My Speech on the Finance Bill

Sir John Redwood (Wokingham) (Con):


I rise to speak in support of tax-cutting proposals. We are not discussing the national insurance reductions in this group of clauses, but both previous speakers have spent some of their time discussing them because they are relevant. They are the other side of the issues related to the correct levels and thresholds for income tax, which are the proper matter of our current debate. I wanted any kind of tax cut in the Budget, because we are over-taxed. I want the right kinds of tax cuts that can speed up growth, which all the major parties in this House want, although there are some disagreements about the exact mix of policies that might create it.

The first thing we need from the Treasury is for its official forecasts and those of the OBR to have greater belief in the fact that if we promote more growth by cutting some tax rates, we may end up with more tax revenue. The best generator of more revenue to pay for our public services is a growing economy. The best generator of more growth is productivity improvements, and there is particular scope for such improvements in the public sector. The public sector was badly damaged by the covid experience. We lost a lot of productivity through the hasty and unnecessary reorganisation of public services during the pandemic, but we are finding it hard work and slow going to get the lost productivity back.

I welcome the fact that, in the latest set of Budget numbers, the Government have put in future productivity recoveries over the next few years, but it is slow progress, even to get back to the levels of productivity in 2019. I put it to the Government that they do not need to spend extra money on new technology, such as artificial intelligence, to get back to the levels of 2019. They may wish to recommend schemes for AI investment to get above 2019 levels but, by definition, we were able to get to 2019 levels of productivity without AI, because it had not been invented at that stage.

There should be more common agreement about the urgency of productivity recovery in public services. We are missing out on at least £20 billion due to the productivity problems that have developed since 2020 and the lockdown experience. However, there is also a source of extra revenue from lower taxes, because if we cut tax rates in the right way, we will generate more cash, rather than less. I think everybody now agrees that cutting certain taxes has that effect, because it is quite obvious that if we impose certain kinds of turnover or activity taxes, they will lower turnover and activity. Indeed, many taxes are imposed with a moral wish to lower activity or usage rates. For example, alcohol and tobacco attract higher taxes because the wish is that people buy them less or, in the case of tobacco, do not buy them at all. We get the same effect with things that we should be promoting.

One of my proposals to the Government is that they should be extremely worried about the large decline in the number of self-employed people since 2019. Some of that is the inevitable consequence of lockdown, which led to older people who were working for themselves being unable to work and deciding to retire a bit earlier, but quite a lot of it is not. Some of it is due to people of younger ages being deterred by their experiences, and some of it is because young people are not coming forward to replace those who were self-employed. It was not just lockdown or the disruptions around that time that caused this problem; it was also the IR35 tax changes, which went through in two tranches, culminating at about the time we experienced the problems of lockdown.

We have lost more than 800,000 self-employed people, partly through a self-inflicted tax wound. The decision was taken in two stages to introduce the idea that a person acting as the customer of a self-employed contractor has a duty to satisfy themselves about their tax status, and can be liable if they have made a mistake in their tax status. That meant it became extremely difficult for quite a lot of self-employed people to get contracts from both smaller and bigger businesses, because why would the executive take the risk that they could, in the end, be tied up in a dispute with His Majesty’s Revenue and Customs that they did not want? It was simpler not to allow a self-employed person to win a contract, because there was tax bureaucracy and an investigation that could put them both on the wrong end of a tax bill and on the wrong end of a moral issue where it looked as if they were helping someone to fiddle their taxes.

HMRC has always had issues with how to define someone as a genuinely self-employed person. There are lots of obvious requirements, because none of us wants to see people who are effectively employed by a single employer taking advantage of tax breaks that were designed to deal with the extra risk of being self-employed, including the lack of benefits that someone gets if they are genuinely self-employed. If they are not getting sick pay and paid holiday, they are in a rather different category from those of us who are employed, who get such benefits from our employer built into the overall package.

The normal sorts of tests include whether someone is working for more than one employer. Do they have a contract for services or an employment contract? Do they have sick pay? Do they have holiday entitlement? Do they have other benefits? These are the tests that we would normally apply to decide whether someone is genuinely self-employed. We have got too tough from the revenue side, and we have lost a lot of self-employed people. We are not recruiting the extra self-employed people we want, who are vital to the growth and vitality of an economy. If we had a few hundred thousand more self-employed people, they would be the innovators, the price cutters and the people who go the extra distance to provide an additional service. They would find customers and be useful challengers to the big businesses. They would not destroy the big businesses but would keep them on their mettle and make them understand that they, too, have to listen more to what customers want, because customer service improvement is often generated first by the self-employed or a small business.

