Yesterday the Prime Minister was very excited about achieving the first one of his top five priorities – halving inflation before the years end, with Consumer Price Inflation (CPI) now down to 4.6% Rishi claimed the credit for what was largely down to global energy prices falling. Most people know governments can drive up inflation by printing money and proliferating spending, which to be fair to Sunak and Hunt they are holding the line on. Not everyone realises that consumer taxes also contribute to the CPI figure. In fact according to the Office for National Statistics* alcohol taxes contributed over a third of a percentage point to inflation.

If the government want to convince the public they are taking effective action on the cost of living they should not be adding to inflation in the Autumn Statement next week with consumer taxes. According to Survation 55% of the public think taxes on alcohol should remain at current levels or be reduced, so any action to reverse or at least hold the line on alcohol duty would be seen by voters as action on the cost of living and would be counter-inflationary. It would also reduce the CPI figure and help reach that 2% goal…

*The ONS paper  “…the 0.37 percentage point contribution to the annual rate in August 2023 from alcohol and tobacco was the largest from that division since the start of the National Statistics series in 2006.”

Guido notes the Treasury team has been filled with aspirational tax cutters after Rishi’s Blue Wall recalibration. The Chief Secretary to the Treasury is a key role when it comes to spending, so it is good to see Laura Trott co-authored a report in 2021 arguing for “Accelerator Zones” across the UK which would, among other things, feature zero capital gains tax on investment. The report’s second author was Bim Afolami, who has just been appointed Economic Secretary to the Treasury. Afolami appeared at an Adam Smith Institute TNG event last month to argue for a youth-focused low-tax Tory shift. Low-tax Cameronites…

Meanwhile the new Financial Secretary to the Treasury Nigel Huddleston has defended high earning taxpayers in 2016 by pointing out “top 1% pay 28% of all income tax and top 3,000 pay as much as lowest 9 million”. Huddleston was fiery in his defence of corporation tax cuts in 2018, saying: “I repeat, tax revenue matters more than tax rates. Populist calls for massive tax hikes will result in less money for the NHS and public services, not more“. Guido looks forward to seeing their strong low-tax leanings reflected in the Autumn Budget now inflation has halved…

Apart from warning Sunak that Braverman’s not a “serious home secretary“, Starmer channelled his inner Truss in his response to the King’s Speech today. The Labour leader immediately attacked the Sunak’s weak growth policies and pointed out that taxes are “higher than at any time since the war – he raised them himself 25 times”. Sound familiar?

Starmer went on to attack what he called the “Tory recipe for British decline: low growth, high tax, crumbling public services with the prime minister serving up more of the same“. Of course, no one is clear what Labour would do on tax…

Susan Hall has blasted the Sadiq Khan on his ULEZ scheme pocketing around £715,000 a day from motorists. A report by Transport for London revealed around 57,200 drivers cough up the £12.50 charge a day, resulting in the expansion cashing in £52 million already. Last year, ULEZ drove up £224 million in tax revenue, and that was before the expansion…

Susan Hall tells Guido:

“It speaks volumes that Sadiq Khan is unwilling to provide any evidence that the air quality has improved until after the Mayoral election. His ULEZ expansion is nothing but a tax grab, taking over £52 million already from those who cannot afford to upgrade their vehicles. As Mayor, I will stop the ULEZ expansion on day one.”

The Uxbridge by-election proved putting the brakes on ULEZ might be a vote winner. Now it’s really hitting motorists in their wallets… 

An EU-funded think tank is now pushing for a global minimum wealth tax of 2% as the “logical next step” after Sunak’s favourite global minimum corporation tax. The EU Tax Observatory gets €1.2 million annually directly from the EU and is run by high-tax ultra Gabriel Zucman who is obsessed with tax havens. It wants governments to initiate talks at the G20 summit in Brazil in November 2024. Wealth taxes were previously standard across Europe but were all scrapped because they failed…

Jacob Rees-Mogg led the charge against the minimum corporation tax this year and tells Guido “taxation is a national not a multi-national responsibility. The EU is always looking for ways to extend its powers and this is another example“. The difference between death and taxes is death doesn’t get worse every time the bureaucrats get together…

The ASI’s Duncan Simpson says that wealthy people obviously “don’t have piles of cash just sitting around” and would have to sell tied-down assets to pay the tax. Instead of doing that they “will simply leave, taking their money with them and ultimately reducing tax receipts“. Sunak will probably be interested…

New figures from the Office for National Statistics show that Public Sector New Borrowing in the first half of the financial year was up from last year but £20 billion lower than the OBR forecast back in March. Borrowing in September was also down £1.6 billion from 2022, though that’s still the sixth-highest since monthly records began in 1993. Seeing as OBR forecasts run economic policy, that means there’s a deal of wiggle room…

For all Hunt’s spinning over the inviability of tax rate reductions, the Treasury is hauling in unprecedentedly gargantuan amounts from stealth tax grabs. Economist Julian Jessop says there is clearly room for “some well-targeted tax cuts” in the Autumn Statement. Guido isn’t convinced that Hunt has got the message…