of months before lockdown they had changed from self employed status to payroll in order to get a mortgage. Not only did they receive a grant for Ā£25,000 at the start of lockdown but they also received Ā£2,000 a month each when they had already taken out loss of earnings insurance so they were paid twice. What checks were made before they received tens of thousands of pounds of taxpayers money? None. Gross incompetence has cost billions, how dare Sunak write it off.
January 27, 2022
Pete B +1
Reply +1
January 27, 2022
Of course the treasury doesnāt need to raise taxes but it and Johnson in particular choose to because thatās what socialists do, raise taxes for the sake of it because they can. Cost of living crisis looming, energy prices going through the roof and Johnson refuses to cut VAT or the green levy, council tax hikes appearing on our doorsteps soon on what are already exorbitant levels which take no account of income or ability to pay, petrol prices their highest ever, most of it tax and food prices going up and up on a daily basis and yet Sunak and Johnson are adamant that our personal allowances will stay frozen for the next few years and theyāll help themselves to even more of our hard earn money by raising NI at a time when taxes are already at their highest level for 7o years and when many businesses are struggling to get back on their feet after this Governmentās over the top disastrous policies over the last two years.
Time to replace this out of touch Prime Minister with an actual Tory, one who believes in small state and low taxes, thatās if there one to be found in the current parliamentary party of fake Tories.
January 27, 2022
Agreed
Fiscal Drag of the allowances is an automatic tax rise, a good example would be inheritance tax, how many years has that remained the same 12 ?
With increasing house prices more and more are slowly being dragged into that net.
Vat at 20% gives an automatic increase in tax take as prices rise.
The tax net getting ever bigger on a whole range of new products and services every year, but they are often disguised as levies or duties, simply to confuse.
January 27, 2022
Great post Jools.
January 27, 2022
If you want to remove unnecessary tax and address wastefulness I am all for it. But I am confused, all the tories on here have been demanding big government – immediate increases in PPE, food and energy supplies, increased border security.
The strong impression I get is that “actual” tories want all this with a small state and low taxes, IE someone else pays for it. But you got some of that – no preparation for the pandemic, no preparation for reduced access to fuels, no enforcement of the borders.
So what actual benefit is there to the rest of the community, not just the non-doms, for “actual” tory policy?
January 27, 2022
I think we need a new PM. One with integrity, honesty and an ability to govern. He/She could quickly tell Rishi to do what JR suggests.
January 27, 2022
you make it sound so straight forward.
January 29, 2022
Changing the PM will not do anything and besides, with whom? The whole system needs to be changed which as it happens is not far off. Ask yourself what do 650 MPs achieve!!!!!!
January 27, 2022
The Noble Lord Agnew set out very clearly the answer to your question. Arrogance, indolence, inefficiency. Just like you leader.
And what is your governmentās position. Total denial. Couldnāt be bothered by up 29 billion. We get some ridiculous bleat from Sunak about a minute amount they have recovered, they should have been more rigorous in the first place.
The Treasury/BEIS living in a protected bubbie with frankly pathetic ministers with neither the knowledge or the balls to challenge them.
As soon as the British Bank was announced and the furlough scheme was announced we knew what would happen. Apparently not HMG.
Years ago you wrote about umpteen schemes āstill openā in Treasury] books and the need and benefit of a tidy up. Nothing happened. They couldnāt care and there is no sanction.
HMG cannot even get them back into office so output down a minimum of 10%
You are wasting your time.
January 27, 2022
Employer’s NI is a really bad tax. It hits UK manufacturers but leaves its foreign competition untouched.
VAT is better, but that is already excessive.
You’d think that government was occupied by people who think UK businesses are a reservoir of cash, which the meanies in the manner of Scrooge keep to themselves, and the government can just dip into it with financial damage to no one but the business owners.
That’s what you get when ministers have no experience of running a business.
If the government had any sense it would scrap employer’s NI entirely to encourage British business. Scrap corporation tax as well and put it on dividends instead, including a withholding tax on what goes abroad.
January 27, 2022
The old and retired do not pay NI, so most Tory voters will be left untouched.
Understand now?
January 27, 2022
Thank for your detailed explanation.
January 27, 2022
Don’t mention it!