I turn now to small businesses themselves. If a self-employed person takes the giant bureaucratic step of taking on an employee or two, they will have all the bureaucracy and the extra tax that goes with that. We need to make it as easy as possible for them to grow their small business, and I am very pleased that the Government have now said that they can raise the VAT threshold, because registering for VAT is a colossal additional commitment that a small business has to make. It means diverting a lot of energy into tax compliance, rather than finding more customers and serving them better, so we should seek to delay that until the business is rather bigger than the level that is currently recommended. I urge the Government, who I know are interested in a growth strategy, to allow people to put off the day when they have to register for VAT, so that they can concentrate rather more on that period of growth.

Turning to the issue of national insurance versus income tax, which we are about to vote on, I began my remarks by saying that I was happy to support the national insurance reduction. It will help those in employment and promote higher real incomes and more spending, which is what we need for a growth strategy and to cheer the country up a bit. However, we need to hear a bit more of the Government’s thinking before we turn the wider proposal—it is not yet proper policy, because it has not been given a budget or a timetable—into a firm manifesto pledge on our main priority for future tax changes. For example, we need a statement from the Government on how people will earn their entitlement to the state retirement pension if there are no longer any employee contributions, because our current entitlement to the state retirement pension is based on the number of years of contributions we have made through NI. We can change that; this Parliament can do anything it likes on those sorts of issues, but it has not changed it yet.

I think this needs some kind of Green Paper or White Paper—some kind of thought-through model of what the state retirement pension scheme will look like if we want to end up with no employee national insurance contributions at all. It might require the abolition of the national insurance fund and having just a payroll tax on employers in the future, because the fund would not look quite the same without the employee contributions. At the moment, broadly speaking, the fund pays for the state retirement pension, with a little balance on top. Long gone are the days when it paid for the health service and many of the other benefits. If we read the details, we can see that there are just a few rather modest residual contributory benefits left. We need some kind of new presentation or analysis of what might happen to the fund.

It is also important to ensure balance and fairness in the distribution of tax reductions, so I think there have to be some tax reductions for those who have completed their working lives and are no longer in receipt of employment income. It would be wrong for the Conservative party to rule out tax reductions that help those who have retired—those who now have investment income because they saved hard and worked hard during their working lives. There needs to be some balance in how we allocate those reductions.

I would also say to the Government that, as they think forward to their next fiscal event, as I think we now have to call them—an autumn statement, a mini-Budget or whatever the latest terminology is—there is more scope in the numbers to have a better return of money to taxpayers than this quite cautious Budget we are voting on tonight gives us the opportunity to do. I do not think we can afford the incredibly expensive habits of the loss-making Bank of England. I fully understand that the Bank of England is completely independent in setting the base rate, setting out its inflation forecasts and conducting its monetary policy through the Monetary Policy Committee, and nothing I am suggesting would in any way interfere with that.

However, we have a parallel policy, which began under Chancellor Darling and the Labour Government and continued under successive Conservative Chancellors. It was always a joint policy of the Treasury and the Bank to create money to buy bonds and to create a jointly held portfolio. Successive Chancellors of the Exchequer needed not only to give their authority to do that—proving that it was not an independent Bank policy—but to give an indemnity to the Bank against all losses. I say to those on the Treasury Bench that we, as a country, have now paid the Bank of England, I believe, £49 billion for losses over the last year and a half or so, and if we believe the OBR numbers, there are many tens of billions in losses to come over the next five years. Those losses come from three different sources, and some, although not all, are avoidable.

The Treasury and the Bank need to discuss those colossal losses and to understand that the United Kingdom and the Bank of England are now very much out of line with the practice of, say, the European Central Bank, which followed a similar policy of creating money and buying bonds in the bad days, but which is not trying to get rid of them all as quickly as the Bank of England. The ECB is not selling them in the market at colossal losses, particularly the long bonds that are sitting on very large losses, because there is no need to sell them. Also, the ECB is not paying its full overnight rate on bank reserves, which would create a bigger running loss. The Bank of England never used to pay any money on reserves prior to 2006. The ECB has reinstituted zero interest on minimum reserves and has a lower deposit rate than the base rate. So I think there are things to learn from the European Central Bank so that the Bank of England could come back without such huge losses that substantially distort our fiscal policy.

The principle of independent monetary policy setting the base rate and forecasting inflation is important, but so too was the independence of fiscal policy from Bank and other outside interference. Now, however, the Bank of England is a dominant influence on our fiscal policy because its losses are so enormous, and that obviously affects what is available to spend or to offer by way of tax reductions. I hope that those on the Treasury Bench are in listening mode on these matters, because if sensible changes were agreed, we could look forward to a little bit more tax reduction and flexibility, and maybe a little more spending where we are hurting—on some features of the health service, perhaps—so that we could reinforce our growth policy with appropriate policies that were eminently affordable.

