Brexit and the waning days of the United Kingdom

[Gups]

I can't imagine many people taking time out of their day to put in a protest vote at a by election.

The turn out was very high.

It was 36% in Tamworth and 44% in Mid-Beds. Low even by by-election standards.

Great results though.

[Josquius]

Huh, had heard elsewhere it was quite a bit higher. Maybe got wires crossed.

The tory response seems to be... Tax cuts for the highest earners.

https://www.theguardian.com/politics/2023/oct/20/rishi-sunak-considers-tax-cut-for-top-earners-after-byelection-defeats?CMP=Share_AndroidApp_Other

Yep. When the country thinks you're corrupt and self serving tax cuts for the wealthiest are what you got to do. I fully support this.

[Jacob]

... maybe it's a "we're fucked, we better get a few last swings in for our main clients"?

[Sheilbh]

And I think probably placate Tory MPs.

Of course it is worth noting that under the Tories taxes have risen to their highest level as a share of GDP since the 70s (or since early post-war, depending on which measurement you look at):


And under current plans the tax take will rise to about 38% of GDP over the next four years which will be the highest level ever (at least in peacetime). Some through tax rises but a lot through fiscal drag of freezing allowances for six years. It's one of the reasons I think Labour may not have such an awful inheritance fiscally (although they will economically) and, just by committing to current Tory tax plans, may have more fiscal wiggle room by the time they take over or at least a couple of years into the parliament.

Of course, regardless, they'll say that having got into office and actually looked at the books it's even worse than we thought

But if you're a Tory MP having voted for numerous budgets that leave Britain with it's highest ever tax take is, as on so many issues, a fairly disappointing legacy after winning your first strong majority in 30 years.

I would love to know the political thinking and polling Sunak's looking at with this idea. But - as with cancelling HS2 - it couldn't be clearer they've just decided to give up on keeping any Red Wall seats.

Edit: For example in 2021's budget alone the Tories voted for 1.5% of GDP's worth of tax rises (when Sunak was Chancellor) which, I believe, was one of  the largest increases in the developed world.

[Sheilbh]

And on wasted opportunities for the Tories - I get that this is just a cross-tab etc etc. But this Canadian polling is really striking as Tories, in the equivalent age group here are polling within the margin of error:

Polling Canada
@CanadianPolling
Federal vote intention among 18-29 Year Olds:

CPC: 40%
NDP: 24%
LPC: 21%
GPC: 7%
BQ: 5%
PPC: 2%

Abacus Data / October 10, 2023 / Online

Obviously there are other factors but just really struck given the emphasis the Canadian Conservatives have put on housing and the housing crisis in Canada.

I think there's lessons there which may apply to the Tories presiding over a housing crisis here. But I think it's also a warning for Labour that they need to deliver on housing because if the Tories have any sense (and they do have an appetite for power), this is something they'll focus on post-election. Lots on the right are very interested in Canada right now. As I say it always reminds me of the unions in the late 60s-70s when all parties knew there was an issue, Labour couldn't agree to moderate reforms - so they got Thatcher's reforms (and Thatcher also initially won young voters). Having failed to deliver on housing from a right-wing perspective, the Tories are now at risk of Labour addressing it in a way they really don't like but that'll win Labour support from a generation of voters - and if Labour don't deliver, vice versa

[garbon]

This link offers a different look at the 40% tax rate.

https://ifs.org.uk/news/one-five-taxpayers-and-one-four-teachers-set-be-paying-higher-rate-tax-2027-threshold-freezes#:~:text=Other%20findings%20include%3A,either%2045%25%20or%2060%25.

Though I don't know anything about the ifs

[Gups]

Huh, had heard elsewhere it was quite a bit higher. Maybe got wires crossed.

The tory response seems to be... Tax cuts for the highest earners.

https://www.theguardian.com/politics/2023/oct/20/rishi-sunak-considers-tax-cut-for-top-earners-after-byelection-defeats?CMP=Share_AndroidApp_Other

Yep. When the country thinks you're corrupt and self serving tax cuts for the wealthiest are what you got to do. I fully support this.

