Today Labour’s new shadow chancellor Rachel Reeves announced the party would scrap business rates to try and boost the high street – a policy that would reduce HMRC’s revenue by £25 billion. Asked about the policy announcement on Politics Live, Emily Thornberry suggested the digital services tax would be increased from 2% to 12% to pay for it – a tax increase that, even if it excluded tech firms scarpering abroad – would raise just £2.5 billion. Did Diane help with the sums?
Guido’s taken some time to look over Labour’s current tax and spend policies, and spots a rather large discrepancy between the two figures:
Spending:
- Scrap business rates – £25 billion a year
- Green investment deal – £28 billion a year
- Reinstate Universal Credit £20 uplift – over £6 billion a year
- Supported Kevan Collins’s full schools catch up package – £15 billion
Opposing the government’s tax rises/spending cuts:
- Opposed the health and social care levy – £12 billion a year
- Opposed corporation tax increase – £48 billion* by 2025
- Opposed maintaining income tax personal thresholds at the March Budget – raising £19.2 billion by 2025
- Opposed public sector pay freeze – saving £4.7 billion a year
- Opposed the temporary switch from a triple to a double pensions lock – saving £5 billion a year
- Opposed cutting foreign aid to 0.5% – saving £4.5 billion a year
- Opposed extending ability of councils to raise tax – saving £2 billion a year
Total: £170 billion
Labour’s proposed revenue raisers:
- Scrap charitable status for private schools – +£1.7 billion a year
- Increase tax on private equity firms – +£500 million a year
- Increase Digital Services Tax from existing 2% to 12% – +£2.5 billion
- Scrapping Boris’s trade yacht – £300 million one-off saving
- Office for Value for Money – Unknown
- Global 15% minimum rate of corporation tax – irrelevant as UK rate is higher anyway
Total: £5 billion
Maybe Labour in Communications was right – Starmer should stop announcing policy if he wants to get near No. 10…
*If you believe the Treasury.
The Tories say Labour plans to increase Government spending by 30%, or £1.2 trillion. This is three times more than even Gordon Brown increased spending by, after the financial crisis. See their working below…
By Guido’s calculation the Tories too plan to outstrip the spending increase by Gordon Brown. Though we have yet to see their detailed figures…
After a month of think tank launches and relaunches, op-eds and policy papers discussing the new radical policies the Tories need to win the next election, Ruth Davidson and Philip Hammond have come up with the uninspiring, unoriginal idea of high taxes, new regulations, more intervention, more borrowing and more public spending.
Ruth today says the Tories have cut taxes far enough and demands more money for the NHS, presumably funded by tax rises or extra borrowing. Her call comes the day after Tax Freedom Day, the point in the year at which the average person starts to actually keep what they earn rather than pay it to the state in taxes. That day now comes later than at any time since 1995 – even worse than under New Labour. Government spending is at £30,000 per household. There is room to solve the housing crisis and make sure the NHS is properly funded while bringing down overall spending and lowering taxes.
Hammond, meanwhile, is planning a speech arguing that Thatcherite free market capitalism is no longer fit for purpose and that greater state intervention is needed to win over young voters attracted to Corbyn. This is such a lazy analysis of the the 2017 result. The ‘youthquake’ theory has been largely debunked, polls are showing a clear trend towards young voters now preferring the Tories to Corbyn, and under 25s are more likely to think the government taxes and spends too much already. As are 25-39 year-olds and 25-49 year-olds.
Ruth and Hammond’s blunt big state approach is not new, it’s not original, it’s not radical, it is the same, tired, old ideas of more taxes, more spending and more regulation. Not only does it concede ground to Labour and play Corbyn’s game – and he can always promise more spending and regulation than the Tories – it doesn’t even correctly identify the direction in which young voters want to see the country to go. Will Tory members and voters really go for it?
At the beginning of her Marr interview Theresa May criticised Labour’s plans for spending and borrowing. She then went on to announce £12 billion of new spending on tuition fees and Help to Buy without saying how she would pay for it. This is dangerous unfunded Labour-lite stuff, fighting on Corbyn’s turf…
High Speed Two Limited is the private firm “responsible for developing and promoting the UK’s new high speed rail network”. It is wholly funded by the taxpayer through a government grant-in-aid under the umbrella of the Department for Transport. HS2 Ltd this morning released its corporate purchasing card statements for the second quarter of the year. They reveal the gravy train summer enjoyed by rail pen-pushers.
Despite the company having its own office space in flashy Canary Wharf, £3,836 was paid to “Canary Wharf” for “staff training events” in April alone. This figure is additional to rent and it is not clear from the statements what precisely it was spent on.
£3,661 went on a health and safety training course organised by Astutis, “Creating a positive health, safety and environmental culture at your organisation”.
In June, a £718 cancellation fee for a staff member’s private healthcare appointment with BUPA was charged to the taxpayer.
£710 was spent on HR software called ‘TeamMood‘ – this allows managers to “follow the mood at the team level. It also allows people to be more sincere about their feelings.”
HS2 is already £7 billion over budget, you don’t need to pay Guido £710 for him to tell you that’s a mood killer.
Taxpayers will want to sit down before reading this. Labour-controlled Manchester council are cushioning recent cuts by splurging £50,000 on 140 designer chairs. The furniture fat cats bought 90 ‘Vitra’ chairs at £387 each and 28 ‘Modus’ chairs at £289 each to glam up the local library, as well as 16 ‘Hitch’ and 6 other ‘Vitra‘ office chairs worth an additional £10,000. Town hall pen-pushers can’t provide exact costings because it would take too long to search their accounts. Taxpayers’ concerns have disappeared “Pouffe!” into thin air.
LibDem John Leech says:
“For a council that claims poverty and blames Government cuts every single time… their ability to find pockets of money for vanity projects is utterly incredible, and absolutely shameless.”
They don’t have a chair leg to stand on…