Members of the House who are interested will know that I am critical of the current control mechanism. I do not think it is very good. It would be much better to have something more like the American system, which has both an inflation and a growth control over the economy. I am suspicious of an economy that is effectively guided by a single five-year forecast by the OBR. I do not believe that the OBR or anybody else has much idea of what the budget deficit is going to be in five years’ time, because there are so many different things that can come along to change it. So, far from that being an iron rule, it is an arbitrary rule. Almost the only thing we know about that number is that it is likely to be wrong.

We need rather more concern about how much we are borrowing in-year and in the next year, because those two things are much more forecastable. I am not in favour of any expansion in the amount of borrowing planned for this year or next year. We have quite a lot of debt, which is why I have tried to identify ways in which the budget arithmetic and the fiscal arithmetic could look rather better if we cut the taxes that can generate more revenue and those that have a cost, but balance that with reductions in expenditure. I have looked at two big pots: Bank of England losses and productivity shortfall.

There is a third area to look for savings, which I know the Government are actively pursuing: getting people back into work and helping, supporting and encouraging those who feel that they cannot return to the workforce to be able to do so. I trust that this is generally supported around the Committee. It could enrich those people’s lives and raise their standard of living, but it could also add to our tax revenues and therefore make lower taxes or better public services that much more affordable. My only criticism of the Government’s efforts on this is that I would just like them to speed up. This needs doing more quickly and on a bigger scale.

The ideas that we have heard and the work that has been put in are, on the whole, very sensible, but we need better results, because a large number of people do not feel that they can be part of the workforce at the moment, and I am sure that some of them could be better off if they felt they were getting the right support. Working has to be worth while, and that also requires the policy changes that are now going through to say that we are not always going to invite people in legally from abroad to do low-paid jobs when what we want is better-paid jobs in Britain and more jobs that engage the potential British workforce who are definitely out there.

I do not think we need the two new clauses kindly proposed by Labour, which probably already has quite a lot of the knowledge that the new clauses seek, as the hon. Member for Ealing North (James Murray) implied. If we do not increase the thresholds, of course more people will end up paying tax. I do not want too many more people paying the higher rate of tax, but to get an upward shift in the thresholds in due course, we will need to go over the issues to see where we could free up some cash. The Government should look at the losses, the employment situation and productivity to find their crock of gold, and then we can all be happier.


  1. Lynn Atkinson
    May 12, 2024

    Brilliant as usual. To simplify to the point where very layman understands is a rare ability indeed. Obviously I fully support the cutting of wasteful spending to fund desperately needed tax reductions. But the means of persuasion is what caught my eye and I particularly like ‘For example, alcohol and tobacco attract higher taxes because the wish is that people buy them less or, in the case of tobacco, do not buy them at all. We get the same effect with things that we should be promoting.’
    How can anybody disagree?
    So for Hunt: divide everything into two categories: the things you want and the things you don’t want. Tax the things you don’t want, and relieve from taxes the things you do. Stop taxing jobs! Start taxing immigration!

    1. Lifelogic
      May 12, 2024

      Indeed and stop paying healthy but feckless people who could easily work not to work.

      “I am favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible.”
      ― Milton Friedman

      I am too for the simple reason that people invest and spend the money they earn so much more efficiently and much better directed on average than Government does the money they have demanded with menaces off the people.

      Wasteful Whitehall diversity and inclusion spending will end
      The Civil Service has forgotten it serves the public, not woke hobby horses. We are fighting back
      ESTHER MCVEY in the Telegraph.

      So Esther will all the hundreds of thousands of diversity hires costing billions be fired? I suspect not? Not so much the Civil Service has forgotten as 14 year of Tory Government has forgotten. Too late now. The Civil service has little incentive to deliver value for money. It is thecelected representatives who need to demand this and ensure that they do so. This so as to get re-elected. They have abjectly failed. Most of what the state sector are directed to deliver does net harm or delivers little or nothing of positive value – Net Zero, Student loans for duff degrees, HS2, net harm lockdowns, the net harm vaccines, the payments to augment the feckless…

      Reply She has said these staff will be redeployed on more useful work

      1. agricola
        May 12, 2024

        Reply to reply.
        Lets hope she has pothole filling in mind.

        1. Everhopeful
          May 12, 2024

          What a wonderful cartoon that would make.
          Streaming out of Whitehall, shovels over shoulders, yellow hats set at jaunty angles….
          ( They’ve ignored the potholes ‘cos they don’t want us driving on the roads!)

