Latest news with #Labour-supporting
Yahoo
23-05-2025
- Business
- Yahoo
Labour-supporting tax expert slams Rayner's raid on taxpayers
A Labour-supporting tax campaigner has slammed Angela Rayner's proposals to reintroduce the lifetime allowance and freeze the top rate of tax threshold. The influential tax expert Dan Neidle said a number of the tax rises contained in Ms Rayner's leaked memo could deter investment in UK companies and undermine 'the progressivity of the tax system'. He also questioned whether some of the proposals could raise as much as the Deputy Prime Minister had suggested. The Telegraph revealed on Tuesday that Ms Rayner sent a secret memo urging Rachel Reeves to raise taxes instead of cutting spending. Mr Neidle is the founder of think tank Tax Policy Associates and also a member of Labour, however he has been critical of the party's policies in the past. The tax lawyer said that half of Ms Rayner's proposals 'make sense from a policy perspective', including closing the commercial property stamp duty loophole and removing inheritance tax relief on Aim shares. However he poked holes in some of the calculations on her memo. For example, he told The Telegraph that closing the stamp duty loophole for commercial property could raise anywhere between £700m or £2bn, as opposed to the estimate of £1bn cited in Ms Rayner's memo. In addition, scrapping inheritance tax relief on Aim shares would probably raise only a tenth of the £1bn figure mentioned by Ms Rayner, he wrote in an article for Tax Policy Associates. In the same article, Mr Neidle criticised Ms Rayner's proposal to reintroduce the lifetime allowance, a £1.07m cap on how much someone could save into their pension over their lifetime without incurring a tax charge. The cap was abolished by the Conservative government because it encouraged doctors to work fewer hours in order to avoid a huge tax bill. Mr Neidle said: 'These problems haven't gone away, and so it seems unlikely Labour is about to change its mind about changing its mind on the lifetime allowance.' Ms Rayner also proposed extending the freeze on the additional rate tax threshold beyond 2028, when it is currently set to rise in line with inflation. This would result in a larger number of workers paying 45pc tax as their wages crossed the £125,140 earnings threshold. Mr Neidle pointed out that the additional rate threshold was already much lower than it had been in recent years. For example, in 2009 the additional rate threshold stood at £150,000 – worth £240,00 in today's money. Mr Neidle wrote: 'Freezing tax thresholds is not good tax policy. It's a large tax increase, but a hidden one. It undermines the progressivity of the tax system to have the highest rates paid by more and more people. And it doesn't affect the seriously rich, just the moderately high-earning.' Mr Neidle also said the case for raising rates on dividend tax – another of Ms Rayner's proposals – was 'not persuasive'. Ms Rayner has pressed the Chancellor to align the higher and additional rates of dividend tax with those of income tax. As a result, a higher earner would pay 40pc tax on dividend income as opposed to the current rate of 33.75pc, while an additional rate taxpayer would see the charge jump from 39.35pc to 45pc. Mr Neidle said the UK's dividend tax rate was already 'one of the highest' in the Organisation for Economic Co-operation and Development (OECD) and warned that increasing it could deter investors. He wrote: 'We want to encourage people to invest in companies, and too high a rate of dividend tax won't do that.' The Deputy Prime Minister and the Cabinet Office were approached for comment. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
23-05-2025
- Business
- Yahoo
Labour-supporting tax expert slams Rayner's raid on taxpayers
A Labour-supporting tax campaigner has slammed Angela Rayner's proposals to reintroduce the lifetime allowance and freeze the top rate of tax threshold. The influential tax expert Dan Neidle said a number of the tax rises contained in Ms Rayner's leaked memo could deter investment in UK companies and undermine 'the progressivity of the tax system'. He also questioned whether some of the proposals could raise as much as the Deputy Prime Minister had suggested. The Telegraph revealed on Tuesday that Ms Rayner sent a secret memo urging Rachel Reeves to raise taxes instead of cutting spending. Mr Neidle is the founder of think tank Tax Policy Associates and also a member of Labour, however he has been critical of the party's policies in the past. The tax lawyer said that half of Ms Rayner's proposals 'make sense from a policy perspective', including closing the commercial property stamp duty loophole and removing inheritance tax relief on Aim shares. However he poked holes in some of the calculations on her memo. For example, he told The Telegraph that closing the stamp duty loophole for commercial property could raise anywhere between £700m or £2bn, as opposed to the estimate of £1bn cited in Ms Rayner's memo. In addition, scrapping inheritance tax relief on Aim shares would probably raise only a tenth of the £1bn figure mentioned by Ms Rayner, he wrote in an article for Tax Policy Associates. In the same article, Mr Neidle criticised Ms Rayner's proposal to reintroduce the lifetime allowance, a £1.07m cap on how much someone could save into their pension over their