Burnham is set to hand mayors the power to charge families an unlimited tourist tax on UK holidays. With no national cap on how high any greedy local leader can set it…
The ‘overnight visitor levy’ – hello again to ‘levy’, the traditional voodoo word for ‘tax’ – will apply to hotels, B&Bs, and holiday lets. Hospitality bosses were briefed this week that England will likely follow the Scottish model, where there is no ceiling. This was actually a policy Rachel Reeves always resisted, with Angela Rayner its biggest proponent. Reeves has been kicked to the curb. And Angela Rayner is in ‘Number 10 North’ today to finesse the raid’s details…
UK Hospitality estimates rolling that out across England is a £1.6 billion raid that adds £100 to a typical family break. Whacking a sector that has already lost more than 100,000 jobs since Labour took office…
Burnham’s government is fleshing out its lines on tax ahead of the Budget, and already hinting at taxation of wealth. Asked about tax on working people by Tory peer Lord Jackson, Labour ministers said in a written answer in Parliament:
“Everyone is being asked to contribute to support these goals, but the Government is keeping the contribution from working people as low as possible by ensuring the wealthiest contribute more.”
That’s the first parliamentary question Burnham’s government has answered in the Lords. Has anyone asked Burnham to define a working person yet?
Andy Burnham’s flagship VAT cut on household energy bills is already leaving him with a sizeable hole to plug at the Budget. Around £850 million…
Burnham is banking on a 0.1% inflation reduction from the VAT cut to ease pressure on cost of living (inflation fell more than expected this morning, but economists expect it to significantly worsen in the second half of the year). If bringing down inflation is a key government priority, there’s another tax cut sitting under his nose that comes without the eye-watering bill…
From 1 October, the Treasury is set to press ahead with another tobacco duty hike. Its own figures show the one-off £2.20 increase per 100 cigarettes and 50g of rolling tobacco is expected to raise just £80 million in 2026-27. Analysis seen by Guido suggests ditching this tobacco tax could reduce inflation by around 0.07%. A cheaper and better way to cool inflation, without burning a hole in the Treasury’s coffers…
Instead, Burnham has gone for the headline-grabbing announcement and the hefty price tag. Another costly pledge piling up in Burnham’s Budget black hole…
One to bookmark for the autumn. He also gave a wishy-washy answer on lifting the personal allowance threshold, claiming he’ll “look at it” at the Budget. There’s a plan, there’s not a plan…
The Downing Street operation is already mopping up after its overenthusiastic Prime Minister. On two counts…
During a ‘huddle’ with reporters on Monday, Andy Burnham told hacks he was interested in raising the personal allowance, which has been frozen. He had signalled his intention the weekend before, and claimed it came up the whole time on the doorstep in Makerfield. Last night No10 said this would not, in fact, happen. That’s one…
Burnham also suggested the 45p tax rate would be hiked to 50p in discussion with journalists. Two days later that has also been reversed, with No10 staff insisting that the manifesto stands. Guido pointed out this would be a direct breach of the manifesto. That’s two…
That’s a current rate of one U-turn per day. Lots of days to go…
Wes Streeting has called for a massive hike in Capital Gains Tax as part of his pitch for the leadership. Or the highest office possible under Burnham…
Streeting complained to the BBC’s Political Thinking podcast about the tax system and proposed a “wealth tax that works“:
“A member of my family is a cleaner in Lancashire. She pays a higher tax rate on her salary than her landlord pays for the growing value of the home she lives in. She slogs her guts out, he puts in far less effort, yet the state rewards him more than her. And we wonder why people are angry.
The system is penalising work. It’s not fair and it’s bad for our economy. We need a wealth tax that works. A pound made from simply owning assets should not be taxed less than a pound made from a hard day’s work. We can do it in a way that is pro-growth, pro-entrepreneur and pro-work.”
The former Health Secretary, who gave his resignation speech in the Commons yesterday, has misunderstood capital gains, which are not income. International evidence (and UK evidence) shows that when CGT rates go up revenues go down…
Streeting’s proposal is for capital gains tax rates to match the three bands of income tax – 20%, 40%, 45%. “Under the proposal, a person’s capital gains tax band would be calculated by adding up their income and profits from assets.” If the tax rate was 40%, then an increase from 24% to 40% would be a 66.7% increase and an increase from 24% to 45% would be an 87.5% increase. Streeting relies on a paper by the architect of the now-discredited Farm Tax which claims £14 billion could be raised…
HMRC’s own calculations show that increasing higher Capital Gains Tax rate by 10 percentage points (a 21% increase in the rate) would actually reduce revenue by £3.5 billion. A 5% increase would reduce it by £870 million. Increasing the lower rate also reduces revenues – the relatively modest CGT rises that have already taken place have resulted in significant lost revenue…
The latest HMRC stats from 2023-4 shows that the average gain per CGT taxpayer was about £174,000 in a year. That means the 45% tax rate in the majority of cases, which according to HMRC forecasts predicts a £7 billion loss in tax revenue…
With three exceptions European countries tax capital gains at substantially lower levels than income. Those three all tax them at between 20% and 10%…
Streeting has proposed this idea before in a pamphlet which seems to represent the last time he thought about policy. The ‘Labour Growth Group’ has mostly copied Farm Tax creator Arun Advani’s proposals in their own paper. Pop that in the bin…
Guido also called this at the beginning of the month. Tomorrow’s news, today…
Andy Haldane, Burnham’s recent adviser on the economy who has not taken up a No10 job, told Andrew Marr on LBC:
“The market now suspects that this is a traditional tax-and-spend socialist government with better TikTok videos…
imposing windfall taxes on oil & gas or on banks or upping capital gains tax would […] repeat the mistake that Rachel made […] The Achilles heel, the fiscal Achilles heel of this government thus far has been its unwillingness and/or inability to cut public spending.”