      2. Lifelogic
        May 12, 2024

        To reply let us hope they are, and are capable of other important tasks. Many were on salaries double those of some junior doctors so what jobs would justify such salaries? Also ditch the net zero lunacy and redeploy these people. The types of people who want to spent vast sums on Electric Ambulances that will need endless recharging, will be rather impractical, heavier, have higher tyre wear, will waste loads of staff times and (over their build and useful lives) will produce far more CO2 not less. Not that CO2 is a problem.

        We do not even have any spare low CO2 electricity to charge them with anyway. So prob. they will be charged on electricity generated from Gas, Coal or even more absurdly by burning American chopped down forests and importing these on diesel ship and trucks to Drax the. drying them and burning them. Economic and environmental lunacy from this government.

      3. Lifelogic
        May 12, 2024

        Rather a pathetic rise in the VAT threshold from £85k to £90k not even catching up with inflation. So another tax increase in effect and a large deterrent to working to much and any expansion for many sole traders.

        1. Lifelogic
          May 12, 2024

          You can run two vat companies but have to be vary careful as lots of anti-avoidance if they are linked. Or you can get customers to pay for all the materials directly to take that out of the VAT limit. So loads of people just stop at the T/O limit, choose not to take more work or an apprentice on. Total insanity for the economy.

          1. Lynn Atkinson
            May 12, 2024


      4. Hope
        May 12, 2024

        McVey could stop costly diversity rot overnight by scrapping S.172 Company Act and by the DEI in public sector. She has not so we can safely say it was a narrative for the masses to hear for election purposes with NO intent whatsoever in delivering. The “fighting” nonsense was to give a sense of passion, which does not exist in the Tory party. She had to say something to justify her non role.

        JR talks about productivity but McVey’s role emphasises a non job that should not exist, a total waste of £140,000 plus car and expenses but one copied throughout councils, police, civil service et etc. govt should lead by example. The govt has an Equality minister as well!! Again, that role could scrap S.172 or DEI rot. So the govt. has duplication but no action!! Productivity!

        Since the institutionally corrupt expense scandal in parliament, MPs have had a massive pay hike for nothing in return, not even improved standards. They introduced better cover up measures! If the standards and sanctions were improved in 2009 ie proper right to recall MPs would be too scared to act as they are at the moment!

        Instead we have moronic fodder lobby by the hundreds, instead of the cull Cameron promised, another no ifs or buts rot from him. At the time of talking about raising standards etc, he was busy installing Greensil! What a liar.

        1. Sir Joe Soap
          May 12, 2024

          And now giving his “bon mots” to the world via a vis the world’s hotspots! Who would listen or take any notice of the person who, having failed to negotiate with Merkel, failed to prepare for the UK outside the EU, failed to win his referendum and failed to keep his promise to leave the EU the next day? Please keep this failure off our screens.

        2. Lifelogic
          May 12, 2024

          Indeed she could do and should do, just as “unequivocally safe” Sunak could and should kill ULEZ but chooses not to do so. Judge politicians by actions or inactions not what they say.

      5. Sir Joe Soap
        May 12, 2024

        Reply to reply. Well this sort of thing is precisely why you’re destined to lose despite the other lot being worse. We need a complete change to the sort of government which treats this stuff as anathema to it in the first place. Having some leftie inclusion type filling potholes or whatever is never going to work is it?

        1. Lifelogic
          May 12, 2024


    2. Ian wragg
      May 12, 2024

      The entitlement to state pension is interesting as you have flooded the country with foreign nationalswho will never make national insurance payments. Finishing personal payments is an ideal cover for hiding the true cost of mass immigration.
      Leaving the tax thresholds stagnant year on year drags ever more people into the income tax net, so no real reduction in net payments only an increase.

      1. Lifelogic
        May 12, 2024

        Indeed and pensioners may get an inflation linked increase before tax but after extra taxes from fiscal drag they are worse off and so have falling living standards. Rather like most of the country does in per cap terms.

        1. Lynn Atkinson
          May 12, 2024

          The state pension should be scrapped if the NI payments are scrapped. People need tax cuts so they can provide for their own retirement themselves.
          Saving must be in the ‘desirable’ box and all taxes on saving scrapped. People MUST be able to accumulate capital because without that capitalism is over. People need to own and control assets, homes, businesses, investments.
          If the Conservative Party is judged by its actions, it opposes Capitalism root and branch.
          We have lost control of our party as we lost control of our country, we need a ‘brexit’ of the anti-capitalists from the Conservative Party.

      2. A-tracy
        May 12, 2024

        There was an article recently about a female care home assistant who came to the uk from Nigeria just two years ago with three children, her husband 48 murderered her with a skateboard, he had a job at Tesco, they were in their 40s when they arrived so would only have 20-27 years for a pension so what happens then? Would they get pension credit, how do we find out if they have pensions from their home country, how is that tied up?