lifetime without incurring a tax charge. The cap was abolished by the Conservative government because it encouraged doctors to work fewer hours in order to avoid a huge tax bill. Mr Neidle said: 'These problems haven't gone away, and so it seems unlikely Labour is about to change its mind about changing its mind on the lifetime allowance.' Ms Rayner also proposed extending the freeze on the additional rate tax threshold beyond 2028, when it is currently set to rise in line with inflation. This would result in a larger number of workers paying 45pc tax as their wages crossed the £125,140 earnings threshold. Mr Neidle pointed out that the additional rate threshold was already much lower than it had been in recent years. For example, in 2009 the additional rate threshold stood at £150,000 – worth £240,00 in today's money. Mr Neidle wrote: 'Freezing tax thresholds is not good tax policy. It's a large tax increase, but a hidden one. It undermines the progressivity of the tax system to have the highest rates paid by more and more people. And it doesn't affect the seriously rich, just the moderately high-earning.' Mr Neidle also said the case for raising rates on dividend tax – another of Ms Rayner's proposals – was 'not persuasive'. Ms Rayner has pressed the Chancellor to align the higher and additional rates of dividend tax with those of income tax. As a result, a higher earner would pay 40pc tax on dividend income as opposed to the current rate of 33.75pc, while an additional rate taxpayer would see the charge jump from 39.35pc to 45pc. Mr Neidle said the UK's dividend tax rate was already 'one of the highest' in the Organisation for Economic Co-operation and Development (OECD) and warned that increasing it could deter investors. He wrote: 'We want to encourage people to invest in companies, and too high a rate of dividend tax won't do that.' The Deputy Prime Minister and the Cabinet Office were approached for comment. Sign in to access your portfolio
BBC News
30-04-2025
- Business
- BBC News
Labour defends net-zero policies after Blair criticism
The government has defended its net-zero policies after Sir Tony Blair said limiting fossil fuels was "doomed to fail" and a new approach was former Labour prime minister argued the debate on climate change had become "irrational" and people in rich countries no longer wanted to make financial sacrifices "when they know that their impact on global emissions is minimal".His comments have been seized on by opposition parties as an attack on Sir Keir Starmer's plan to achieve net zero carbon emissions in the UK by Labour ministers insist the drive to net zero will not involve any financial sacrifices and have minimal impact on people's lives. It comes as a highly critical report by the independent Climate Change Committee says Labour has made very little progress in preparing the UK for the growing threats posed by rising temperatures since coming to Secretary Steve Reed told Times Radio that Sir Tony had made "a valid and important contribution" to the climate change debate."I agree with much of what he said, but not absolutely every word and dot and comma of it," he added."But this government is moving to clean energy because it's best for Britain. It's more energy security for Britain."He said the government's plan to replace nearly all fossil fuels for electricity generation with wind, solar and wave energy by 2030 was aimed at breaking the UK's "dependency" on "fossil fuel dictators" like Vladimir Putin and it would lead to lower energy a report by the Tony Blair Institute, Sir Tony argues that the expected global rise in fossil fuel use and the doubling of airline travel over the next 20 years undermines current climate policies."These are the inconvenient facts, which mean that any strategy based on either 'phasing out' fossil fuels in the short term or limiting consumption is a strategy doomed to fail," he report says existing carbon targets should be kept in place to give certainty to business but a rethink of how they are achieved was urgently says the focus should instead be on emerging technologies such as carbon capture and storage and nuclear fusion - and new international effort to persuade the world's biggest economies, such as China and India, to cut their emissions. Conservative shadow environment secretary Victoria Atkins said it sent a "clear message" to the government that it needs to "rethink" its approach to net leader Kemi Badenoch recently ditched her party's support for net zero by 2050, which the party had pursued in said there was "consensus across the board" on the need to protect the environment, but that "we have to take the public with us".Sir Tony's intervention has highlighted divisions in Labour over net on the right of the party argue that the government is not doing enough to support workers and save jobs in the oil and gas sector in the transition to clean Labour-supporting environmental campaigners have accused Sir Tony of handing ammunition to the Conservatives and Reform told the BBC the publication of his report on the eve of local elections was a sign that Sir Tony was losing influence over Sir Keir Starmer."This is an oddly public and oddly-timed intervention that would usually be made by someone struggling for access," he added. Sign up for our Politics Essential newsletter to keep up with the inner workings of Westminster and beyond.