January 27, 2022
NLH. That will be you one day Martin. Taking over from Andy?
January 28, 2022
already mentoring.
January 28, 2022
FuS – actually he is not correct, the working retired will pay the NI 1.25% levy.
and you are going to love this from Which:
The levy will be paid on all earned income ā meaning those working beyond state pension age will also be charged, but this is set to kick in from April 2023 according to the āBuild Back Betterā plan. The Prime Minister said devolved governments in Scotland, Wales and Northern Ireland will receive an extra Ā£2.2bn per year as part of the levy, which is 15% more than the nations are set to contribute.
Read more: https://www.which.co.uk/news/2021/09/national-insurance-tax-to-be-hiked-by-1-25-to-fund-social-care-crisis-how-much-more-will-you-pay/ – Which?
January 29, 2022
“Working retired”.
That’ll be “not retired” then.
January 29, 2022
Theyāre still old and drawing their retirement benefits Martin (the ONS consider them retired as they are drawing their State retirement benefits, previously they didnāt pay NI at all although their employer did but now they will pay the 1.25% much to Andyās pleasure Iām sure) and you said āold and retiredā. When some people retire at 65 on less than Ā£10,000 pa they have to continue working in their late 60s and 70s.
January 27, 2022
Seems like we are paying for a lot of confused high salary people to come up with the wrong conclusions given your posting today John.
Has anyone other than you asked WHY ?
If I was getting incorrect figures on a regular basis from my Accountant, I would simply ask someone else to do the job. Has that not occurred to the Chancellor or the Prime Minister. ?
If those who are actually doing the figures think the mythology is wrong, why do they not suggest it should be changed ?
So many questions, too few answers.
January 27, 2022
Well said..!
That doesn’t make the Treasury sound like the professional body we need – have they been taking hints from certain people in SAGE?
This all reminds me of a law the Germans put in place, in December 2019,
This was modelled on the ‘Burden Sharing Act as after the Second World War.”
It seems that no real estimates were made of how much the compensation would cost, but they still propose to take money from all citizens. There was the 50 percent levy on all assets introduced in 1952, payable in quarterly installments over a period of 30 years. The allowance amounted to 5,000 Deutschmarks, so that the majority of all citizens were affected by the levy. We can extrapolate what these amounts might be now, but they will not be insignificant.
I’m concerned that with us still having so many EU laws still live, that we might have this nightmare ahead of us, or something similar.
The link is in German but translates easily: https://reitschuster.de/post/ausufernde-gesundheitskosten-enteignung-mit-ansage/#disqus_thread
January 27, 2022
JoolsB
When you look at the top table, how many of the cabinet positions are really,really necessary each one with their own team and support staff?
That said I am sure our host could pencil in 20 at least like minded real experienced, trustworthy, knowledgeable, respected, true conservative members to form a cabinet even accepted that name only positions would be done away with to start the long hard uphill slog to get this country firing on all cylinders.
January 27, 2022
Should have added with belief in Brexit and from the back benches.
New faces, new ideas, total commitment and the opportunity to deliver the WOW factor in everything they do. Let’s break away from same old ,same old, new meat same gravy.
January 27, 2022
And in other news in the year to March 2021 12000 suspected sex abusers and 55000 people arrested for violent offences were released on bail without any conditions.
More institutional failure putting especially women in domestic situations at risk. We also read shop lifters will be let off.
And of course when yet another person is brutally murdered by someone known to them, there will be a costly enquiry and yet again the recommendations will be ignored.
Another thing to make you and other MPs, proud Sir JR. At least Yvonne Cooper thinks itās important.
January 27, 2022
Courts have had difficulty in working through the government’s lockdown restrictions, as Sir John will be well aware. https://publications.parliament.uk/pa/ld5801/ldselect/ldconst/257/257.pdf
Justice was one of the less obvious casualties of that policy (and there have been many), which must must never, never be repeated in any form.
January 27, 2022
Butā¦taxation is a main platform for the Agenda.
How else can you pay for Sustainability, Gender Equality, a Caring Economy and Well-being??
I squeezed an FOI from our council regarding a highly authoritarian and disruptive cycling event.