        Were they given a social house because she was a care worker? If you gave British woman a social house with a care workers job perhaps you’d find it easier to recruit them.

        Do we now have to keep him in prison for life or does he get sent to a prison in his home country? Do we now have to put all three of his children into care or do they perhaps go back to their family? Just an awful story all around, she had a court order to keep him away from her, I believe the police were outside when she was attacked.

  2. DOM
    May 12, 2024

    I don’t see an income tax rates reduction. I see Hunt appeasing Brussels by not cutting income tax rates. In effect a Tory chancellor puts the interests of the EU before the interests of this nation

    The EU don’t do cuts in income tax rates as this warps flows of risk capital across member states. Hunt is still acting as though we are still a member state of the EU

    1. Lifelogic
      May 12, 2024

      No overall tax cuts as yet. This despite Sunak/Hunt many claims & lies to the contrary. No growth in GDP per cap, still vast levels of government borrowing, vast levels of low skilled immigration, the net zero rip off energy insanity, endless waste and dysfunctional public services – this wherever you care to look.

      1. Hope
        May 12, 2024

        Absolutely Dom, another measure not to compete but act in lock step to EU!

  3. agricola
    May 12, 2024

    The points I take from your speech are that the government is financially illiterate and manages to combine this with a complete lack of understsanding of human nature and the motivation of the individual.

    That the Civil Service have descended in many instances into out of control anarchy is a given. Little wonder their productivity is negative. Their numbers require a heavy cull, their diversity activities eliminated, and their contract with the nation rewritten. Not negotiated but imposed. Alas that requires Thatcherite firm leadership.

    Much will be made of our improving financial performance as a nation, GDP up by 0.6% in the first quarter of 2024 in comparison with the first quarter of 2023. This I credit largely to the self employed and SMEs who press on despite government. The only figures that count are personal elector GDP which on the consocialist watch has fallen beyond 21st in the World league tables along with the less tangible feel good factor. Incompetent government has knocked the steam out of the UK population. Covid and Ukraine are no longer mitigating factors for the dirth of competent management.

    There is nothing I disagree with in your lengthy speech to the HoC. It was accurate and politely put, but was anyone in our shambles of a government listening.

    1. Lifelogic
      May 12, 2024

      It seems to me this Government has largely given up. Most Tory MPs are just looking for their next job after they are evicted as MPs. But they do get a 25% of salary pay off tax free – this not just when they lose their seat but even when they resign in total disgrace. Then if they are people like Blunket (who had to resigned twice in total disgrace) you then later end up in the Lords with your £361 a day tax free allowance. This is daily salary equivalent to a taxes salary of about £195,000 PA (if that is they stay the whole day and not just for a long lunch. If a two hour lunch then more like £800k PA equiv. A junior doctor starts on £34k less tax & NI and less circa £7k in student loan interest (and that is with their extra London allowance). All in it together as Ministers like to say/lie.

    2. Hope
      May 12, 2024


      Furthermore JRs pro EU govt will not entertain such cogent thinking if it makes the UK more competitive than the EU or diverges from EU thinking. A party/Govt. of traitors to our national interest.

  4. David Andrews
    May 12, 2024

    A comprehensive and very sensible package of actionable ideas. It is a pity that past Chancellors have implemented these measures that should be reversed.

    Slightly off topic, you refer to the administrative impact of VAT on small businesses. The same could be said for the ESG/DEI administrative impact on SMEs which, it seems, are enforced by the FCA. Quite how this woke agenda came to, or was assumed by, a financial conduct authority is unclear to me. It is obvious, from reading annual financial reports that compliance has a significant impact on the senior management time and costs to the detriment of trying to run a profitable business. Pages and pages of text are devoted to parading compliance, often supported by data prepared by external consultants. I read there has been something of a revolt against similar requirements in the USA. We need a similar revolt here in the UK.

    1. Timaction
      May 12, 2024

      Equality legislation, 172 Companies Act ensures the FCA measures and monitors compliance with DEI/ESG. Anti White Englishmen supported by Tory/Labour Uni Party. Totally discriminatory legislation against us in recruitment, selection and retention. White hetrosexual men have no “special” characteristics so they can be discriminated against. The Tory’s wonder why the London markets are having fewer IPO’s. Many thinking of going elsewhere in competitive profit and capitalist places…. like the USA. We’ll keep voting for more of this wokerati policies, mass immigration, net zero and highest taxes ever for our own destruction and bankruptcy…… said no one ever, anywhere!!

