The middle-of-the-road IFS think tank has produced this chart showing that corporation tax will be higher in the UK than any other G7 country and higher than the average of OECD industrialised countries. That however is not the full story; the 7,000 largest companies will be part nationalised with 10% in the hands of Marxist McDonnell, unions will be restored to their 1970s status able once again to hold management to ransom, with strikes made easy for secondary picketing thugs and union agitators on the board. High earners will be taxed over half their income. Why would anyone invest in Britain?
Chris Leslie, a former Labour Shadow Chancellor, calls on McDonnell to “Come clean on tax raid plans” which are likely to mean soaring taxes for all, not just the rich. Leslie warns that Corbyn’s Labour could mean higher council tax, extra taxes on pensions and other tax changes in a new report issued by Mainstream, the anti-extremism campaign chaired by former Labour MP Ian Austin. Leslie says it time for
“… John McDonnell to come clean on how much Corbyn’s Labour will cost ordinary people. It’s ludicrous to suggest that Labour could fund its ever-growing and expensive wish-list simply with tax rises on just a tiny number of very wealthy people. Alarm bells should be ringing in households across the country. Because it will be ordinary families who will end up paying for things like making universities free for the children of millionaires, or giving Premier League footballers free broadband and free car loans.”
Corbynistas will slate Leslie as a “New Labour” critic. Back from when the party won elections…
Download full report here.
Today is economy day, Shadow Chancellor McDonnell will be up later promising to spend hundreds of billions of borrowed money and raised taxes. Sajid Javid has just promised to increase spending by hundreds of billions in borrowed money. No mention of that fiscal deficit the Tories promised to close in 2015.
All this borrowing will, they both claim, be financed from the sale of government gilts at the currently prevailing cheap interest rates. The market is suspicious and interest rates will inevitably rise if the market is flooded with gilts. The world’s biggest bond investment fund is Pimco, here’s what their chief investment officer for global fixed income told the FT this morning:
“The prospect of increased sales of gilts to fund more government spending makes the current high prices even less attractive. Gilt yields look too low in general. If you don’t need to own them it makes sense to be underweight”
Incidentally, the name of that chief investment officer is Andrew Balls, brother of Ed Balls. Saj knows that investors will not perpetually buy gilts at the high prices and the low yields prevailing today…
Polling by Public First for the Taxpayers’ Alliance finds that tax cuts are popular with workers. Lost in the all-party noise about spending on ‘free things’ is the enduring truth that tax cuts are popular with voters. The key findings were:
The patronising attitude of politicians, progressive think-tankers and broadsheet columnists towards the working classes is that they want more welfare spending, in reality they want to be able to keep and spend more of their own money on the things they want – like everybody else. They are pro-business because most of them work in small businesses. Poll after poll shows that the truth is that people who work hard to earn a living resent over-generous welfare benefits more than those on higher incomes; for example 50% of C2DE voters believe there should be a National Insurance “no claims” rebate every five years for people who haven’t claimed Jobseekers’ Allowance. Only 39% of higher earning ABC1 voters think the same.
In news that would attract more attention if not for Brexit, the government is briefing that there will be no the major tax cuts despite the promises Boris made during his leadership campaign, such as raising the income threshold for lower earners and increasing the 40% tax rate threshold from £50,000. Going into an election without having delivered Brexit or tax cuts means Boris definitely won’t be running on his record as PM.
Guido has been told in explicit terms “the cuts ain’t happening“, with the Treasury instead prioritising spending on infrastructure, such as roads and hospitals. The Treasury is already weary of Boris’s spend-happy approach to government, with the policies announced at Tory conference alone totaling almost £60 billion. Government borrowing was £9.4 billion in September according to data released yesterday. The first time in 5 years that the level of borrowing has increased year-on-year in September. Total borrowing for the financial year to date stands at £40.3 billion, £7.2 billion more than in the same period last year. In comparison the revenue lost to HMRC keeping the promise Boris made to raise the higher tax threshold for the middle classes looks like mere pocket change.
Guardianistas can take comfort this morning, that despite the global dystopia depicted on their news pages, one of their own – Justin Trudeau – has won the Canadian General Election. Though the Canadian Conservative Party actually won the most votes (and as the Guardianistas never tire of telling us that means Hilary is really president or something). Trudeau is well known for being incredibly right on about climate change, immigration, foreign aid and gun control – the whole package of virtue signalling. Yet he ran and won as a tax cutter…
He promised more tax cuts and depicted his Conservative opponents as only wanting tax cuts for the rich. He has promised “middle class” tax cuts and tax cuts for small businesses and a reduction in sales taxes. Who knew tax cuts could be so popular with voters?
Ominously for Canadian voters, Justin failed to mention his promised tax cuts during his victory speech (which he very gracelessly began one minute into his Conservative opponent’s concession speech). He big up his environmental policy. Choosing to skirt over his recent oil pipeline expansion announcement…