(WEF seems to think that millions of Brits will take to their bikes again!)
The figures, paid for by council tax, are staggering.
This is what they want for all the ālevelling upā schemes etc etc. ( And rejigging road priorities).
We all have to pay for globalist perceptions of āinequalityā( which caused covid!).
And the money will flow ever upwards into multinationals.
January 27, 2022
From the outside I find it difficult to understand the purpose of the Treasury. We have a Chancellor and various political/ financial advisors who should be in charge of the seven volume tax book, what it contains, and it’s impact on the economy. We have HMRC charged with applying the tax book rules and collecting the tax. We have a Cabinet of ministers deciding how to apportion, whatever HMRC collect, to the needs of the population as they see it. All the above are controlled within the remit of a democratic government.
Until recently the Treasury was there to apply the dictats of EU financial policy. I get the impression that it has yet to come to terms with its new masters, us the electorate. Remember all the false propaganda the Treasury pushed out during and post the Referendum, acting for EU interests rather than being totally neutral. Not only do their financial forcasts continue to be inaccurate, but they continue to act as an autonomous entity. Time to question their very existence, along with their largely unintelligible bible, the tax book. A subject that should take precedence over cheese cakes and champagne at number 10. Better spill some blood than wine.
January 27, 2022
And we read the Sue Grey report is being held up by issues around duty of care for some of the people named.
Yeah right. How many coats of paint can we put on it, to cover it up more like.
What about the bloody duty of care for families who lost loved ones unnecessarily in care homes, couldnāt be with them, restricted funerals, all sheltering in lockdown whilst No 10 partied.
One rule for one as usual. Duty of care. It was their own fault through arrogance. They donāt deserve it.
January 27, 2022
On this blog, we keep going round and round the same discussion on the government’s crackpot policies :
Net Zero, the lack of self sufficiency in energy, Tax increases, failure to tackle illegal immigration : the list is endless. Our host has proposed sensible changes to almost all of them, yet there is little support in parliament for any changes in direction, some of which are urgently needed.
Our host pointed out months ago that, thanks to the vaccine-led economic recovery, the government has received much more in tax receipts than expected, yet the NI increase is still scheduled to go ahead.
Whatever the PM thinks, why hasn’t the cabinet ensured that it is abandoned ?
Reply Good question
January 27, 2022
reply to reply….they share responsibility for everything the fool does.
January 27, 2022
So you accept responsibility for voting this lot into office?
Didn’t think so.
January 27, 2022
Yes I accept responsibility for keeping Sir John in place, trying to keep the Government on the straight and narrow. And OMG doesn’t he need to ! I’ve said before I would not have voted for any of the main parties, but Sir John was faced with a rejected MP from an adjacent constituency. Not being able to stomach such a cheek I had to do my bit to keep him in place.
I hope you have the same trust in your MP?
January 28, 2022
+1
January 27, 2022
We need you back in the cabinet. In the role of Chief Secretary to the Treasury at the very least.
reply The Chief Secretary has to carry out the Chancellors policy and does not usually get involved with tax policy.
January 29, 2022
CHRISS – Shortly there will not be a need for any of them.
January 27, 2022
I think I’ve sussed why the probate teams aren’t passing through simple estates, in order to concentrate on the ones with tax for the state perhaps, yesterday we were told Rishi had a bumper year on inheritance tax, and extra half a billion more than he was expecting.
One solicitor lodged probate I know of is still being processed in its sixth month, one year after the death, nothing complicated, and the solicitor said he has another four and it’s just the regular length of delay now, another probate which attracted tax still took over a year, with the tax office wanting their cut of tax before the main home could be sold because of probate delays. Then in the next paragraph the State is raising probate cost by over 70%.
We are told by the Unions that all these agents/servants of the state working from home are more productive not less productive, they worked from home throughout covid we were told. What takes so long with simple estates under Ā£250,000 (including property sale?) This means empty homes are lying around for over a year, bills racking up, two people in the will died already before they got their little bit that would have made their lives more comfortable at the end and the money spent straight back in the economy.
January 27, 2022
The National Insurance hike – yet another tax on the poor and the young to pay for the rich and the old – was voted for by Tory MPs.
The vast majority of Tory MPs voted for it. Labour opposed it.