The Independent
15-04-2025
- Business
- The Independent
What do the tax returns published by Starmer, Rayner and Reeves tell us?
What did we learn from the tax summaries published on Monday by Keir Starmer, Angela Rayner and Rachel Reeves? Almost nothing that we didn't know already. Their salaries as MPs were £77,000 in the 2023-24 tax year. In Starmer's case, he received an extra £49,000 as leader of the opposition. These figures are already public. The only new information was the amount of interest they each earned on their savings. In Rayner's case, nothing. In Reeves's case, £64, implying savings of about £2,000. Starmer, by contrast, reported £5,174 in interest. If that was from a National Savings Direct Saver account, it would mean he had about £150,000 in it. Is that not the sort of amount that you might expect for someone who had been paid about £200,000 a year as director of public prosecutions for five years? And even that tells us little. He (and Rayner and Reeves) could have other savings in tax-free ISAs. Some of my fellow journalists were interested in the declarations of 'other benefits'. These were the donations of clothes that had already been made public in the register of MPs' financial interests. It hadn't occurred to me that these would be taxable, but of course they were. And that is about it. Reeves received £12,000 for her book on female economists, some of which she wrote herself. Starmer had £500 in royalties, having written legal books more than two decades ago, including European Human Rights Law: The Human Rights Act 1998 and the European Convention on Human Rights. Grateful as I am for having been prompted to look up Starmer's author page on Amazon, I am doubtful that the public interest has been served by this use of the billable hours of the firm of chartered accountants hired by the prime minister, the deputy prime minister and the chancellor in preparing this information, or of the less well-paid time of the civil servants who uploaded these summaries to the government website. Dan Neidle, the Labour-supporting former tax lawyer, commented yesterday: 'I wish politicians would stop publishing bowdlerised summaries of their tax returns and claiming they've published their tax returns. They haven't.' I disagree. I wish politicians would stop publishing their tax information altogether. It is an American import that we can do without. In the United States, the focus on the character and biography of the candidates for the presidency is so intense that it became the convention that they must publish not only their tax returns but the results of a medical examination. Until last year – when guess which candidate failed to publish either. In August 2024, Donald Trump said he would 'gladly' share his medical records, but he did not do so. Neither he nor JD Vance published their tax returns, either, despite Kamala Harris publishing hers for the previous 20 years along with the results of her medical. We British only ended up following the pre-Trump American precedent because Boris Johnson and Ken Livingstone got into an on-air scrap in a TV debate in the London mayoral election campaign of 2012. Livingstone accused Johnson of avoiding tax by channelling his earnings from books through a company. It turned out, when they both published their tax summaries, that this was something Livingstone did and Johnson did not. It was one of the greatest own-goals of election-campaign history. There was much interest at the time in the personal wealth of David Cameron and George Osborne, and later on in the even greater wealth of Rishi Sunak and his wife, after The Independent revealed Akshata Murty's non-dom tax status. But none of their tax returns (sorry, Dan Neidle, 'summaries') revealed anything that was relevant to their holding public office, which ought to have been declared separately in any case. The demand for politicians to 'publish their tax returns' is like the demand for public inquiries. They are both based on two assumptions: one, that damning secrets are being withheld; two, that publication (or an inquiry) will expose them. The first may or may not be true, but the second definitely isn't. Tax returns contain partial information or none at all about tax-free savings, trusts or funds held abroad. Ever since British politicians have been intermittently expected to publish them, they have contained nothing of interest. Anything embarrassing has been made public by journalists or by voluntary disclosure in registers of MPs' or ministers' interests. My view remains that either everyone's tax return should be published, as in Norway and Finland, or no one's. Transparency for everyone is a bracing idea, although it is worth knowing that in Finland, where they are proud of their openness, the day when the previous year's tax information is published is known as 'National Envy Day'.
