[Finance] Rachel Reeves to reveal £20bn shortfall left by Conservative Government

[Harry Wilson's tackle]

it's not the state's money though either. i think it's the framing of IHT, a tax on death and your inheritance which is something a lot of people spend their live working for (pass on something, give them something they didnt have, etc). most often people dont even qualify but still get annoyed at the concept of that. reframe it to tax the recipient, flat 20-30% rate on monies received. people accept income tax as quite normal, i reckon this would raise way more, more difficult to avoid, and help ease the abomination of probate.

Are you a flat tax rate man like me? Crikey?

It's so bleeding obvious. I even showed the sums to show it is fair.

 

[rogersix]

I’m not wealthy, I’m just hard working and aspirational.
I wanted a better life than what was on offer at the time: Council House. I didn’t go to university, I got 4 o levels.
It was in Thatchers Britain in 80’s, growing up in Scotland where they hated her, even more than down here.
Aspiration and opportunity. That’s what I grasped from that time and that’s what I instill in my kids today.
Not big state and take from those who want do well and achieve.
If you take from achievers and wealth creators, they will leave and take their wealth and creation somewhere it is appreciated and embraced as a force for good, not as a sponge to be continually squeezed.

would your kids feel the same pride as you do if they also managed?

 

[BenGarfield]

I was reading the comments rather than looking at who was posting.

I agree with you that ALL the 3 major UK parties avoided the economic elephant in the room although all 3 had sound political reasons for doing so. But we haven't got a decade or two to waste before we join a Customs Union or EFTA - we've got spending requirements now that need funding.

Labour were naive in the campaign to categorically rule out rowing back on Brexit and should have stuck to the "we have no plans to rejoin" line.

I speak as a Remainer who has finally accepted Brexit has happened but we aren't saving £350 million a week, the money isn't going into the NHS, we haven't got better trade deals, there aren't better opportunities outside of the EU, the USA doesn't want a free trade deal with us, there is a shortage of labour, a lot more red tape and border aggro. It's all bad, it's all bollocks and this country - a global player, a nuclear power - cannot afford to be in the position we are in.

The counttry can "afford" whatever it likes. The only limits are real resources and inflation.

 

[Weststander]

Are you a flat tax rate man like me? Crikey?

It's so bleeding obvious. I even showed the sums to show it is fair.

At a stroke it would remove all need for tax planning manoeuvres around tax thresholds, plus there’d be no disincentives to earning over milestone thresholds. Tax take might even increase.

 

[Harry Wilson's tackle]

I was reading the comments rather than looking at who was posting.

I agree with you that ALL the 3 major UK parties avoided the economic elephant in the room although all 3 had sound political reasons for doing so. But we haven't got a decade or two to waste before we join a Customs Union or EFTA - we've got spending requirements now that need funding.

Labour were naive in the campaign to categorically rule out rowing back on Brexit and should have stuck to the "we have no plans to rejoin" line.

I speak as a Remainer who has finally accepted Brexit has happened but we aren't saving £350 million a week, the money isn't going into the NHS, we haven't got better trade deals, there aren't better opportunities outside of the EU, the USA doesn't want a free trade deal with us, there is a shortage of labour, a lot more red tape and border aggro. It's all bad, it's all bollocks and this country - a global player, a nuclear power - cannot afford to be in the position we are in.

You have hit two nails on the head.

1. If Labour had nudge winked about rejoining the EU (or even simply suggested making some sort of arrangements) and
2. If Labour had said they would have to raise some taxes....

Richie Sunk would have been returned to number ten. Unless...

1. Sunak had at the same time admitted he would have to raise taxes and
2. admitted that Rwanda and the other wheezes were a deflection from the real problems caused by Brexit

The last General election was the ultimate water carrier election, with Labour needing to spill not a drop from their vessel while defending themselves from the Tories who were shoving them with their empty vessel.

 

[Harry Wilson's tackle]

The counttry can "afford" whatever it likes. The only limits are real resources and inflation.

I though you once said we can ignore inflation by printing more money?

 

[LamieRobertson]

I though you once said we can ignore inflation by printing more money?

I’ve tried that on my home printer but A4 sized notes won’t fit in my wallet

 

[ozzygull]

In case I'm one of those you are targeting there - I'm certainly not party politicking at all here.

Both major parties ignored the economic elephant in the room during election campaigning, sticking their fingers in their ears when the IFS, and others, suggested we were speeding towards an unavoidable major decision point, and it would have been nice if that was acknowledged and addressed.

I just wanted the Tories out so we could at least have a change and hope grown ups would run the country. The thought of the tories winning again was a really scary, it would be like they could do what ever they want and they never lose.

It was however completely obvious to me that despite what Labour were saying/ not saying that if we want to get our services back to pre-Tory level then taxes would need to rise. I also understood that if they said they were going to raise taxes it would have been jumped on by the right wing press and could have cost them the election. I think the majority of people who can afford to pay a bit more tax would be happy to do so IF it was used to actually make a difference and we could see the improvement to our services.

 

[HeaviestTed]

she should windfall tax any company who has higher profits due to high energy costs or high interest rates, it makes no sense making the people poorer through high interest rates to just give banks higher profits.

 

[Chicken Run]

Reeves is expected to make it explicit that she believes her predecessor deliberately did not act to address the looming spending shortfall. “Jeremy Hunt is going to have a lot of explaining to do,” said one source.

Rachel Reeves expected to reveal £20bn shortfall in public finances

Chancellor may raise some taxes in the autumn due to what Labour describes as its ‘shocking inheritance’ from Tories

www.theguardian.com

Bob, genuine question, why didn’t you put this story in the Labour Government thread (yes I know you thought it deserved a thread of its own)

 

[abc]

It’s funny when people (inheritors) write to financial columns about evil HMG/HMRC taking “their” money through IHT. It’s not their money. It’s their parents, less a contribution to the nation, leaving their money.

