While Labour continues to reverse its pre-election definition of “working people” to justify tax hikes, the Adam Smith Insitute offers another path for raising money from Capital Gains Tax. Scrap it…
Statistical modelling in the ASI’s new report suggests that national income would grow by £25.08 billion thanks to increased saving if CGT was gradually phased out. Further revenue increases from higher investment and productivity would more than replace revenue lost from CGT and boost growth…
Without Capital Gains Tax national income would, according to the modelling, rise by 0.9% annually, in perpetuity. That’s thanks to a 2.4% increase in national savings as a percentage of national income. Bean-counters will know that two-thirds of the lost revenue from scrapping the tax would be offset by increased revenue from other taxation as a result. Multiplier effects to growth would more than compensate for lost Treasury revenue while every family would be £1,000 a year better off…
Reeves should rule out a rise in CGT in the budget, and better still scrap it altogether. Talk about a rabbit…
Once again the No 10 communications operation is breaking down. Starmer told broadcast journalists yesterday night that someone who works and also gets income from shares or property “wouldn’t come within my definition” of a “working person.” Today his spokesman clarified that “a person who holds a small amount of savings in stocks and shares still counts as a working person.” Guido cast his mind back to before 5th July, when Labour made a specific pledge in its manifesto: “Labour will not increase taxes on working people”…
These are the definitions of “working people” the public was given prior to the election:
Compare that to now, days before the budget.
Spot the difference? They did promise change…
New data just released by HMRC shows Capital Gains Tax receipts have shot up by 16.3% in the third quarter ahead of the budget. Coming in at £572 million from July to September – compared to £492 million in 2023. Realise your gains, realise your gains…
September’s CGT receipts hit £192 million, which is the highest figure since 2008. Inheritance Tax receipts, boosted by frozen thresholds, hit £4.3 billion between April and September, a 10% increase on the year before. Evidence shows that people actually give up the ghost to avoid the death tax…
Starmer’s personal firefighting over budget speculation on an incoming Capital Gains hike hasn’t worked, then. More evidence of the Laffer Curve in action will likely present itself if Reeves chooses to hike CGT in the budget – HMRC itself predicts a 10% hike would lower revenues by £2 billion. Labour’s tax crosshairs are clearly set on growth-promoting wealth…
Care Minister Stephen Kinnock was asked a pretty simple question ahead of the budget this morning: “Are six-figure earners working people?” No response – six times in a row…
Kinnock eventually said Labour hadn’t worked out what a “working person” was yet: “Obviously the definitions have to be seen in the round and that’s what’s going to be put on the table.” Rachel Reeves made it clear, though, what the party’s definition of working people was during the election campaign: “Working people are people who get their income from going out to work everyday, and also pensioners that have worked all their lives and are now in retirement.” Which obviously includes those who receive a large salary…
Kinnock just said: “our manifesto made it absolutely clear that we will not be raising National Insurance income tax or VAT on working people.” A cynical combination of two entirely different sentences in the manifesto…
Streeting said yesterday that Labour’s “focus” when it came to not hiking taxes was on “people who are on lower or middle incomes.” It only took a hundred days for Labour to give up its growth-friendly façade…
Amid the flurry of pre-budget briefing the FT now reports that Reeves will extend Sunak’s 2021 income tax threshold freeze beyond 2028, when it was due to end. The current threshold freeze will raise more than £33.5bn by 2029 and will drag 3.8 million more taxpayers into the additional rate band….
The stealth tax was a big focus for Labour’s attack operation before the election. Reeves said last year “Labour aims to lift a freeze on tax thresholds that is on track to cost workers on the basic 20% rate of income tax £750 a year each.” The party’s assault on the “25 Tory Tax Rises” singled out thresholds in particular: “Labour has found that Tory stealth tax rises over the next two years have hit the average sales assistant with a £660 tax bombshell.” Not only will Reeves not reverse the tresholds – she is specifically set to make the “bombshell” worse for longer…
Labour claims that the manifesto pledges won’t be broken with this because Labour only pledged to keep rates at the same level. The public are sure to be sympathetic…
Latest figures from the the Institute of Directors have optimism in the economic outlook falling to its lowest level since 2022. The index took a dive to -38 in September, down from -12 in August…
Confidence in firms’ prospects has also dipped while investment intentions have droppped to their lowest point since September 2020. Directors cite “concerns over likely tax increases, the cost of workers’ rights, international competitiveness,” and “broader cost pressures” in their latest dour assessment of times to come. Reeves’ budget summarised…

Meanwhile the Tories’ £3,500 business day at Conference has received poor reviews with little interest from firms and tickets getting a two-thirds discount at the last minute to egg on interest. At least they didn’t ask for their money back this time…