Reeves is right to slash funds for wealthy landowners
It is reported that the scheme will be designed to be less generous, with payments being retained only for small farms. The landowning interest will be expecting to whip up mass public anger again, just as it did for the countryside march. But what exactly are taxpayers getting in return for ELM payments?
The idea behind ELM was to come up with a more sensible scheme than CAP, which for the last two decades has been little more than welfare for landowners – it doles out billions to them simply for owning land and keeping it in the vague definition of 'agricultural condition'.
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The Guardian
12 minutes ago
- The Guardian
A UK headline wealth tax? It may be simpler to put up existing taxes
Pressure to go further on wealth taxes – by creating new modes of clawing at hoards of hard-to-reach cash – is mounting. For starters, the fiscal picture is looking fairly bleak, with economists estimating that Rachel Reeves must raise £20bn – or even as much as £50bn – to meet her goal of balancing day-to-day spending against the revenue raised from taxation. On the government backbenches, meanwhile, MPs want the chancellor to squeeze the richest in society harder. They even put forward an early day motion last month calling for a 2% annual tax on individual assets over £10m. Yet introducing these kinds of taxes is often not straightforward, with the behaviour of the wealthy being hard to monitor and harder still to predict. The first significant problem is working out where the assets are and who holds them. That has always been difficult and has become even more challenging after one of the most important economic surveys, the household wealth data series, was suspended by the Office for National Statistics because of its low quality. The upshot is that HMRC simply does not know how many millionaires or billionaires there are in the UK. Without reliable figures, it is extremely hard to write policies, cost them and administer them. There is also a battle to be had with an 'old guard with set views' in Whitehall. Whitehall sources paint a picture of a Treasury led by figures influenced by economists whose thinking was prominent at Oxford University in the 1980s and 90s – such as James Mirrlees, Christophe Chamley and Tony Atkinson – leading to something of an orthodox view. In a nutshell, that position is that if you tax capital too much, it will stop investment and hamper growth. Or, in Chamley's words: 'Tax rate on capital income tends to zero in the long run.'. Since this era, the debate within economics has become more nuanced. A growing body of research suggests that some taxation on capital, even at relatively high rates, could lead to greater investment. As it becomes less attractive to hoard wealth because of taxation, risk appetites would then increase in pursuit of higher returns. You might be less tempted to keep your money in a vanilla savings account that can be taxed hard and easily if you can get a much better rate of return – even with a bit more risk – elsewhere. Treasury insiders argue that Reeves has followed the more modern logic, having already taken steps to widen the scope of inheritance and capital gains tax (IHT and CGT). They posit that her reluctance to pursue a headline wealth tax does not mean she has pulled her punches when it comes to taxing wealth. Hostile backbenchers, on the other hand, suggest she follows the old orthodoxy too closely. They often cite her decision to go for relatively small changes in the amounts of tax paid via CGT, rather than bring it more closely in line with income tax at the last budget, which also upset more senior political colleagues. What the debate about how to handle changes to IHT (which have been fiercely opposed by farmers) or CGT illustrates is that if the government really wants to tax wealth more effectively then it has all kinds of ways to do so before opting for a politically – and potentially economically – sensitive route with a headline wealth tax. Yet even changing existing mechanisms might not be easy, when the UK already has one of the highest rates of tax on property and wealth among developed economies, according to the Organisation for Economic Co-operation and Development. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Political pressure may make it harder to maintain a more gradualist approach, however. Figures on the left of the Labour parliamentary party are attracted to totemic wealth taxes of the kind introduced in Spain – its so-called solidarity tax – and Switzerland. They see it as part of showing a commitment to rebalancing the economy. Reeves is critical of international examples, saying that Switzerland does not have IHT, and that Spain's wealth tax is so riddled with exemptions that it raises too little money. Some developed economies that had comparable wealth taxes have dropped them, too. 'We have inheritance tax. We have capital gains. We've just got rid of the non-dom tax status that doesn't exist anymore in our tax system. So we do have taxes that tax the wealthy,' Reeves said in a recent interview with LBC. Other measures that go further are not yet proven to work, she claims, saying that those who 'come up with simple solutions' must do more to 'explain exactly how it would work, whether it's an ongoing tax, what it would do to tax avoidance, what it would do about people moving or changing the way that their wealth is stored'. Economists argue that the government should focus its energies on raising existing taxes, such as equalising CGT with income tax, for example, or changing gifting rules around IHT first, rather than introduce a novel wealth tax. The Treasury is already examining gifting rules among other possible IHT changes. Yet while Reeves might agree with some of these arguments, it's less clear whether her cabinet colleagues will tolerate a slow and steady approach, particularly if the fiscal picture sours.