This is a Tory tax, not a treasury tax. The Treasury simply implements the policies of the government – even if those policies are idiotic like your Brexit border queues and internal Brexit customs border between GB and NI.
The solution is to not vote for idiots.
January 27, 2022
As far as I can see, the Ā£36bn extra spending pledged to the DHSC in the Chancellor’s autumn budget will be funded by the projected Ā£36bn over the next 3 years from the NI increase. So if the increase is scrapped, Health and Social Care doesn’t get the extra money, or else it does get the extra money and the hope is that the money can be found from somewehere else, ‘somewhere down the sofa’. It doesn’t sound reassuring.
I wonder how much support there would be in the country for scrapping a ring-fenced tax levy dedicated to health and social care spending. It would be a gift to the opposition, certainly.
Reply The government is Ā£60bn better off so far this year than budget as tax revenues are coming in well above forecast so we dont need the tax rise.
January 27, 2022
Repy to reply: Thank you for adding that key information to what was in your article.
January 28, 2022
NI is still paid by 66 year olds now Andy, now that you are approaching 50 is 66 starting to look young.
January 27, 2022
You would have thought that most of this would go without the need to say it for a Conservative administration – but not this one, or indeed, the last two.
It has been clear for some time that the Ā£12.9bn has nothing to do with fiscal necessity, and everything to do with the Prime Minister’s wish to declare his total support for an unreformed NHS.
January 27, 2022
The national debt is Ā£2.4 trillion and with interest rates at 0.25% its costing the Treasury about Ā£2.2 billion a month to service. However, a one percentage point rise in interest rates, off the back of a post-pandemic inflation spurt, would add another Ā£20.8billion to annual debt interest payments for 2025-26. At that level, its a problem.
Sunak has printed more money than any other Chancellor in history. The way things are looking at the moment, a Labour Chancellor will have to deal with the consequences.
Reply Nonsense. You have to deduct the so called interest that does not entail cash payments by the government to someone other than itself.
January 27, 2022
Reply to reply: and how much is that? Ā£2 bn? Ā£1 bn? Or much less?
If one puts such a rebuttal without any figure to sustain it, do not be surprised that some here will go āWe donāt believe youā. So what is the amount of the deduction?
January 27, 2022
I realise that my question is badly worded: there is no interest paid by the government to itself. But I still think the following is a relevant question: what is the cost of servicing the national debt (net of Asset Purchase Facility)? Is it still around Ā£23.5 bn, or has it suddenly disappeared because of the more favourable forecast or āmoney found down the sofaā?
January 27, 2022
Why did they do their best to sandbag recovery by threatening a whole range of tax rises for next year to dampen confidence and put businesses and companies off spending?
….
Stanley Johnson and his type want us to have declining economic growth and prince charles wants us to pull all leavers at our disposal to make it happen. Rio Earth Summit, Club of Rome, Great Reset. The enemy is within.
…
January 27, 2022
Costs will continue to rise under policies of net zero and high associated taxes
”A driver has been shocked to find that a new battery for his car will cost more than the car is even worth. He was quoted Ā£15,000 for a replacement and warned that others online had been complaining about the same problem” Express.co.uk
January 27, 2022
It seems to me that ministers are losing their grip on the civil service.
A kind of bowler hat coup d’etat
January 27, 2022
Off topic, here is Boris Johnson, who in his earlier journalistic incarnation repeatedly told newspaper readers about the insane and pettifogging nature of the EU, now loudly and bombastically expressing surprise that the EU is implementing the Irish protocol that he negotiated in an insane and pettifogging way:
When in fact the insanity is embodied in the protocol itself, because how can it be a rational solution to have EU checks and controls on all the goods coming into Northern Ireland, and on all the goods produced in Northern Ireland, when the potential problem which has been identified relates to just that trickle of goods leaving Northern Ireland across the land border into the Irish Republic?
