Sir Keir Starmer’s grand plan to raid the pockets of non-doms in a tax crackdown could leave a gaping £1 billion hole in funding earmarked for schools and hospitals, according to The Guardian. Treasury officials fear the punitive tax will raise no money at all, driving away the wealthy and draining the coffers…
It’s another example of Reeves and her cronies not understanding that tax hikes only send the rich packing their bags and take their fortunes elsewhere. The plans, initially imposed by the Tories, were flawed from the start. The OBR initially reckoned scrapping the non-dom tax loophole could rake in £3.2 billion a year, with Labour planning to spend £1 billion of the cash it would supposedly raise on public services. Though the figure was “highly uncertain” from the start. Labour continuing to create their own ‘black hole’…
Last week, Starmer claimed that there had been no impact assessment on how the decision to strip millions of pensioners of winter fuel payments will affect them. He asserted: “There isn’t a report on my desk which somehow we’re not showing, that I’m not showing, as simple as that.” Turns out, that’s not true…
A response from the Treasury to a FOI request shows that they do have a “full internal policy impact assessment”, though refuse to publish it as it was part of the “formulation or development of government policy”. Shadow Chief Secretary to the Treasury Laura Trott slammed the “shocking revelation” of a “hidden analysis”. Starmer once again misleading the public on the goings on in Whitehall. So much for governing with “transparency”…
As Rachel Reeves sharpens her knives for the “painful” Autumn Statement, Guido thought he’d dig into those on her economic advisory council at the Treasury. Unsurprisingly, they’re a troupe of tax-hiking, anti-Brexit, climate crusaders…
Leading this merry band is John Van Reenen, a relic from the Blair years. Van Reenen’s greatest hits include papers arguing that the low top-rate income taxes have little benefits for innovation, and argues for higher fuel prices to stamp out what he calls “dirty innovation.” Perhaps that’s where the rumoured fuel duty hike might be coming from. He’s also a vocal Brexit basher, pushing for a “soft Brexit”— rejoining the Single Market. According to him, the so-called benefits of Brexit, like trade deals with non-EU countries, are hardly worth the paper they’re written on…
Then there’s Neil Amin Smith, former Labour staffer and moonlighting member of Clean Bandit, who has been singing the same tune: more taxes. He’s proposed letting councils slap a 3p surtax on the basic income tax rate, suggesting tax devolution that allows councils to control part of the income tax schedule. It’s no surprise he’s on Labour’s side, writing in 2019: “Ultimately there is only one way of increasing the funding available across government – higher taxes.” Guido wouldn’t be shocked if he was playing that line to Reeves as we speak…
Anna Valero is another anti-Brexit crusader who’s joined the Chancellor’s echo chamber. She’s often spoke about the “chaos” of Brexit “threatening” the UK’s economy. Valero’s another one who’s been pushing Net Zero, arguing the UK should invest £26 billion a year in a low-carbon economy instead of tax giveaways. She’s also poured cold water on tax cuts in general, claiming they don’t spur growth. With advisers like these, it’s no wonder the Autumn Statement is shaping up to be a tax hike bonanza. The “party for growth”, everyone…
Ian Corfield, a banker who generously gifted over £20,000 to key Labour figures—including Rachel Reeves—has snagged a plush civil service position in the Treasury, as noted by Politico. Corfield was a senior business director for Labour leading up to the election, and was appointed as a director of investment at the Treasury in July. I’ll scratch your back…
A gentle reminder: the civil service is supposed to commit to impartiality, designed to keep political leanings out of their work, though it seems Corfield managed to pass the “exception rule”. Now, Corfield will be on a plum salary between £97,000 to £162,500. He’s not the first Labour donor to reap the rewards of their former donations either. Richard Hermer replaced Emily Thornberry as Attorney General, having donated £5,000 toward Starmer’s leadership campaign. Follow the money…
Even the tax-grabbing fanatics at the Treasury have to face the truth. A Freedom on Information Request has revealed that internal Treasury briefings are making quite the case for a low-tax economy. A document from January this year, delivered to Jeremy Hunt, makes the statistical case. It’s a shame none of its lessons made their way into the budget…
While the Treasury claims that “there have been many important factors affecting advanced economy growth rates“, it is forced to admit in its analysis that “over the 2010-22 period, OECD economies with higher total tax (as a share of GDP) have on average seen lower cumulative GDP growth.” A phenomenon that has been observed for hundreds of years…
“This association applies whether looking at (1) all OECD economies; (2) removing some extreme outliers (Ireland, Turkey, and Greece); (3) removing all OECD economies that are not considered “advanced” by the IMF; and removing Ireland and Luxembourg given their unusual tax policies (presented in the below chart and table) and (4) considering just the G7 and Spain.“
The briefing established what people have been saying for years – that top performers have lower tax burdens: “The US and Canada saw the fastest GDP growth over in the G7 between 2010 and 2022, with the 1st and 3rd lowest tax burdens in the G7.” Any chancellor who wants to deliver a ‘Budget for Long Term Growth’ might take note…
Read the full Treasury briefing below:
The Public Accounts Committee has published a new report into government borrowing this morning which doesn’t paint a rosy picture. The report slams the Treasury for its inability to measure whether borrowing, which has pushed net debt to 97% of GDP, has value for money:
“The Treasury recognises that there is no single quantitative metric to measure its performance and instead relies on more qualitative measures, such as monitoring market demand. But this means it is impossible to know whether it is securing value for money from its approach.”
With taxpayers “on the hook for more debt repayments and interest costs” the Treasury claims it would be “unfair” to be produce a metric for its borrowing performance, instead claiming numerous measures like whether debt is being sold in the “right areas” are taken into account. Meanwhile, the Committee says with high staff turnover the Treasury “faces challenges in maintaining the appropriate expertise” to manage debt. More unaccountable borrowing is more tax deferred…
