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Oh dear...
https://www.telegraph.co.uk/business/2024/12/16/reeves-inheritance-tax-raid-cost-more-than-it-makes/
Looks like Labours IHT raid will cost the country money overall - in which case why are they doing it?
In case the link doesn't work, here a quote: "Rachel Reeves’s inheritance tax raid on family businesses and farms will backfire by costing the Treasury over £1bn more than it makes, economists have said.
A drop in investment caused by the Chancellor slashing tax relief risks outweighing the extra income the Exchequer expects to gain from the changes, according to analysis by CBI Economics.
Its report says the Treasury has “underestimated the impact” of changes to business property relief (BPR), with the majority of family businesses forced to cut investment because of the raid.
Analysts estimate that 125,678 jobs will be lost as a result. Overall, the loss of economic activity will lead to a £2.6bn reduction in income from taxes such as corporation tax, income tax and national insurance over the next five years, the research suggests.
This is much more than the estimated £1.38bn in extra inheritance tax that Ms Reeves hopes to raise from cutting BPR, meaning that the Exchequer will be £1.26bn worse off than under the status quo."
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Not exactly a neutral perspective, but a much better reason for rethinking than 'won't someone think of the poor business owners'. As you say, if it's going to create a net decrease in revenue then what's the point?
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
I'd be interested in seeing the analysis behind it, as I don't trust the reporting to accurately reflect it. It also seems to depend quite heavily on self reported responses to a survey that was designed to get this result.
If the OBR comes up with the same numbers with a more rigorous approach, then there will be changes to it.
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There's something a little fishy about quoting those job losses to so many significant figures.
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This is doing well in the charts - wonder if it'll be the Christmas number 1? 😀
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]1 -
Absurd comparisons from Labour backbenchers.
Coz ignoring years of public information is just like being trapped in a burning building or crushed to death.
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
Yeah, it seems that Corbyn is suggesting compensation of £10bn should be doled out from the magic money tree, and that some Labour MPs are attaching themselves to that fantasy.
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This growth thing is not going to plan...
https://www.telegraph.co.uk/business/2025/01/06/record-tax-raid-triggers-mass-job-cuts/
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]1 -
And yet wages have increased ahead of inflation for the first time since 2021. Do we trust the Telegraph to report responsibly? I won't pay to find out, that's for sure.
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The BBC had the same story this morning but with an additional note that the service sector saw modest growth in December, presumably nothing much is happening so you can spin it either way.
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no need to pay, the telegraph's incompetence is not limited to its sub-tabloid reporting standards for its gullible customers, but also to the design of its paywall, just disable scripting and you're in (you probably won't want to stay there though)
my bike - faster than god's and twice as shiny1 -
Could that be in any way due to the 'strings free' bumper pay rises that Labour chucked at the public sector and the unions?
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
The report ties in with Reeves saying she was not happy with growth and the overall economic growth position being pretty much zero. Are you happy with that?
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
30 year gilt rate has hit a 27 year high today.
Reeves and Starmer ain't doing very well so far.
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Only 4 and a half years to go...
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
10 year gilt rates have hit their highest level since the GFC today. More bad economic news.
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Why is it bad?
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Because it makes Government borrowing more expensive, mortgages more expensive, loans and other debt more expensive. Reduces disposable income, and therefore is bad for the necessary growth. There is no 'headroom' left in the treasury's budget calculations, so spending cuts may be required.
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Labour is unlikely to make any significant spending cuts, so another tax raid may be on the cards. Wonderful.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
27 years ago would be 1998ish, I was under the impression that that was the start of a decade when the UK economy did very well (early New Labour I think)
So the previous high was followed by good times economically? Am I wrong about the post 1998 economy or is something else going on there?
Not trying to start an argument, I'm genuinely interested if there is any link between the two (until it gets into detailed economics, at which point I will get confused an bored 😄)
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So everything was rosy during covid when gilt rates were incredibly low?
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Anyway here's a little bit of good news: Mick Lynch is retiring.
Here's a pic of him next some other leftie activists.
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
don't forget his rightwing brexiter activities, good riddance to him
my bike - faster than god's and twice as shiny0