January 27, 2022
Yes Denis, the Northern Ireland Protocol is a far more important reason to get rid of Boris than the parties. It is Boris Johnson who is standing in the way of a solution – nobody else, JUST HIM. Lord Frost proposed that the UK unilaterally introduce an ‘honesty box’ system whereby only lorries carrying goods for the Republic need stop, but Boris vetoed this as he was afraid of conflict with the EU. If we are not prepared to adopt any solution that the EU does not like that means that we will not adopt any solution, ever, full stop. This is a betrayal not just of Northern Ireland but also of Brexit and the UK as a whole. I can’t understand for the life of me why the ERG have not all sent their letters in to Graham Brady. Really – what on earth are they doing supporting this enemy of Britain, of Northern Ireland, of Brexit and of the British people? What the hell are they playing at???
January 27, 2022
Another hidden at the moment cost to be taken on board by the energy bill payers and taxpayers will be the safe disposal of wind turbine blades, solar panels, and batteries. Reported on the Stop these Things website highlighting all the problems in the USA and cost to the disposal of turbine blades
“Hundreds of thousands of wind turbine blades have already found their way into landfill, with millions more to follow. Bear in mind the wind industry has been with us for barely 20 years and most of the increase in (occasional) generating capacity has occurred in the last decade. And yet, thousands of blades are being replaced on operating turbines or simply dumped when they are unshackled from turbines that have already given up the ghost”
You can lay good money on it, that the power companies will be seeking funding to help with this big environmental disaster waiting to happen
January 27, 2022
We don’t need:
Hs2 lite = ~Ā£50Bn one-off
Fraud = ~Ā£20Bn recurring. Design the benefits so there cannot be massive fraud, this is not difficult.
Less Intl Aid = ~Ā£10Bn recurring. Define managing illegal immigrants as intl aid.
10% less Civil Servants and cap pension benefits. Automation / process optimisation, reduce complexity.
10% less NHS non-clinical staff. Ditto.
Out of control councils, a right old mess of uncontrolled costs of wages/pensions and social/care… going to take some transformation to sort that out too, like the NHS.
Things to be done:
Finish Brexit/NIP and sort out the fishing mess.
Give folk a choice about paying for the BBC….
Energy, we’ve done to death already and are aligned. Drill/mine/frack and replace with nuclear for baseload. Get back to sensible low cost energy.
Build more houses and reduce demand by limiting immigration. Plenty of brownfield left & vacant high streets, repurpose offices including government and council buildings.
Barnet formula review & make First Ministers accountable, produce financial report and accounts, incl England.
Give people a vision of something to look forward to.
January 28, 2022
Bristol is now trying to get rid of its Mayor – not its Lord Mayor. This could catch on. Maybe it could include First Ministers.
January 27, 2022
The County Councils are sure as hell doing nothing to help the Treasury. Reported in the Telegraph that a large number of councils are actually subsidising charging fees on their public units and 21 are giving it away free. Highlighted also on Not a Lot of People Know That web site. Bet our community charges will be going up and some
January 27, 2022
āWhy did they [the Treasury] do their best to sandbag recovery by threatening a whole range of tax rises for next year to dampen confidence and put businesses and companies off spending?
It might be thought that the Treasury feels it needs more money to expand the civil service or to build more 4 star hotels for the 100,000+ illegal immigrants expected to cross over the Channel this year or to increase subsidies on windmills.
But of course it can always print more money for all of this.
So it can only be to curb inflation and at the same time make the Government unpopular, especially with an election coming up.
January 27, 2022
Consider this.
Covid vaccination markedly reduces the chance of a severe reaction to the Covid virus, reduces hospitalisation and the chances of death from it. Whether we realise we have it or not we can pass it on, vaccinated or not. There are many sound medical reasons for a number of people not to be vaccinated. Now consider NHS workers who for their own private reasons choose not to be vaccinated. They can become very ill themselves and end up dead, many have. In the process they can occupy ICUs to the detriment of other acute cases. This must be offset against the downside of loosing 70,000 NHS workers from a service already in deficit to the tune of 100,000, and a relative value judgement be made as to whether this is more important than risking the death of a small number of them. Realise that front line NHS staff take much more effective measures at work to prevent disease transmission than do the general public. I contend that this edict needs to change well before its implimentation date, or watch waiting lists accelerate.
January 27, 2022
Who is Chancellor, who is PM is a short term fix.
Does the world want the abolition of Nation States ?
Would the world be better under a Global Authority ?