A recent letter to the Telegraph, someone was furious because effectively HMRC were taking £400k from their parents £2m estate.

Money …. people are obsessed. How about being elated with the £1.6m?

Furthermore, those parents had ample opportunity to mitigate the eventual level of IHT whilst they were alive. If they chose not too then the whole of society benefits but the inheritors do pretty well too.
So as you suggest, what’s the problem?

 

[Gwylan]

I think this shows what the real problem is. In this country politics is too much about "How can I personally be better off?" and not enough about "What is best for the society in which I live?"

Ain't that the truth?

It's compounded by the fact that about 85/90% of 65+ vote but not too many under 30s. This means government policies (of both Labour and Tories) have been geared towards the older generation. So people are voting in self interest for policies that favour the unproductive sector of the population.

I can't see that changing for a while

 

[Uh_huh_him]

Labour are wisely using the same playbook the tories used from 2010-2018

- "It's the last lot's fault".

The electorate gobbled it up last time.

 

[Couldn't Be Hyypia]

I would’ve agreed with you for decades, but the assets disparity in the UK has become untenable, unfair. We’ve sitting in homes worth 6x that of 1996 not through entrepreneurship or working harder than today’s 30 year old, but by luck.

Before this becomes a "fact", houses are worth 2x what they were in 1996 according to the ONS.

Nationwide UK House Prices Index Adjusted for Inflation ['Real' Prices]

Nationwide Quarterly House Prices UK index data from 1973-2021 adjusted for inflation, also known as 'real' UK house prices

www.housepricecrash.co.uk

 

[S.T.U cgull]

Surely the problem with ensuring that children' can't inherit parents' homes is (1) the multi-millionaire rich will still avoid it with family trusts and so forth, so it will be primarily aimed at the middle class, and (2) - and this is the biggie IMO - that there are already many millions of twenties and thirties scrambling round to buy homes which they are struggling to afford, and if parents can't leave houses to their children (or they can't afford to keep the house they've been left) then there will be even more people joining the scramble.

IHT, or another similar tax, is paid on most trusts - just at a lower rate of tax. Inheritance tax is paid by something like 3% of persons estates.

It is rather easy for most people to avoid the worst of the tax by gifting their wealth >7 years before death or using insurance policies to pay out the estimated tax bill when they pass.

Larger issue with that tax in particular is the amount of reliefs and exemptions for ‘agricultural’ property/land.

 

[Gwylan]

Before this becomes a "fact", house prices are worth 2x what they were in 1996 according to the ONS.

Nationwide UK House Prices Index Adjusted for Inflation ['Real' Prices]

Nationwide Quarterly House Prices UK index data from 1973-2021 adjusted for inflation, also known as 'real' UK house prices

www.housepricecrash.co.uk

I would take those prices with a massive pinch of salt. I bought a flat in Balham for £72k in 1993 - £210,000 in today's prices according to the ONS. Just had a look on Right Move and seen similar flats a couple of streets away for £1.1m. That flat was partly funded by my share of the sale of my dad's house £54k in 1992. Try going to an estate agent in Brighton and say you want a four-bed house for £165k and time how long they'll spend laughing at you.

Westander's 6x is probably a bit of an exaggeration but it's certainly closer than your 2x

 

[Couldn't Be Hyypia]

IHT, or another similar tax, is paid on most trusts - just at a lower rate of tax. Inheritance tax is paid by something like 3% of persons estates.

It is rather easy for most people to avoid the worst of the tax by gifting their wealth >7 years before death or using insurance policies to pay out the estimated tax bill when they pass.

Larger issue with that tax in particular is the amount of reliefs and exemptions for ‘agricultural’ property/land.

It's 4%, but the point is well made. The current allowance for IHT is £1m (assuming a couple, where one died first and left the estate to the surviving partner).

IHT makes sense as a form of capital gains tax.

 

[Couldn't Be Hyypia]

I would take those prices with a massive pinch of salt. I bought a flat in Balham for £72k in 1993 - £210,000 in today's prices according to the ONS. Just had a look on Right Move and seen similar flats a couple of streets away for £1.1m. That flat was partly funded by my share of the sale of my dad's house £54k in 1992. Try going to an estate agent in Brighton and say you want a four-bed house for £165k and time how long they'll spend laughing at you.

Westander's 6x is probably a bit of an exaggeration but it's certainly closer than your 2x

Not mine!! The Office of National Statistics.

 

[Harry Wilson's tackle]

I just wanted the Tories out so we could at least have a change and hope grown ups would run the country. The thought of the tories winning again was a really scary, it would be like they could do what ever they want and they never lose.

It was however completely obvious to me that despite what Labour were saying/ not saying that if we want to get our services back to pre-Tory level then taxes would need to rise. I also understood that if they said they were going to raise taxes it would have been jumped on by the right wing press and could have cost them the election. I think the majority of people who can afford to pay a bit more tax would be happy to do so IF it was used to actually make a difference and we could see the improvement to our services.

Indeed.

Anyone claiming the main reason they voted tory was because they thought Labour were not being sufficiently forthcoming about what they would have to do to fix the mess caused by the Tories has a brass neck.

And anyone who voted Tory who is now popping up like a turd that won't flush, doing a little dance and saying 'told you so, I knew how badly the Tories had f***ed the economy, and Labour were not being honest about it, and that's why I, er, vote Tory again' needs to get in the sea.

 

[vegster]

If only the Tory government had paid as much attention to running the country rather than trying to trawl up hate for migrants, the anti "woke " agenda and trying to pick fights with.. well anyone really.