  5. Everhopeful
    May 12, 2024

    A favourite government hobby.
    The intricate and delicate art ( a bit like origami) of divesting us of our money and possessions and rights and dignity.
    And yet with the weight of hundreds of years of oppression and trickery weighing down on us we still try to rearrange the knives in the cutlery drawer.
    Just as well really to be so diverted because when people finally see through it all it gets very nasty.

  6. Bloke
    May 12, 2024

    Evidently the Treasury has made many misjudgements and errors about the economy and continues to bungle. There has been plenty of good advice for years but a long-overdue shortage of action. The forthcoming election should sort what taxpayers want to happen.

  7. Everhopeful
    May 12, 2024

    Very odd how amid tax, tax, tax policies the powers that be are happy to relinquish Danegeld from oil and tobacco. Yes they scrabble to make up the deficit but they were very convenient taxes I imagine.
    It occurred to me that tobacco has probably been targeted because it is viewed as colonial. Wonder how they will proceed with the already reduced sugar?
    Sugar tax?
    Extended SDIL?
    I don’t know why they don’t just shut us in our houses and tax us for breathing…
    Oh 😳

  8. William Long
    May 12, 2024

    You highlight two real horrors here: the huge reduction in the self-employed, through seemingly deliberate policy, and the Bank’s losses through unnecessary Gilt sales. Dealing with these would give very easy wins, and it is incomprehensible that a so-called Conservative Chancellor has not done so. Has the Bank even given any reasoned justification for its insistence on realising the losses on its Gilt portfolio, rather than holding stocks standing at a discount, to maturity?

    1. Lifelogic
      May 12, 2024


  9. Ian B
    May 12, 2024

    Today the media is reporting that a Taxpayer Funded Net-Zero Charity is using this taxpayer money to fund Labours election campaign.

    Another illustration how lazy OUR 2 Chancellors (Sunak/Hunt) are with distribution of OUR money while highlighting the corruption there is throughout the whole of our Parliamentary System, nothing illegal, of course – but pure hypocrisy of the taxpayer being FORCED to fund divisive political activism.

    If the money wasn’t needed by the charity, it should have been returned to the Taxpayer. Its this waste that has shown ‘£100K, judged by our record’ – ‘Hunt’ is not fir for purpose.

  10. Original Richard
    May 12, 2024

    The current economic policies only make sense if the goal is to impoverish and control the population. The tools are increasing tax, spending, Civil Service employment and losses wherever possible, whilst reducing Civil Service productivity and the wealth creators, the self-employed and small businesses. Unsurprising to learn that N.I will be removed as this will aid the intended further increases in immigration.

    The biggest tool of course is Net Zero, the transition from cheap, abundant, reliable energy to expensive, unreliable, weather dependent chaotically intermittent renewables with no plan for grid-scale storage, taking us from a first world to a third world country in one step.

    Having lied on P19 of the Net Zero Strategy in 2021 that we will have electricity available “at the flick of a switch from abundant, cheap British renewables….” We are now told that smart meters, dynamic pricing (and rolling blackouts – inevitable when electricity supply from weather dependent renewables fails to match demand) that “less waste can help us to achieve energy abundance, keeping the cost of energy down through bountiful supply” :

  11. Ian B
    May 12, 2024

    Self Employed are the potential startup that cause wealth creation in this Country. Large Corporations have a tendency to fight growth, the potential start-up. Once bean counters inherit the board or a large organization ‘customer first’ disappears, they protect their bottom line be removing potential competition – the start-up, the self-employed.
    Must takeover offer nothing to the Customer other than the removal of choice and competitive pricing.
    The UK, its ‘watch dog’ have a habit of rewarding those that sell of large well established profitable businesses to foreign owners. For those companies to be then off-shored, stripped of assets, fundamentals and capability to survive. The starting place to reward the individuals involved is for then to be given a knight-hood. A knight-hood for asset stripping the UK? You couldn’t make it up.
    Is it right or wrong for this trading of companies to take place? That is not always the question, the question should be does the recipient purchasers home Country permit the same reciprocity, if not why are they protected as predator companies?

  12. Bert+Young
    May 12, 2024

    All excellent points Sir John ; I sincerely hope No.10 will recognise the the value of your comments and implement an economic plot of everything you have raised ; if this happened the Conservatives would recover from the mess they are in and win the next election .

  13. Christine
    May 12, 2024

    I live in an area where the Civil Service used to be the largest employer. Since the Scamdemic people now mainly work from home. They cannot return to the offices because most of the offices have been demolished and houses built on the land. I can understand why productivity has gone down listening to them talking about walking the dog, doing the housework and watching TV during working hours. The whole situation is a disgrace but has been brought on by politicians who seem unable to understand social behaviour. This behaviour is also widespread in the private sector. Only the self-employed seem to work hard nowadays and even they take on less work than they could because of the VAT threshold.

