Friday 26 August 2016

Will anything happen with Hammond as Chancellor?

I am hearing that the new Chancellor is not planning to do much with the Autumn statement. Really as a new Government in fact, one would have expected quite chance of doing something radical to show a difference to Osborne's non-austerity austerity.

Instead, there is a huge problem with Heathrow where Theresa May is very exposed in her own constituency of Maidenhead, who are deeply anti-expansion. Yet Gatwick seems to be off the menu as BAA have been so successful with their lobbying for Heathrow or bust.

In terms of the economy, it desperately needs some change of tack from the low-rates, low-savings, low growth model created by the Cameroons.

The chance is to boost growth by raising infrastructure spend and relaxing planning laws further. Also to end the pensions triple lock which is denuding many areas of Government of any cash.

However we are likely to get further tax cuts for business, which have so little impact on business investment when personal taxes are so high (most business are privately owned, the personal tax always ends up being key for 99% of people).

Then there is the long overdue review of both public sector pensions provision and the personal tax code including NI. If not now, when?


Graeme said...

It is interesting that so many people keep calling for infrastructure spend. Two problems here. First, the level of Nimbyism is such that it takes about 20 years to get a project approved - you even refer to the Heathrow expansion. Second, the construction industry appears to be running at full capacity. There is building going on all over the place - you cannot walk down any street in London without some massive scaffolding in place - there rarely seems to be anything happening however.

Weekend Yachtsman said...

So the suggestion is that he abolishes the triple lock (thus ensuring pensioners at least think they will not get any rises) and merges NI with Income Tax so that pensioners at least think their tax rate might go from 20% to 31%?

What could possibly go wrong?

Yes I know the impact won't be as bad as that, but perceptions guide votes, the government (any government) isn't trusted, and one group that can be depended on to turn out to vote every time, is the pensioners.

I think Mrs. May will have more sense, personally.

dearieme said...

Leave these topics to Corbyn.

Anonymous said...

Doesn't the private equity tax level (10% "entrepreneurs relief") completely skew the incentives towards the sort of people who can borrow a few tens (or hundreds) of millions to buy a business, sweat the staff and assets, then unload to a greater fool?

Whereas the person who builds up a business from scratch and runs it gets taxed 20%-odd on profits (CT), then 38.1% on the dividends once his total renumeration hits 150K.