Daily Record
3 hours ago
- Daily Record
Brexit spin doctor 'among MSPs who made Gnasher jibe' about Nicola Sturgeon
SUNDAY MAIL EXCLUSIVE: Monteith is claimed to have made comments about the former First Minister's teeth after rumours of her nickname circulated in Holyrood. Former Tory MSP and Brexit spin doctor Brian Monteith was among the MSPs making jibes about the Nicola Sturgeon 'Gnasher' rumour it is claimed. Sources told the Sunday Mail Monteith was 'the most prominent' of those remarking on the nickname in the Holyrood corridors during Sturgeon 's first term. The former First Minister revealed in her memoir that she ended up crying in the toilet after learning of a derogatory rumour about her injuring a former boyfriend. The gossip led to her being referred to as 'Gnasher' by some in parliament and the media, with Sturgeon revealing an MSP repeatedly made reference to the nickname, her teeth and dentists when she was around. A former journalist who covered parliament at the time and was based at Holyrood said: 'Monteith was the most prominent MSP I remember who was saying things about this rumour and seemed to enjoy making remarks about Sturgeon's teeth and mouth. 'Most people would accept he was quite aggressive as a politician and I can see why Sturgeon could have felt intimidated or bullied by him. 'At the time I think many people just took the comments as the nature of politics even if it was a particularly disgusting rumour, but looking back on it it was sexist and wrong.' Several former MSPs said they also recalled Monteith mentioning the rumour in parliament or commenting on Sturgeon's teeth. Monteith was the MSP for Mid Scotland and Fife between 1999 and 2007. In 2005 he was ousted from the Tories after plotting the downfall of then-leader David McLetchie, who he referred to as "The Letch". He later went to work as a spin doctor for Nigel Farage's campaign and became a Member of the European Parliament for the Brexit Party in 2019. In her book Sturgeon wrote of an unnamed MSP: 'I was subjected to some nasty bullying by a male MSP of another party. 'At some stage over this first term in Parliament he started calling me 'Gnasher' both to other people and occasionally to my face. Whether he was the instigator of the story or just enjoyed referencing it to make me feel uncomfortable I don't know. 'His behaviour got steadily worse. He would often make 'jokes' about teeth or dentists when I was within earshot. He seemed to revel in my discomfort and I became quite scared of him.' Join the Daily Record WhatsApp community! Get the latest news sent straight to your messages by joining our WhatsApp community today. You'll receive daily updates on breaking news as well as the top headlines across Scotland. No one will be able to see who is signed up and no one can send messages except the Daily Record team. All you have to do is click here if you're on mobile, select 'Join Community' and you're in! If you're on a desktop, simply scan the QR code above with your phone and click 'Join Community'. We also treat our community members to special offers, promotions, and adverts from us and our partners. If you don't like our community, you can check out any time you like. To leave our community click on the name at the top of your screen and choose 'exit group'. If you're curious, you can read our Privacy Notice. Sturgeon said she chose not to identify the MSP who bullied her, concerned about the 'backlash he might whip up against me'. A trawl of Holyrood's official report from the first term of the Scottish Parliament shows Monteith was the only MSP who commented publicly on Sturgeon's teeth. During an education debate on September 30, 1999, in which there had been no mention of teeth previously, Monteith said: 'Nicola Sturgeon may have perfect teeth, but she does not give me the ring of confidence when it comes to education policy.' MSP Fiona Hyslop immediately interjected and asked if he would say the same thing 'about a male member of this chamber' Monteith replied: 'Yes—if the SNP passes the brief to a male member, I would be happy to make that statement in the future. I say that as someone who does not have perfect teeth.' Lib Dem MSP Jamie Stone said that the session was turning into a 'dental debate'. Stone said he remembered Monteith's comments at the time and that they caused 'quite an uproar, particularly with female MSPs in the chamber.' Sturgeon ally and former SNP Westminster leader Ian Blackford said: 'This was appalling behaviour by Monteith. It is not acceptable, offensive and bullying. 'We rightly call out all forms of abuse and it is the case that attacks on women in public life seem to be more prevalent than those on men. He should have been called to account. 'There is no place for such behaviour in our public life. We ought to think of those who can be traumatised by such unacceptable behaviour.' A spokeswoman for Sturgeon said she would be making no further comment other than what is in her book.
Times
7 hours ago
- Times
Soaking the rich is the left's new magic money tree
H ow can you tell the difference between an opponent and an enemy? In Westminster your opponents are the ones sitting opposite you. Your enemies are the ones sitting behind. OK, it's an old joke. But it's one that will probably raise a chuckle from Rachel Reeves. Or, rather, a pained grimace. Last year Britain endured a miserable summer. We knew taxes would go up, but not which ones. Rumours flew that Reeves would raise this tax, that tax. Confidence duly withered. Now, it's happening again — in large part because of the people sitting behind the chancellor. It turns out that, from means-testing the winter fuel payment to curbing the horrendous rise in incapacity spending, Labour backbenchers are unwilling to sign off any spending decisions that cause their voting base the least amount of pain. And the bond markets have noticed.