Yahoo
26-03-2025
- Business
- Yahoo
Anxiety over welfare cuts rises among Labour MPs
There has been some unease in Labour's ranks over the planned savings in the welfare budget. The government's newly published assessment of the impact of the changes has increased that anxiety. The contents – with its estimates of increased poverty levels - show that talk of difficult decisions is not mere ministerial sloganeering. While polls suggest tackling the benefits bill is popular, voters and Labour MPs tend to be more squeamish when cuts affect disabled people. The scale of those cuts has led some Labour MPs publicly to declare for the first time today that they won't vote for the welfare changes – though any rebellion is ultimately likely to be unsuccessful. Perhaps of greater concern to Chancellor Rachel Reeves is that MPs on her own side are openly challenging her approach, and putting forward alternatives. Those around the chancellor had believed that any argument over her iron-clad fiscal rules on debt and borrowing had been won well before polling day. Many of the new MPs were regarded as leadership loyalists, and it was assumed that they bought the argument that Labour had to kill off any impression that it would tax too highly and spend too much. It was also assumed they were aware that any major change to rules on borrowing and debt would invite unflattering comparisons with the short-lived regime of former prime minister Liz Truss. But some Labour MPs are finding an increasing number of difficult decisions are, well – increasingly difficult. Key points from the Spring Statement at a glance Three ways the changes could affect you and your money Who is affected by the Pip and universal credit changes? Watch: Henry Zeffman on what you need to 58 seconds In the Commons on Wednesday, the Labour chair of the cross-party work and pensions committee, Debbie Abrahams, supported moves to get people back into work. But she suggested that some of the changes to benefit levels would undermine rather than bolster elusive growth. She asked bluntly: "How will making people sicker and poorer help in driving our economy up?" And left-wing MPs are publicly promoting alternatives. Bradford MP Imran Hussain called for a wealth tax and former frontbencher Andy McDonald demanded a hike in capital gains tax. Big Labour-supporting unions such as Unite take a similar view. Privately an MP regarded as being on the right of the party is advocating a temporary tax on wealth until the economy picks up. And a prominent Labour backbencher – who chaired a cross-party committee – had a range of possible options for bringing in more revenue. They included a council tax revaluation; less pensions tax relief for the better off; a land tax; a new tax on property owners and not tenants. That backbench MP was none other than Rachel Reeves herself – in The Everyday Economy, a pamphlet she penned in 2018. Think tanks - such as the centrist Social Market Foundation – have also pushed alternative options such as cancelling the Lower Thames Crossing, taxing empty property, and taking another look at the triple lock, which can lead to inflation-busting increases in state pensions. But as well as ignoring her younger self, the current debate the chancellor would really like to extinguish is whether to change - or bypass - her fiscal rules. These can lead to a spending squeeze in order to convince the Office for Budget Responsibility she's on course to have debt falling and day-to-day spending in balance by the end of the Parliament. What ignited - or at least re-ignited - the debate was the decision of the German parliament to exempt defence and infrastructure investment from their equivalent rules. So it's no longer just those on Labour's left who are calling for more flexibility. Some serving ministers privately believe that if – as the chancellor says – "the world has changed", then her rules can change with it. One of former prime minister Tony Blair's closest former advisers – John McTernan – has advocated an exemption for defence in the New Statesman. The Fabian Society – a think tank affiliated to Labour – has said that if the UK faces further fiscal pressure, the government must look again "at how it can raise revenue progressively to protect our public services and support the vulnerable". Rachel Reeves made it clear in her Spring Statement that her rules – which she tweaked at the Budget – were "non-negotiable". And the Treasury insists that following Germany's lead would push up the cost of borrowing – and therefore mortgages – even further. The chancellor has insisted that to ensure economic stability, there is no alternative to her approach. With fears that stubbornly sluggish growth will lead to more difficult decisions at the autumn Budget, some voices on the left and centre-left are now begging to differ. Spring Statement 2025: Key points at a glance Reeves squeezes benefits as 2025 growth forecast halved