It’s much discussed behind closed doors.
Make the discussions open.
Reply We have just left a multinational body that impeded our own decision making.
January 27, 2022
Itās much discussed behind closed doors.
…
Whose doors?
We have nation states as firebreaks against bad laws etc
January 27, 2022
Well I know that obvs.
My comment stands.
Let the question be asked globally and openly.
Vote No.1 from me.
Pro nation states
but want to see the arguements
( Being open minded )
January 27, 2022
Delighted to see that this evening there is a real chance that the NIC increase will be delayed ( hopefully shorthand for scrapped totally) for backbench support ? Well done Sir John et al if this is the case
Don’t stop there . Get it scrapped along with the Corporation Tax increase for 2023 and get it cut to 12.5% ( ignore Biden’s dotty standardisation at 15%)
January 27, 2022
Thanks for some common sense and for reproducing the text. Some publications seem to be limiting what the accounts of dissenting voices can do. On ConHome for example, as of the time the partygate leaks started coming out, any posts of mine went to moderation and never emerged from there, one way or another.
That site has pro-remain views and constantly trots out articles by Gauke, Grieve and Liddington among others – not to mention an endless stream of pro-net zero twaddle. Whatever it is these days, “conservative” it ain’t.
Oh and please keep up the good work fighting aginst the NI rise. We need to get rid of Employers NI totally btw.
January 27, 2022
Business Secretary Kwasi Kwarteng reported on BBC as saying ”No u-turn on national insurance tax rise’
reply Yes, but it will be PM/ Chancellor who call it if it changes
January 27, 2022
The people at the Treasury have probably decided that their “forecasts” can never be accurate…
… which would then explain their decision to be excessively pessimistic …… so that we plebs will ultimately receive good news….
…. rather than to be excessively optimistic… so that we eventually receive bad news.
If Treasury forecasts do err on the side of caution, the decision makers are probably entitled to look at the margin of error in past forecasts to help form a view of the margin of error in current/future forecasts.
In an effort to get things right I am wondering if, as a matter of course, Treasury forecasts are updated daily/ weekly/monthly ?
January 28, 2022
On reflection…. we are in the 21st century. The Treasury is stuffed full of highly intelligent and highly paid finance experts and I.T. experts.
Forecasts are updated in real time ?
January 27, 2022
The Chancellor should understand that lower tax rates often result in higher tax revenue; it’s known as the Laffer Curve. Current SDLT rates are actually suppressing property transactions as people think twice before moving house. Anyone considering moving needs to be very sure about their intended purchase because if they find they don’t like their new home for any reason they will be hit with more SDLT if they need to move again. It seems like SDLT is more like a clumsy attempt at social engineering than it is about raising tax revenue.
January 28, 2022
It’s going to get even more taxes if your treasury doesn’t cut the recovery off at the knees with an extra 2.5% ni tax on workers and 1.25% on the self-employed. A self-employed still struggling to recover from two years of many being restricted in their work.
The ‘experts’ say Boris is mad to unlock whilst 3bn people are still unvaccinated – they have all been invited for a vaccine, most people have had 3, if this 3bn choose not to get it after such a fantastic and fast injection program and especially the massively successful 3rd booster program literally billions processed in a month then tough on them. If it is true the vaccines work then those that did what is considered the ‘right and sensible’ thing are ok anyway.
AZ initially said no boosters were required after 2 jabs then we were given PZ as well!
A big concern for the 3bn unvaxxed – if NHS vaccinated staff all lose unvaccinated friends and colleagues then who will treat the unvaccinated patients when the saintly and some forced vaccinated staff refuse to?
The 800,000 anti-vax staff what grade are they all, are the majority under grade 5 band and untrained and can be replaced with unqualified carers? Have the NHS lined replacements up ready?
January 28, 2022
I hope the 3billion aren’t headed for the Channel to cross, it will get really busy.
January 29, 2022
Interesting article today 29 Jan on Briefings for Britain site ( The Dam is breaking …… ) concerning the Treasury’s modelling of Brexit, highlighting the skewed and political analyses since 2016.
January 29, 2022
Strange that the treasury suddenly found revenue at this moment in time? Nothing can stop what is coming, NOTHING.