It's not really a tax cut though is it? Just raising the threshold at which you pay 40% which has been frozen at £50k since 2021 despite inflation. Aimed at upper middle earners rather than the properly wealthy.

[Josquius]

Huh, had heard elsewhere it was quite a bit higher. Maybe got wires crossed.

The tory response seems to be... Tax cuts for the highest earners.

https://www.theguardian.com/politics/2023/oct/20/rishi-sunak-considers-tax-cut-for-top-earners-after-byelection-defeats?CMP=Share_AndroidApp_Other

Yep. When the country thinks you're corrupt and self serving tax cuts for the wealthiest are what you got to do. I fully support this.

It's not really a tax cut though is it? Just raising the threshold at which you pay 40% which has been frozen at £50k since 2021 despite inflation. Aimed at upper middle earners rather than the properly wealthy.

It's a cut in the amount of tax they pay so I do think it's fair to say.
As someone in that rate it's a stupid idea.

[Gups]

It's hardly corrupt or for the very wealthiest though. The Tories do plenty of shit, the hyperbolity should be saved  for that.

[Admiral Yi]

Gups, meet Squeeze. 

[Josquius]

It's hardly corrupt or for the very wealthiest though. The Tories do plenty of shit, the hyperbolity should be saved  for that.

. I never said it was?
It isn't a good look to be favouring the group they fall into, and which least needs any help, when they're already seen as grossly corrupt and self serving however.

[Richard Hakluyt]

If the freeze on tax allowances continues then it will be increasingly possible to pay the 40% rate and be pretty broke, this will become a big issue in the coming years.

[Josquius]

If the freeze on tax allowances continues then it will be increasingly possible to pay the 40% rate and be pretty broke, this will become a big issue in the coming years.

Sure. It's something to look at.
I'm certainly not rolling in it and couldn't afford a particularly grand house.

But far more important would be raising the 0% bracket and I'd say lowering the bar for the additional rate a bit (they've already done this a little I think but could do more. as well as increasing the actual tax level there)

[Sheilbh]

If the freeze on tax allowances continues then it will be increasingly possible to pay the 40% rate and be pretty broke, this will become a big issue in the coming years.

It is sucking in an increasing number of people and I think "top earners" gives the wrong impression:


Also the really top earners lose their personal allowance anyway.

If the freeze on tax allowances continues then it will be increasingly possible to pay the 40% rate and be pretty broke, this will become a big issue in the coming years.

Yeah. I think there is a fairly strong case for tax simplification in the UK (both corporate and personal) - especially for young graduates because for most of them you need to add 9% to whatever the tax rate is.

As Dan Neidle has pointed out, for example, on the impact of both student loans and then the way a lots of things are means tested and then withdrawn or clawed back in some way leads to some pretty wild marginal rates. E.g. for someone who graduates, starts work around £20k and starts a family - it doesn't take many years before their marginal rate is basically 70%:


I think it's the same issue as with corporate tax (and I think part of this is the need to announce things at an annual budget) where there's lots of focus on headline rates. But actually what matters (and gets fiddled with all the time) on the corporate tax side is the tax base, while on the personal side as I say there's lots of means testing etc.

But far more important would be raising the 0% bracket and I'd say lowering the bar for the additional rate a bit (they've already done this a little I think but could do more. as well as increasing the actual tax level there)

They increased the personal allowance from about £5,000 under New Labour to £12,000. I'm not sure increasing it more would be my priority.

I think there was research by the IFS or Resolution Foundation that found that also primarily benefited "top earners". I think there's a bit of an argument on it though - I used to be very much on the side of things being targeted at the poorest and making them have maximum impact, since 2010 I've swung far more to the universalist side even if it means a lower rate of help that is less effective at targeting the poor (and the rich also benefit).

[Gups]

The real hand out to the wealthiest was the changes to the pensions allowances earlier this year.