    Maybe working from home was intended to isolate individual workers and make it much easier to replace them with AI when the time comes.

    1. Lynn Atkinson
      May 12, 2024

      Christine narcissists have no clue about human nature. Cash payment is the only men’s in a number of cases, to get work done. Self-employed people are being forced to break the law to avoid the VAT death sentence. If the Government want us to be the law abiding, honest nation we have always been, then it MUST make it possible to earn an honest living. Stop taxing people into illegality.

  14. Ukretired123
    May 12, 2024

    Thank you Sir John for taking up the crucial importance of the economic advantages of SMEs and self employed, so little understood by many people and often treated with contempt by HMRC and especially Labour’s Gordon Brown (who also thought our Gold Reserves needed selling off at the bottom of the market).
    As the old saying goes “Never Assume as it makes an ass of u and me” .
    Being self employed today has more risks than when I started in the 1980s and would deter most folks as the bureaucratic “Grand National” type hurdles you detail are just plain ridiculous.
    How can you save money to invest in the future with record levels of taxation. I think when AI hits us all we will have to be very adaptable and flexible and there will be great demand for such self reliant people (as opposed to most passengers on the employment bus).

  15. Ukretired123
    May 12, 2024

    That should be non-contributing passengers.

  16. Ian B
    May 12, 2024

    The UK Tax take at its highest level in more than 70 years.

    Chancellor Hunt says the Conservative Government ‘must be judged on its record’.

    The tax take has risen exponentially since the Conservatives took power 14 years ago. So, as he suggests the Conservative Government under his and his predecessor management has been a 14-year disaster. His own management has shown him to be a prolific don’t care spender and a high punishment tax activist – so all the traits of being a full on tax & spend Socialist.

    The size of the State, therefore its tax consumption has risen by a similar magnitude to the tax take over the last 14 years. The rise and not the promised ‘bonfire of the Quangos’ has similarly increased the tax spend burden. Yet the services delivered have declined inline and proportionate to the punishment dished out.
    This Conservative Governments control of spending is none existent, it can’t manage its own affairs.

    If the Country and the people are exposed to earning more, creating wealth for themselves and therefore the Country, there is more money around, to go around, therefore more being paid into the tax pool without actually raising tax rates. It’s called budgeting, good housekeeping. It all starts at the top, with this Conservative Government actually managing their own spend and what that will achieve to then pay into the tax pool – Sunak and Hunt have shown they don’t care and have no concept of money, how it is actually earn’t.

    That is a convoluted way of saying it is the ‘economy stupid’

    1. Ian B
      May 12, 2024

      Chancellor Hunt and PM Sunak – I voted Conservative because I wanted a Conservative Government, I didn’t expect broken election promises time and time again. I didn’t expect a high tax, high spending Socialist Government as that are the policies and the direction of this Conservative Government. Calling yourself Conservative then outdoing the Socialism that would be expected under Labour just doesn’t ‘cut-it’. That means we have an entity calling its self a Conservative Government and in office due to lies.
      It is not about Left or Right, there is no such thing, you either believe in a prosperous UK or you don’t this Conservative Government shows it is in the ‘don’t’ camp. If you believe in the UK you first get your own house in order, you spend what the economy can afford, not what you as dictators you can take – they are different things. To increase spending you have to increase the earnings of UK Plc, you have to remove the prolific waste form the State, that includes the expenditure you manage that has no results.
      Conservative come to and retain power by listening, hearing and working with, not against the people of this Country.
      We can no longer be frightened of a Labour Government, we have the Blair/Brown doctrine and diktats embedded at the top table

  17. forthurst
    May 12, 2024

    I don’t agree that IR35 caused the loss of genuine self-employment. The people it affected were working for single employers under their day-to-day direction doing work in which they had no risk capital invested and if their contract terminated they simply found another. Rather different from the man who takes on genuine risk and whose business failure might leave him with large debts.
    One of the major causes of the loss of productivity is the working from home scam. If people are not located in a place of work how can there be any certitude that they are working full time for the hours for which they are contracted?

    1. Ukretired123
      May 12, 2024

      Never Assume. The very mention of IR35 strikes fear and loathing from the genuine self employed as it by default assumes that you are not taking risks but you are only as good as your last contract. If a client defaults you risk going bust. Yes the cowboys exist but IR35 is so cack handed like a sledge hammer to crack a nut.
      You have to wear many hats when self employed from finance, marketing, purchasing to selling in addition to your main business, often in competition with larger companies who take these for granted. Juggling these competing demands is a daily risk.
      It is easy to say you can move on to your next contract but where will that be especially in a downturn and especially when you get older.
      Most folk don’t live in London and travel has even more prob these days.

