Will Labout use at least some of the recommendations in the Taxing Wealth Report 2024? It seems possible. The FT has reported this morning that:
UK shadow chancellor Rachel Reeves has “no plans” to revive her previous call for a tax increase on the pension savings of higher earners, but has refused to categorically rule out such a move.
Her spokesperson said Reeves had “no plans” to change the current regime of pension tax relief, even though earlier in her career she proposed reforms that would increase taxes on pension savings by higher earners.
“That's not a Labour policy — we have no plans to change pension tax relief,” the spokesperson added. “It will not be in our manifesto. It's not something we are looking at and we have no plans to introduce it.”
Labour is going to have to find money from somewhere if it is to meet its economic objectivces. Reducing tax relief on pension contributions by higher-rate taxpayers would save £14.5 billion in tax subsidies to the already well-off. Why wouldn't Labout want to do that?
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Because they’d rather keep the current freeze on the personal allowance thus dramatically increasing the tax take on ordinary people rather than address the actual rich. For people also facing a steep rise in their mortgages I really wonder how they are going to manage. I appreciate compared to someone on minimum wage this cohort of people might be considered well off, but to the actual rich they really are just ordinary.
“UK shadow chancellor Rachel Reeves has “no plans” to revive her previous call for a tax increase on the pension savings of higher earners, but has refused to categorically rule out such a move.”
Is it me or is there a huge difference between a ‘tax increase on pension savings’ and reducing a tax subsidy?
Cyndey,
As I understand it, yes – there’s a huge difference.
Labour have some plans to increase some taxes, for example on non-doms (despite Sunak claiming to have done it already, we don’t even have the draft legislation yet), and VAT on school fees, and the carried interest returns of private equity managers (capital gains tax at something more than 28% rather than income tax, as I understand it). This is all pretty small beer.
The Conservatives are trying to trap Labour into saying what they will or won’t do on pensions, on property taxes, as well as rates and allowances on other taxes. The proper answer is “unlike the Conservatives we are not going to make promises we cannot keep”. Who increased VAT to 20%, increased corporation tax to 25%, increased SDLT to up to 17%, cut the capital gains annual exemption, reduced the threshold for 45% income tax, and froze many other tax thresholds and allowances for many years? Some of these are things I might support but it goes to explain why the tax take under the Conservatives is so high.
Andrew,
I’ve been as frustrated as anyone by the apparent drift to the right (though I wouldn’t say the far right) of the Labour party, but I can see that Starmer was between a rock & a hard place.
Bitter experience has shown that, thanks to the unceasing efforts of most of the MSM to demolish any party even vaguely left of centre, a large part of the electorate has an irrational fear (paranoia) of anything presented as such which, however unpopular the present co-called government, could easily result in Labour losing the election and remaining in perpetual opposition.
So while an over-cautious approach to counteract this widespread paranoia risked the sort of fury & rejection we have seen by many of those broadly on ‘the left’, the alternative put him at serious risk of losing the election and with it the chance to actually change anything.
I know many of those here have come to believe Starmer is really a wolf in sheep’s clothing, a fully signed up neoliberal. While I respect their opinions and they may prove to be right (though I continue to hope not), I continue to find them hard to accept. Time will tell, hopefully quite soon (see my post & Richard’s comment below). As he now seems almost certain to win at least a relative majority and this be able to form a governmant, maybe it wouldn’t hurt to stop knocking him so hard until things become more clear?
We will have to disagree on this
Nothing requires Starmer to crush the left in his party to win this election
He has done so because he is as far removed from being a socialist as Thatcher was
We must send this question on mass to the BBC: your Vote Your Voice. Like the UK public really have a voice…
From today’s Guardian article, sounds like it – in an expected autumn budget:
“After ruling out rises in VAT, income tax or national insurance, shadow chancellor said to be weighing other options to raise cash in an autumn budget”
“Rachel Reeves is under pressure from Labour shadow ministers to raise capital gains tax as part of an autumn budget at which the shadow chancellor is considering up to a dozen new revenue-raising measures.”
https://www.theguardian.com/business/article/2024/jun/06/rachel-reeves-under-pressure-from-shadow-ministers-to-raise-capital-gains-tax-to-revive-public-services
That’s exactly the sort of thing I was hoping for, against all the odds it seemed! Fingers crossed.
There will be an autumn budget, without a doubt