    2. Lynn Atkinson
      May 12, 2024

      That was the excuse, the net caught everybody else too.

  18. Roy Grainger
    May 12, 2024

    Hunt wants to cut the link between NI payments and pension entitlement to pave the way for making the pension means tested. Simple as that.

  19. Dave Andrews
    May 12, 2024

    Tax reduction would be a good thing, though the taxes the government are likely to cut aren’t the ones really needed. We need to abolish employer’s NI, push corporation tax onto dividend tax entirely and scrap the energy taxes as that will help British firms directly. Instead, government will want to reduce income tax and VAT because that makes the voter feel good.
    Pushing up public sector productivity would be great, but I really don’t see there is the wit within the House of Commons to achieve this. As an alternative, just cut out the things that don’t need to be in the public sector. Health treatment for lifestyle diseases could be put onto the charity sector for example. I don’t see why I should be forced to pay for someone else’s folly, although I might contribute out of pity.

  20. A-tracy
    May 12, 2024

    Perhaps the self-employed figures dip is just a lag from covid. You won’t have the returns in for the tax year ending March 2024 for everyone until next January 2025. I know self-employed people that were forced to band together into mini companies 2 – 4 people operating in a little clique all still worked for the same company that used to employ them as individual sub-contractors, those accounts will be interesting to unpick.

  21. glen cullen
    May 12, 2024

    120 illegal aliens /boat people arrived yesterday from the safe country of France

  22. Original Richard
    May 12, 2024

    “I wanted any kind of tax cut in the Budget, because we are over-taxed.”

    But is it not the case that spending is deliberately made wasteful and high so that high taxation, necessary to reduce our options/ability/power for either spending or saving/investing our own money, looks justifiable?

  23. Original Richard
    May 12, 2024

    O/T if I may please :

    Downloading the data from Gridwatch the average power from the 28 GW of installed wind capacity has been 2.2 GW over the last 7 days. The average demand meanwhile has been 25 GW.

    Yet the DESNZ can write in their “Smart Secure Electricity Systems Programme consultation: Summary Document” for implementing DSR (Demand Side Reduction) for the 2035 decarbonisation date :

    “Drivers of Electric Vehicles (EVs) arrive home from work or leisure and plug their EVs into their smart charge point, safe in the knowledge that their hassle-free tariff will ensure their car is charged during the next low-demand period, saving them money on their energy bill and reducing pressure on Britain’s expanding electricity grid. Drivers with bidirectional charging capable EVs may be signed up to export energy from their EV’s battery to power their homes during peak use periods – whether that be for lighting, cooking, or entertainment purposes – and still wake up to a charged EV the next morning.

    Oh, really?

  24. murphy dublin
    May 12, 2024

    I used to import / export quite a lot from Britain but because of the difficulties with regulations now and the extra paperwork I have had to switch to dealing more with France and Belgium. I still visit UK a lot and have family and friends there but have a bad feeling about the way things are going. I’ll make just one point about young people and this is about young people out of work and not looking for work – and here’s the thing the jails are full of young people many of them with far too long sentences for small enough offending and with no chance of rehabilitation so when they come out they are largely a spoiled or spent force where there is little chance many of they will ever re-enter the workforce at any level – saw people myself who worked for me early twenties locked up for years for handling stolen property – there has to be another way.

  25. M.A.N.
    May 12, 2024

    I’m guessing a lot of the increase in public sector staffing at the fca/fsa/ pra is because of taking back control of regulation that used to be done by the eu.

  26. iain gill
    May 12, 2024

    “We Are About To Elect A Government Nobody Wants.” What went wrong? a lecture by David Starkey is up on YouTube. Well worth a watch.

    1. IanT
      May 13, 2024

      What a fantastic lecture it is too – 58 minutes very well spent. David reminds us why we really were “Great” and the immense damage Tony Blair has inflicted on us. We just need people of courage to lead us back from the brink but at the moment they seem to be in short supply

      PS Apart from his main thrust, he also makes the point that “Tory” is now quite different from “Conservative”
      How True!

  27. Robert
    May 13, 2024

    Great speech, I agree.
    Yes IR35 changes have simply made it not worth it being contract or freelance (precursor to small biz). People have gone permanent now after decades.
    V effective policy if preventing growth of uk business is the aim. Own goal UK!

  28. Iain gill
    May 13, 2024

    I see Labour have 10 policies to change Britain on their website. It’s an advance on them being completely policy free, and just depending on the conservatives being crap. Some of their policies are just fluffy, with lots of wiggle room to do anything they like. Some of the words are ambiguous as they clearly intend dumbed down roles, rather than properly appropriately qualified people. All of the policies could be demolished easily, and it’s surprising that the government is not even trying.

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